Goldman Sachs Says Hong Kong Set to Benefit Most from Quantitative Easing

By Nick Gentle - Nov 3, 2010 8:04 AM

Goldman Sach Group Inc. raised its 12-month target for Hong Kong’s Hang Seng Index to 29,000, saying the city has the most to gain from extra liquidity released by quantitative easing programs and China’s growth.

Hong Kong will benefit most from a structural capital relocation away from developed markets to emerging ones, Goldman analysts said in a report today. They said the MSCI Hong Kong Index offered a better proxy for Hong Kong growth than the Hang Seng Index, for which China stocks make up 56 percent of its market capitalization.

The analysts said Hong Kong property stocks such as Sun Hung Kai Properties Ltd. and Cheung Kong (Holdings) Ltd. would benefit from liquidity-driven real estate inflation.

Wednesday, December 1, 2010
People's Daily: International Investment Bank Caused Crash
By staff reporters Sun Huixia and Ma Yuan 12.01.2010 20:00

People's Daily Says Investment Bank Responsible for Plunge
In an apparent effort to influence the stock market, the People's Daily opposed big fluctuations in stock market

(Beijing) - China's official mouthpiece, the People's Daily, said December 1 that an international investment bank manipulated stock markets for its own gain and a group email that it sent to investors triggered off a plunge in share prices on November 12
In a commentary contributed by Shi Jianxun, a professor at Tongji University, an unnamed international investment bank allegedly sent emails to investors, advising them to sell their shares. The article, titled "Where is China's stock market heading in the next two decades?" said that rumors of impending stamp taxes also sent the market into a tailspin.

On November 12, the Shanghai Composite Index fell 5.16 percent, the largest single-day drop in 2010 so far. China Securities Regulatory Commission has started a probe into the alleged manipulation and has not released their findings.

The article, published on the front page of the overseas edition of the People's Daily, said that China should avoid dramatic fluctuations in the stock market and make it a major vehicle to increase the wealth of the masses. The overseas edition targets audiences outside of the mainland.

"Big fluctuations on the stock market have a remarkable impact not only on economic development, but also on the harmony and stability of the society," said the commentary.

About 150 million Chinese invest in stock markets and investors are from all walks of life, said the commentary, adding that any move in the stock market would rattle the nerves of millions of people.

The commentary was the second in two weeks for the state-run newspaper to voice its strong support for a bullish market. In the commentary published last Wednesday, the stock market was described as the best place to absorb excess liquidity.

"China's fight against inflation will not come at the expense of a stock market collapse. The market should not overreact to the measures by the government to curb inflation," said the previous commentary.

The commentary added that stock markets still lack fairness, accountability and transparency.

The Shanghai Stock Exchange and Shenzhen Stock Exchange were launched two decades ago with the official mission to facilitate state-owned companies in their corporate financing. All listings still need to be approved by securities regulator, rather than by the exchanges.





Goldman Advises Clients To Take Profits On "Long China" Trade
Submitted by Tyler Durden on 11/11/2010 12:16 -0500




After last night's completely unsurprising "beat" of Chinese annualized inflation of 4.4%, Goldman today has come out with a note which, however, is very surprising: Goldman's Robin Brooks and Dominic Wilson have decided to close out their "long China" recommendation, which was one of the firm's Top 2010 Trades presented previously on Zero Hedge. And while the profit on the trade of 11.3% is appealing, the reason for the unwind makes little sense. As everyone had been fully aware (see our note here) in advance, the inflation number would come out at 4.4% (and so it did). To use this as an argument for tightening expectations seems a little disingenuous. Which begs the question: why is Goldman truly no longer bullish on China? And does this mean that the firm no longer buys Jim O'Neill latest decoupling thesis? Lastly, as China has been a key dynamo for world growth, if there is little equity upside to be had in the one last capitalist country, what can we say about the less than capitalist America? This is further compounded by Jan Hatzius' suddenly rosy again outlook on the US economy (coupled with Goldman's ongoing demands for up to $2 trillion in QE, which with every passing day is becoming increasingly more improbable)...

From Goldman Sachs:

Following yesterday’s RRR hikes, overnight China’s CPI inflation came in at 4.4%, above consensus of 4.0%, while industrial production rose by 13.1%, slightly short of consensus expectations of 13.4%. Money growth remained robust at 19.3% yoy. These data reinforce our view that activity remains solid even as inflation is picking up, so that more tightening measures are likely on the way. Jobs data in Australia was stronger than the headline number suggests (5.4% vs consensus of 5.0%), with the rise in the unemployment rate due to a jump in labor force participation. The main even today and tomorrow will the G-20 summit of heads of state.

Yesterday we closed our long China (HSCEI) equities recommendation and long EEM/SPX recommendation with potential gains of roughly 11.3% and 2.3% respectively. With the US cyclical data (ISM and Payrolls) surprising on the upside last week, initial jobless claims continuing to trend lower, and inflation and policy tightening back squarely on the EM policy agenda, the near term outlook for this type of relative trade versus the US is more muddied than it has been for some time. The China (HSCEI) equities top trade too has moved up strongly in the last few months on the back of better cyclical data and easier policy. With successive inflation prints above the policymakers’ comfort zone, another hike in the reserve rate earlier today, and more policy tightening likely in the works, the near-term risk/reward for this position also looks unappealing as we approach the year-end ‘roll-off’. This “risk-management” aside, we continue to like the long-term outlook for EM equities: growth remains robust, and low interest rates in the majors should continue to exert downward pressure on the cost of funding for EM corporates. In the near term the inflation risk in some EM economies is growing and real, but as long as it is dealt with, equities should remain broadly well-supported, but after a strong run since September, it will be important to be more selective going forward.

As for how Goldman's top 9 trades of 2010 have fared so far, below is a summary - of the 9 original trades, 4 have been closed (2 at a loss, 2 at profit), and 5 remain still open.

Stay short S&P 500 Dec10/Dec11 Forward Starting Variance Swap, opened at 28.20, with a target of 21, now at 25.466.
Stay long Russian Equities (RDXUSD), opened at 1645.9 for a target of 2050, now at 1804.00.
Stay long GBP/NZD, opened at 2.29, with a target of 2.60, now at 2.0531.
Close short 2-yr GBP swap rates vs. long 2-yr AUD swap rates on a 1-yr forward basis, opened at -268.5 bp, for a potential loss of 24 bp (inclusive of carry).
Close short 2-yr TRY rates through cross-currency swaps, opened at 8.77%, with a target of 12.0%, for a potential loss of 168 bp (inclusive of carry).
Close long 5yr credit protection in Spain vs. short 5yr credit protection in Ireland at 13 bp, opened at 70 bp, with a target of 20 bp, for a potential profit of 2.9% (inclusive of carry).
Stay long the GS FX Growth Current, opened at 103.5, with a target of 111.8, now at 104.1.
Stay long PLN/JPY, opened at 32.1, with a target of 37.5, now at 28.9471.
Close long Chinese Equities (HSCEI), opened at 12616.01 on 01 April 2010, with a target of 15000, for a potential profit of 11.3%.

HOW CAN HSI LONG,HSCEI SELL?THIS NEVER HAPPEN IN HISTORY!!!LETS CHECK THE PERFORMANCE OF HSI, HSCEI AFTER THE GOLDMAN REPORT

HSI:24876 ON NOV 5TH 2010(day of report) DEC 15:22975---DOWN 7.6PERCENT

hscei:13889 ON NOV 10 2010( day of report) DEC 15: 12585---DOWN 9.3PERCENT

BOTH DOWN RIGHT?I WANT TO SEE HOW HSCEI CAN PLUNGE WHEN HSI GO UP TO 29K

GOLDMAN SUCKS

wed 1dec 2010:
same pattern as monday: hangseng, sti rally in late afternoon.
at night, us surge up 2+pc

commodities surge,wheat up 6.5pc

TUES nov30 manipulation pattern
hsi drop 158 points,sti drop 13 points.

this drop is a far cry from shanghai comp dropping 3.5pc in the day when hsi drop only 1.1pc.--suggesting more upside

HENCE WE GOT THE ANSWER from usmkt at nite..
usmkt drop also by same %tage--hence this drop is factored in by hsi yesterday.

gold,silver surge at night,breaking the 50mark.

LOOK AT THE SIMILARITY:

STAGE ONE

FROM MAR 09 2010 SP500 UP FROM 672 TO 930 MAY4TH 2010:9WEEKS

FROM AUG30 2010,SP500 UP FROM 1030 TO 1227 IN 10 WEEKS:NOV1ST WEEK

AFTER 1ST LEG OF CHIONG MUST REST RIGHT??

STAGE TWO:

FROM MAY4TH 2010 ,SP500 DROP TO 878 AND RESTED FOR 3 WEEKS

THIS IS WHAT EXACTLY IS HAPPENING NOW:
WEEK STARTING 29NOV 2010 IS THE 4TH WEEK:

Sp500 drop from 1227 to 1173--either this week we get a surge OR its the last week of consolidation

next STAGE 3

will come the fake surge to 1240-1250,IN DEC 1ST,2ND WEEK,THEN A ONE MONTH(4WEEK) FALL OF 100POINTS TO 1140

exactly like 1st week june to 1st week july2010


SO TECHNICAL!!!1140 WAS THE BREAKOUT POINT

now lets look at hangseng:

STAGE ONE:

mar09:hsi rose from 11344 to 15977:4500points in6 weeks(same as usmkt)

aug30 to oct 1st week:7weeks hsi rose from 20372 to 23866: 3500POINTS

STAGE TWO:

THEN IT RESTED FOR TWO WEEKS IN MAY2010:DROP A TOTAL OF 15977 TO 14457 :1500 !!

