Recall generally unlikely for good debt.

The reason, bank is looking for trouble itself, if they did.

Imagine bank sudden recall the car loan, housing loan, how many borrower out there can repay or increase collateral at anytime?
If they have the money to repay at anytime, they don't need to borrow in the first place.

So by doing so (recall and margin call), bank is looking for trouble for NPL, which hurt itself by doing so.
No win party.

If borrower willing to pay on time for any underwater loan, bank is happy to see the prompt monthly repayment instead for forcing borrow to repay or increase collateral.

Eg.
A borrow make a car loan 100K, repayment a few K each month, who is in the right mind to recall the loan?
Forcing borrower to repay anytime?
Increase collateral?

Highly bank need to tow tons of car out there. Banks want money, or make money with interest from loan, they do not interested on cars.

Same with property
if the property bought 500K, now valuation plunge to 300K
Forcing borrower to repay? Borrower mostly has no instant money to repay or any collateral, so if doing so, bank needs to foreclose it.
Wait, foreclose it, bank will be hit by 200K loss.
While borrower has prompt payment that for 500k, that bank doesn't need to hit by 200K loss and stuck with a property.
Same with car, banks do not interested in property at all, they want money, interest money, not property, be it worth or not worth.

As a banker, which one you choose?

Mostly term loan, car loan, property loan, that every month you need to make payment one, banks generally willing to see prompt repayment instead forcing suddenly repayment or sudden forcing borrower to increase collateral.

One is loss-loss situation (forcing repayment, forcing increase collateral in a prompt repayment loan)
One is win-win situation.

So the reason is obvious, although margin call, increase collateral, cut back credit limit etc issue may happen again,
generally they may enforce it on the loan they already see as dubious aka borrower has showed sign unable to repay, even as mentioned from above post as term NPL.

Nowadays, most countries have learn to borrow internally, instead foreign.
Reduce the risk of foreign exchange, as well as both borrower and lender have the common interest.

GDP growth + credit expansion always come hand in hand.

The key is those credit expansion is used for improved productivity and not excessive.

Whether GDP number due to foreign investors opening factories that low value added using to low level worker or not, will be seen through the GDP.

GDP is output made.
Scenario 1
Foreign factories opened a factory with low value added product, employ cheap labour.
So factories import raw material RM1, low value added sell at RM1.20. Your output is Rm0.20

Scenario 2
While another country with factory import the same raw material Rm1, but high value added, sell at RM2.00, output is RM1.00

GDP is how much output, value added that your economy can induce.
So high GDP number will roughly tell us some story of state of economy.

While how much output you generate, how much potential the income can be generated by your population.

The major fear is always public debt especially for Malaysia that economy has big chunk contribution that come from gov, as well as plenty of big GLCs.
A 1.5 million gov servant is a major economy force (in term of spending power that drive the economy).
Somemore gov budget is in deficit situation, means more debt needs to be raised to service the old debt.

Corporate debt if earning money, aka corporate is making profit, no issue of repayment. A debt that can make a profit is a good debt.
Household debt, if the person is earning income that can support the repayment, no major issue.

I was the one went through the 1997 crisis in the stock market,
I can share the experience during that time and a lot of people saw rosy prospect ahead, as many said it was rise of Asian Tiger back then, most people were very optimistic about the economy situation even though stock market had risen quite significantly , and stock market was quite buoyant. Even some analyst said high PE is justified due to rise in earning, just like dotcom bubble.

Little people saw the crisis coming, due to currency depreciation.
RM was as high as USD2.50 before the crisis hit.

Not to discredit economist or analyst,
but if economist and analyst indeed very good in seeing the future, RM won't surge to USD2.50 before plunging to more than RM4 just in months time.

