Shooting own foot also not know...

Economy is a looping cycle.
You can make the loop become bigger, while still consume the same physical resources.

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Added on October 9, 2011, 11:06 amEconomy is not a zero sum game.
You can have all winner across without loser
and
you can have all loser across without winner.

This a lot of people don't understand.
They only understand one winner must have one loser. So they look for physical resources only.
It is not the case for economy.



This post has been edited by cherroy: Oct 9 2011, 11:06 AM

Pole dancer don't need to eat more foods to make you happy.
Whether they sell the service to you or not, they still eat the same amount of foods.

Must eat more than before, only can dance and provide service to you.

Natural resources is not finite.
You eat rice today, it is not the like finish already, it grow back.
You chop down tree now, after 50 years it grows again.

Where is the finite?

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Added on October 9, 2011, 11:10 amAgain please post this issue on RWI, this is property section.
Any further post on this kind of issue is not welcomed in this section.
Ty.

This post has been edited by cherroy: Oct 9 2011, 11:10 AM

It is not shocking at all, and not a rocket science, it is an obvious choice, and logical choice especially when the borrowers are under stressed.
You must understand the word "underwater" property.

You bought a house 500k and obtained 500k loan, which you need to pay monthly.
Now the house market price is only worth 250k, but you loan still 500k.

If property price doesn't goes back up 500k, and stay the same 250k, for everyone USD1 you are paying to the loan monthly, you are burning USD0.50 straight away, aka you are paying USD1 price to a house that only worth USD0.50 every month.

There were a lot of underwater properties during 1997 crisis time and foreclosure of properties
Just we don't see this time around, because prior to 2008 financial crisis, Asia did not have RE bubbles.

Yes, cultural issue can make some different as well, but Asian tend to have higher saving rate which serve as backup fund to avoid foreclosure.

Also foreclosure law, or defaulting the properties loan law is different as well.

To see the supply is too much or not, or specifically properties price can be sustained or not, is not solely about population number, aka 1 house 1 people ratio or whatever ratio.
It never work like that.

It is all about money that willing to put in properties.

A rich tycoon can own 100 properties, and only 20 rented out, the rest 80 collecting dust, if the rich tycoon views he/she has too much money, don't know to park where, and FD and elsewhere investment return also pathetic, he/she can opt to buy 80 properties that collecting dust also never mind. Then, pricing is supported.

Buying come from money, not people.
You can have 1 million people that has no money, even you build 100 house, also price drop.
But if you have 100 billion idle money, cheap money, don't know go to where money, but only 100 person, house price can soar.

And this is happening right now.

People keep on complaining house price keep soaring, say, hey no enough middle income people to buy, soon or later, it will collapse, but in reality, there is simply too much money around, especially from the upper class people.
Worldwide has zero interest around, so if you have the plenty of money, where do you want to put it?
Bank? earn nothing
Stock market? too risky, volatile especially lately few year.
Inflation is eating the money, need to find some hard asset, obvious choice - property.

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Added on October 19, 2011, 5:06 pmLocally, most company are finding hard to find enough skilled workers to fill in the job.

This post has been edited by cherroy: Oct 19 2011, 05:06 PM

There is difference between Malaysia and Spain.

Malaysia has high saving rate, which is the strong backdrop supporting point.

Also, Malaysia doesn't have unemployment issue if one is skillful enough, one shouldn't have problem to find the job in Malaysia at current and near future, in fact, most factories are short of personnel across, from operators level, technician and engineers.

It is no secret, high saving rate is part of Asian culture.
Now with modern or newer generation, this has somehow deteoriate a lot.

You cannot escape from foreign workers.

It is naive to think that can simply kick all out the foreign workers to restore the job for local, and resulted local can get high pay.
This doesn't work.
Ask a fresh graduate earn Rm1500-2500 with a diploma/degree.
Even the construction company now willing to pay Rm3000 for the construction job,
the graduate willing to do the job?
the graduate has the ability to do the job?
the construction company dare to give the job the graduate?

No matter how, in a economy, someone always needs to do those tough and dirty job one.
With now, newer generation has become more pampered (I don't mean to generalise all, just in reality, a lot), almost impossible to tell them to do those job.
They may will to do the sales job that earn Rm1500, instead hard and dirty job that can earn RM3000.
Some even worst that I came across, choose to sit at home, because the reason "it doesn't worthwhile to do a job that pay Rm1500-1800, I better off sitting at home).

Sorry for OT too much.