NOW it also drop about 1000points from 23866 and rested for 2 weeks(approx 3500/4500 x 1500)

STAGE 3:

then it shoot up in 1st week of may:to 17442(up about 3000points)

now IT AlsO SHOOT UP about 2000points from 22800s to 24988

STAGE 4:the REST

hsi drop 1000points from 1st week of may 2010 to 3rd week of may 2010

now hsi drop 2000 points from 1st wek of nov to 4th week of november

STAGE 5:THE SHOOT!!

hsi shoots up 2800 points from last week of may to 2nd week of june 2010.
the high on june8th 2010 is 19161,higher than 17440,may1st week high

hence we can conclude december 1st,2nd week will be the shoot!!
AND LIKELY TO GO AT LEAST 2800 POINTS FROM 22870 TO ABOUT 25600S in dec 2nd week 2010


WE WILL CONTINUE ONCE WE REACH DECEMBER 2ND WEEK

from today 30nov2010 onwards,i will be creating a new compilation of every day manipulation patterns in hsi,sti,usmkt

30nov2010

hsi started by going lower all the wy to the last hour at 3pm,then it shoot up 300points,1.3pc.

Sti also followed suit and close flat.

US market opened down 1.3pc and rocket up also in the last hour at 4am 1.3pc and close flat

RATIONALE?

HSI HAS FALLEN MORE THAN STI AND DOW.HENCE HSI CLOSE UP IN LAST HOUR WHILE DOW OPENED LOWER BY 1.3PC AND CLOSE FLAT.

LETS CHECK THE RATIONALE:

HSI 24988 DROP TO 22782,TOTAL 8.8PC
SP500 ONLY FROM 1227 TO 1173 TOTAL: 4.4PC

EXACTLY HALF!!!!!
HENCE U ALSO CAN DEDUCE THAT 22782 HSI AND 1173 SP500,3150STI IS GOING TO BE THE BASE TO PROJECT UPWARDS FROM:

HENCE HSI WILL "OUTPERFORM" BOTH STI AND DOW IN THE COMINNG DAYS UNTIL WE REACH 1225-1227 IN SP500.

THE SURGE IN HANGSENG WILL BE "AIDED" BY A KELONGLY "COINCIDENTAL" RISE IN THE SHANGHAI COMPOSITE.

China Hedge Funds Outperformed Rivals in 2009 0 comments
Jan 23, 2010 1:09 AM
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Share0 I made a list of 2009 performance results for mainland China-based hedge fund managers. Needless to say, it is very impressive that those managers had done well in the past year, especially comparing to their rivals in other Asian regions.



Here is a table with the top performing hedge fund managers for 2009.



Fund
Return in 2009
Strategy
Manager

Golden China Fund
182.40%
Equity Long Short
Greenwoods Asset Management

Pinpoint Opportunities Fund
142.23%
Equity Long Short
Pinpoint Capital Management

Springs China Opportunities US Fund
105.45%
Equity Long Short
Springs Capital

Rising ABH Growth Fund
96.78%
Global Macro
Rising Fund Management

China Dragon Engine Fund
79.72%
Multi-Strategies
Cypress House Asset Management

Pinpoint China Fund
78.65%
Equity Long Short
Pinpoint Capital Management

Greenwoods China Plus
70.63%
Equity Long Short
Greenwoods Asset Management

Congrong Advantage Fund II
64.80%
Equity Long Only
Congrong Investment Management

Congrong Advantage Fund I
59.76%
Equity Long Only
Congrong Investment Management

SMC China Fund
53.01%
Equitly Long Only
Simon Murray & Co. Cayman

Wisdom Sustainable Growth
46.77%
Equitly Long Only
Wisdom Investment Management

Congrong Advantage Fund III
46.43%
Equity Long Only
Congrong Investment Management

Pinpoint Asia Strategies
40.26%
Multi-Strategies
Pinpoint Capital Management

Source: Bloomberg




As you can see, hedge funds run by local Chinese performed well in 2009, especially Lu Jun’s Congrong Investment Management. I just heard that the firm would relocate to another building and want to enlarge their investment team in the next year. It is an amazing time for Chinese hedge funds. If you check other performance results which haven’t been tracked by Bloomberg, you would get to know more outstanding fund managers. For instance, Guangdong-based New Value Investment’s flagship fund, New Value II fund, was up 192.57% in 2009 and ranked No. 1 in all Chinese onshore hedge funds. New Value fund, another product managed by the house, gained 156.47%. But now, only local Chinese investors are allowed to access these funds. Once those fund managers could launch offshore products, it will be a wonderful time for global investors to enjoy their capabilities in stock market.


LOOK AT MY DARLING PINPOINT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!I AM A PROUD INVESTOR IN PINPOINT SINCE 2006

compare the 1966-1982 bear market with 2000-2016??bear market many many similiarities.
1.the shape
2.the subprime bottom in 2008 looks exactly like the 1975,which made a lower low

LETS WELCOME THE SECULAR BULL IN THE US MARKET

Brian Kelly: QE2 Could Be Bullish for US Dollar
Published: Monday, 18 Oct 2010 | 11:35 AM ET Text Size By: Brian Kelly, "Fast" Contributor


On Friday, the financial markets were abuzz with the notion that Ben Bernanke stated “all other things being equal, there appears to be a case for more action.” The knee jerk reaction was predictable, the US Dollar fell and bonds climbed, however, by the end of the US trading session these trends had reversed … why?

I would point to other portions of Chairman Bernanke’s speech where he spoke about the risk and rewards of unconventional monetary policy. One of the most surprising admissions by the Chairman was that he did not know the ultimate impact of QE2. From the speech:

"One disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public."

Perhaps this was simply refreshing honesty which the market is unaccustomed too after the Greenspeak era. However, the fact remains that the Chairman of the US Federal Reserve, who did his doctoral work on the Great Depression and the deleterious impact of a waning money supply, is concerned about the unintended and unknown consequences of his actions. The financials markets have been expecting higher bond prices and a weaker dollar, but this expectation is flawed. Through QE2 the US Fed is attempting to spur financial speculation which they hope will foster real investment in property, plant, and equipment. By extension these facilities will need to be filled with workers and voila…unemployment drops.

Lower Bond Prices, Higher Yield

While the market has focused in the mechanism for QE2, i.e. asset purchases, it has completely ignored the primary tool used by the US Federal Reserve…communication. Chairman Bernanke, in numerous speeches and papers, has argued that Federal Reserve policy is not limited to interest rates and money supply, he suggests that the first step for policy makers is to communicate the Fed’ s intentions. If executed flawlessly, the Fed may not even need to write one buy ticket for Treasury securities. So has it worked?




The above chart illustrates market expectations for inflation over the next five years; it is simply the 5 year Treasury Rate minus the 5 year TIPs rate. As the chart shows, without buying a single Treasury Bill, Note or Bond, the US Fed has successfully increased inflation expectations from 1.2% to over 1.6%...in less than a month. At this pace, inflation expectations will be at 2% (the Fed’s target) by the time of the November FOMC meeting. The implication is that market expectations of a massive bond buying program could be incorrect. Furthermore, if financial speculation leads to real economic investment and hiring then further QE is not needed.

Impact on the Dollar

Without a massive bond buying program the linchpin of the dollar bear argument disappears - the Fed will not be “printing money” and will not destroy the dollar. In fact, QE2 could be bullish for the US dollar. The Fed’s verbal commitment to support asset prices coupled with its ability to buy assets should provide support in the US financial markets. Moreover, while yields may move slightly higher due to inflationary expectations the US stock market will remain relatively attractive as compared to bonds. Therefore, from an investor’s perspective US assets become attractive. The “Goldilocks” environment the Fed is attempting to create could result in foreign investor interest in the US markets as relatively low rates and the Bernanke “put option” make the US a safer place to invest. This foreign investment interest would be supportive of the US dollar. Moreover, as other countries attempt to weaken their currency the US dollar will strengthen, making US investments even more attractive.

How We Are Playing It

The simplest way to play a stronger US dollar is a long position in the US Dollar Bullish ETF [UUP 22.3193 -0.0207 (-0.09%) ]. This ETF gives an investor broad exposure to dollar strength; additionally, the US equity markets may need a period of adjustment to a stronger dollar. A strong US Dollar does not always mean lower stock prices; in fact if the Fed is successful the real economy will begin to improve. However, the current market mindset is that a strong dollar is bad for stock prices. It may take some time before the markets change their view and thus the direct currency play via UUP appears to be the most attractive investment.

Disclosure: Accounts managed by Kanundrum Capital are long UUP.


exactly my view

1st half in the sp500

666 to 950:mar09 to jun09(went thru the 200day MA)
950 to 870:jun 09 to jul09(retest the 200day MA and bounce off the 200day MA)
870 to 1150:jul09 to jan10
1150 to 1040:jan10 to feb10
1040 to 1220:feb10 to apr2010

IF WE EXTRAPOLATE THE SAME TREND into the 2nd half:lets see the stunning coincidence!

1040 to 1320:sept2010 to dec2010(go thru the 200 WEEK MA at currently around 1200)
1320 to 1240:dec2010 to jan 2011(the 200wk value will increase when sp500 goes up,around 1220-1240 then)
1240 to 1520:jan 2011 to jul2011
1520 to 1410:jul2011 to aug2011
1410 to 1590: aug2011 to oct2011

HOW COINCIDENTAL THE MANNER THAT SP500 AFTER THE CORRECTION IN DEC2010 WILL BOUNCE OFF THE 200WEEK MA THE SAME MANNER AS IT BOUNCES OFF THE 200DAY MA
PLUS the final value of the 2nd half will be also the same 1590 the all time highs!!!