The same can be said before subprime mess, Japan real estate burst and loss of decade etc.
Little economist saw how deep subprime affected Lehman, and the Lehman aftermath event that lead to global financial crisis.
Same with Euro debt crisis, little saw it coming until it is too late.
And same with Euro debt crisis, when most people including many analyst doom and gloom and predict the crisis exploded, it did not. In fact stock market in Europe hit all time high, and Euro stay high.

After seeing through and experience many kind of bubble/crisis, from experience, crisis often happen when people least aware.
As if people is more aware, people will take precaution measure, when people take precaution measure, means bubble deflated before it burst, hence the magnitude of crisis is significantly reduced already.

The next crisis may be out of most people prediction.

Try to time a crisis and predict a crisis is more difficult to guess a lottery number.

Basically, what I want to tell is future is unpredictable, economist can use data to justify whatever scenario, but whether it did follow the theory, it is another matter.
Human behaviour, how situation unfold in economy is never a mathematics or science subject that can use theory and calculation to predict exactly the outcome.

Risk can be assessed, but risk assessment high and low issue is another front compared to predict some event/crisis to happen and happen at when.

For eg.
Current invest in a property risk is higher than few years ago due to escalating house price that is too fast, as well as household debt is high comparatively.

So one can base on the risk assessment to do asset allocation, and alter investment decision etc, aka you look for reward ratio issue etc to make the asset allocation.
But you do not predict the property price plunge at 2015 or 2018. This is the difference.

As I do not have crystal ball to predict whether bubble will burst and burst at when.
I can only do whatever the deemed suitable for me aka just like you said, risk assessment, then I adjusted asset portfolio based on assessment done.

I cannot predict something to happen and when it will happen, that is beyond my control.

As those thing I have no crystal ball to know, so I cannot predict like bubble will burst on 2017 , and I won't make investment based on the prediction.

For me, and from experience, it is not wise to make any investment decision, based on prediction made.
Eg. predict stock market crash on 2015, then sell every stock and keep cash, or short the market etc.
As if the stock market doesn't crash, I may lose big due to short by predict the market to crash.

Even if the stock market is high in valuation (yes I view current valuation is high), I can do
1. Stop buying any stock
2. Reduce stake
3. Switch to defensive stock, low beta stock etc.

But I will never predict the market to crash that sell everything and short the market.
We can't time the market, but we can make asset allocation, diversification to counter the risk of it.

Euro crisis has given a good lesson why we shouldn't predict and time the market.
Those short Euro, short Europe market, sell everything during that time based on prediction Euro may disintegrate, are loss big time due to prediction.

Who can predict Nokia 10 years ago that was handphone leader now no longer leader.
Who can predict Apple (prior before Iphone and Ipad) will become leader in handphone and tablet.

That's why I stop making prediction, because I am not good in predict something to happen as had seen so much thing changing that beyond my capability to predict.

You can short FKLI easily with just a few thousand RM for a contract.
Just open an account and phone call and few thousand buck capital.

If property bubble burst, and property price crash, I can assure 99.9% FKLI will crash down hard as well.

A point worth RM50, so if current KLCI 1870 crash to 1000, you gain 870 x RM50 per contract = RM43,500 per contract (just using a few thousand capital),
If bet 25 contract, gain Rm1 million.

Crisis, or boom and burst is part of cycle of economy.

Financial crisis happened 6 years ago, life still going on, business still there, just process of eliminate the weak, while there are people making good profit from the crisis as well.

Even one bought FTSE, DAX, Dow Jones, S&P at historical high prior before 2008 crisis, and suffer 50% of loss in the height of crisis, now is making profit.

I salute people that can predict and time any kind of crisis.
As if can predict accurately a financial crisis to happen, then can short the market, and make a fortune from it, and retired early with the fortune and enjoy the rest of the life, out of rat race working life for money.

Whether how high installment or affordability issue that could lead to high risk of default, I cannot comment, as didn't study thoroughly into it, but one thing I knew that banks are more well capitalised as compared to 2008.

