2016 Recession Year? Gloom and doom 2017!

[Enye]

Fully budgeted bro.

 

http://www.todayonline.com/singapore/singapores-public-sector-construction-set-surge-2016

 

Just look at the public construction speeds and scale islandwide.

OK thanks! so bca gave us an early preview of Budget 2016

 

Radx should have an easier time this year

 

 

[OmOm]

It is not pessimism but pragmatism. 

 

We cannot ignore the danger signs that have been emerging consistently and more frequently over the last couple of years.

 

Whether we believe it or not, the seasons continue their relentless cycle, and autumn is now making way for winter's onset.

 

From: http://www.afr.com/business/banking-and-finance/forget-about-europe-what-about-the-possible-asian-banking-crisis-20160209-gmpzfp

 

"Legendary Swiss investor Felix Zulauf, who runs Zulauf Asset Management, was one of the first to sound the alarm, warning that China's economic woes would inevitably infect Singapore and would probably prompt a banking crisis.

 

Singapore's banking-sector loans have grown dramatically in the past five or six years. Singapore is now losing capital, which means the banking industry is losing deposits.

 

He said this would probably cause carry trades to backfire, triggering heavy losses for those who had borrowed heavily to buy higher-yielding assets.

 

'I expect a banking crisis to develop in Singapore and to spread eventually to Hong Kong,' he said."

 

 

To be honest, I find the pessimism a bit puzzling.

 

Just a few years ago, the Govt was delaying and deferring many public projects because of the crunch for construction companies and commodities, in order to minimise the competition with private sector.

 

This is a perfect time to build up our infrastructures for a better tomorrow for all. Admittedly, we cannot be unaffected by the global situation but I would argue that if there are countries that fare less badly, we should be one of them as we have the funds and capacity for expansionary policies during global downturns. So far, the axe has been primarily focused on companies that depend strongly on foreign demand.

 

My thinking is this, do you feel that the roads are getting expanded and relaid more often, with MRT constructions completed ahead of time, and many other public projects on the way? This is the best and cheapest time to expand the infrastructure for the long term plans of SG. The local Govt has several options and strategies to play with still at this juncture. This is unlike US and Japan, fast running out of options.

 

[Enye]

first casualty of oil price crash....

 

 

 

Former Aussie coal billionaire and Singapore resident Nathan Tinkler declared bankrupt

Former Australian coal baron Nathan Tinkler resigned as chief executive of Anglo Pacific Coal Ltd on Feb 10, 2016.PHOTO: BLOOMBERG

PUBLISHED

FEB 10, 2016, 1:59 PM SGT

UPDATED

FEB 10, 2016, 4:49 PM

FACEBOOK1,016TWITTEREMAIL

 

SYDNEY (REUTERS) - Former Australian coal baron Nathan Tinkler on Wednesday (Feb 10) resigned as managing director of Anglo Pacific Coal Ltd after losing a legal battle over money he owed from the sale of a luxury jet and being declared bankrupt.

Mr Tinkler, 40, rode the mining boom to become Australia's youngest billionaire before losing it all when coal prices collapsed.

The bankruptcy was declared in Australia's Federal Court on Tuesday and stems from a complaint from GE Commercial Australasia Pty, which claimed he owed US$2.25 million (S$3.14 million) on a Dassault Falcon 900C he once owned.

Mr Tinkler, who resides in Singapore, was not immediately available for comment. He told The Australian newspaper on Tuesday that he would appeal against the ruling.

Under Australian law, bankrupt individuals are barred from holding corporate directorships. Mr Tinkler was in October appointed chief executive of Australian Pacific Coal, which has agreed to acquire the majority of a coal mine from Anglo American.

A statement from Anglo Pacific Coal announcing the resignation, also said Mr Tinkler would continue to act as a technical adviser to the company and that the deal with Anglo American was not affected by the bankruptcy ruling.

The one-time electrician who was ranked as Australia's 26th- richest person by Forbes in 2012, made an initial attempt at a comeback two years ago. But a deal to buy a mine from Peabody Energy fell through when he failed to make a A$70 million (S$69.1 million) closing payment.

As coal prices plummeted, Mr Tinkler was forced to sell an array of assets purchased with the proceeds from his coal businesses, including a beloved thoroughbred horse farm and a professional soccer club to repay debts.

The action, taken by GE Commercial, is related to the forced sale of the private jet. In 2012, receivers impounded a luxury plane in Singapore and a helicopter in Brisbane.

Mr Tinkler argued the currency conversion had been incorrect and the debt had been recorded in US dollars, the Daily Telegraph reported.

 

 

[Showster]

Exposure to China is a definite risk. But loan growth has been stalled from 2014.

