US Default Will Kill Many Here?

[Gendut]

As we know, our overprice properties are highly leveraged. In the worst case scenario of US default that carries on for a long period, I cannot imagine the consequences.

 

From my limited understanding, upon default, US banks will not be paid. In fact everybody Uncle Sam owes will not be paid. Vaults will empty. There will be a run on the banks to withdraw their money. The banks on the other hand will try to source hard currency from whereever they can.

 

Borrowing costs will skyrocket. Banks will recall all loans if possible. If you default on your payments, they will repossess your homes. Only HDB-loans will be safe.

 

Eventually money supply will tighten in Singapore and interest costs will rise. Now here is the kliller.

 

Economy grinds to a halt. Valuations plummet. Everybody will be sitting on negative equity. Banks will want you to recapitalise. Will MAS strenghten the S$ then to slow down the US$ exodus?

 

For the man in the street, no job, no $$ what happens? Will this scenario pan out?

 

 

[The_Bear]

COE go down or not?

[Longg8]

As we know, our overprice properties are highly leveraged. In the worst case scenario of US default that carries on for a long period, I cannot imagine the consequences.

 

From my limited understanding, upon default, US banks will not be paid. In fact everybody Uncle Sam owes will not be paid. Vaults will empty. There will be a run on the banks to withdraw their money. The banks on the other hand will try to source hard currency from whereever they can.

 

Borrowing costs will skyrocket. Banks will recall all loans if possible. If you default on your payments, they will repossess your homes. Only HDB-loans will be safe.

 

Eventually money supply will tighten in Singapore and interest costs will rise. Now here is the kliller.

 

Economy grinds to a halt. Valuations plummet. Everybody will be sitting on negative equity. Banks will want you to recapitalise. Will MAS strenghten the S$ then to slow down the US$ exodus?

 

For the man in the street, no job, no $$ what happens? Will this scenario pan out?

 

i confirm......that you are not in the financial sector....

[Zze121]

Interest rate raise, no more 1+% housing bank loan.

[Pufferfish1]

time to buy properties?????

[Tigershark1976]

As we know, our overprice properties are highly leveraged. In the worst case scenario of US default that carries on for a long period, I cannot imagine the consequences.

 

From my limited understanding, upon default, US banks will not be paid. In fact everybody Uncle Sam owes will not be paid. Vaults will empty. There will be a run on the banks to withdraw their money. The banks on the other hand will try to source hard currency from whereever they can.

 

Borrowing costs will skyrocket. Banks will recall all loans if possible. If you default on your payments, they will repossess your homes. Only HDB-loans will be safe.

 

Eventually money supply will tighten in Singapore and interest costs will rise. Now here is the kliller.

 

Economy grinds to a halt. Valuations plummet. Everybody will be sitting on negative equity. Banks will want you to recapitalise. Will MAS strenghten the S$ then to slow down the US$ exodus?

 

For the man in the street, no job, no $$ what happens? Will this scenario pan out?

 

 

if bank repossess the home just because of 2 to 3 default payment, that means the ecoomy is not that bad.... worst case is, bank dont even dare to repossess cause there is no demand and the whole market crashed. they repossess the property means they have to hold and pay more overheads...... thats what happen in many asian countries during 1997 crisis....

[Gendut]

i confirm......that you are not in the financial sector....

 

You are right. But that is where the learning starts.

 

So what is your prediction? That the default will not happen at all?

[Jasonjst]

USA is wanyang king lah , will come out something at the eleven hr to avoid a default technically .

[Happily1986]

in any case, the root cause of your doomsday scenario centres around the lack of equity in the market. Worse comes to worst, the IMF, World Bank and ADB could pump in emergency equity into the market to calm the markets.

[Bystander50]

Will the MIW throw in our CPF $ and reserves to Uncle Sam if Uncle Sam threaten/warn the MIW with something?

 

[Zanter]

Interest rate raise, no more 1+% housing bank loan.

