Sunday, March 15, 2009

Hardships hit Singapore expats reports on the downsizing of expatriate lifestyles in Singapore.

As the expat ranks swelled and foreigners put down roots, the city's tonier districts filled up. Prices for apartments in Western enclaves like Tanglin and Orchard doubled in value from 2004 to 2008 as buyers snapped them up. Waiting lists for coveted spots at international schools like the Singapore American School or United World College of South East Asia were so long that expats were encouraged to register their children at birth in order to gain admission four or five years later. The cost of joining the Singapore Island Country Club and the American Club soared as transferable memberships were bought and sold on the open market like hot stocks. (See 10 things to do in Singapore.)

Today, as beleaguered investment banks shutter offices and commodity prices and trade flows plunge, Credit Suisse estimates that hundreds of thousands of expat jobs are disappearing from Singapore. Property prices, particularly of high-end homes, are expected to fall some 50% as the recession gathers force.

But in a departure from previous downturns, some expats are electing not to return to banking centers such as New York City and London. This recession is global, and the implosion of the financial-services industry means job prospects back home are even bleaker. American Marc Rudajev, a 37-year-old ex–hedge fund manager whose $350 million fund dissolved in the middle of 2008 as global stock markets swooned, is one of the Singapore expats not hurrying home. "This economic crisis is affecting every country," he says wearily. "But if there is a glimmer of hope anywhere, it's here rather than in the U.S. or U.K."

A Canadian sales executive for a global media company, who requested anonymity because he is negotiating a severance package with his former employer, is another expat who has been living parsimoniously since being laid off. In the boom years, he occupied a spacious sea-view apartment near downtown Singapore that rented for $5,000 a month. Today he occupies more modest digs, paying about $700 a month for an apartment he shares with a friend. "I'm interested in creature comforts like hot water, but I can do without joining a country club or driving a Lamborghini," he says.


Anonymous said...


The real estate bubble was largely fuelled by the reckless IT guys indulging in the massive loans. Now they have been hit badly by the reduced monthly ( fixed & variable components) salaries, more salary cuts in the future, mandatory leaves without pay. This faltering group is going to make sure that the entire Ponzi scheme of the real estate developers/builders will be collapsed sooner than expected.

Anonymous said...

Anither relevant Article
Realty Sector Under Scanner

Anonymous said...

Preparation for another Bubble ?

India has already faced double digit inflation in commodities & 400% inflation in asset prices. Now when market is taking its own corrective action,
the corrupt politicians are preparing for another bubble. Though the current crisis starts with sub-prime lending, the real cause is speculation by foreign investors.

FDI rule change to help Unitech raise Rs 5000 cr
“Unitech can now raise up to Rs 5,000 crore through global

depository receipts (GDR) without an approval from the Foreign Investment Promotion Board (FIPB).”

Following two factors were attributed by Paul Volker while describing the economic crisis in 1980.
“One is technological change, which means that capital can now move about the world with unprecedented speed.
The second is the liberalization of financial markets, the dismantling of controls which has swept across the world. This leads to a large number of countries whose own banking sector is small & vulnerable to entering the financial market place.”

Ben Bernanke has also attributed the same cause in below interview.

So guys let it fall then only pick up, minimum 50% price cut is guarantee.


Anonymous said...

Indian Authorities are misleading us on Inflation. The inflation Is going up instead of coming down.

India Misleads on Inflation

Abeer Bagul said...

Rates of a flat in Kothrud, Pune:

I pity the guy who buys at this rate.

Anonymous said...

The indian mungerilals is in full retreat from singapore/dubai/london etc. Their assets blasted to smithereens, these suckers are now despondent, suicidal & forced to return to india. Where same old same old CRAP awaits 'em.
Easy come, easy go, mungerilals.

Anonymous said...

@Anonymous (5:03 AM)

Brother, why do you call Indians mungerilals. If you can, please help these people, if you can't please don't curse them. Everybody's destiny is determined by lord shiva, before they are born and nothing can change it. So, they may be paying their penance for their karma done in previous life. Life is just a bubble and everything is pre planned by bhagwan

Jai Hind

shailesh said...

Economist article on India,

Bridges to somewhere
From The Economist print edition

The slowdown puts the onus on the government to start rebuilding India’s rickety infrastructure.

In other countries, fiscal stimulants are raising the spectre of “bridges to nowhere”. But in India, extra infrastructure is sorely needed. During the boom, India’s industry expanded faster than the electricity grid’s capacity to power it; its air traffic outgrew its airports; and cars rolled off the production lines faster than the roads could accommodate them. In DLF’s Aralias in Gurgaon, each flat is allotted three spaces in the car park underneath. But many residents buy more.

The company looks after the roads, storm drains, sewer system and the flora within “DLF City”. But outside, the state authorities have struggled to keep pace. Gurgaon’s roadsides are disfigured by deep trenches, where the trunk sewer line waits to be laid.

Now that India’s economy is slowing and competition for men, materials and money is slackening, India’s public infrastructure may have a chance to catch up. In Gurgaon the Delhi Metro Rail Corporation is building an elevated railway that will connect the upstart city to the capital. It is a public project backed by the governments of India, Delhi and the neighbouring state. It is also now the busiest construction site in the city.

I wished Indian Central government gave same amount of attention to cities other than Delhi. I am always appalled at poor infrastructure in Mumbai / Navi Mumbai. The citizens have to resort to stop trains to have their voices heard.

Anonymous said...