 

http://sbr.com.sg/economy/news/chart-day-singapore%E2%80%99s-loan-growth-abruptly-tumbles-multi-year-low

 

http://www.businesstimes.com.sg/banking-finance/singapore-banks-loan-growth-to-fall-to-35-in-2015-fitch-unit%E2%80%99s-research

 

http://sbr.com.sg/financial-services/news/extremely-low-loan-growth-new-normal-singapore%E2%80%99s-largest-banks

 

I personally think the risks have already been priced in the recent falls, but just my opinion. But may limit further exposure to the banks and adopt wait and see approach going forward.

 

 

It is not pessimism but pragmatism. 

 

We cannot ignore the danger signs that have been emerging consistently and more frequently over the last couple of years.

 

Whether we believe it or not, the seasons continue their relentless cycle, and autumn is now making way for winter's onset.

 

From: http://www.afr.com/business/banking-and-finance/forget-about-europe-what-about-the-possible-asian-banking-crisis-20160209-gmpzfp

 

"Legendary Swiss investor Felix Zulauf, who runs Zulauf Asset Management, was one of the first to sound the alarm, warning that China's economic woes would inevitably infect Singapore and would probably prompt a banking crisis.

 

Singapore's banking-sector loans have grown dramatically in the past five or six years. Singapore is now losing capital, which means the banking industry is losing deposits.

 

He said this would probably cause carry trades to backfire, triggering heavy losses for those who had borrowed heavily to buy higher-yielding assets.

 

'I expect a banking crisis to develop in Singapore and to spread eventually to Hong Kong,' he said."

 

 

[OmOm]

Risks can be priced in only when the situation has stabilised. Loan growth may be tapering off but NPL (non-performing loans) ratios are going up.

 

From: http://business.asiaone.com/news/local-banks-still-facing-oil-and-china-woes

 

"DBS went further with its disclosure in the third quarter, and showed that S$9 billion of its O&G exposure - or 40 per cent the total S$22 billion - belonged to the support services segment, which include shipyards, and other offshore marine services players.

 

As it is, OCBC said in the third quarter that it had restructured certain O&G loans, though it did not name firms. UOB's non-performing loan (NPL) ratio is up 1.3 per cent from 1.2 per cent a year ago, on O&G exposure."

 

and from: http://business.asiaone.com/news/oil-and-china-exposures-hurting-spore-banks

 

"At OCBC, bad loans rose to 0.9 per cent from 0.7 per cent a year ago. OCBC said then it was taking "proactive" measures on some accounts, and had restructured certain loans.

 

A bearish view is held by Morgan Stanley, which sees Singapore banks as being less defensive as the credit cycle turns, and amid slow loan growth."

 

 

Exposure to China is a definite risk. But loan growth has been stalled from 2014.

 

http://sbr.com.sg/economy/news/chart-day-singapore%E2%80%99s-loan-growth-abruptly-tumbles-multi-year-low

 

http://www.businesstimes.com.sg/banking-finance/singapore-banks-loan-growth-to-fall-to-35-in-2015-fitch-unit%E2%80%99s-research

 

http://sbr.com.sg/financial-services/news/extremely-low-loan-growth-new-normal-singapore%E2%80%99s-largest-banks

 

I personally think the risks have already been priced in the recent falls, but just my opinion. But may limit further exposure to the banks and adopt wait and see approach going forward.

 

[Showster]

The banks can be forgiven for their less-than-defensive positions because of the sheer number of wild cards in the hands of the Govt. Nonetheless, its a good reminder to always be cautious. 

 

 

 

Risks can be priced in only when the situation has stabilised. Loan growth may be tapering off but NPL (non-performing loans) ratios are going up.

 

From: http://business.asiaone.com/news/local-banks-still-facing-oil-and-china-woes

 

"DBS went further with its disclosure in the third quarter, and showed that S$9 billion of its O&G exposure - or 40 per cent the total S$22 billion - belonged to the support services segment, which include shipyards, and other offshore marine services players.

 

As it is, OCBC said in the third quarter that it had restructured certain O&G loans, though it did not name firms. UOB's non-performing loan (NPL) ratio is up 1.3 per cent from 1.2 per cent a year ago, on O&G exposure."

 

and from: http://business.asiaone.com/news/oil-and-china-exposures-hurting-spore-banks

 

"At OCBC, bad loans rose to 0.9 per cent from 0.7 per cent a year ago. OCBC said then it was taking "proactive" measures on some accounts, and had restructured certain loans.

 

A bearish view is held by Morgan Stanley, which sees Singapore banks as being less defensive as the credit cycle turns, and amid slow loan growth."

 

 

[BenTong]

To be honest, I find the pessimism a bit puzzling.

 

Just a few years ago, the Govt was delaying and deferring many public projects because of the crunch for construction companies and commodities, in order to minimise the competition with private sector.