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Added on October 31, 2011, 12:53 amWe don't know how many % of current property buyers are actually full or over-leveraged speculators.

But at least our banking giving loan time, is not as relax as subprime. This is the crucial part of preventing a big collapse of properties.
May be late few year is more relax than previous, but it is not the like subprime, can easily get a house loan if you wish to.

Even out of the speculators, some may come from rich background, which can reduce the impact of fire-sale.
Also, we have a lot of cash rich company around that I had seen they bought a lot of properties to hold, to rent/invest to generate income, instead cash money that sitting in banks that earn pathetic interest rate.

Properties bubbles and big collapse always associated too lenient practice of giving loan previously.

As you said, rural people generally don't borrow, then already a big plus, and many more blue collar people cannot borrow, as banks don't want to give them a loan, which is another plus point.

Properties price escalating in not limited to Malaysia, it is across the world (apart that suffer big bubbles prior 2008), due to cheap liquidity, and massive QE pumping, whereby too much money flowing around the globe (thanks to globalisation ), resulted commodities price stay at high elevated level, as well as nowhere to park the money, and many flow to properties sector, as properties sector is at least can hedge some inflation risk.
On top of that, speculators and flippers join in further to push up the properties price further.

Properties correction, I would say big possibility, but collapse, I don't think so or high probability.
Remember we are facing inflation problem, not deflation, which is also part of factor that supporting properties price.

This post has been edited by cherroy: Oct 31 2011, 12:53 AM

Subprime loan is exist way before the market collapsed, this is known.

It is easy to try out whether we have subprime loan or not.
Just ask a few friend with little income, go to bank to apply for housing loan, see what is the respond.

I don't deny properties price is escalating too fast due to many speculators, but to say subprime loan work in Malaysia is somehow overly.
Some more conservative banks are not giving full loan/valuation on properties.
For eg. even market price of a property is 800k, bank value at 750k only.

Yes, banks are more relaxed, household loan is climbing to alarming rate already, mainly due too much speculation on property around, as every property bought you need to accompany with loan, except those buy cash one. Also too many easy payment scheme and personal loan around.

Speculators suffer, yes will cause the property price plunging as this is good for healthy correction. Actually this is good to ditch out speculator in property market.
But to say property sector is heading for collapse because of speculators around, is a bit overly, my opinion only.

If you bought the house for own stay, whether the price drop 30% or 50%, it doesn't matter one, as when you bought, you had already taken into the account your affordability based on the initial purchased price.

Also, property is a form of investment, nobody is forcing anyone to buy the house in the first place.
There is never a guarantee that buying house won't result in losing money.

You don't understand what is bankruptcy for country. (There is no such thing "announce bankrupt")
US never will be bankrupt if everyone is using USD.
And country cannot be "bankrupt", they only defaulting the bond/loan only.
Country still there, still operation, just the old debt, cannot be paid (this is what we called default).

If BNM doesn't set rule or tighter rule and need pay slip for credit applicant, we should be more worry.

A property 10 years ago was 200k, do you expect it still to be 200k, when price of goods, and everything else, like oil, copper, has double, quadruple, even hiring foreign labour workers cost already double in these few years?

Household debt is alarming, but as long as there is tighter control on credit given out, a disaster is spared.
We may heading for slowdown, and potential big correction in property, but to say it is heading to collapse and imminent, with current stat and situation, It is a bit overly.

Properties price is escalating too fast, but not up the degree like others in overseas, and somemore, it is more towards urban and strategic and hot location around, not across everywhere.
Go to out-skirt of town, there are still reasonable affordable house, and some more rental not that expensive either.

The one will hit the hardest will be those hot location, high end.

This post has been edited by cherroy: Nov 2 2011, 04:32 PM

The term "bankrupt" only give some illustration for non-financial savy public, and many may not understand what default and bankrupt, and the term of bankrupt always scare average joe street out there.
In reality, many countries did default their loan/bond before, this is not something new.

Since when people demanded US to repay all its debt?
Just like you apply for housing loan of 300k when you just earned 5k per month. Will bank is foolish enough to demand you to pay the 300k, and make you bankrupt as a result?

Ask back yourself, you demanded trillion being repaid to you, where do you park the money?
What is the use of trillion cash money?
Trillion of cash money is more dangerous than trillion of US treasuries.
Nobody demanded US repay its borrowing one shoot.
Even somebody demanded it, and no money to repay for it, just print it, problem solved. Money can be printed/created one


Yes, if you see 200k properties that was 2 years ago, now selling 2 million, you concern is understandable.
Err, do we have this kind of property around?
Please enlighten us.