More want transfer out of Singapore
By Elizabeth Soh
http://www.straitstimes.com/STI/STIMEDIA/image/20101009/ST_17798250.jpg
A poster at an agency in Lucky Plaza advertises transfers for maids to Hong Kong. There, experienced maids can earn about double their pay here. -- ST PHOTO: NG SOR LUAN

THE 'maid crunch' may get worse, with agencies reporting a recent surge in inquiries from maids here who are hoping to transfer to places like Hong Kong and Taiwan.

As it is, employers here are already finding it more difficult to hire maids after the Philippine authorities recently tightened rules on Filipinos leaving for jobs abroad. The shortfall in supply could worsen with more maids here choosing to leave for other places, instead of renewing their contracts.

While such a trend is not new, maid agencies say they have noticed a surge in such inquiries this year. Of the 10 maid agencies polled by The Straits Times, eight say they have seen a 50 to 70 per cent jump in inquiries from maids in the past six months about transferring to places like Hong Kong and Taiwan.

Said maid agent Agnes Tan, 46: 'Out of the 30 applications I handle each month, about 10 are overseas transfers, compared to fewer than five a month last year.'

Ms Shirley Ng, president of the Association of Employment Agencies Singapore, confirmed such a trend.

Better pay is a key pull factor. An Indonesian or Filipino maid with four to six years of experience can earn $800 in Hong Kong, compared to just $450 here.

With fewer maids heading to Singapore, agencies are also increasingly publicising such transfer services as an alternative source of revenue.

At Lucky Plaza, a sign on the door of one maid agency advertises: 'Quick transfer to Hong Kong, Higher Pay!'

Over at Orchard Plaza, a maid agency has pamphlets on its desk advertising transfers to places like Saudi Arabia, Spain and even Norway.

Maids have to fork out about $2,300 to $3,000 to pay for transfers. Agencies here take a cut of about $300 - roughly the same amount they make bringing in a maid to Singapore.

'The only way we can make money now is to cater to the needs of those already here,' said an agent who declined to be named.

Mrs Marylou Cuneta, 37, is a maid who left for Hong Kong in January after eight years here. She now earns about $900 a month - double what she used to make.

She told The Straits Times: 'I am very happy in my current job - but I know I would not have got it if I didn't work in Singapore first.'

Additional reporting by Teh Joo Lin


THIS IS MY MESSAGE TO SINGAPOREANS.DONT EVER THINK YOUR MONEY TOO BIG..RIDICULOUS.I HAVE HEARD OF CASES(my ex nus classmate) ONE MAID IN CHARGE OF A 6PEOPLE HOUSEHOLD,2STOREY HUDC,think what?pay very big?can even tell me maid dont do, can hire another one.soon, all maids will shun singapore,and only the lousy ones come here.want to have more children, live in bigger house,BE PREPARED TO PAY MORE!!
dont ever take maids for granted
IN HONGKONG,SMALLER HOUSE plus LOWER BIRTH RATE, plus HIGHER pay,who doesnt want?

By Tara Lachapelle and Nikolaj Gammeltoft

Sept. 27 (Bloomberg) -- The Dow Jones Industrial Average will surge to 38,820 in an eight-year “super boom” beginning in 2017, according to Jeffrey A. Hirsch, editor in chief of the “Stock Trader’s Almanac.”

“All previous major economic booms and secular bull markets were driven by peace, inflation from war and crisis spending, and ubiquitous enabling technologies that created major cultural paradigm shifts and sustained prosperity,” he wrote in a press release sent with the 44th edition of the book.

Hirsch’s forecast comes more than a decade after James K. Glassman and Kevin A. Hassett predicted the Dow would rise to 36,000 by 2005 in “Dow 36,000,” a New York Times bestseller. The 114-year-old average ended 1999 at 11,497.12 and sank as low as 7,286.27 in 2002 following the Internet bubble. The Dow then jumped to a record 14,164.53 in 2007 and fell to 6,547.05 in March 2009 after the worst financial crisis since the 1930s.

“He’s got some crazy number on there,” said Frank Ingarra, a Stamford, Connecticut-based money manager at Hennessy Advisors Inc., which oversees about $900 million. “We’ve had probably one of the worst 10-year periods in history, and I think there’s just too much overhang with the government for it to get to those numbers.”

259% Surge

The Dow closed today at 10,812.04, meaning it must gain 259 percent, or about 8.9 percent annually in 15 years, to reach Hirsch’s projection. It has lost an average of about 1.3 percent a year since the end of 1999. The Standard & Poor’s 500 Index slipped 0.9 percent a year including dividends between 1999 and 2009, the first negative return for a decade since data began in 1927, according to S&P.

The withdrawal of U.S. troops from Iraq and Afghanistan and inflation caused by the wars and spending to end the financial crisis will help push the Dow higher, Jeffrey Hirsch said in the statement. Advances in energy technology or biotechnology may also help spur the rally between 2017 and 2025, he said.

“I can’t throw a dart that far,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion. “It’s too unknowable with regard to the things that would set up that kind of move.”

The “Stock Trader’s Almanac,” first published by Hirsch’s father Yale Hirsch in 1967, is known for revealing seasonal patterns in equity market returns. The “Best Six Months” strategy shows that since 1950, investors made the most money owning shares of Dow companies between Nov. 1 and April 30 and avoiding them the rest of the year. The book includes data showing the third year of U.S. presidents’ terms -- such as 2011 -- produce the best returns.

Jeremy Siegel

Glassman and Hassett based their forecast on work by Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School, who had noted that since the early 1800s, equities had never offered a negative return, after inflation, if held for 17 years or more. To the authors, that meant stocks were a safe bet for long-term investors if they could handle short-run volatility.

Glassman served as President George W. Bush’s undersecretary of state for public diplomacy and is now executive director of the George W. Bush Institute. Hassett is the director of economic-policy studies at the Washington-based American Enterprise Institute and a Bloomberg News columnist.

The Dow, created on May 26, 1896, by Wall Street Journal co-founder Charles Dow, was initially valued at 40.94 and included American Cotton Oil, Chicago Gas, Distilling & Cattle Feeding, National Lead and Tennessee Coal & Iron. General Electric Co. is the only remaining original member, though it wasn’t in the average for nine years starting in 1898.

The Dow surpassed 100 in 1906 and reached 1,000 in 1972. It topped 5,000 in 1995 after jumping 1,000 points in nine months. It was made up of 12 stocks initially, increased to 20 in 1916 and expanded to 30 in 1928. The average’s biggest single-day point loss was 777.68, or 7 percent, on Sept. 29, 2008.

EXACTLY WHAT I FEEL..REMEMBER I SAY BASED ON HANGSENG CHARTS,HANGSENG TO REACH 32K IN END 2011 TO 2012 THEN A DROP OF 50% TO 2015-2016,THEN A SUPER RALLY IN 2016,2017!!!

REMEMBER WHAT I SAID???
CASE SHILLER HOME PRICE INDEX COULD FALL BACK TO YEAR 2000LEVELS AS THE JOBLESS RATE IN US STILL VERY HIGH

BUT ITS TIME TO HAVE THE US STOCK MARKET CHEONG UP!!!

AS I SAID U DONT NEED TO USE REAL MONEY TO PUSH UP A STOCK MARKET...IF U UNDERSTAND WHAT I MEAN...

ITS NOT ABOUT OBAMA QUANT EASING 2
ITS NOT ABOUT MIDTERM ELECTIONS

STOP LISTENING TO MEDIA NOISE

ITS ALL ABOUT ONE UP,THE OTHER DOWN





Home Price Double Dip Begins
Published: Wednesday, 15 Sep 2010 | 11:31 AM ET Text Size By: Diana Olick
CNBC Real Estate Reporter
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The trouble with many of the "indicators" we report is that some are pretty current and others are severely lagging. Home sales are generally the former and home prices the latter.

That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.

Well we're here.

Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."

And there's the rub.

Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.


"Sellers on the market today have cut $29 billion off their collective home equity."

Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.

We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."


Mortgages


30 yr fixed 4.50% 4.67%
30 yr fixed jumbo 5.36% 5.53%
15 yr fixed 3.88% 4.24%
15 yr fixed jumbo 4.80% 5.05%
5/1 ARM 3.37% 3.29%
5/1 jumbo ARM 4.03% 3.52%

Find personalized rates:


Bankrate.com


They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.

Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.

why sp will break 1130 on the upside???

because silver just cheong up more than gold cheong up...

goldsilver ratio is a very crucial indicator...

sp500 has rebounded from 666 to today sept 14 1120,70 percent and goldsilver ratio has dropped 30plus percent from 90s in mar 2009.
assuming this ratio holds constant,

sp500 has 450 more points to go up to 1570,alltime highs in year 2000 and 2007
how much can goldsilver ratio fall?another 15 to 20 percent from current sept 2010 60s to 50,the crucial level in chart...

THREE SCENARIOS:
CASE ONE:if gold FALLS while silver rises, then sp500 will hit 1570 faster,hsi hit 32K by mar 2011

CASE2:IF GOLD FLAT WHILE SILVER RISES:then my target will be hit on sept 2011

CASE3:if gold rises and silver rises,then MAY drag to mar2012

http://uk.finance.yahoo.com/echarts?s=%5EHSI#chart1:symbol=^hsi;range=my;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

please download the hangseng chart from 1986 to 2010..

its trading in uptrend channel...
HERE IS THE ARITHMETRIC TREND

TIME PERIOD 1:
jan 1994 to jan 1995,hangseng drop for 1 year
jan 1995 to july 1997,hangseng up for 2.5 years

difference:1.5years

TIME PERIOD 2:
AUG 1997 TO AUG 1998:HANGSENG DROP FOR 1 YEAR
aug 1998 to 2000 aug,hangseng up for 2 years

difference:1year

TIME PERIOD 3:
aug 2000 to apr 2003:hangseng down for approx 2.5years
apr 2003 to oct 2007:hangseng up for 4.5years

difference:2 years

NOW:2007 nov to 2009 march:hangseng down for 1.5years
mar2009 to...??hangseng up for ???

the norm is u add 1 to 2 years to the down years from the hangseng bottom to get the expected time line and the target

HENCE I CONCLUDE: SELL HANGSENG IF U SEE
1.NEAR 32K ON 2011 SEPT
2.NEAR 32K ON 2012 MARCH
3.NEAR 32K ON 2012SEPT
4.OR ANY VALUES GREATER THAN 32K ON ANY OF THESE DATES...

