So we await the Q4 results for Avg Monthly Income Reports

We have seen the the CPI for year 2007, a whopping 4.2%, and all lights are flashing red.

But how are we going to create a solid fundamental view on the prevalent economical climate of our nation? I'd suggest you take look at the Q4 results of the average monthly income report.

Currently, as it stands the avg monthly income of a Singaporean is at $3,481 a drop from Q2 $3,578. That said, we could argue that the drop could be a mere seasonal adjustment due to the fact that 2006 displayed similar trend in data (with less volatility though), see below,

Q2 2006 -3,297
Q3 2006 -3,256 (-1.24%)
Q4 2006 -3,961 (21.65%) CPI For 2006 = 1%

Q1 2007 -3,903
Q2 2007 -3,578
Q3 2007 -3,481 (-2.71%)
Q4 2007 -????? (???????) CPI For 2007 = 4.2%

Granted, Q4 Data for monthly income must be bullish to complement the inflationary CPI Data. Next issue would be, how bullish should the data be? I will assume that we should see at least an equal increase in percentage compared to 2006 Q4 data.

Anything less would mean the pockets of the average Singaporean will hurt for 2008 and it would mean an early signal that the economy has thus reached a peakish momentum. Please note that i mentioned economy, not the markets, i'm expecting this will slowly work it way into the market in q3 or q4 of 2008.

Thus a bullish q1-2 of 2008 will prove a classic divergence with the statical data and investors should be advised to excercise prudence.

best regards
jest

Will The Buying Dry Up?

We have seen that practically almost everything is going bull. 2007 has been a memorable year indeed, a year where our market and major currencies reaches unprecedented heignts. The strengtening of Singapore currency has encouraged our Singaporeans to travel more and we are likely seeing the good 'ol 90s replayed.

The emergence of China as the new up and coming economical behemoth, has caused the face of economics to take a huge restructuring, no longer can we depend on US statistics as the main indicator to guage the world's financial health. As money keeps sprouting froom every roots of developed asian nation and it seems like good times are here to stay... but is it really here?

While our nation has increased our surplus, we have to note the current scheme of renumeration for our citizens, has it been helping us to face the current inflation? Feedbacks were stall holders are facing high prices, forced to raise the price of their food but barely making much profit.

Lets not forget the US housing frenzy has driven the world's Housing market to go into a massive bull run (BS run that is where now we question the AAA collaterals) until some one opened a can of worms.

Credit and Life

So how did we suddenly become so rich? Have we ever wondered where did all this bursting liquidity in the current economical climate really came from? US has shown huge cracks in their credit setup, Euro is leaking fresh blood, how many more bad news can we chew up before the credit beast starts knocking on our doors?

Ask yourself, are you still under credit? House, Car, entertainment, bills, taxes, we are paying for almost every item we desire here and bargain hunt is a long foregone conclusion. Almost every average Singaporeans owns a car (with a 10 year loan on $1 installment), sounds good eh.

Ignorance is bliss but before we know it, when all the liquidity starts drying up and defaults start knocking on the doors, will the harsh reality surface? debt is evil.

Financial Bang

As stated, the financial markets of 2007 ended with a bang with no lack of scare and drama. Investors expect a spillover to carry on to 2008 drivng the markets further and higher, while this can be true, we can expect a strong fundamental divergence to surface in 2008, while price rises higher, prepare to face lesser potential buyers. As prices accelerates beyond any comprehension, citizens will start to feel the pain of buying.

Will we ever see the tipping point?

Buyers expect prices of houses to go higher, which may be true, but, ask ourselves this question, can the general population with the median income scheme, afford to pay such high prices? What have the goverment done to aid this? We are indeed resting in a very strong psychological and physical barrier.

So, who is the smarter one? The buyer or seller?