Felix Zulauf: Global Stock Selloff Will Continue

Banking crisis for Singapore??? (3:30)

http://www.barrons.com/video/felix-zulau...D2B33.html

(24-01-2016, 06:40 PM)Behappyalways Wrote: Banking crisis for Singapore??? (3:30)

http://www.barrons.com/video/felix-zulau...D2B33.html

He does not say why he thinks there will be a banking crisis in Singapore. What would trigger the banking crisis- loans for property? Oil and Gas? Malaysia and Indonesia? China? A combination of all of the above?

2016 is looking like a tough year for Singapore, likely to include a rise in unemployment, more falls in property prices (all downward) and the stock market (volatile swings), maybe a managed decline in the S$. But I think other places are going to have it a lot tougher, such as Hong Kong - sclerotic government that can't agree funding for major projects, property market that is only just turning down from massive high, currency tied to a rising US$, stock market loaded with mainland companies, Chinese tourists/shoppers staying away.

Could This Be the Year of Many Bears?
http://www.msn.com/en-us/money/other/cou...vi-BBoEklh

Collateral damage yes, but I would be surprised if Singapore and its banks were at the epicenter of the storm

Of course if we have a global recession - or simply major slowdown, which looks likely now - Singapore will be affected. But it's worth remembering that the authorities have quite a few levers that they can pull once growth tanks (loosening real estate limitations, increasing the number of foreigners etc) and pretty deep pockets allowing to smooth the growth trajectory and - if that were really necessary - recapitalize the banks.

I just did a quick search on Felix Zulauf, he's a perma bear and somehow, along the way, he will be right. Personally, I don't tend to take forecast that seriously. The most important thing for us right now is to believe in what the value that we buy and what they are worth. Anything else is just entertainment, if the horizon is long enough.

A massive banking crisis is brewing in Singapore, says Swiss billionaire Zulauf
https://sg.finance.yahoo.com/news/massiv...00286.html

(25-01-2016, 07:08 AM)Dosser Wrote:

(24-01-2016, 06:40 PM)Behappyalways Wrote: Banking crisis for Singapore??? (3:30)

http://www.barrons.com/video/felix-zulau...D2B33.html

He does not say why he thinks there will be a banking crisis in Singapore. What would trigger the banking crisis- loans for property? Oil and Gas? Malaysia and Indonesia? China? A combination of all of the above?

2016 is looking like a tough year for Singapore, likely to include a rise in unemployment, more falls in property prices (all downward) and the stock market (volatile swings), maybe a managed decline in the S$. But I think other places are going to have it a lot tougher, such as Hong Kong - sclerotic government that can't agree funding for major projects, property market that is only just turning down from massive high, currency tied to a rising US$, stock market loaded with mainland companies, Chinese tourists/shoppers staying away.

(28-01-2016, 12:50 AM)smalkmus Wrote: I just did a quick search on Felix Zulauf, he's a perma bear and somehow, along the way, he will be right. Personally, I don't tend to take forecast that seriously.

If you search a bit more, you learn that he is the Barron's Round Table best stockpicker: http://www.pragcap.com/how-useful-are-th...e-pundits/

25.1% Annualized Return over a period of 10 years. It suggests to me that Zulauf's forecasts do carry some weight, also in practice.

I hope Singapore government will learn its lesson and reduce it reliance on service industries.. Service industry serves where the wealth goes. If wealth outflows, the services will go too.. There is not really much value add..

I don't really know how to term this crisis. Maybe I will call it the crisis of being too comfortable.. If I look back the crisises in 1997, we see real fear in the market. People ending their lives due to margin trading losses or increase in bankruptcy. Nowadays these kind of scenario are getting lesser and instead I see Singapore enjoying lives more and more (everyone having a smartphone, eating out at restaurant etc.) but completely forgetting that they are serving their debt and if they lose their income, how to service it..

My personal view is this will probably be a REITs crisis. Too many people gained wealth through the appreciation of property and then further securitisation and so on. No doubt we can say that our real estate assets are backed by actual income holders but nowadays who are paying the income? A lot of banks, FIs, property related service industry, regional headquarters (with no operations here) and now you put into the mix of poor performing commodity and o&g players, I don't really see the diversification of industries other than services in Singapore.

I think government is going the right track now into entrepreneurship and value creation. Maybe it's too late. Maybe it's not possible in the past. But whatever it is, this generation probably have to bear the consequences for being fat and now we need to do some slimming.

Just ranting and purely based on gut feeling.

Haha. Come to think of it.. Perhaps I can call it a "Mah Bow Tan crisis"

(12-02-2016, 01:55 AM)mrEngineer Wrote: I hope Singapore government will learn its lesson and reduce it reliance on service industries.. Service industry serves where the wealth goes. If wealth outflows, the services will go too.. There is not really much value add..

I don't really know how to term this crisis. Maybe I will call it the crisis of being too comfortable.. If I look back the crisises in 1997, we see real fear in the market. People ending their lives due to margin trading losses or increase in bankruptcy. Nowadays these kind of scenario are getting lesser and instead I see Singapore enjoying lives more and more (everyone having a smartphone, eating out at restaurant etc.) but completely forgetting that they are serving their debt and if they lose their income, how to service it..

My personal view is this will probably be a REITs crisis. Too many people gained wealth through the appreciation of property and then further securitisation and so on. No doubt we can say that our real estate assets are backed by actual income holders but nowadays who are paying the income? A lot of banks, FIs, property related service industry, regional headquarters (with no operations here) and now you put into the mix of poor performing commodity and o&g players, I don't really see the diversification of industries other than services in Singapore.

I think government is going the right track now into entrepreneurship and value creation. Maybe it's too late. Maybe it's not possible in the past. But whatever it is, this generation probably have to bear the consequences for being fat and now we need to do some slimming.

Just ranting and purely based on gut feeling.

REITs, and particularly industrial REITs, have fallen significantly this year. Falling rents and valuations are possible, as the economy slows. However, I would question whether there will be a 'REITs crisis'. The weak point for REITs is their borrowing - if they were not leveraged, they could survive almost anything. Although leverage is limited to 45%, and commonly actually around 40%, this is enough to cause strain in a falling market, as seen in 2008/2009, particularly for weaker REITs that may have difficulty rolling over their loans at reasonable rates. However, in 2008/2009 there were some simple strategies employed by a number of REITs to reduce the strain. The most common was a rights issue, typically to drop their gearing to around 20% to 30%. I can remember applying for rights (and surplus rights) for First REIT, Fortune, Cambridge and, I think, Saizen, practically every REIT that I held at the time. Saizen went further and dropped it's distributions for quite a long time. Cambridge and Fortune introduced schemes that allowed unit holders to opt to convert their distributions into units. All designed to retain cash in the REIT, reduce gearing, and provide funds for expansion in what was then a weak market.

I am not saying that there isn't going to be more pain, but I would question whether there will be a 'crisis'.