SEE WHETHER IM CORRECT IN 2012

let us do the evaluation:

from the US HOUSING AND STOCK MARKET CHARTS, A AND B

SCENARIO 1.the us stckmarket MAY dangle in this consolidation band for another 10 years from 2010 to 2020 with us housing market to the downside to 2000levels.

we see that the rest in the stock market is TWENTY YEARS, namely1930 to 1950 and 1960 to 1980 roughly.and the us housing market is the MAIN CULPRIT in 2007, the rest in the us house market is fourty years, namely 1900 to 1940s hovering on the 5 line,even the GREAT DEPRESSION IN THE STOCK MARKET in 1930s cant bring the housing market in us to go below the 5 line,and didnt erase ALL gains from 1900 to 1930s.THE US STCK MARKET is the cause of 1930s depression, hence u see a return to 1900s levels in 1930s.so this tells us FURTHER DOWNSIDE IN THE US HOUSING MARKET IF WE SUPERIMPOSE THE HOUSING TO THE STOCKMARKET CHARTS IN 1930S as 2007 was caused by the US subprime.

SCENARIO2:SINCE subprime was us housing caused,and not the us stockmarket, hence it also suggests the opposite of 1930s that us stockmarket to break out UPWARDS of the band MUCH EARLIER than the us housing market.we can see that the us housing market broke off in 1940s when the us stckmkt hover in the band to 1950s.

so which scenario is MORE LIKELY to happen?we look at signs from us and other parts of the world.

fact 1. look at the hangseng charts.even with us subprime hangseng is unable to go below the uptrend channel from 1986.a TWENTY FIVE YEAR CHANNEL!!!and the hangseng level now in 2010 exceeds that of 1997,sugggesting a cheong to above 32K in the hangseng to about 36K!!(draw a diagonal straight trendline connecting highs)

BUT the HONGKONG HOUSING MARKET (chart C) was unable to go above 1997 highs for the smaller flats,other than GCBs,it was only the GCBs that return to higher than 1997 highs,suggesting EVEN WITH INTEREST RATES AT RECORD LEVELS, AND HKD SUPER LOW NOW, STILL UNABLE TO PUSH THE OVERALL HONGKONG HOUSING MARKET TO NEW HIGHS,suggest weakness in the HK salary terms and the HK economy.(same for singapore also)

WITH THIS HANGSENG CHART,I DEDUCE SINCE HANGSENG IS STILL WAY ABOVE 1997 LEVELS,14K VERSUS NOW 20K,HANGSNEG WILL GO RETEST THE UPTREND CHANNEL RESISTANCE AT 36K,HENCE THAT IS LIKELY TO BE CAUSED BY US STOCK MARKET GOING TO NEW HIGHS IN THE 2010 TO 2020 PERIOD--SCENARIO 2!!!!!

CHART C:

chart A

CHART B

S&P 500 PE S&P 500 Price S&P 500 Earnings S&P 500 Dividend Yield Interest Rate Inflation more ▼ multpl

Case Shiller National Home Price Index



Chart | Table | CSV |
Current Index: 131.81

January 2010

The Case Shiller Home Price Index is an indicator of U.S. housing prices nationally.

The data presented is in nominal (non-inflation-adjusted) dollars. For an inflation-adjusted (and more striking) view see Case Shiller Home Price Index, Inflation Adjusted

The steep decline in US home prices, starting near the end of 2007, is the largest drop since the great depression and the 1930s.

Data is courtesy Robert Shiller, from his book, Irrational Exuberance, and Standard and Poor's, which provides more information on the methodology for calculating the Case Shiller Home Price Idices.

Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice, and may be delayed.

Copyright © 2010 | contact@multpl.com

NOW COMPARE TO THE STOCK MARKET IN NOMINAL TERMS---chart A

we shall track from 1900s- great depression to now to see a similarity in us markets and now

time period 1:1900 to 1930:
us dow jones OUTPERFORM US PROPERTY MARKET 60 TO 300 IN DOW JONES VERSUS A 3 TO 6 PT RISE IN CASE SHILLER

TIME PERIOD 2: 1930 TO 1940
STOCK MARKET RECOVER TO 200 FROM DOWN FROM 300 TO 40.PROPERTY MARKET RECOVER MUCH LESSER THAN DOW---FROM 7 TO 4 THEN TO 5

THIS CLEARLY SHOWS EVEN IN A STOCK MARKET CRISIS 1930, THE STOCK MARKET OUTPERFORM THE PROPERTY MARKET

time period 3:1940-1950
CASE SHILLER rocket from 5 to 11, BUT DOW is flat for a decade!!!!

TIME PERIOD 4:1950-1970
CASE SHILLER IS FLAT BUT DOW UP FROM 300 TO 1000!!!

time period 5:1970-1980

DOW FLAT AT 1000!!!! BUT CASE SHILLER CHEONG 2X!!!

TIME PERIOD 6:1980-2000

GOLDEN PERIOD FOR US!!!
dow up 10 TIMES from 1k to 10k
BUT CASESHILLER UP ONLY 2X!!

TIME PERIOD7:YEAR 2000 TO 2010:
DOW STUCK AT 10K FOR A DECADE!!
BUT HOUSES ARE STILL HIGHER THAN 2000!!

WHAT ARE LESSONS LEARNT?
1.PROPERTY AND STOCK MARKET TAKE TURNS TO CHEONG UP but STOCKMARKET OUTPERFORM PROPERTY IN LONG RUN DUE TO FASTER AND BIGGER RISES CONSISTENTLY OVER A CENTURY!!

2. HANGSENG BEHAVES LIKE DOW JONES STUCK AT 20k FROM 2000 TO 2010 but snp500 is below 2000 highs of 1560 showing weakness in us general economy.dowjones having more overseas business companies eg caterpillar is at the 2k year highs

hence i conclude that hangseng will trade like the dow going back to 32K AND BREAKING IT in the next few years prob 2012 as hangseng hasnt moved much for past 10 years

hsi chart for past 20 years:
http://uk.finance.yahoo.com/echarts?s=%5EHSI#chart1:symbol=^hsi;range=my;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

hongkong property prices also at year 1997 levels BUT the difference is that hsi is above year 1997levels but hk property price at 1997highs EVEN AS INTEREST RATES KEEP ON GOING DOWN.SHOWING BUYERS FATIGUE IN PROPERTY.SUPER LOW INTEREST RATES CANT PUSH PROPERTY TO SUPER HIGHS--CHART C

from the dow jones chart,1930s was stckmkt caused ,2007 was housing caused,u superimpose 1930s stckmkt chart to be housing 2010 chart and we know us housing going to be stuck for a long time prob 20 years in the mud, whereas the dow jones with the hangseng in 2012? will break to new highs(due to MNCs,companies deriving their revenues from overseas like china,asia.)as shown by the case shiller in the 1940s

property is like an inferior good,rising much lesser and slower than the stock market overall.

Forget the Double-Dip: Stocks Still Can Rise in Bad Economy
Published: Wednesday, 25 Aug 2010 | 12:02 PM ET Text Size By: Jeff Cox
CNBC.com Staff Writer
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Even if the economy performs as poorly as expected for the rest of the year, that may not mean bad times on Wall Street.


Stocks often rise even in bad economic times.


Some analysts maintain that cheap valuation will provide a boost to the markets in the current downtrend.
In fact, during times of slow economic growth since 1990, stocks have risen twice as often as they have fallen. The trend is important to remember amid a series of GDP downgrades from major analysts and worries that the economy even could fall into a double-dip or worse.

Many major analysts—Goldman Sachs and JPMorgan among them—have cut their GDP projections to below 2 percent for the third quarter and about 2 percent for the fourth. What that means for the stock market, though, may not be so obvious.

"Basically when you look at GDP numbers coming out they usually are not a very good predictor of the stock market," says Sam Stovall, chief investment strategist at Standard & Poor's. "It's sort of the other way around. The stock market tends to predict movements in the economy by six months."

The recent history of economic slowdowns is one of opportunity for stock-buying investors, sometimes in the extreme.

Take 1995, for instance. With GDP trudging along at a respective 1 and 0.9 percent pace in the first and second quarters, stocks were booming. The Standard & Poor's 500

[.SPX 1056.04 4.17 (+0.4%) ] gained 9 percent in the first quarter, then kept the momentum going with an 8.8 percent rise in the following three months.


AP
--------------------------------------------------------------------------------


The 2001-2003 recession also saw good times for the market. GDP grew 1.4 percent in the fourth quarter of 2001, while the S&P rose 10.3 percent; growth was 0.1 percent in the fourth quarter of 2002, vs. an S&P gain of 7.9 percent.

The average stock market result on the 18 quarters between 1990 to 2010 when GDP was between zero and 2 percent was a gain of just under 3 percent.

One of the keys to the reverse coordination between the two measuring sticks is that stocks tend to do well when nobody expects it.