How about a lot of unreported household income?
There are plenty of hawkers than can earn better than graduate out there.
They may not be included in the stat of household income.

I don't deny property price is stretching and furthermore, but there are people that are rich enough and have decent earning, and with collateral to get a loan out of it to buy the properties.

Who said, US need to repay it?

Just because you cannot afford, they are overvalued? No offence.

If you are not afford for 700k, you are out of the game, but it doesn't mean others won't able to afford it.

There may others new generation who are capable in earning power to get a 700k loan.

We cannot look at ourself situation, or just something around us to judge, hey most people cannot afford a 700k loan because most are earning 3-5k.

You don't get what I am saying.
There are many people out there earn 7-8k or even up to 10K income, which can afford the 700k loan.
Just because a person getting 5K income, doesn't mean there are no people that can get 10k income, there can be 10k people around that are getting income.

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Added on November 3, 2011, 9:21 amThe VSS is because there will be overlapping of personnel after merger.
Ain't you see sometimes besides the road, there are EON and HLB just side by side?

Please get real, Malaysia now are facing shortage both unskilled and skilled workers across.
Simply drive through the industrial park, hiring banner is everywhere.

Simply pluck a headline to conclude? Nice try.


This post has been edited by cherroy: Nov 3 2011, 09:21 AM

So equipped ourself with skill and climb the ladder up.

Skilled employee in high demand and they are being paid well generally across.

a country cannot be "bankrupt", a country only default their loan and lose credibility on securing new or future loan/bond.
Aka nobody dare to loan you in the near future.

You cannot put a tag on a country as "bankrupt" xyz,
You cannot foreclose a country asset, land.
You cannot put the country into the jail.
You cannot harass the country to pay you back the money once they defaulted.

You are not from financial background, you don't understand what is happening in financial world.
Default happening from time to time.
Greece is not the first country to default, nor the last one.

Yes, overspending, pile up of debt will lead to trouble afterwards.

The bankrupt is just a term to use to describe, no country is "bankrupt" one.
Even you called them bankrupt, what is the difference between before bankrupt and after?
The country is still there.

I ask you back.
For individual, yes, you have bankruptcy law to define the individual situation, aka the individual cannot have asset, cannot own an account.
For country, do you have a international law to define country that is bankrupt? None.

Please learn.
The one who fear Greece defaulting is not Greece themselves but France and Germany.

Then mean country cannot "bankrupt" loh...
Already learned the first lesson.

None is none. where got mean doesn't mean it is not bankrupt.

The actual situation is defaulting/defaulted.

Mean no one dare to lend you money anymore in the near future.
Country no longer able to payback the money, due to overspending too much.
Then will say to you, sorry I can't pay you back.
End of story. No further or nothing you can do.

Unlikely individual, you have law to sue the individual and use bankruptcy law to foreclose the property he/she owns or whatever valuable asset he/she has.
Country level, none.

It is not actually no idea to solve it, the problem is solution is so painful, and many don't want to take the medicine.
See how Fed and central banks keep on using QE to pump the economy, despite lack of success of the QE to the real economy.

If globally fall into recession, Malaysia won't spare from it.
RM valuation is about how healthy the Malaysia economy situation is, disregard how global economy is. As currency level is relative one.
You cannot have all currency depreciate together.
You worry about gov budget situation, economy trade surplus/deficit etc factor to justify the RM valuation, not about global economy situation.

Shit may happen, no one dispute it, including me, if debt crisis is not solved, but it is not the end of the world.
We had experience how deep shit was during 1997, yet still recover from there.

US is a unique situation, you cannot apply 1997 type of crisis into them.
1997, Asean/Asian country borrow too much money particularly in the form of USD and spent it.
Borrowing due time, no money (USD) can be used to repay back, as USD is not your native currency, nor you have control or can print it.

USD can be printed by US.

If said default, people don't scare.
If said bankrupt, people scare to death.

Just like parent scare the kids, if you lazy, you will become a beggar or whatever "bad" when grow up time.

Although the bankrupt term is wrong, but it is good word to use to scare people as many couldn't understand one, including some media, reporters, but we must understand the context of the word use.

LOL, who else got room to cut? US, Japan?
Almost everywhere near zero already.

While for Asian countries are fighting inflation due to QE, the room for cut is limited.

Now already easy credit, more easy credit make little difference.
0.5%, vs 0.25% make very little difference only.