The fall guys are usually the small guys

The Hongkong authority have arrested two female employees of Bank of China for selling the Lehman Minibonds 'on suspicion that they had fraudulently or recklessly induced others to invest money.' This Lehman fallout is becoming a joke in the whole wide world. Only the small guys got caught and no one else. What about the people who created this scam? Oh cannot call it scam. It is sophisticated financial instruments thought out by the best talents in America, for sophisticated clients with the knowledge, intelligence and appetite to lose big. So the note creator is innocent, the banks who allowed the notes to be sold are innocent, the regulators too are innocent. Only the small salesmen and saleswomen are guilty. This must be the bigger scam than the Lehman Minibond scam itself.

A good policy is a good policy

Hsien Loong revealed that certain groups have sent emails to pressurise the govt to lower property prices and threatened not to support the govt in the next general election. And it is likely that these people are going to benefit or profit from lower HDB prices. The only people I see that could benefit from lower HDB prices are those that were caught gasping for air when HDB prices galloped away. With so many govt help and subsidy schemes, this aggrieved group should be very small. The group that are going to benefit more with high HDB prices and should be pushing the govt would be owners of HDB flats. Then they can sell them at huge profits and migrate to somewhere cheaper. Beach camps are also a good alternative. Hsien Loong’s main message is that people should not pressure the govt to act in any way. This is a sure fail tactic. The govt will probably stick to its gun no matter how well meaning or logical is the course to take. It is better to write to Reach and make a genuine plea, and the govt will listen better. It even gives awards to good contributors. The high price HDB policy is going to stay. It is the best policy that benefits all flat owners. And buyers can be assured of getting their flats in 3 years instead of 7 years. And the govt believe so, and will likely to be campaigning for this policy in the next general election. They have to after Mah Bow Tan and HDB have so successfully defended this position and turning around will be self defeating. The govt’s view is firm. Whether the people believe so, or some people believe so and some don’t, let this be the election issue to be decided by the votes. Let there be no pressure but a contest of ideas. Those who believe that this policy is good and the way to go, continue to vote for the govt that is promoting it. Those who don’t agree can vote otherwise. It is just a govt’s position and policy.

Who is talking strange?

There is no property bubble, yet. Did anyone see the elephant inside the classroom? No, where got elephant? Property prices are hitting the roof, demands are incessant looking at the queues at property launches despite the record releases of new BTOs. Maybe it is all carefully managed and expected. Within expectation. The govt will not intervene in the property market and if it does, ‘we do it only because we want the market to work better’ said Mah Bow Tan. So no need to panic, no need to complain, the market is working better. Better for who and in what ways? The govt did not intervene when the population shot up by more than 1m people. The govt did not intervene by building more flats to meet the demand. Maybe it was managed to be that way. Or maybe they did not know that the population had grown disproportionately and no need to intervene. The govt prefers to leave it to market forces, supply and demand. The two cases of Ten Mile Junction and Tampenis were an aberration. The low demand was not due to market forces. And the developers will buy low to sell at big proft. Cannot be like dat. So when the prices are low when there is no demand, don’t release the sites. Afterall the govt has the responsibility to make sure that state land gets a good price. All perfectly sound argument. Not talking strange. And today, there is no property bubble yet. Everyone is happy, the govt is happy, the developers are happy, the speculators are happy, the home buyers are happy, the owners of all properties are happy. We have a perfect situation with everyone happy. This is how clever the property market it being managed. I am not talking strange either.

Great News, Resale home prices at new high!

This is the best news on the front page of the ST. More than 800k HDB flat owners are going to celebrate, and those owning 5rm flats and bigger are instant millionaires. The latest transaction at Bras Basah HDB complex fetched more than $600 psf. Whew, everyone is going to be very grateful. Now they should know who to vote to protect and increase the value of their HDB flats. And private property owners will also be waiting in glee as HDB upgraders will have more money to buy private properties at higher prices. For those singles and still waiting for a HDB flats, cannot wait liao. Go quickly and grab a flat fast. Tomorrow will be more expensive. The prices can only go up and up.

Property bubble is good

Justin Chiu of Cheung Kong Property lives by the religion that property bubble is good. It has to be. High property prices mean big profits for his company and big bonuses for him. Every property developer must live by this religion, or they should not be in the property business. They are in to make money, big money. They are not in a charity business. Sorry, I think I must qualify this. Some charity businesses are also very happy with big bonuses. No one should demand that property developers build properties and sell at a loss or at subsidized profits. That is fundamentally wrong. They must make the most profits they could from their projects. They must sell at market price, as high as the market can afford. It is not their responsibility to make sure that properties are affordable and reasonable. That is the job of the govt. The govt is responsible to the people and has a moral duty, a social contract, to house the people in decent homes, not in dog’s kennel. The roles of the govt and property developers are different. It only becomes a problem when a govt thinks it is a property developer, to max profits and a property developer thinks it is the govt and sells property at a loss. But in a world when the lines are blurred, when confusions set in, when the govt is not the govt, when the developer is not the developer, the people will become collateral damages in a greedy game of profits.