Saturday, April 18, 2009

Parameswara's Weekly Round-Up (5th – 11th April 09)

Hi all.

I think of all Singaporeans, we ordinary people of the street know how bad the economy really is, because we have to live in this real world. Every day we are bombarded left, right and center with bad news of our economy, and most of this bad news are from foreign media. Why are they like this to us?

Maybe these foreign media don’t like us. Did any of you guys out there offend them, or were too cocky or rude to them? If you have, tone it down ok, and maybe, just maybe, they will write friendly stuff about us. It really is very embarrassing, especially if you have to travel out of the country... by bus ok, and only to Malaysia, not many can fly these days, even on budget flight...

The top prize for economic news this week goes to The Straits Times who carried in their headline news (online version only, cannot afford the regular newspaper) Mr. Lim Boon Heng’s economic wisdom: “Bonus is not a dirty word”. And of course this week’s economic book prize goes to Mr. Lim. Perhaps he is our equivalent of Alan Greenspan, or Dick Cheney – “deficit is good”.

5th April 2009, Straits Times - “Bonus need not be a dirty word.”

Mr. Lim: “companies’ bonuses are part and parcel of the overall wage package“

Para: Is Mr. Lim living in a different world? Is he aware we are going into a deep recession, and even maybe a depression, and whose bonuses is he referring to?

Mr. Lim: “we now operate differently from the past”

Para: Ha-ha… Mr. Lim we had better operate differently from the past, because whatever way that matters were operated didn’t work isn’t it?

Mr. Lim: “should not get overexcited whenever we see the word ‘bonus’ being used“.

Para: Not excited, Mr. Lim, angry.

Mr. Lim: “people should not mistake a bonus as somebody getting something extra and undeserved and out of line with the current economic situation”.

Para: Mr. Lim needs English lessons. Synonyms for bonus are – extra, plus, benefits, additional windfall.

Mr. Lim: the uproar over bonuses paid by troubled firms like AIG was because the American public perceived these to have come from Government bailouts.

Para: Mr. Lim, Singaporeans are poorer, but they have got wiser, and they know that the uproar of AIG bonus is because it’s corruption and cronyism.

Parameswara is thinking, is Mr. Lim conditioning us to expect huge bonuses to be paid this year? I hope I can get some of it.

I think Mr. Lim should read some of the following articles. I have taken the trouble to highlight the headlines and the source for him for easy research. Perhaps bonuses nowadays are for gloom and doom.

6th April 2009, The Malaysian Insider - Sentosa (Singapore) dream gets hazy

It was supposed to be Asia’s answer to glitzy Monaco, but plans to remake Sentosa into an island playground where rich foreigners and locals live and play are going to take longer than expected to materialise.

  • Fewer than 1,000 homes are likely to be completed by the end of this year, and several developers are expected to delay their projects further.
  • City Developments, for example, has postponed its $580 million project comprising luxury apartments, shops and a five-star, 320-room Westin Hotel, originally slated to open this year.
  • Colliers’ data, based on caveats lodged, shows that only one non-landed residential unit in Sentosa was sold in Q4 2008. In the first three months of this year, the number rose slightly to eight.
  • This is a far cry from transaction volumes at the height of the property boom in 2007. In Q1 2007, some 279 non-landed homes were sold in Sentosa. In Q2 that year, the transaction volume was 243.

PARA: Our Switzerland of the east vision remains a vision 8 years after the target date. Will the same fate await – The Monte Carlo of the East?

14th April 2009, Bloomberg News - Singapore Forecasts Even Worse 2009 for Its Economy

  • Singapore said Tuesday that it expected its economy to contract by as much as 9 percent this year
  • On Tuesday, the country’s Ministry of Trade and Industry revised its forecast for 2009 for the third time in less than five months, saying it now expected the economy to shrink by between 6 percent and 9 percent — making for what would be among the most severe contractions in the region
  • Badly hit by the collapse in overseas demand for items like electronics, precision engineering and pharmaceuticals. All three are key areas in Singapore’s manufacturing sector, where activity slumped 29 percent during the first quarter of 2009 from a year earlier.
  • Data on Tuesday showed Singapore’s overall economy had contracted in the first quarter by a record 11.5 percent from a year earlier, and by 19.7 percent from the previous quarter — much more severely than analysts had forecast.
  • “Falling demand in late 2008 and early 2009 has severely affected domestic manufacturing output,” Singapore’s Ministry of Trade and Industry said in a statement announcing its revised forecasts. “While there are tentative signs of some stabilization in the housing, financial and manufacturing sectors in the U.S., they do not point to a clear turnaround in economic activity.”

PARA: Does LKY still think stimulating the domestic economy is not the answer?

14th April 2009, Financial Times - Singapore devalues currency as economy slows

  • “MAS will therefore re-centre the exchange rate policy band to the prevailing level of the Singapore dollar nominal effective exchange rate.”

PARA: Where Para once came from (Indonesia), we devalue our currency every year. Is that going to be the case here too?

14 April 2009, AFP - Singapore dollar depreciated as contraction looms

  • The Monetary Authority of Singapore, the country's de facto central bank, said in a statement it lowered the trading band for the Singapore dollar, which essentially allows the local currency to depreciate.
  • Singapore last eased its monetary policy in October 2008.

PARA: Does this means our cost of living is going up further? Or are we adjusting to accommodate the coming collapse of the US$, or both?

Other headlines of the week:
6th April 2009, Business Times - Fixing the faults with foreign listings
7th April 2009, Straits Times - SBS, SMRT Buses fined
7th April 2009, Straits Times – Grads flexible about pay
8th April 2009, Straits Times - Changi Airport looking to fill 400 job vacancies
10th April 2009, Asia One - Singaporeans say more medical choices in Johor Bahru

Until then,