 

For those already having a property may consider locking in the interest rate. DBS offering 3 year fixed at 1.48%. Not a banker, no vested interest. Better do it on Monday in case hell breaks loose, which I cant believe it will.

[Yewheng]

As we know, our overprice properties are highly leveraged. In the worst case scenario of US default that carries on for a long period, I cannot imagine the consequences.

 

From my limited understanding, upon default, US banks will not be paid. In fact everybody Uncle Sam owes will not be paid. Vaults will empty. There will be a run on the banks to withdraw their money. The banks on the other hand will try to source hard currency from whereever they can.

 

Borrowing costs will skyrocket. Banks will recall all loans if possible. If you default on your payments, they will repossess your homes. Only HDB-loans will be safe.

 

Eventually money supply will tighten in Singapore and interest costs will rise. Now here is the kliller.

 

Economy grinds to a halt. Valuations plummet. Everybody will be sitting on negative equity. Banks will want you to recapitalise. Will MAS strenghten the S$ then to slow down the US$ exodus?

 

For the man in the street, no job, no $$ what happens? Will this scenario pan out?

 

Eh.. not so serious.. The main reason why President Obama keep say default will cause economic Armageddon is because he just want to use this excuse to raise debt ceiling to prolong the debt till election time so that he will have chance to get voted in again.

 

 

So what happen is if after Aug 1, if debt ceiling is not raise, it will depend on President Obama what he is going to cut spending on. Those $ that used to feed people who is unemployed and military will be 1st be a big hit. And bank still have choice to raise interest rate and increase income tax and collect more $ from people. ( So still can delay a bit longer ) . Ultimately in long run, it will depends on how President Obama handle the situation.

Edited July 29, 2011 by Yewheng

[Alim]

2nd August is the D-Day....

 

US Treasury Web

[Yewheng]

2nd August is the D-Day....

 

US Treasury Web

 

Interest rate in US still super low.. So there is still some chance to get extra more $ by raising interest rate.. President Obama still have chance to cut spending drastically on defense, and $ that feed people who is unemployed. So now is what President Obama do that causes what happen after that.. If President Obama just give up and say well, we will default, means will default. If president Obama say will cut spending (drastic) on many areas, perhaps still have chance of not to default.

Edited July 29, 2011 by Yewheng

[Observer]

by going default, credit rating drop and....

[Jim]

Please dont scare people and yourself.

 

What is going on here is just political posturing in the US. If Bush can invade Iraq without Congress authorization, and burn a few trillion in the process, Obama sure can do whatever he wants. The key thing is, the Republicans wants to make him look like an evil dictator in the process so he will be kicked out next year. And that's just it. Just like Clinton impeachment. Drag Clinton through the mud so Gore cannot get elected.

 

Dont worry and get some sleep.

[Yewheng]

by going default, credit rating drop and....

 

Even if debt ceiling is raise, credit rating may still possible drop. See what Obama says about US debt publicly.. and that affects on the world thinking on US credit rating...

Edited July 29, 2011 by Yewheng

[Icedbs]

Interest rate in US still super low.. So there is still some chance to get extra more $ by raising interest rate.. President Obama still have chance to cut spending drastically on defense, and $ that feed people who is unemployed. So now is what President Obama do that causes what happen after that.. If President Obama just give up and say well, we will default, means will default. If president Obama say will cut spending (drastic) on many areas, perhaps still have chance of not to default.

 

If there is any dignity left in the US gov. , they should choose to default.

 

Once defaulted, they will have to think hard how to cut spending because they can't be printing anymore money to solve their problem.

 

Yes, the world will go through some pain, but let's call that an rehabilitation for a greater good.

 

Otherwise, we are just prolonging the problem, we get a recession every few years and then finally a tsunami depression on our future generations or our kids.

 

Talk about kids now paying for our housing loan in future. If this don't get solved, I think they will be paying far more for our indulgence and igorance.

 

I say take the pain and go for default. Admit it like a man that US has overspent and is now time to stop the bleed.