Singapore property market crash : Oct 2008 new home sales dive 70% month-on-month

This article belongs to the Singapore property market story arc.

channelnewsasia.com :

New home sales in Singapore dived 70% in Oct 2008 compared to Sep as home buying sentiment continued to sour. According to URA data, developers sold 112 new and uncompleted private residential homes last month, versus 380 units sold in September. They launched just 159 units for sale, compared to nearly 767 in September.

- Guess there won't be too many buyers in this kind of environment. Who'd be buying anyway? Besides the rich and the foolhardy, that is. I have warned fellow forummers to beware of catching a falling knife. If you can believe it, sentiment in the Singapore housing market is not nearly negative enough yet. The contrarian community is talking Second Great Depression and the locals are still raring to go in? Quite a discrepancy there. Prices are not low enough. The bottom is a long way down.

(2008-11-17 23:29:02 SGT) [Biz] Permalink Comments [1]

Zimbabwe hyperinflation rate hits 516 quintillion percent, to set world record within 6 weeks

This article belongs to the Zimbabwe inflation watch story arc.

peakoil.com -> telegraph.co.uk :

With official statistics of Zimbabwe's inflation rate at 231 million percent widely distrusted, the Cato Institute has calculated the figures based on exchange rate movements and market data, putting Zimbabwe's annual inflation rate at 516 quintillion per cent - 516 followed by 18 zeros - overtaking Yugoslavia in 1994 and putting it behind only Hungary in 1946. Prof Steve Hanke said: "... if they keep going at this pace, they have a shot at it within a month or maybe a month-and-a-half at the outside."

In post Second World War Hungary monthly inflation reached 12,950,000,000,000,000 per cent, with prices doubling every 15.6 hours - Zimbabwean prices are currently doubling every 1.3 days. The most famous hyperinflation, Weimar Germany in 1923, is in a distant fourth place, at 29,525 per cent a month with prices doubling every 3.7 days. Zimbabweans must spend money as soon as they get it before it loses its value. But goods are in desperately short supply. Supermarkets are accepting only US dollars and South African rands, leaving those without access to foreign currency in dire straits.

- If nothing is changed, and the recent G20 meeting has kind of proven that, this could turn out to be a preview of what comes next after the ongoing global hyperdeflation. The so-called strong US dollar as it is currently, with the USDX floating way above 80 is a temporary illusion. The fundamentals stink. The Fed's balance sheet is full of crap toxic waste mortgages and that's supposed to be some sort of backing for the currency? The dollar is worthless, and by extension all other currencies linked to it by exchange rates. Zero multiplied by anything is still zero. This is simply what people from all ages have eventually found out regarding all fiat currencies.

So we have a thousand trillion dollars of credit derivatives overhang that are collapsing as we speak, together with the global stock markets. The bond markets are said to be next, and some say the currency markets as well. Then there's the printing press. A thousand trillion dollars can be in time overwhelmed by a thousand quintillion dollars. Dam bursting stuff. It could be the worst of all possible worlds, as we get plunging asset prices followed by an all-out hyperinflationary collapse. Brace yourselves.

(2008-11-17 23:04:51 SGT) [Biz] Permalink

GM collapse could cost $200 billion in bailout, 2.5 million jobs lost

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

bloomberg.com :

General Motors, seeking a federal bailout as its cash dwindles, would cost the government as much as $200 billion should the biggest US automaker be forced to liquidate, a forecasting firm estimated. The projected expense covers programs such as unemployment insurance, and new measures needed to revive economic growth after millions of auto-related job losses. Such a sum would dwarf the $25 billion bailout package being debated in Congress to help prop up GM, Ford and Chrysler. GM earlier said it may run short of operating cash by year's end.

A GM shutdown would cost jobs among suppliers as well as at the automaker itself, pushing the US unemployment rate next year to 9.5%, compared with current projections of 8.5%. Job losses would total 2.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing. The federal government also might "be on the hook for the pension benefits and health benefits", said Dana Johnson, chief economist with Comerica.