 

This is a perfect time to build up our infrastructures for a better tomorrow for all. Admittedly, we cannot be unaffected by the global situation but I would argue that if there are countries that fare less badly, we should be one of them as we have the funds and capacity for expansionary policies during global downturns. So far, the axe has been primarily focused on companies that depend strongly on foreign demand.

 

My thinking is this, do you feel that the roads are getting expanded and relaid more often, with MRT constructions completed ahead of time, and many other public projects on the way? This is the best and cheapest time to expand the infrastructure for the long term plans of SG. The local Govt has several options and strategies to play with still at this juncture. This is unlike US and Japan, fast running out of options.

US n Japan running out of options? You must be kidding. They can lose $200b and not blink. If we lose $200b we kaput. We are just a city.

[Showster]

That is the reason why we are careful.

 

We are careful in good times, we are even more careful during bad times.

 

US n Japan running out of options? You must be kidding. They can lose $200b and not blink. If we lose $200b we kaput. We are just a city.

 

[Eaton]

Nibble abit uol. Hope can drop more to buy more

[Scion]

seems like everything is tanking again...

 

crude oil price USD26+ now, going to test previous lows

 

all markets red red like angpows

[Eaton]

seems like everything is tanking again...

 

crude oil price USD26+ now, going to test previous lows

 

all markets red red like angpows

Think a lot of companies might collapse if it stay below 20 for months.

[Ttl1976]

Need to see green green.

I go temple pray.....

 

Ha ha ha

[CH_CO]

https://sg.finance.yahoo.com/news/massive-banking-crisis-brewing-singapore-024500286.html

 

I have warned of this since last year

 

3 things i am not sure if the market is reacting properly. Market fear is making everyone think in a non rational way.

 

1. Oil price at its lowest , shouldnt it mean that the cost of production should be much cheaper , be it in raw materials and energy cost.

 

Even under any circumstance , a lower oil price is good for manufacturing bussiness , unless you are in the service sector. Yes there might be a short term oversupply of goods but this should normalise in a couple of month at most a year.

 

2. Oil storage is slowly at its peak in US , thus signaling to me some b**tard might do some funny things to lead to a higher crude price in the next 3 to 5 years.

 

3. Negative interest rates in Japan and Swiss , this should reflect an even better opportunity to "buy" and borrow to the tilt , as the market drops , personally i will be sourcing and looking around for good deals in the midst of a crash , places like orchard and anything around keppel bay would be what i will be looking in 2016 and 2017.

 

As the market is growing negative and more and more reports are showing a negative outlook

Edited February 11, 2016 by CH_CO

[Eaton]

https://sg.finance.yahoo.com/news/massive-banking-crisis-brewing-singapore-024500286.html

 

I have warned of this since last year

I think he wan to buy cheap Ocbc and uob

[Jamesc]

 

first casualty of oil price crash....

 

 

 

Former Aussie coal billionaire and Singapore resident Nathan Tinkler declared bankrupt

Former Australian coal baron Nathan Tinkler resigned as chief executive of Anglo Pacific Coal Ltd on Feb 10, 2016.PHOTO: BLOOMBERG

PUBLISHED

FEB 10, 2016, 1:59 PM SGT

UPDATED

FEB 10, 2016, 4:49 PM

FACEBOOK1,016TWITTEREMAIL

 

SYDNEY (REUTERS) - Former Australian coal baron Nathan Tinkler on Wednesday (Feb 10) resigned as managing director of Anglo Pacific Coal Ltd after losing a legal battle over money he owed from the sale of a luxury jet and being declared bankrupt.

Mr Tinkler, 40, rode the mining boom to become Australia's youngest billionaire before losing it all when coal prices collapsed.

The bankruptcy was declared in Australia's Federal Court on Tuesday and stems from a complaint from GE Commercial Australasia Pty, which claimed he owed US$2.25 million (S$3.14 million) on a Dassault Falcon 900C he once owned.

Mr Tinkler, who resides in Singapore, was not immediately available for comment. He told The Australian newspaper on Tuesday that he would appeal against the ruling.

Under Australian law, bankrupt individuals are barred from holding corporate directorships. Mr Tinkler was in October appointed chief executive of Australian Pacific Coal, which has agreed to acquire the majority of a coal mine from Anglo American.

A statement from Anglo Pacific Coal announcing the resignation, also said Mr Tinkler would continue to act as a technical adviser to the company and that the deal with Anglo American was not affected by the bankruptcy ruling.

The one-time electrician who was ranked as Australia's 26th- richest person by Forbes in 2012, made an initial attempt at a comeback two years ago. But a deal to buy a mine from Peabody Energy fell through when he failed to make a A$70 million (S$69.1 million) closing payment.

As coal prices plummeted, Mr Tinkler was forced to sell an array of assets purchased with the proceeds from his coal businesses, including a beloved thoroughbred horse farm and a professional soccer club to repay debts.

