The flexible truth

We have all been convinced that 30% of household income is the reference for affordable housing. What does this number really mean? To begin with, household income can be one income family, two incomes or several income family. This part is really very flexible and can be anything. The problem with the number of income in a family is that it is not a certainty and can vary over time. But the house/flat, when bought, the amount to be repaid in a 30 year mortgage is inflexible and will remain the same. So one day it is affordable within the definition of 30%, the next day could be very affordable or very unaffordable.

When breaks up, when children got married and left the family unit, the affordability reference can change drastically. Same as when a household loses one or more incomes. The affordability can become meaningless.

The other issue of this affordability is the rubber band of time. To be stretched to 30 years, 50 years or 100 years to be affordable is a playing of rubber time. This kind of interpretation of affordability is treacherous and deceiving and can be adverse to the home buyers.

What about the type of housing, rental or bought, 30 year lease, 60 year or 99 year lease, or freehold? Comparing a 99 year lease with freehold and using the same yardstick of 30% household income surely would make the meaning quite different. When a 30% income is for the purchase of a freehold property, and applying it to a 99 year leasehold, it is like comparing apple with orange.

Would the type of properties or size of properties matter in this affordable formula? 30% to buy a 1000 sq ft unit and a 500 sq ft unit surely must be quite different as the quality of living condition will be affected. To make this clearer, look at yesteryears fresh graduate spending 30% of his income for a landed property and today’s graduate spending an equivalent percentage to buy a 99 year leasehold shoebox flat. It is affordable in both cases, but are they the same?

This flexible truth is now being waved daily to tell the Sinkies that housing is affordable. Is this kind of truth acceptable and responsible? What kind of credibility is the person spouting this kind of reasoning? Is his or her intent honest, sincere and well meaning?

The testimony of St George

The ST gave George Yeo half a page of coverage and a great and adorable photo as dessert. George has put on weight, his hair is growing and getting darker. He is not only looking younger, he is looking more relax and happy, yes, genuinely happy. Life must be good for George in the private sector. His fallen from grace could be like the blinding of Paul to help him see the truth. At worst, George is now spared from the daily curses of ungrateful citizens.

The interview and George’s comments were very interesting. The more interesting part is not what he said but what he did not say. For instance he said, ‘When I look back on my various portfolios, there were opportunities to do good.’ He did not say whether he seized those opportunities or he did not. Later he added that he had more freedom now, and less of that constant pressure.

On the issue of credibility he added, ‘In the old days you’re protected by ritual, by hypocrisy, sometimes by ignorance. Today, it’s no longer possible. If a picture is too perfect, you know it can’t be real.’ Wow, in these few words he said so much. Great George!

How could people be protected by hypocrisy and ignorance? This is very interesting. Can hypocrisy really protect anyone? Or can anyone think he can be protected by ignorance? The part about being too perfect is just too much to be true. It is like the picture perfect Avatar Garden, so perfect, and yes, how real is it?

Singapore as the perfect city of growth and development is just perfect, economic growth every year, like 15%, a world record, property prices can only go up, the people all becoming millionaires, salary can only go up to make sure that all the properties are affordable and the people will have so much money in their CPF to live a rich and happy life in retirement when they are 100. Everything is so perfect.

It is great to read George Yeo in the ST in such a favourable mood.

Asia at the cross roads of being being enslaved by the Evil West again

The troubles, crisis and wars in Asia in general and in East Asia and South East Asia in particular have all been instigated and churned up by the Evil Empire, USA. The evil and satanic white American politicians in the White House, the Pentagon and CIA can't bear to see peace and prosperity in Asia especially East Asia.They fear illogically that the rise and prosperity of East Asia will relegate USA to rank behind Asia eventually. So, they try to change the natural trend of events of the rise of a peaceful and prosperous Asia by evilly engendering crisis after crisis in creating proxy wars through creating fears,  suspicion and dissension and playing constantly on the psychological fears among the unsuspecting Asian countries , hoping thus these perennial crisis and wars will push back Asian development and prosperity and allow the Evil Empire to pretentiously play the good guy and gain power to lord over all Asian countries again. Asian countries especially India, China and Japan must rise above their narrow interest to unite and build a prosperous and harmonious united Asia and be aware of the wicked insidious schemes of the West headed by the Evil Empire, USA .  Asians must either unite or be enslaved by the satanic Evil Empire, USA and the West again.