One thing I learned from experience, crisis will never is the same, and will not repeat in the same pattern, always come in different form.
80's Japan real estate burst
97 Asian financial crisis, rapid depreciation of currency
2000, dotcom bubble burst
2008 global financial crisis
then gold and silver bubble.

It never repeat the same, always come in the form of people least expecting.
Next could be real estate glut, or whatever, I do not have crystal ball to know.

That's why I am so so person and ordinary person on the street, and not billionaires and tycoon.
I am not so clever to predict human and social behaviour, let alone time the market.

I always accept I am not the smartest nor smarter person, but an ordinary person, so I don't proclaim I can predict anything, let alone time when it will happen.
That's why my previous post, I can only posted experience that had happened before.

If economist, central banks are good in predicting then we shouldn't have any crisis at all, because they are good and accurate to predict and know the future, they should have the ability to pre-emptied the risk of it way before any crisis could happen.

In real fact, the degree and debt of subprime cascading effect is way beyond most economist and even Fed can imagine before it "exploded". http://www.usatoday.com/story/money/busine...crisis/1845451/


Did Fed predicting global financial crisis?
Did BNM predicting 1997 Asian financial crisis?
Did economist/analysts predicting dotcom bubble burst?

My so so knowing,
I only can comprehend current household debt is high, need to cool down the debt rising, before it become unsustainable that could lead to crisis happens,
But I do not know how to predict crisis happening or when it will happen.

There is a difference between predicting something to happen, vs risk assessment.
For eg. current invest in property after experience fastest rise in price and low in yield property has high risk, <--- this is risk assessment based on data
vs
predicting property price to crash and when it crashes.

I do not know BNM got prediction crisis will happen or when it will happen, new to me with so so knowing social behaviour. Ty for enlighten.
I need to search the BNM press release or any meeting of minutes for it.

My experience is never important to anyone, this is a open discussion forum, I posted whatever I experienced before, as this is an open discussion forum, anyone can post their experience, and view.
I don't know a forum place that so so person cannot post, or must exclusive to smart person only.

Center bank late in action due to politic and conflict of interest, then what's for the accurate crisis prediction then?
Then it is no different as compared to don't know how to predict, because little action to pre-emptied it.
Just like one knew today what 4D number will be, but due to conflict of interest or whatever reason, and do not buy the number, it is as good as none, make no different whether can predict it or not.

Judgement is done on action done, not prediction, just like a person is smart to predict or know exactly property price is going to crash, but no action done to short the market to take advantage on the crash, or to sell the property they have right now before the crash, so that can collect "dead chicken" as some said, then accurate prediction is as good as none.

I never make any proclaim I knew anything, nor smart before or tell other not to buy property or buy property before, nor advice people to invest or not on something, whether other invest on whatever, is personal issue, not related to me.
Even the bubble is extra-ordinary big or not, and going to burst big or not, and a person still insist to invest, I don't condemn the action.
Gain or loss by other person, I do not care, or why should I care.

Any action taken on the topic was because of name calling, person attack, incite personal attack, or not related to property talk issue, like you stupid, you shut up kind of post, (which bring no value to the topic, or for readable purposes)
There is no post being taken action because of view of UUU or DDD or said property price is to crash or not.

Moderator is not the smartest person, it is just a task to take action on unnecessary posts that make a topic is readable and stay in topic.
Just like a football match, referee is not the one the smartest to play football and may not know how to kick the ball properly as compared to professional footballer, but his action is to referee the football match so that match can be properly played within the rule of the game.

There is no need to care whether the moderator is stupid or not, or whether other is stupid or not.
Just like I never care people make a profit from property, nor I care people make loss or even suffer due to property price crash.

You just need open an account with investmant bank for futures trading.
Deposit a few thousand RM in the account, then phone to broker/remisier said you want to sell FKLI June contract, and it is done.
Whenever KLCI drop a point, you gain RM50.