- You might know the saying which goes something like, "As GM goes, so goes America". If GM goes bankrupt, America itself won't be too far behind. In fact, the contrarian community has been saying that America has already been technically bankrupt for years.

This has the potential to blow up really quickly. There can be no recovery if consumers don't buy cars, and consumers won't buy cars if they don't have jobs to drive to, and if they don't have jobs to drive to because their jobs happen to involve the car industry in some way or another, well you can see where this is going. It's going to become a death spiral. And 2.5 million job losses might just be for starters. Half the country jobless could be the next big thing.

(2008-11-17 20:31:55 SGT) [Biz] Permalink

Peak Oil : IEA reports global depletion rate could go up to 9.1%, struggle to produce crude oil

seekingalpha.com -> ft.com :

Output from the world's oilfields is declining faster than previously thought, the IEA said in its annual report. Without extra investment to raise production, the natural annual global crude oil depletion rate is 9.1%. The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as in the North Sea, Russia and Alaska. The effort will become even more acute as prices fall and investment decisions are delayed. Even with investment, the annual rate of output decline is 6.4%.

Demand is slowing down, but with the expected slowdown in investment the eventual effect will be magnified. The IEA warned that the world needed to make a "significant increase in future investments just to maintain the current level of production". The share of rich countries in global demand will drop from last year's 59% to less than half of the total in 2030, the clearest indication yet that the demand side is moving away from the US, Europe and Japan, towards emerging nations.

- Earlier, I said that it's a race to see whether it's the oil demand or oil supply that will decline faster. But with NYMEX crude oil prices dropping over 60% from the $147.27 record high, it is starting to look more like the former than the latter. Just take a look at the shutdown of 67,000 factories in China. Now we're really talking demand destruction.

This is bad. In the Great Depression of the 1930's, energy usage went down 8%. If we are talking about crude oil prices falling because demand is falling faster than supply is falling, then we're talking about the global economy possibly going to shrink faster than say 9%. Welcome to the Second Great Depression.

(2008-11-17 13:53:10 SGT) [Energy] Permalink Comments [2]

67000 China factories closed in H1 2008 as global economic collapse takes hold

peakoil.com -> nytimes.com :

An export slowdown amidst the global financial crisis has contributed to the shutdown of at least 67,000 factories across China in the first half of 2008. The social problems arising from the slowdown have stirred anxiety in China's government, which has unveiled a $586 billion stimulus package to help create jobs, mostly by building transportation infrastructure.

Due to the mass layoffs, many migrant workers are heading home early for the Chinese New Year, in late January. Many of the 7,000 workers who lost their jobs when a Hong Kong-owned toy factory called Smart Union shut down last month have returned home. Many such factories were run by Taiwanese or Hong Kong managers who fled the mainland.

- Looking back in history, the sudden closure of the Smart Union toy factory leading to 7000 job losses, together with the plunge in global stock markets in the Oct 2008 period, would probably mark the point at which the global economic collapse started, kicking off the Second Great Depression.

As it usually is with such things, few people saw this coming. You know what I was actually thinking at that point? It probably seems funny (or perhaps not) in hindsight, but I was thinking, okay, that was a Mattel factory, let's hope my Transformers are still being churned out by a Hasbro factory elsewhere.

The doomer faction of the peakoilers have been yelling about a fast crash scenario for years, but couldn't quite put down a date to it, while the moderate faction, which I used to count myself a member of, thought it would be more of a gradual decine. Most of the contrarian community looked at China's resource usage and many of us called for massive price inflation and commodity price increases and we called it exactly right, at least for a while.

I myself muttered a few times about China hitting a brick wall. We're way past that now. We're looking at the train wreck. What's next from here? I'm with the doomer faction this time round. I've upgraded my doomerosity level from 6 to 8. It's body count time.

October 2008 was just the beginning. Earlier I said that 2008 was going to be the Year of Inflation. Okay, we got that. If this keeps up, and all indications are that it will, 2009 is going to be the Year of Collapse.

(2008-11-17 00:07:09 SGT) [Biz] Permalink

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