"When you have lowered expectations you can have a potentially good rally," says Ryan Detrick, senior analyst at Schaeffer's Investment Research in Cincinnati. "It makes sense that at times when you have lukewarm growth but overall expectations are probably lowered, you can have those upward surprises in the stock market."

Stocks even have held their own during times of economic contraction.

Of the seven negative GDP readings during the same time period, the S&P rose three times, including the 15.8 percent gain in the second quarter of 2009 when GDP fell 4.9 percent, and a 13.6 percent rise in the first quarter of 1991 when GDP fell 1.9 percent. The average was a gain of 1.23 percent.




Jeff Cox
Staff Writer
CNBC.com
"You've got this economic growth piece, but then you've got this other piece which is, 'What do I do with all this money in a money market paying me 0.25 percent?'" says Nadav Baum, executive vice president at BPU Investment Management in Pittsburgh. "That's the dilemma that investors are looking at, and they're starting to realize that 'I'm probably OK to go out and buy big dividend-paying stocks.'"

With the possibility of the US economy slipping back into negative growth posing an increasingly high danger, the notion that stocks can still rise might provide some comfort to equities investors.

Economist David Rosenberg of Gluskin Sheff on Tuesday reiterated his assertion that the US economy is not in a recession but rather a depression. But even he pointed out that stocks rallied sharply for several years during the Great Depression before falling again.

The Dow Jones Industrial Average [.DJIA 10067.32 26.87 (+0.27%) ] rallied about 64 percent in 1933, another 38 percent in 1935 and 24 percent in 1936, before falling 32 percent in 1937.



"Even though the GDP number is getting weak, that doesn't mean stocks can't go higher," Baum says. "It's not just a factor of GDP. There are other forces that can help stock prices go up right now. The bigger factor is, 'Where can I do to make the money on my money?'"

S&P's Stovall argues that valuations continue to be attractive based on current consensus earnings estimates.

The current S&P price-to-earnings ratio on a non-Generally Accepted Accounting Principles basis is 14, which Stovall says is a 26 percent discount to the average P/E on trailing earnings on records dating back 22 years. On a GAAP basis, that number goes to 17, which is actually a 36 percent discount to average over the same 22-year period, and is level with the average GAAP basis since 1936.

S&P actually is projecting that stocks could fall on a short-term basis back to a bear market—20 percent drop from the April 23 highs—before shoring up and turning positive. The firm has a 1,190 price target for the "500" in the next 12 months, a jump of about 13.5 percent from the current level. The index has fallen 14 percent from the April high.


RELATED LINKS
Current DateTime: 09:03:07 25 Aug 2010
LinksList Documentid: 38849832
'QE': Why Should Investors Care?Depression, Not Recession: Rosenberg
"Unless we expect earnings to actually decline moving forward, rather than advance at a slower pace, I would tend to say that valuations would stop us from seeing anything more than a light to average bear market," Stovall says. "The market is readjusting itself. Maybe we could end up seeing a sharper move downward in the next month because investors want to get it over with."

© 2010 CNBC.com

REMEMBER MY SMS TO SOME OF U ALL IN MID APRIL 2010 WHEN I WAS IN HONGKONG--WHEN STOCKMKT GO UP WITHOUT POSITIVE DIVERGENCE, THIS IS THE END RESULT...
TECHNICAL ANALYSIS DIFFERENTIATE A FAKE RALLY FROM A TRUE RALLY, BUT NO ONE IS GONNA PREDICT 100PERCENT WHEN EXACTLY.
I DONT KNOW WHY SOME IDIOTS TELL ME FUNDAMENTAL REASONS LIKE US GOVT CANT MAKE STOCKMKT FALL BECAUSE HAVENOT REMOVE BAILOUT PACKAGE,ETC.
STOCKMKT NEVER LISTEN TO FUNDAMENTALS, TEXTBOOK STLY UNIVERSITY ECONOMICS

John said...
thanks skeptic.
I was pleasantly surprised that my comments was highlighted in your blog. My name is John, so I guess you can put a name to anonymous.

I do apologise for the typo and grammer mistakes in my previous blog. I also realize my comments could have offended some people but I have no ill intent.

I have met many Singaporeans who took the plunge abroad but at the end chose family first and decided to return to Singapore. I respect that, especially for those with children. It is not easy. But like I say, working and succeeding overseas require sacrifices. Unless you have a cushy expatriate package (which are rare these days), you need to be separated from your love ones and tough choices need to be made. The point I was trying to make is that if you make a conscious decision to work abroad, then start planning ahead, mentally prepare to make sacrifices, it is possible to find jobs abroad. It is not a bed of roses but the benefits outweigh the shortcomings.

What worked for me may not not work for the rest, but here it goes:
1) decide which country you want to go. sounds obvious, but you will be surprised that most people have no clue what they want. I decided on China because I saw the opportunities to extend my career by easily 15-20 years especially for my industry. I looked at my colleagues in their 40s struggling to do something in a tiny market like Singapore and decided that I need to do something before I hit 40.
2) your next employer are likely to be abroad so it only makes sense to find any opportunities you can find on overseas conferences, job fairs, network and get to know people overseas. Pay for the trips yourself. "The prophet is never acceptable in his own country', basically, local employers in Singapore and headhunter will give you a huge discount when you tell them you want to work abroad. It is almost discrimination. No different from government treating foreigners better than Singaporeans. To give you an example I once wrote to an international headhunting firm based in Singapore and after the interview, I was so demoralized I wanted to give up. I wrote in to HK (same firm) directly, met with their partner, cleared all the interviews and was eventually hired. You need to find a way to present yourself in front of your prospective employer and show them you are hungry and willing to compete on local terms. If you are competent, you will get the job. More importantly, finance and legal sector in HK pays much better than Singapore. I eventually find my way to China, but that is another story. The jobs you are looking for are not on internet or classified ads, especially for senior positions. Attend overseas conferences, trade fairs, and pay for it yourself if you have to and network like crazy. I just don't see many singaporeans hungry enough to do this.
3) I once told a Singaporean to apply for CEIBS (a business school in Shanghai) instead of NUS if he really wants to work in China one day. I was given the usual, cost of living, ROI, value for money analysis. 40% of the participants in CEIBS are foreigners, where most of them eventually found jobs in China. Today, CEIBS is the top 10 business school in FT and NUS is still well..you know. Most Singaporeans, if they can help it, would like to stay in Singapore and use Singapore as a base to travel. It used to work, but I don't think it is feasible anymore. My point is, if you want to work in that country, best to study in that country as well. If all you have is a local degree in NUS/NTU, either you have a lot of overseas assignments to back you up or you have something else to offer.
4) Start the first few years alone and once you build some foundation and cash, bring your family over. The first few years are the toughest, but if you survive, it gets easier. How to survive is probably another topic for another day.
5) be aware of the forces that hold us back. Going overseas is a personal change process, and the comfortable lifestyle here in Singapore, girlfriends, wives, parents desire for children to stay close to them, all could be possible forces that hold us back. If you cannot afford to leave your love ones, then don't go abroad. There are friends of mine who refused overseas posting because they don't want to be apart from family. I respect that and it is a very personal choice. On another note, I am also aware that this friend of mine is struggling to find a meaningful job for 3 years since he was retrenched at 40. His company was moved to China.If he had gone with the posting, he probably still have a job and probably clocked a lot of useful experiences abroad as well.
6) there are people who are still doing very well without leaving Singapore. Your girlfriends and wives will be reminding you this as well. HR professionals, never seem to have problems looking for jobs. You make an assessment of your own industry, where is it heading and if having overseas experience benefits you.

I wish everyone the best and thank you for reading this.

May 1, 2009 3:14 AM

Singapore's Online CommunityForums

Login 27 Apr, 04:20AM in sunny Singapore! Home → Speaker's Corner →
Are Singaporeans cowards? 85 posts
Please Login or Signup to reply. « Previous 1 2 3 4 Next »
bila_prem

164 posts since Sep '05 22 Jul `07, 11:32AM I’ve seen european nations voicing out their anger against the government. Its people more powerful than the government. Are we in a communist nation who keep our mouth shut and let the government climb on top of our heads?

mochou

1,743 posts since Jan '03 22 Jul `07, 11:36AM See towards who loh, towards gahmen, most likely yes.

But most singaporean are not cowards, you see how they complain at service line staffs(Restaurant, hotel, airport counters, etc), they so fierce.

taken from sgforums

LOOK AT THAT COMMENT BY A FORUMMER IN SGFORUMS.THAT IS THE TOP REASON WHY I HATE MOST SINGAPOREANS

Cost of living in Shenzhen
Shenzhen is one of the most expensive cities to live in China, but still relatively cheap compared to most Western major cities.To give you an indication of how much things cost, I collected some prices. I'm sure prices will vary a bit depending on where you buy and which brand you buy, but this should give you a good indication. I rarely eat in Western restaurants and have adopted a Chinese eating pattern. If you enjoy Western restaurants, you obviously will spend more. Living costs are relatively most expensive, house prices came down in 2008, but have risen a lot again and buying a house in a good location in Shenzhen is expensive.


The areas near the border with HongKong (traditionally Futian and Luohu, but now also increasingly Nanshan) are a bit more expensive to live. Living in the center also has other benefits, for example closer to library, more shopping malls, more restaurants etc. Bao'an is currently fast expanding and when the subway finishes in 2011, Bao'an will be more convenient to live as well. Whenever you go to Bao'an (where the airport is) you definitely feel that it's further away from the center: less high buildings, broader roads, less people.