PS : futures market/trading is high risk, do not participate if you don't clear what you are doing. You can lose ten of thousand per contract, even though with a few thousand capital to buy/sell a contract.

Short selling on stock, yes can be banned, but futures market is always opened for any shorting.

Futures market works on basis one buy vs one sell, aka it is zero sum game.
So you need sell/short to participate to a trading to complete, so futures market is always open for shorting.

You can complain to admin if there is any wrong doing bymoderator or bias whereby DDD comment being deleted across with bias intention.
I am willing to relinquish the moderator tag if admin seen I am not fit for the task and not neutral enough in taking action on posts.
There is feedback section on top of page for such complaint.

There is no benefit being carry a moderator tag, not getting paid a single cent nor any advantage.

I attended one day seminar on GST, I read on GST related issue explore it, and I posted the GST matter, I do not see anything wrong with that.
If there is anything wrong comment or post on GST, just correct it, this is how forum work and for and everyone learn from it.
There is no rule said somebody with experience only can post or experienced person posted must be right or those only attended one day seminar cannot post a right comment.

Just like I know a joint name property cannot be forced sell either joint party, so I posted it cannot be done, while I am happy somebody prove it wrong and can list out any existing law allow it to do so.

This post has been edited by cherroy: May 31 2014, 01:33 PM

As mod, there is never issues whatever post come from DDD, UUU, TTT, ABC or whatever, those previous posts deleted has no essence of posting related to property, but personal attack, inciting, using foul word etc.
You can check with b00n (staff) as well.

Yes, pretty agreed on above comment.
Household debt is at elevated level, this is a major worrying poin,.
as well as DIBS is going to be tested in coming future.
But I do not dare to say crash is imminent, a correction may be on the card, whether it crashes or when it crashes, this is beyond my so so capability to predict.

At current scenario, even there may be interest rate hike, it won't be too much, low interest rate environment is not going to end soon.
Malaysia has been at around OPR +/- 3% for almost 17 years already.
With high foreign currency reserves, positive current and trade surplus, there is no need to hike rate for currency front.

Banks are more well capitalised compared to previously + loan margin about 80-90% to the property valuation, this create some breathing room for banks before needed for any bail out.
We can always check banks published NPL number to know how the situation unfold.

I only knew if A & B joint buy a property, both A&B need to sign before the property can be sold.

But previously there is discussion or post stated that A can force B to sell, even B is not willing to sign, that until now, I cannot find an answer for it.

I don't need to be pretending,
as I don't even know where is the Setia Echo hill, what property is built there, how much, nor I have any interest to buy any property.

Moderator or Staff can never go through every post, whenever post being reported, the system will highlight the specific post only on the report sheet, not entire topic, so action mostly is done based on specific posts, non-reported post is not highlighted nor can be seen through the report.

How UUU or DDD status is not interested, as it is personal matter.
Age also does't matter, I am not selling age. .

The one matter in this forum is how the forum place is being used to post around, and not for personal attack, foul word cursing etc.
Ty.

I always advise people not to joint name owned a property, even husband and wife, this is my always stand, as I had seen in real life how joint owned property become a deadlock situation whenever there is dispute.

Whether Eurozone debt crisis is halfway unsolved or not, I do not know, but look at Greece bond yield, Euro currency level, stock market indices across the major bourses in Europe (FTSE, DAX, CAC), all are not as doom and gloom as many predicted.

When tapering started to take place, US treasury surged from 2% to nearly 3%, and everyone talked up how high the yield can be, (first 10 billion already so much, if total taper time, should even higher) but since then even more tapering is announced and planned, treasuries yield goes down instead of up, now below 2.5%.

Prior before 2008 financial crisis, treasuries 10 years was around 4%, and Malaysia OPR was 3%, it didn't cause any problem or capital flight, in fact, it is the other way round, USD was the one plunging across vs most currencies out there.
So the dynamic of financial market is not as straight forward, a lot of other factors can be influencing how situation unfold as well.