The action, taken by GE Commercial, is related to the forced sale of the private jet. In 2012, receivers impounded a luxury plane in Singapore and a helicopter in Brisbane.

Mr Tinkler argued the currency conversion had been incorrect and the debt had been recorded in US dollars, the Daily Telegraph reported.

 

 

Live fast die young. Financially.

 

[Voodooman]

Banking crisis? Oil & gas and commodities may lead to higher NPL but property prices probably need to collapse to precipitate a banking crisis as our local banks have so much real estate loans on their books, I don't see that but the super bull run we have in the last 10 years due to China is likely to be all but over.

 

 

 

It is not pessimism but pragmatism.

 

We cannot ignore the danger signs that have been emerging consistently and more frequently over the last couple of years.

 

Whether we believe it or not, the seasons continue their relentless cycle, and autumn is now making way for winter's onset.

 

From: http://www.afr.com/business/banking-and-finance/forget-about-europe-what-about-the-possible-asian-banking-crisis-20160209-gmpzfp

 

"Legendary Swiss investor Felix Zulauf, who runs Zulauf Asset Management, was one of the first to sound the alarm, warning that China's economic woes would inevitably infect Singapore and would probably prompt a banking crisis.

 

Singapore's banking-sector loans have grown dramatically in the past five or six years. Singapore is now losing capital, which means the banking industry is losing deposits.

 

He said this would probably cause carry trades to backfire, triggering heavy losses for those who had borrowed heavily to buy higher-yielding assets.

 

'I expect a banking crisis to develop in Singapore and to spread eventually to Hong Kong,' he said."

[OmOm]

1. Under normal circumstances, low raw material (crude included) prices produce nett stimulatory benefits to the global economy. However, we are in strange times. Raw material prices have been declining the past few years, and producers generally practise hedging through futures contracts to minimise the impact of raw material price volatilities on their margins.

 

Hedging overheads (miscues, wrong bets, counter-trend rallies etc) have largely resulted in them not being able to capitalise significantly from the falling prices. Also, underlying the oil/commodity crisis are geopolitical factors besides the usual economic considerations so fundamental analysis based solely on economic features may not provide an accurate forecast.

 

2. Oil storage costs have been burgeoning and we are still not seeing the light at the end of the tunnel. 

 

From: http://finance.yahoo.com/news/crude-oil-storage-costs-rose-155015878.html

 

"So, limited crude oil storage facilities caused crude oil storage costs to rise to $0.90 per barrel on February 9, 2016—compared to $0.10 per barrel in August 2015. Crude oil storage costs rose nine times in six months."

 

While it is true that short-term crude price increases have resulted from this, in the mid-term to long-term, this swings the other way, producing overwhelming pressure on producers to slash prices ala "fire sales" mode to reduce inventories. 

 

3. While it is tempting to think of NIRPs as a natural extension to ZIRPs, they do not operate in the same way and pose higher risks of destabilising the global monetary system (read: currencies). At a higher level, they set in motion factors resulting in currency wars. Following BOJ's recent NIRP, Sweden has just gone further into negative-rate territory. Trade wars inevitably spring forth from currency wars, and the ensuing deflationary effect of the former may negate the theorised hyperinflationary aspects of the latter. 

 

How this plays out remains to be seen of course, given the large number of variables but IMHO, deflation is still the current king of the hill. 

 

 

https://sg.finance.yahoo.com/news/massive-banking-crisis-brewing-singapore-024500286.html

 

I have warned of this since last year

 

3 things i am not sure if the market is reacting properly. Market fear is making everyone think in a non rational way.

 

1. Oil price at its lowest , shouldnt it mean that the cost of production should be much cheaper , be it in raw materials and energy cost.

 

Even under any circumstance , a lower oil price is good for manufacturing bussiness , unless you are in the service sector. Yes there might be a short term oversupply of goods but this should normalise in a couple of month at most a year.

 

2. Oil storage is slowly at its peak in US , thus signaling to me some b**tard might do some funny things to lead to a higher crude price in the next 3 to 5 years.

 

3. Negative interest rates in Japan and Swiss , this should reflect an even better opportunity to "buy" and borrow to the tilt , as the market drops , personally i will be sourcing and looking around for good deals in the midst of a crash , places like orchard and anything around keppel bay would be what i will be looking in 2016 and 2017.

 

As the market is growing negative and more and more reports are showing a negative outlook

 

Edited February 11, 2016 by OmOm

[Showster]

Will have to wait till 24 Mar to confirm if we are really going the deflationary path without resistance. Wait for the wild cards to be played.

 

Income going up, CPF contributions going up. Retrenchment yes, but certain sectors whose personnel gets recycled. I highly doubt deflation can really take place in a big way.

 

 

 

 

How this plays out remains to be seen of course, given the large number of variables but IMHO, deflation is still the current king of the hill.