Compared to the Netherlands, Shenzhen is still much cheaper to live. Especially eating in restaurants in much cheaper. House prices had gone up a lot and were approaching Dutch levels, but have since dropped off quite a lot; since the start of 2009 they are rising again. Never trust prices you see advertised online, but come here and look around. Because house prices dropped so much, it's now easy to find a place to rent. Also realize that 100m2 is already quite big in China and it should cost below 5000Y/month. (I sometimes see advertisements targeted at foreigners asking ridiculous prices -be warned and just look around and bargain).



According to Mercer's 2009 survey of living costs Shenzhen is now 22nd on the list of most expensive cities in the world for expats! Mercer's Cost of Living survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

1. Tokyo - Japan


2. Osaka - Japan

3. Moscow - Russia

4. Geneva - Switzerland

5. Hong Kong

8. New York


9. Beijing

12. Shanghai

16. London


22. Shenzhen

23. Guangzhou



This is my personal, unscientific, list of daily items. Just use common sense in China and live like a Chinese, then you will see that the cost of living is not so high.

Food/Drink
Price (Yuan)
milk, small paper cup 2.90
white bun supermarket 1.8
half sliced bread 5
apples (per kg)
7
water (1.5 liter)
2.5
lettuce (0.5 kg)
1
rice (0.5 kg)
2
pork (0.5 kg)
12
spareribs (0.5 kg)
18
bag of nuts
5-20


Daily usage
big bottle soap 20-30
t-shirt, men 20-50
shirt, men
40-200



Restaurant
dinner, 2 person 30-120
lunch, 2 person 25-50
chinese fast-food order (incl. delivery)
10-20
some dishes

fish 20-100
vegetable 10-30
meat 20-50
rice/bowl 1-2


Living/work
rent house, 50m2
2.000Y/month * see note below

rent house, 100+m2, good location 8.000Y/month
buy house (normally 70-150m2) 7-25K RMB/m2
utility (electricity, water, management)
200/month
internet 2MB ADSL
1440Y/year
native english teacher, fulltime
10.000+Y/month *see note below

taxi 5 km (start 12.5)
20
bus/subway 2-5/trip



Also take a look at the Chinese supermarkt folder I scanned, this will give you an even better idea of the things you can buy and for what prices.

* note about apartment renting costs July 2009:

Just like salaries, the prices for renting an apartment vary hugely. You can go from 1500RMB/month for a cheap community, where normal Chinese people live to extremely luxurious which are twenty times as much ! Also be aware that the English-language classifieds are usually not the cheapest. Best option is just to look around while you are in the city and go to some Chinese real estate companies. Prices have dropped a lot in 2008, but have been rising since the start of 2009 again. Some examples of expensive apartments on offer at ShenzhenParty :

Location Size (m2)
Description price RMB /month
Futian CBD 109
3 bedrooms (one master bedroom), 2 bathes, 1 large living room & 1 dining room 8.500
Futian Honey Lake 200 3 bedrooms, 1 study room, 1 living room, 1 dining room, 1 kitchen, 1 balcony. 30.000
Futian, near to Co-co park 151 3 bedrooms ,and 2 bathrooom, fully furnished and equiped 12.000
Futian Che Gong Miao Metro Station 116
2 bedrooms, 2 bathrooms, 1 study room, 1 living room, 1 dining room, 1 kitchen 8.000
Luohu center,beside Diwang mansion 63 1 livingroom,1 big bedroom,1 kitchen,1 washroom 5.500
Luohu KingGlory plaza 42 2.000
Nanshan Coastal rose garden 127 3 bedrooms 2 bath 5.900
Nanshan/Shekou Sea Taste Garden 78 2 bdrooms, 1 bath , 1 nice kitchen , 2balcony , 1 living rooms 3.800

As you can see, 2000 is about the minimum you pay in reasonable locations. You can go lower by looking around in the city. It's easy to spend over 8000RMB/month for big apartments.



*note about salaries foreign teachers:

The State Administration of Foreign Expert Affairs has updated the salary guidelines for a foreign expert or teacher in July 2009. Salaries start at 3,000 to 4,100 yuan per month for bachelor degreed teachers in underdeveloped western areas to as high as 12,000 to 15,000 per month for full professors in first-tier east coastal cities such as Shanghai and Guangzhou. Although these salary guidelines are more realistic than the previous recommendations, they are still lower than what a foreign teacher should expect

2010 Ranking of Home Property Prices in Chinese Cities: Shenzhen Takes CrownApr 05, 2010

Elivecity.cn, an online market research agency in China, has published their ranking of “January 2010 Home Property Prices in Chinese Cities” on March 29th. The results find that Shenzhen has the highest home property prices of the Chinese cities researched, with new homes selling at an average price of 22,304 RMB/square meter; Shanghai came in second with a home price average of 20,186 RMB/square meter; Wenzhou ranked third with a home price average of 20,050 RMB/square meter.



This is the fourth research and report on home property prices in China done by Elivecity.cn. For this year's report, they've researched over 100 major Chinese cities, including provincial capitals, major port cities and hubs of commerce, cities with economic aggregate totaling over 100 billion RMB, cities with GDP per capita near or above the national average, major cities for tourism and travel, etc. The home prices have steadily ballooned in China in spite of the economic recession and this is especially true for Nanjing, Sanya, and Shenzhen – where prices have climbed 91%, 66.5%, and 51% respectively in the last 6 months. The top 10 cities ranked in the survey that have home prices averaged at more than 10,000 RMB/square meter are as follows: Shenzhen, Shanghai, Wenzhou, Beijing, Hangzhou, Sanya, Ningbo, Xiamen, Guangzhou and Dalian. Elivecity.cn has also published a ranking of top 10 most expensive residential areas in the different researched cities to give a better idea of the different appropriation of home prices within a city.

According to a staff member with Elivecity.cn, the research results of average home property prices for a city have taken into consideration the following info: 1. formal figures published by experts; 2. actual prices researched; 3. statistical analysis of price trends in major real estate markets for the region. And because the cities and communities all vary in size, the average home prices were calculated in accordance with the highest and lowest priced regions within a city to give a more accurate presentation. Metropolises like Beijing and Shanghai are made up of numerous regions and districts that vary greatly in respective home prices. For example, home prices in Pinggu district of Beijing averaged at 6,096 RMB/square meter while those in Xicheng district of Beijing averaged at 33,125 RMB/square meter; homes in Shanghai Songjiang district averaged at 9,700 RMB/square meter while those in Jing'an district averaged at 32,200 RMB/square meter.

Hong Kong May Increase Sales Taxes on Homes, Sell More Land
April 21, 2010, 4:40 AM EDT
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e-mail this story print this story digg this save to del.icio.us add to Business Exchange By Sophie Leung

April 21 (Bloomberg) -- Hong Kong said it will raise sales taxes on some properties and accelerate government land auctions to prevent a bubble in a real estate market where prices surged 29 percent last year.

The city may raise the stamp duty on homes sold for less than HK$20 million ($2.58 million), Financial Secretary John Tsang told lawmakers today. The average size of loans approved in February in Hong Kong was HK$2.21 million, according to the Hong Kong Monetary Authority.

“The government is deeply concerned about the rising trend of property prices,” Tsang said. “I understand the worries of residents about rapidly rising home prices, and I agree that we need to reduce the bubble risk in the property market to avoid any impact on the financial system’s stability and the recovery in the real economy.”

Buying by mainland Chinese and low borrowing costs have driven a 7.4 percent increase in Hong Kong home prices this year, adding to 2009’s advance. The government in February said the stamp duty on homes selling for more than HK$20 million would be raised to 4.25 percent from 3.75 percent as of April 1.

It raised down payments on luxury homes in October. Luxury properties are those that cost at least HK$10 million each or are bigger than 1,000 square feet (92.9 square meters).

“Such mere empty talk is useless in helping to bring home prices down,” Kevin Lai, economist at Daiwa Capital Markets Hong Kong Ltd., said by phone today. “Even if the policy turns real, it won’t help to curb speculation as long as interest rates are kept at a such low level.”

Least Affordable

Hong Kong homes are the least affordable among the world’s major cities and are rapidly becoming less accessible to the residents, according to a study commissioned by the South China Morning Post, the city’s biggest English-language newspaper. The study used international comparisons and Hong Kong government figures, the newspaper said.

The territory had the greatest disparity between rich and poor among Asian cities, according to a 2008 report from the United Nations. The Gini coefficient, which measures wealth inequality, was 0.53, compared with an average of 0.39 for Asia, the report said. A Gini coefficient of zero indicates perfect income equality and 1 reflects perfect inequality.

Two residential sites, one in Kowloon and the other on Hong Kong Island, will be auctioned off in June and July without developers having to indicate interest first to trigger bidding, Tsang said. That would bring to four the total number of sites the government is selling in the coming three months, Tsang said.

Auction System

In Hong Kong, the primary source of land available to property developers is through government auctions. Under the current system, developers must indicate interest in a site on a government list. Once a “trigger price” has been met, the site is auctioned.

The government will change the way it puts sites up for auction, Tsang said in his Feb. 24 budget speech. The government would consider putting sites up for sale even if they haven’t been triggered, he said then.

Hong Kong will hold two land auctions for sites in the New Territories in May with developers triggering the sales.

The city will make about 55,000 new homes available in the next three to four year, Tsang said.

Low mortgage rates and excessive liquidity, coupled with not enough supply are fueling the risk of property-price bubbles, Tsang said.

The 20-year-low mortgage rates won’t be sustained for long as governments around the world wind back stimulus measures, he said. A 3 percent rise in rates would boost monthly mortgage repayments 30 percent, Tsang said, citing a stress test result.

“I urge residents or investors to carefully assess the impact of climbing interest rates on mortgage payments when they consider buying apartments,” Tsang said.

