The lure of hot money and big funds

We welcome hot money and big funds into our market. In fact the mention of such items will send saliva dripping down the corners of our mouths. Hot money and big funds mean a lot of money to be made and a more vibrant economy. Why then are countries getting the shivers when there are too much hot money and big funds pouring in? Why then is IMF talking about change and applying more controls on such hot money and the activities of big funds? There are two sides of the coin. The hot money and big funds will benefit the developers and speculators in properties and in stocks. In the case of properties, they will buy up everything they could for profits of course. Who pays for their profits? Anyone loses out? When someone is making tons of money, someone else must be paying for it. The whole thing will spiral down to the little guys who will find the roof over their heads getting costlier and beyond their reach. The big guys will all be laughing to the banks and having their parties. In the case of stocks, the big funds are making millions and billions at the expense of the small guys. Yes 1 or 2 may make some money, but the big picture is a sorry state of affairs. Just like listing of foreign stocks, when they grabbed the money and run, leaving a shell for the local investors. The Stock Exchange may be happy earning the $600 clearing fee per trade and add a few millions to its bottom line. Contrast this to the billions of profits that the big funds are wiping from the market and sending the small investors to the laundry. The net sum gain or loss is frightening and negative to the country as a whole. Is it worth it? Earning a few penny and losing billions in the process? Would anyone bother to look at the big picture? Would a few privilege ones making a few millions be enough justification for the majority losing their billions? The hot money and big funds are here to make a quick buck from the locals, and leave the carnage behind when they depart. Maybe the IMF is crazy. Maybe those countries that shunned hot money and big funds are stupid. Maybe we are smarter


Wally Buffet said...

That's capitalism!

The chinese word for the word "poor" 穷 has a radical "labour" 力 included. It implies that if you use only labour in your pursuits, you will be poor whereas conversely if you use your brain as well, ah, you'll be much much better off.

Go with the flow. Follow the path of hot money and big funds and you not only pick up the bones but some sliver of the meat left behind.

I am not complaining.


Chua Chin Leng aka redbean said...

On a personal level I fully agree with you. Exploit the system to its max. But as a govt, it should not work this way. It has to think of sharing the wealth for the greater good and not to a small minoriy.

There is responsibility with power.

Anonymous said...

The problem with America is that they are fond of putting people who are from the private sector, who unfortunately acquired the taste of putting their own interest first, and carry on their selfish bad habits into Government.

There is now no responsibility with power. Only exploitation to it maximum.

Chua Chin Leng aka redbean said...

Ya, they should learn from us, putting selfless people who always put the interest of the people first and foremost.

See how they are planning for the interest of the people with the people's money in the CPF? Nobody ask them to do so but they kept at it zealously, for the good of the people. They all have a heart of gold.

If there is a heaven for good people, they will all be there.

Matilah_Singapura said...

The "hot money" isn't even apparent yet.

Just wait and watch as the amount of sovereign defaults happen. Already Greece, Ireland, Italy, Spain and Portugal are on the brink. Iceland -- half dead already. In danger: Germany, Japan, UK.

Fuck, I can't wait for these fucker to fall. Think of all the cheap stock ad real estate you could buy. With their currencies emulating the purchasing power of used toilet paper, think of the cheap holidays and "dirty weekends" you could have, and all those hard-up women who desperately "need help".

Big money? Not yet, Save your money and make more in the meantime. Opportunities will be at your doorstep soon.

Chua Chin Leng aka redbean said...

Spend and consume first, pay later with tomorrow's income. Done on a small scale, manageable, is a good thing. Done excessively, is like big time gambling. Placing all the bets in at one go, and hoping that it will all turn out fine.

When things turn bad, the noose will be tightened and all will be hanged to dry.

Govt policies should encourage thrift and not wild spending in the hundreds of thousands and millions, in mortgages, and pray that nothing goes wrong.