Saturday, April 5, 2014

Singapore's credit bubble time bomb

Corporate debt vs GDP

Zerohedge had quoted Goldman Sachs opinion on China's corporate credit bubble as below.
The rapid rise of corporate leverage to 130% of GDP in 2011 - one of the highest corporate leverage ratios in the world - is concerning. This high leverage is the result of substantial investment in the manufacturing sector since 2008, leading to over-capacity in many sectors such as solar energy, steel and ship building. It is therefore critical for the new leadership to pursue reforms that not only support the private sector, but also consumption more broadly, in order to utilize this capacity; the alternative would likely prove negative for sectors, banks, and ultimately, the economy.
Singapore corporate debt is 133% of GDP. In Singapore, the situation is a little different from China because there are some institutions that make use of Singapore's position as financial hub to raise capital, then use it oversea. Nevertheless, high corporate leverage has lead to mal-allocation in areas of property in Singapore. In addition, the financial institutions here will be over exposed to economics fortunes in the regions, due to the fact that Singapore elites have always been trying very hard to punch above our weights.

Public debt vs GDP

Singapore's public debt is due to PAP borrowing against her citizen in the form of CPF, and stands as high as 106.1% of GDP. This is an no issue to the elites, as they have already plan for a default by using inflation. The strategies are
  1. setting inflation rate higher than CPF interest rate
  2. withholding the CPF monies forever
  3. keep changing regulations so that people can withdraw less and less
  4. inflating the price to public housing to consume up the citizen's CPF

Household debt vs GDP and her increment

Singapore's household debt stands at almost 61% of GDP and see an increment of almost 20% (among the highest in the world) compared to 2006. Singapore is among very few countries that corporate, government and household are all steep in leverage.

Countries like China may have debt problem in one domain but not in the others.

Total debt vs GDP

The above is total debt figures is from Goldman Sachs. There is no numbers for Singapore though. Nevertheless, by summing the the 3 earlier numbers, total debt of Singapore is estimated to be close to 300% of GDP. That put us in the league of deadbeat Japan and UK.

Replacing impending asset deflation due to low fertility with FT ponzi steroid

While other institutions rely on Singapore government's statistic, CIA factbook is likely to have the most accurate estimation of Singapore's fertility rate as she is most inclined to conduct independent research and verification.

CIA factbook reports that year 2014 Singapore's fertility is 0.8 children per woman, the No 1 lowest among all other countries in the planet.With this fertility rate, house price will fall. There won't be enough working adults to borrow, and banks will suffer. That is to say, Singapore need a population ponzi, to prevent deleveraging, that will harm the wealth and asset value of elites.

Who is our business elites and what are they doing?

Forbes most recent compilation of Singapore richest does not yield any surprise. Eight of them make monies through blood sucking usury, property or speculation. That is to say, they are directly responsible for all misery of Singaporeans such as high indebtedness. The remaining two tycoons are tax dodging FT.

Ironically, their activities will cause low fertility, which will cause house prices to drop, harming their own wealth. The most natural solution to their woes is population ponzi.

Not a single nations in the world's elites are as sickening compared to Singapore. In USA, the society still allows people like Bill Gates, Larry Ellison, the Google or Facebook guys to ascend. There are parasites elsewhere but none are able to match Singapore.

The problem of Singapore is we have too many leeches, sucking out so much vitalities and wealth, mis-allocating capital that make it impossible for real talent to emerge.

While Singaporeans feed our parasites, the parasites's political machine, the PAP, keep accusing Singaporeans as daft, lazy and stupid.


Anonymous said...

Aboriginals in Taiwan despise and hate Taiwanese Hokkien and Hakka for slaughtering their ancestors and taking their land

They (pure blooded aboriginals) warned them (Taiwanese Hokkien) to stop claiming that their ancestors were natives, because the Hokkien raped some aboriginal women so their descendants have aboriginal blood from this rape

"The descendants of Plains Indigenes are extremely opposed to using their ancestors in such calls for Taiwan independence. In efforts to revive their traditional culture, maintaining group solidarity among their villagers is more important than differentiating the ancestral origins of village members. "Keep the Village Siraya" is important in the propaganda used in their appeals for official recognition."

Aboriginals HATE Japan too, because both Japan and Taiwanese Hokkien treated them like sh*t. When May Chin led aboriginals to protest against Japan, the Taiwanese Hakka Japan bootlicker Lee Teng Hui warned them to "behave"

Taiwan aboriginals protested against the Dalai Lama after pro independence Taiwanese Hoklo invited him to Taiwan.

The standard Taiwanese Hokkien word for aboriginal is barbarian (fanzi in Mandarin), while we Waishengren actually call them by the respectful term "Yuanzhumin".

Both of us waishengren and Aboriginals despise Japan and your Hokkien "brothers" for their lies.

Many Filipino Chinese are Hokkien, many of them are like Amy Chua and HATE Filipinos. Some of them came to Taiwan and spread their views about Filipinos to Taiwanese Hokkien, and Taiwanese Hokkien generally despise EVERYONE from southeast asia, regardless of religion. They view both aboriginals, Filipinos, and Malay as savages (not because of religon) but because they hate Austronesians and the "Malay race", and they also look down on aboriginals.

Everything I said is the truth, and when you can't respond to it you claim I am paid by the CCP, ROFLMAO.

Anonymous said...

Chinese are low nosed slit eyed jaundice skinned monkey and are and have always been jealous of high nosed round eyed indians

Anonymous said...

I am Indian and your blogs makes no sense. i have good friends from all races but your kind of blogs attracts only the worst kind, just like the comment above. This is just a vicious cycle that you are propagating

jack said...

The economic doom will start in China after the world cup,i.e.ugust 2014,it would be a very different world in 2015,watch out!

Anonymous said...

Eventually Evil China will break into pieces and the world be peaceful again.

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