While gains in Hong Kong home prices had “tapered slightly” in recent months, the “increasing risk of a property bubble cannot be ignored,” Tsang said.

The Hong Kong government plans to prevent developers from enticing buyers with inaccurate models of apartments and to scrutinize their sales tactics. Real estate companies should disclose properties sold to their own executives, Secretary for Transport and Housing Eva Cheng said on April 12.

--Editors: Andreea Papuc, Joost Akkermans

To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net

IDIOTS WILL FOREVER BE IDIOTS.BUYING PROPERTY AT PEAK IS AKIN TO BUYING AN ILLIQUID STOCK LIKE AUSSINO,ETC. somemore, buying residential properties machiam hk population 20m, as full of 40storey apartments whereas singapore population 5m only with not so many high rise.
IDIOTS SPECULATE RESIDENTIAL PROPERTY WITHOUT THINKING OF SUPPLY,ETC.only low interest rates,etc.MACHIAM THEY DONT NEED LOANS FROM BANKS TO BUY.IT IS VERY OBVIOUS THEY ARE DAMN IDIOTIC AS THEY NEED TO BORROW FROM BANKS YET NOT SCARED OF RISING RATES!!!!

this is called ARITHMETRIC PROGRESSION:
A.P. from the top is 960+(n-1)200=1560, n= 4,d is the common difference,remember the formula?T = A+(N-1)d


as sp500 tests the upper resistance trendline so many times, i favour for a breaking of THAT trendline to 1350 this week.

CONCLUSIONS: AS JES CONSOLIDATION WAS A STRAIGHT HORIZONTAL BASE THE PUSH UP WAS IMMEDIATE BREAKING THE 1YEAR RESISTANCE TRENDLINE AT 5TH TIME, MERCATOR CONSOLIDATION FORMATION WAS NOT SO NEAR THE 1 YEAR RESISTANCE TRENDLINE ,HENCE THE 7.5C PUSHUP WAS NEEDED TO "PARK" JUST BELOW THAT CRUCIAL RESISTANCE,AND A 3.5 C RETRACEMENT FOLLOWS.WE SHOULD HAVE A 7.5 C PUSHUP IN THIS COMING WEEK STARTING 26APR 2010,WHICH WILL TAKE US TO 38C IN THE SAME MANNER AS JES.

MARGIN 800 LOTS AT 22.2C TODAY
closing 24 C rested for ONE YEAR., PLUS BEAUTIFUL WEEKLY,DAILY CHARTS WHAT MORE DO U WANT?
EXACTLY LIKE SWIBER LAST TIME IN 2009 MARCH.SWIBER CHIONG FROM 25C TO 1 DOLLAR FROM MARCH TO MAY 2009

LOOK AT THE TOP BOLLINGER BAND, TRENDLINE AND JAN21 2010 HIGHEST POINT
ALL MERGE INTO ONE POINT!!

»Ruminations of an Overseas Singaporean

This is my tenth, or eleventh year away from Singapore and I am not quite sure if I can articulate how I feel about my home country. After all, every national day over the past decade was spent away from Singapore, and this year is no exception.

Looking back, I can hardly remember what I did over the past ten national days. There was one year where I sang Count On Me Singapore in the bathtub on the morning of August 9th. That was in Beijing, probably in 1999 or 2000. There was another year where I tried visiting the Singapore Embassy, only to realize that it was national day and the Embassy was closed for the day. Jeez. That was in 2005 where I was studying in Seoul. I actually forgot it was national day when I left home that day.

But national days over the past decade were mainly about attending the occasional national day gatherings/receptions, mostly in Beijing, and twice in Washington DC, where I was pursuing my masters in international affairs.

Living in four different cities over the past decade has enabled me to see Singapore through the eyes of the many – often interesting, intelligent and discerning - people I have met, though admittedly many harbor fairly stereotypical views of the island.

Mainland Chinese I have met often praise Singapore for its efficiency, good governance, lack of corruption and cleanliness. But they would also lament about how small, hot and humid the country is.

South Koreans generally have a high regard for Singapore. They give top marks to the island for its efficiency and good economic performance. As Koreans took pains to remind me, Singapore companies own some of the most prestigious addresses in downtown Seoul, such as Seoul Finance Center in downtown Gwanghwa-mun. And oh yes, they love Yakun kaya toast!

Hongkongers, on the other hand, generally view Singapore as the territory’s competitor. Many Hongkongers describe Singapore as sterile, uninteresting and too restrictive on personal freedoms, unlike their (still fairly) laissez-faire territory. The only redeeming quality about the island, in the minds of these food-conscious Hongkongers, is Hainanese chicken rice and a whole array of other delectable hawker fare.

As for Americans, well, at least ordinary Americans, I am usually the only Singaporean they have ever met in their lives. In 9 cases out of 10, when I say I am from Singapore, the name Michael Fay would inevitably be brought up. Never mind that it has been almost 14 years since the American teenager was caned in Singapore for vandalism. Then of course there were questions ranging from whether “is it true that you cannot chew gum in Singapore”, to “is it true that you can get jailed if you do not flush the toilet after use?”

My American classmates would usually try to engage me in discussions about why political liberalizations in Singapore had not kept pace with economic development. As for my professors, I would invariably be asked during class discussions to “speak from a Singaporean viewpoint” on issues ranging from regional security, the island’s zeal in embracing FTAs (Free Trade Areas), to the influence and legacy of Confucianism in Singapore (huh?).

So, much as I wished to (occasionally) underplay my nationality, it is about as easy as erasing a permanent 10-cm mole on one’s face.

But if there is anything that had been driven home to me after being away from Singapore for over a decade, it is the sense that Singapore is small and will always be constrained by its size and geographical limitations. The best that the island state can hope to do is play a role that is incommensurate with its size, and remaining useful and relevant both regionally and globally – both of which the country had done with aplomb. Of course, such an awareness of Singapore’s limitations should not be viewed in a pessimistic way, but pragmatically. The awareness stems from the amazement that an artificial creation like Singapore had come this far, coupled with the worry and anxiety of the long-term viability of this artificially created entity whose idea of a shared historical and cultural heritage is to draw from the heritages of our Asian neighbors in Malaysia/Indonesia, India and China.

A country that begins with a clean slate and little historical baggage (except with its closest northern neighbor) is a great recipe for nation building. But will it be an equally good recipe for nation-bonding, and nation-togetherness in the midst of turbulence and turmoil? Will all the singing of Count On Me Singapore tide us through a crisis, given that countries with longer and more deeply-entrenched historical and cultural traditions had crumbled in the face of crisis, wars and devastation?

I do not know, and honest to goodness, do not wish to see any of the above scenarios materialize. All I hope for, at least during this national day, is an authentic bowl of laksa, a plate of truly spicy and sour-rish rojak and a steaming-with-fragrance plate of Hainanese chicken rice.He’s looking to open either in Hong Kong or Singapore. This is interesting because he prefers Hong Kong to Singapore mainly because the Hong Kongers are more appreciative and show more respect whereas while Singaporeans love their food, they tend to haggle over small things like corkage.



FROM http://food.recentrunes.com/?p=1458.

Hong Kongers, according to him, are more willing to spend on food. He fears that Singaporeans are unwilling to experience, for example, the cost of his upcoming menu of new dishes where (possibly) a single course of Abalone that costs (not priced) S$300 and takes several days to prepare.

While this blog has strong views about corkage, having spent some time with Hong Kongers (they party really hard), I must agree with Chef Chan’s observations.

That’s ok because the Egg Tarts with Ginger sauce arrived. This is the other famous must-try item that everyone whose had this since Hai Tian Lo has been telling this blog.




Indeed, this blog was blown away with the exquisitely balanced taste of the creamy egg tart with just the hint of ginger. However, this got mixed reviews because some preferred a stronger treatment of ginger. This blog feels that a small shift in either way would have ruined the whole delicate ensemble. This was a good way to finish off the meal.




Chef Chan is a soft-spoken but friendly person with very strong views on how Chinese cuisine should be approached (Without fear but taking care in the details). The food issued from the kitchen was consistent with all feedback and reports from friends who have visited. The service was very good with a ratio of 1 staff to 4 diners with the Restaurant Manager hovering in the background constantly tweaking the service.

I would like to think that the food quality, in terms of execution, suffered a little because of the fact that it was closing soon. This blog can’t help but think what the new menu would be like with the personal touch of the Master.

elindra

52,427 posts since Jun '04 14 Feb `08, 3:49PM Can ~

But can you be as productive as the Hong Kongers?

They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.

If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.

The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.

So unless we change, we can just stay here and bitch and cry and nothing ever changes.

What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.

InnoHippo

20,123 posts since Jun '04 14 Feb `08, 4:09PM Originally posted by elindra:show
Can ~

But can you be as productive as the Hong Kongers?

They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.

If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.

The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.

So unless we change, we can just stay here and bitch and cry and nothing ever changes.

What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.


INNOHIPPO:

brutally true



eagle:


Well said

FROM FORUM IN SGFORUMS

=DJ UPDATE: GIC Has $5 Bln Paper Loss On UBS Investment - Source (2010/03/05 14:18PM)


--------------------------------------------------------------------------------



(adds background)



By P.R. Venkat

Of DOW JONES NEWSWIRES



SINGAPORE (Dow Jones)--The Government of Singapore Investment Corp. has incurred a paper loss of $5 billion on its investment in UBS AG (UBS) after its convertible notes become shares Friday, a person familiar with the situation said.

That represents about 45% of its original $11 billion investment in the Swiss bank.

In 2007, GIC acquired a 9% stake in UBS through convertible notes on a fixed coupon of 9% per annum with a two-year maturity period.