Southernglory1
1st November, 2012

Comparative advantage of a FT in Sin

Sinkieland is not only a paradise, a Disneyland to the FTs. It is a gold mine, like the gold mountain of California in the early 20th Century. Every poor peasant would risk life and limbs to go the beautiful country called America. Singapore is everything a FT can ask for, especially those from the third world countries when the comparative advantage is simply too good and too many. In America of old, they were exploited, discriminated, the govt and system were hostile to foreigners. In Sin, the foreigners were welcomed with open arms, govt budgeting funds to help them to assimilate to the new environment and people. The govt treats foreigners even better than the locals. Many came for top jobs, replacing the locals with full blessings from the govt, as foreign talents. What more do the foreigners want?

Take the cost of bringing up and educating a Sinkie here compare to those from the third world, the latter costs nearly a pittance to the millions needed to bring up a child. The cost here ends up with every child a losing concern. For a FT from a third world, it is big profits, plus exchange rate advantage, the return is unimaginable.

And the education of a child, the education system and infrastructure there and here, a Sinkie child will be given the best in education, but the sickening thing is that they are found not good enough compare to a third world product who could even be bossing him all over. The straight As that our students are getting must be fictitious that even our employers, both private and govt, don’t see them any up. Someone or the employers must be thinking that the grades are all fixed up while the grades of third world products are genuinely good, excluding the fake degrees that are not discovered.

The third world FTs are here for an upgrading, upgrading everything, from lifestyle, housing, income, jobs, status etc etc, it is all one way, up. The natives or Sinkies are also one way, down, except for the rich and powerful. Sinkies are downgrading in everything, in income, in lifestyle, from car ownership to public transport, from good paying jobs to driving taxis or as self employed agents, from landed properties to non landed properties, from bigger flats to smaller flats, from managing foreigners to being managed by foreigners, from renting rooms to foreigners to renting rooms from foreigners, from employing foreigners to begging to be employed by foreigners, from defending our country to defending foreigners. And people on the streets, from being kind to foreigners to being beaten by foreigners.

What is happening?

Having children is a bad economic proposition

When one looks from the angle of profit and loss or the yield of an investment, having babies is a bad gamble. Statistically, only the top 20% of a cohort would be making decent returns in terms of profit. Maybe 30% will break even and the rest outright losses.

Let me show some numbers. Bringing up a child will easily cost between $500k to a million or more. Giving an expectation of 5% per annum return and a productive life of 30 years, the return should be 150% plus cost. A million dollar upbringing cost would need a return of $2.5m and a $500k cost will need a $1.25m return. To earn $2.5m a Sinkie must bring in an average of $83k pa for 30 years. How many average Sinkies could earn this amount? For a return of $1.25m the average income should be $42k. This is likely to be the bulk of the average Sinkie’s income.

Put the money in properties, a $500k investment over 30 years is likely to give a return of 10 or 20 times, capital gain and rental income. This means between $5m to $10m in the Singapore context. Why would people want to indulge in the precarious and risky venture of child bearing for so little return and so many angsts?

Bringing up a child can be a bad dream, some a nightmare, and worst, could be a life time of hellish experience. To make things more disgusting, you have a govt lusting at every child as a digit to contribute to economic growth, to pay for someone’s sports car or multi million properties, and to defend and die for dunno what.

When everyone is looking at child bearing from the economic point of view, it just does not make sense to bring up a child. It is too costly, and to most parents, a losing proposition. Many would have to write it off as bad debt or capex to be depreciated over 30 years if lucky, or a lifetime of cost incurring negative asset. Does anyone look at a child as a new life, to be cared for, to be loved, to be provided for, to live life and to enjoy life, instead of becoming any inanimate cog in the economy?