Bloomberg: 'Ghost of 1994' looms over Asia

Taking away the first part of securitising the loans, it sounds like what Singapore is staring at now. Fortunately only about 40% of our SG bank loans are in property which is relatively lower to what Spanish banks had in 08/09.

Btw subprime also refers to lending to people with low credit ratings. So this could be another cause of the crisis aka reckless lending to low credit worthy individuals in the search for profits.

(09-06-2013, 03:55 PM)CityFarmer Wrote:

(09-06-2013, 01:03 PM)finnfinn Wrote:

(09-06-2013, 12:40 PM)CityFarmer Wrote:

(09-06-2013, 12:06 PM)rogerwilco Wrote:

(09-06-2013, 11:32 AM)CityFarmer Wrote: IMO, real estate is unlikely a "mother" of all financial crisis.

What about the 2008 US subprime mortgage crisis ?

First of all, for argument sake, 2008 crisis is just one crisis among the three discussed, so it is non-conclusive to say "mother of all".

Secondly, I will not relate the 2008 crisis with real estate, but with financial engineering and incentive model of bankers.

Hmm.. financial engineering helps to artifcially bring down financing property. Fueling housing bubble. . Is cheap financing that is the problem. . financial engineering is just a tool to get there. . As for incentive model of bankers.. another tool to sell the story to investors .the key here is cheap financing. .many has attribute causes of 2008 to various factors but I find cheap financing more digestable...

As for being the mother of all, that is my opinion la. ..

The 2008 financial crisis is never due to cheap financing? Subprime mortgage isn't a cheap financing, but an inferior in quality and expansive financing. Maybe I miss-understood?

Probably you are referring to future crisis x year later, if any...

Applicable to past, current and future.

By cheap financing, I mean risk is misprice ie. compensation of underlying risk is lower than what it should be. An asset can be inferior in quality (By inferior I debt serviceability is less ideal) but with the right reward, is still doable (think of our Ah Long! ). The abundance of liquidity in times of loose monetary environment means that such assets are attractive from yield standpoint, driving down the price of credit for such assets - this is what I meant by cheap financing. Understand your point of inferior quality and expansive but do consider if the sub-prime is price correctly at the onset (think Ah Long again! ), will the situation be different? That is why i attribute it to cheap financing...

Not surprise that we can have different opinions on what are the causes and if we look around, different literature attribute 2008 to various causes. I am sure we saw Alan Greenspan's name out there too..

Again, different people can have different interpretation and depending on what we read, we will attribute to different causes. But I still stick to my point that I find cheap financing more digestable explanation and contrary to your suggestive point of "never due to cheap financing", I think it has a big hand in the 2008 crisis..

On Present, do I see similarities? - my answer is yes.

On future, will it happen again? YES! because humans are forgetful..

If I may feedback, notice that you are the moderator here. I join this forum in the hope of sharing and through active discussion, learn something along the way...But if we are to "close the door" on an opinion by saying or suggesting "never" as in your case, how can we expect to achieve the objective? As contributors, we are entitled to our viewpoints.. as readers, we can agree or not to but saying/suggesting "never", not too encouraging IMO, especially from the moderator..

Just my 2 cents worth. Peace..

Leverage is the mother of all crisis

i totally agree. If this is a public forum everyone of us is entitled to his opinion. As long as his opinion

Quote:is not disrespectful or harmful

to anyone. If this forum starts to qualify harmless opinions, how are we going to feel free to exchange ideas. If we want to talk about "facts", of course it's a different matter.

Quote:“Everyone is entitled to his own opinion, but not to his own facts.”

(09-06-2013, 05:13 PM)specuvestor Wrote: Leverage is the mother of all crisis

Agree!!

Allow me to amend a bit. . .'Overly leverage is the mother of all crisis.'

(09-06-2013, 05:20 PM)Temperament Wrote: i totally agree. If this is a public forum everyone of us is entitled to his opinion. As long as his opinion

Quote:is not disrespectful or harmful

to anyone. If this forum starts to qualify harmless opinions, how are we going to feel free to exchange ideas. If we want to talk about "facts", of course it's a different matter.

Quote:“Everyone is entitled to his own opinion, but not to his own facts.”

Well said!

(09-06-2013, 05:00 PM)finnfinn Wrote: If I may feedback, notice that you are the moderator here. I join this forum in the hope of sharing and through active discussion, learn something along the way...But if we are to "close the door" on an opinion by saying or suggesting "never" as in your case, how can we expect to achieve the objective? As contributors, we are entitled to our viewpoints.. as readers, we can agree or not to but saying/suggesting "never", not too encouraging IMO, especially from the moderator..

Just my 2 cents worth. Peace..

I like the word, "Peace ..."

I have two roles here, one is ordinary forum member, the other one is moderator. Ordinary member by default, and once as moderator, i will put up a reminder on the role switching.

As moderator, ordinary member or even in person, i always welcome diversity.

I checked any "moderator" highlighted in my previous postings by mistake, and i am glad i didn't find any. So you can safely take me as other ordinary forum member, which also entitle to his opinion.

The "never" is an opinion and end with a "?", not sure why it sounds so authoritative?

Peace as ordinary member, and bow-out...

finnfinn

Surely Cityfarmer is entitled to his own opinion? As far as I can tell, Cityfarmer did not say anything like "because he disagrees with you, therefore you should not post." This is a marketplace of ideas, everybody is entitle to his own opinion. Let a thousand flowers bloom!!!

In any case, my (not so original) view is that ultra loose monetary policies of central banks created these financial crises. Dotcom bubble, housing bubble and debt bubble (the mother of all)?!

(09-06-2013, 05:49 PM)HitandRun Wrote: finnfinn

Surely Cityfarmer is entitled to his own opinion? As far as I can tell, Cityfarmer did not say anything like "because he disagrees with you, therefore you should not post." This is a marketplace of ideas, everybody is entitle to his own opinion. Let a thousand flowers bloom!!!

In any case, my (not so original) view is that ultra loose monetary policies of central banks created these financial crises. Dotcom bubble, housing bubble and debt bubble (the mother of all)?!

i think America likes to think or believe, America is the only real "Free" country in the World. In fact America wants every other country to be like them. Ultra loose policy has its pros and cons too. They believe in changing for renewal sake. But anyone can only be president for life for 2 terms, i think is a good practice. i think Singapore should follow suit. Now even China also believe in at least changing their PM. & PRES. only after 10 to 15 years. (if i am not wrong). No such thing for life as in the past. i think high time Singapore should follow suit. So many of our old ministers are still around. Why?

(09-06-2013, 04:29 PM)CY09 Wrote: Taking away the first part of securitising the loans, it sounds like what Singapore is staring at now. Fortunately only about 40% of our SG bank loans are in property which is relatively lower to what Spanish banks had in 08/09.

Btw subprime also refers to lending to people with low credit ratings. So this could be another cause of the crisis aka reckless lending to low credit worthy individuals in the search for profits.

Singapore property market is far different from US. at least Singaporean can't just walk away from his/her property loan without declaring bankruptcy. It means, very unlikely, Singapore property market is going to have too high a default rate as long as banks don't foreclose the property and the owners continue to pay.