In a filing to the Securities and Exchange Commission in February, GIC said that it will convert the notes into 230.7 million ordinary shares of UBS on March 5, thereby bringing GIC''s stake in UBS to 6.6%.

A GIC spokeswoman confirmed to Dow Jones Newswires that the UBS notes were converted into shares.

Although there is currently a paper loss on GIC''s investment in UBS, the sovereign wealth fund has previously said this is a long-term investment and it has confidence in the prospects of the Swiss bank.

GIC manages Singapore''s foreign-exchange reserves. It is the world''s fourth-largest sovereign fund in terms of money managed, according to Deutsche Bank.

GIC was among a number of global sovereign wealth funds that invested in western banks or subscribed to their fund raising plans during the global financial crisis.

In September last year, GIC cut its stake in Citigroup to below 5% after it exchanged its convertible preferred stock in the bank to common stock and made a profit of US$1.6 billion over the conversion price as part of the transaction. In December, the sovereign wealth fund saw its stake diluted further in the U.S. bank to about 4% after the latest round of capital raising by Citigroup.

During that time, GIC said that will continue its investment in Citigroup and it was confident of the long-term prospects of the bank.



-By P.R. Venkat, Dow Jones Newswires; +65 64154 152; venkat.pr@dowjones.com



Click here to go to Dow Jones NewsPlus, a web front page of today''s most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=42fctzS7EoMCKahz38LMLQ%3D%3D. You can use this link on the day this article is published and the following day.




(END) Dow Jones Newswires

March 05, 2010 01:18 ET (06:18 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

PLEASE KINDLY NOTE THAT WAVE A OF CORRECTIVE WAVE 2 HAS NOT ENDED...
HSI WAVE 2A FINAL TARGET--18200-18500
STI WAVE 2A FINAL TARGET--2600-2625

LONG AT YOUR OWN TICKET TO HELL
now news so bullish--technicals so bearish---CLASSIC CASE OF ONLY IDIOTS WILL KENA TRICK
IDIOTS ARE CONFUSED AT WHEN TO USE REVERSE PSYCHOLOGY OR WHEN TO GO WITH THE FLOW...
Y???
BECAUSE THEY ARE FUCKING IDIOTS..I SAY THAT AND I WILL SAY THAT AGAIN

IDIOTS THINK THEY ARE SMART TO COUNTER ME WITH TERM "REVERSE PSYCHOLOGY"...OH MY GOD--THAT MAKES THEM LOOK EVEN SILLIER--WE TRADERS ARE REVERSING THEM WHEN THE FUCKING IDIOTS THINK THEY REVERSE US!!!!!????

LOOK AT YOURSELVES IN THE MIRROR TO SEE WHETHER YOU HAVE THE FUCKING EXPERIENCE TO REVERSE EXPERIENCED TRADERS

ACT SMART BUT SO FOOLISH,CONFUSED THROUGH AND THROUGH--REALLY FUCKING IDIOTS

MY DARING PREDICTION---THIS FRIDAY---MARCH 5TH WILL BE A VERY BAD DAY FOR STOCKS...--based on the 4 brothers charts

Singapore, Abu Dhabi Face Losses on UBS, Citigroup (Update2)

March 2 (Bloomberg) -- It took the Government of Singapore Investment Corp. three days in 2007 to agree to prop up UBS AG, ailing from subprime losses. It may take a decade to recoup that investment of 11 billion Swiss francs ($10 billion).

GIC, manager of more than $100 billion of the city-state’s foreign reserves, faces a paper loss of about 5.6 billion francs when it becomes the biggest shareholder of UBS on March 5, as shares of Switzerland’s largest bank trade at a third of the conversion price on notes it holds.

Singapore isn’t alone among sovereign wealth funds facing losses from supporting banks in Europe and the U.S. in the credit crisis. More than $69 billion in investments by such funds has so far produced $20 billion in realized and paper losses, according to data compiled by Bloomberg. Hurt by their contributions to the health of the financial system and stuck with some of the investments for years, sovereign wealth funds may shy away from coming to the banks’ aid the next time.

“Once burned, twice shy,” said Charles Whitehead, a finance law professor at Cornell University in Ithaca, New York, who has tracked the strategy of such funds. “If a weak bank came back to them again for capital in the next crisis, the sovereign wealth funds won’t be there.”

That was one of the findings in a survey by FTI Consulting Inc. published on Feb. 15. In interviews with managers of sovereign wealth funds controlling about $2.5 trillion, FTI found that they are “particularly cautious with regard to supporting further bail-outs of distressed companies.” FTI didn’t identify the funds that took part in its survey.

Personal Touch

European and U.S. bank chiefs made personal pitches to the funds during the height of the mortgage market meltdown. Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec. 6, 2007, and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time.

Acknowledging that recouping the money might take longer than initially expected, Ng said in GIC’s annual report, published in September, that he still has “confidence” in the “long-term prospects” of the investment.

GIC, which declined to comment for this article, will receive 230.7 million UBS shares for its mandatory convertible notes this week for 47.68 francs each. UBS shares closed yesterday at 14.98 francs.

Qatar, Abu Dhabi

“The game turned out not as easy as it may have seemed,” said Florian Esterer, who helps manage about $55 billion, including UBS shares, at Swisscanto Asset Management in Zurich. “It will take probably more like a decade than three years” for UBS shares to return to 2007 levels.

There were some profitable deals too, such as Qatar and Abu Dhabi funds that waited until the depth of the crisis to invest in London-based Barclays Plc and Credit Suisse Group AG of Zurich. Yet one third of the winnings, which totaled $12 billion, resulted from a regulatory change rather than timing.

After the U.S. government required troubled banks to have more common equity instead of weaker tiers of capital, Citigroup Inc. had to offer favorable prices for its preferred shareholders to convert to common. That led to windfall profits of $4 billion for Kuwait and GIC on investments that would have lost $9 billion under their original agreements.

Not As Lucky

Abu Dhabi Investment Authority didn’t benefit because it didn’t buy preferreds when it came to the aid of New York-based Citigroup. So it may face a $4.8 billion paper loss when it is forced to convert its so-called equity units to shares starting this month at a price almost 10 times higher than the current value. Abu Dhabi filed an arbitration claim against Citigroup, which has the most writedowns and losses from the credit crisis, alleging the bank wasn’t forthcoming about its financial health when it was seeking capital. In a December statement, Citigroup said the claim is “without merit.”

A spokesman for the Abu Dhabi Investment Authority declined to comment.

There were other profitable bets on banks during the crisis, such as the September 2008 investment in Goldman Sachs Group Inc. by Warren Buffett’s Berkshire Hathaway Inc. Buffett purchased $5 billion of perpetual preferred stock with a 10 percent dividend, reaping Berkshire $500 million in annual payouts. He also received warrants to buy $5 billion of common stock for $115 a share at any time within five years. Based on yesterday’s closing price of $156.54, Berkshire’s sitting on a paper profit of $1.8 billion on the warrants.

Due Diligence

“One lesson that all investors, including the sovereign wealth funds, learned from this crisis is that you have to do the due diligence before investing,” said Rachel Ziemba, a senior analyst who tracks such funds at Nouriel Roubini’s Roubini Global Economics in New York. “The funds are already looking at fundamentals more closely. They’ll be more wary to take such big stakes in banks in the future.”

The funds’ banking investments in the crisis diverged from their traditional strategy of taking smaller stakes in an array of companies, Ziemba said. The diverse distribution of stakes in close to 100 firms in the U.S. that the China Investment Corp. revealed in a regulatory filing last month is proof that they’re going back to their original goals, she said.

In June, CIC increased its investment in New York-based Morgan Stanley by $1.2 billion, even though its first purchase was out of the money by about $2 billion on the $5.6 billion it put in the Wall Street firm. The fund took part in Morgan Stanley’s sale of new shares, saying it expects the investment bank to become more competitive. The equity units CIC bought in 2007 will convert to stock at $48 in August. Morgan Stanley shares closed yesterday at $28.19. CIC declined to comment.

Follow-up Support

Sovereign wealth funds tend to support the companies in which they had invested in times of need, said Nuno Fernandes, professor of finance at IMD Business School in Lausanne, Switzerland, who has been studying the funds. Still, the recent losses “had huge implications internally, and the funds were criticized by their local constituencies. They will invest less in financials going forward.”

Temasek Holdings Pte, a separate Singapore government fund that oversees more than $120 billion, sold its shares in Charlotte, North Carolina-based Bank of America Corp. for a $4.6 billion loss in early 2009. It had acquired the stock during the conversion of its stake in Merrill Lynch & Co. when the investment bank was bought by Bank of America.

Dilutions, Losses

After the initial round of investments by the sovereign wealth funds in late 2007 and early 2008, banks and brokers announced more losses on their mortgage assets. And they kept going back to investors for more money. The dilutions since then and the losses -- $1.25 trillion worldwide -- may make it difficult for some bank shares to recover to 2007-08 levels.

In the two years following GIC’s investment, UBS’s writedowns and losses from the credit crisis swelled almost threefold to more than $57 billion. UBS boosted the number of its shares by 98 percent since the end of 2007. Citigroup’s share count jumped almost six times in the same period.

After UBS’s capital raising was announced on Dec. 10, 2007, it drew criticism from other shareholders. Profond, a Swiss pension fund, said it was treated unfairly by the bank because it wasn’t offered the same deal, which included a 9 percent interest payment on the mandatory convertible notes sold to GIC and an unidentified Middle Eastern investor. Swiss tabloid Blick christened UBS the “United Bank of Singapore.”

“The majority of people at the end of 2007 expected this crisis to be a lot less severe than it in the end turned out,” said Dirk Hoffmann-Becking, a London-based analyst at Sanford C. Bernstein Ltd.