Why investment in India could fall very sharply

"There is no way that the government can expand its investment to compensate fully for this fall in private investment. At best, it will try to increase investment by 4-5 percent of GDP. This will mean that there will still be a sharp decline in total investment as a ratio of GDP at least by 4 percentage points."

Anonymous said...

IMF sees India's growth rate slowing dramatically

"India's economy is slowing dramatically and uncertainty surrounding the outlook is unusually large, the International Monetary Fund Financial crisis
said on Tuesday."

Anonymous said...

Economic with truth

Excellent article on how India's pink dailies peddle lies about the economy.

Anonymous said...

"The results of the Sixth Pay Commission have certainly added a substantial fiscal burden, though less in relative (to the economy) terms than its predecessor. Political uncertainty has increased, with general elections formally announced and significant prospects for an even more unwieldy coalition government than the one whose term is expiring."

Anonymous said...

ICAI opposes RBI move on restructuring loans

"According to the proposal, commercial banks need not classify a non-serviced loan under NPAs if the borrower has submitted an application for restructuring the package before March 31, 2009."

Anonymous said...

When RE market will rebound?
1. Once the job security will return back.
2. Housing prices will become affordable.

As unemployment is the lagging indicator of economy, the employment market will improve last. It means the factor#1 will improve after economic rebound.
So there is only scope in changing factor#2.

As per the latest data, India is showing 0% inflation rate, even assuming the real inflation rate as 3% still it’s a phenomenal drop in inflation. As per the Phillips curve, the inflation & employment have exponential relationship. It means fall in inflation is rise in unemployment.

As prices will fall in deflation, cash is the king.

“India is staring at deflation, or negative inflation, with the official inflation rate this week falling to 0.44% — the lowest since 1977. If deflation lasts for some time, as seems possible, it would be a new experience for India.”

So guys let it fall then only pick up, minimum 50% price cut is guarantee.


Anonymous said...

Slowdown bug bites TCS, no more benches
Tuhina Pandey
Friday, March 20, 2009 (Mumbai)
The IT companies earn more when they employ more but that’s now a thing of the past. Recession has clearly taken a toll on business with not many new projects coming in and existing clients cutting back on their IT budgets.
The gates to the largest Indian IT company TCS is gradually closing for engineering graduates.
How would it impact the aspiring IT engineers and the company?
There would be no more offer letters in advance and a slim chance of employment for the ones who finally graduate, and that only if the company has more business on hand and needs to recruit.
However, for S Ramadorai, the CEO of TCS, the bigger worry now is to deal with the existing bench—the idle number of employees that typically amounts to 15-20 per cent for an IT company and for TCS which employs over 1,30,000 employees, it’s a daunting task.
"We cannot afford benches anymore. We will redeploy and retrain existing bench and put a freeze on lateral hirings. The non-performers will have to find alternatives, " Ramadorai said.
So, even if Ramadorai tactfully puts it, more layoffs in TCS is a reality and the company also plans to make changes in variable pay structures to tame employee cost and link salaries more and more to the performance of the company.
"One change is to increase variable pay component and even make adjustments in the existing structure. There is a lot of room for cost cutting," Ramadorai said.

Well, the IT companies incur almost 50 per cent of the total cost on employees. Now, in these tough times when business is not fast and thick, it is this expenditure that they are aiming to axe. Therefore, a tough job market and more layoffs are inevitable.


Anonymous said...

Those who brag about 5~8% growth, please read the following.

Those who flex muscles and proud of the billionaires in India, please note that nothing has changed in India since independence. Liberalisation has benefited a privileged few and the majority population is still finding it difficult enough for two square meals.

nakul said...

I just finished reading Happionaire's Cash The Crash. I think I must have been the first few people to read it and I was amazed by the book. But even more by the analysis done on real estate. The book is a must read for each and every person not just on this blog, but the entire nation. It clearly states that a crash of over 50% is yet to come in Indian real estate. Vulture will be very happy to read this book. A real eye opener.

Anonymous said...

Thought I would share J Interesting story – the moral is too close to reality!



Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

2) B decided to purchase the land from A for 1 dollar. So, A and C now each own 1 dollar while B owned a piece of land that is worth 1 dollar.

The net asset of the country = 3 dollars.

3) C thought that since there is only one piece of land in the country and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A and together with his own 1 dollar, he bought the land from B for 2 dollars.

A has a loan to C of 1 dollar, so his net asset is 1 dollar.

B sold his land and got 2 dollars, so his net asset is 2 dollars.

C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net asset is 1 dollar.

The net asset of the country = 4 dollars.

4) A saw that the land he once owned has risen in value. He regretted selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C.

As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.

B loaned 2 dollars to A. So his net asset is 2 dollars.

C now has the 2 coins. His net asset is also 2 dollars.

The net asset of the country = 5 dollars. A bubble is building up.

(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C and cancellation of his 2 dollars loan to A.

As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.

B owned a piece of land that is worth 4 dollars but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.

C loaned 2 dollars to B, so his net asset is 2 dollars.

The net asset of the country = 6 dollars. Even though, the country has only one piece of land and 2 Dollars in circulation.

(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blew. An evil thought came to C's mind. "Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, I think after all the land that B owns is worth at most 1 dollar only."

A also thought the same.

(8) Nobody wanted to buy land anymore.

In the end, A owns the 2 dollars coins, his net asset is 2 dollars.

B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. His net asset become -1 dollar.

C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.

The net asset of the country = 3 dollars again.

Who has stolen the 3 dollars from the country ?