10/07/2007

The seduction of Greed

The en bloc sales panic is easing with new laws coming in to stamp the euphoria. Property prices suddenly took a turn for the worst, or becoming more stable. But before the ink dries, the media are reporting on another new frenzy. Property prices in the eastern shores are rising, and rising and rising. Quick, quick, grab what you can find before prices run away. We are now seeing two opposing camps singing different tunes. On one side, there is a call for caution and to keep the lid on property prices shooting to the sky. On the other, the stirring and fuelling of news of how prices will rise and the encouragement to buyers to start buying at whatever price. Some will get burn by greed and some will make a fortune from this greed. Heard of a case where the owner stood to gain $400k during the en bloc madness. But when the new regulations came in, the price fell through the bottom. The buyer chose to forfeit his option money of $15k than to pay for a property that he could now get for $400k less.

8 comments:

Anonymous said...

What do you expect? Most Singaporeans are by nature greedy and kiasu. I feel so sorry for you lot, all you can think of from morning to night is $$$$$. Have a life !!

Anonymous said...

Thriving and striving for success are universal adopts of orientals and migrants everywhere, not a trait of any singular people or culture.. and greed is good, rewarding is right as they clarify business in the market place according to gecko. And we are so lucky to be plugged into modernity and competition that keeps us alive and on our toes morning to night. That's why like-minded people are flocking in everywhere becos this is where the opportunities are.

The tranquil sleepy fishing village model in contrast doesnt offer much quality, options or choices in life besides sour grapes and they will be on the demise even more as their able, talented people leave them for a better life in thriving cosmopolitan places like singapore.

Matilah_Singapura said...

No one, not even a govt can beat the market. If people are going to bid up prices, they are going to bid up prices. If people bid down prices, or act disinterested, then prices fall.

What are you moaning about? People might be "greedy" or "selfish", but what the fuck business it of yours anyway? Every human being is FREE to be however they want to be—not sacrifice themselves to conform to your fucked up "moral standards", so that you can be happy.

I wish the govt would interfere more. That would cause the market to eventually crash and opportunists like me will benefit.

Anyway, why are you moaning? Not so long ago property owners thought that the sky was going to fall, when property prices plummeted to record lows. Also low were stock prices and COE's. Remember people buying COE's for 50 bucks?

Spectacular rises in asset prices (not values) are more a result of the increase in the money supply, loose credit policies. There are definite credit bubbles in the capital structure—not just in S'pore, but globally.

All over the world, asset prices are way high. In "Boh Cheng Hu" Thailand, the market has shown that it cares little for political coups and what-not, real estate is high, the baht is at record highs, and the stock market is steadily increasing.

Oh yah, and there are people like redbean moaning and groaning about it, but no matter. People could care less. They are motivated by their own self-interest, and when prices move upward, it seems that many folks want a "slice of the action".

Good for them. Everyone is free to choose what the hell they want to do with their lives, whether you like it or not.

redbean said...

i agree. greed is a great driver. there is probably no progress without greed.

but everything must be managed. extremism is bad and destructive.

Matilah_Singapura said...

No one "greedy", in a sense that an emotion can somehow be made into a tangible living thing. We are not our emotions. We experience many emotions at different times, and greed is only one of them.

It is impossible for any govt to control the emotions of people. Managing greed would be like the govt attempting to manage "lust" or "jealousy" or "happiness".

And any move to try to curb market "speculation" will backfire because of Economic Natural Law 101 "People respond to incentives/disincentives".

For e.g. you ban drugs, a "spontaneous order" of a black market evolves. You heavily tax tobacco, people start smuggling. You ban gay-activites, it goes underground or overseas.

The only way to stop the over bidding of assets is to get rid of paper fiat currency and fractional reserve banking, and return to 100% reserve banking and an "objectively" based hard-money—for e.g. The Gold Standard.

Since that is unlikely to occur, you can bet on asset prices being bid up, and eventually crash, as reality demands its bill paid.

Anonymous said...

Crash or no crash life still goes on, business as usual. And my financial savy friend told me people actually make tons of money whether the market goes up or down, but i am skeptical how they are able do that.

Matilah_Singapura said...

Learn about derivatives, warrants, short-selling etc. — i.e. "speculation".

And if you can "tahan" getting burnt a few times, you could be making tons too.

...but this stuff isn't for the faint hearted. I am a sceptic too, but I too know people who do this well.

Can you learn skills which are "intuitive" to special people? Perhaps, but I doubt those skills will ever be at a level the people who are firstly "naturally gifted", and then take the trouble to develop their gifts further.

Not everyone can be a George Soros.

redbean said...

i have seen many success stories and many, many more failures. i have learnt all the theories and principles and formula. but still unable to make a killing.

what i know is that for every one success story, hundreds or thousands failures came with it.

for all the theories, if they are that good, there will be no losers. for every theory works only if the market is with you.

some success stories are due to a little bit of luck. some due to things we don't see and don't know.