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Ian Verrender

February 2, 2012

Once again, the Apocalypse has been averted and the four horsemen have ridden off to create havoc elsewhere.

Rather than the much-heralded assault on the Australian residential housing market, as has been predicted for the past five years by an ever-increasing host of international and domestic doomsayers, we are instead witnessing an orderly retreat.

There’s little doubt that Australian property is likely to be subdued for at least the next few years and that values here are likely to decline.

As in previous times, the property market appears to be settling in for a prolonged hibernation after a debt-fuelled run-up.

But those gleefully predicting a US-style crash in the Australian property market are so far wide of the mark it beggars belief that anyone bothers to listen.

In fact, about the only place there has been a US-style property market crash in the past few years is in the United States of America, a catastrophe sparked by reckless lending and a total failure of regulatory oversight that ricocheted around the globe in 2007, sparking round one of the global financial crisis.

Those US-style excesses (loans to borrowers with no ability to repay) were almost universally repelled in this market. As a result, we’ve largely avoided the after-effects.

That hasn’t stopped the hyperbole by an ever-increasing mob of normally reputable commentators.

But the facts are far more sobering.

The official figures released this week by the Bureau of Statistics clearly show a downward trend in the domestic housing market.

Overall, we experienced a 4.8 per cent national decline in the year to the end of December. But the manner in which the declines were carved out provides the most interest.

Australia may be a nation in the throes of a once-in-a-generation economic transformation, with resources squeezing out traditional industries, but there has been little evidence of that in housing demand.

Among the biggest surprises was that Brisbane, one of the beneficiaries of the resources boom, led the housing market price declines with a 6.7 per cent drop in the year to the end of December.

Adelaide and Melbourne were next in line. But the biggest surprise was the pullback in Perth residential real estate, shedding a whisker under 5 per cent.

Unlikely as it may seem, Sydney was the best performer of all with a decline of just 2.7 per cent over the year. (OK, Canberra outdid Sydney with a 2.6 per cent drop but no one ever pretended it was a normal city.)

Australian residential real estate is expensive on just about any measure you care to nominate.

And it is clear that it has reached a tipping point. For it has outgrown the capacity of Australians to service the debt required to buy a property. Not only that, the stronger dollar has made our property more expensive for foreign investors.

But to employ that argument as the exclusive rationale for a domestic property market collapse is naive in the extreme and ignores the fundamentals of market operations – supply and demand.

Given the tighter lending criteria imposed upon our banks during the boom years until 2008, the only way that we will experience a US-style property crash here is if there is a serious rise in unemployment – a change that would spark loan defaults and flood of distressed property on to the market.

That’s not impossible. But it is highly unlikely given our historically low unemployment right now and our place in the global economy as a resources supplier plugged into the only growth region in the world right now.

For a US-style property collapse to occur here, we would need sovereign debt defaults across Europe, the disintegration of the European Union and a banking crisis that would cripple even China. And if that happens, we’ll have bigger concerns than the price of our homes.

As with any market, there is a delicate balance between supply, demand and price. For those pining for ”the good old days” when we had ”affordable housing”, it is time for a reality check.

The truth is that housing was never affordable. All that’s changed in recent decades has been a shifting of the equation surrounding supply, demand and price.

In the good old days, the only reason housing was far cheaper – on an average earnings basis – was that credit was restricted.

Up until financial deregulation in 1983, our banks had to labour under the yoke of federal regulations that prohibited them from offering home loans to customers above 13.5 per cent. Credit was in such short supply, few were offered enough cash to buy a home.

It wasn’t until our banks discovered cheap offshore credit in the mid-1990s and brought the cash onshore that we suddenly had ”affordable” home loans. But the cheaper credit simply shifted the price of real estate higher.

It was a windfall for the banks. For the real estate boom resulted in ever larger loans. And those larger loans bloated the earnings of our major banks, a financial perpetual motion machine that came to an end more than two years ago.

As a nation, it’s left us with a serious but not insurmountable foreign debt problem. (That’s right, it’s a private not a government debt that is the problem).

It also is the reason global ratings agencies are seriously considering downgrading our banks, particularly given the threat to international finance from the ructions in Europe. And it goes a long way to explaining why our banks have aggressively switched back to domestic funding, to raising their cash at home.

The adjustments are in place. A crash? Don’t bet the house on it.

The Age

A HUGE proposal for Melbourne’s CBD will add nearly 3000 dwellings to its already overloaded apartment market.

Industry Superannuation Property Trust has submitted plans for Melbourne’s biggest residential development – six skyscrapers between 39 and 63 storeys rising between 142 metres and 222 metres in height.

The project, on The Age‘s former site in Spencer Street, is opposite another enormous urban renewal precinct, the 2600-apartment Upper West Side complex in Lonsdale Street.

Of the six proposed, the tower on the corner of Spencer and Lonsdale will be the largest.

Existing buildings that cover two-thirds of a city block between Little Lonsdale and Lonsdale streets will be demolished.

The size of the master plans lodged two days before Christmas mean they will need to be signed off by Planning Minister Matthew Guy rather than Melbourne City Council.

The trust’s objective was to rejuvenate the ”West End” by opening up ”six development parcels” on the 1.7-hectare site, planning documents said.

”In terms of CBD redevelopment, the scale of the site is immense,” they said.

As a result the super fund will consider parcelling up portions for others to develop.

After hitting a five-month high of US107.5c yesterday, the dollar is on track to challenge its all-time high, currency experts say.

It peaked at US110.6c last August just before Europe’s intensifying debt crisis hit home.

In a major boost for Australians looking to travel overseas and consumers buying online, the appetite for assets regarded as higher risk – such as the Aussie – has returned.

It comes amid signs the worst of the sovereign debt crisis may be over. Positive manufacturing figures out of China and the US have boosted hopes that the market overreacted to fears about the global impact of a new recession in Europe.

ANZ head of foreign exchange strategy Richard Yetsenga said strong demand for commodities in Asia would help ensure the dollar remained close to $US1.10 throughout 2012.

“And any continuing shift towards global investment in Australian assets has the potential to significantly boost it in the future,” he said.

“All the signs are looking good for the currency and (it) could even go above $US1.10, with the US dollar weak and the strength of commodity prices.”

CommSec chief economist Craig James said $US1.10 was achievable in the short term. But he is tipping the currency will drop back closer to parity in coming months, with the Reserve Bank to make cuts to official interest rates.

oriental daily news

2 2 2012

東方文薈：馬來西亞會否破產？

馬來西亞會否在2019年，如首相署部長依德利斯所預言的走向破產？依我之見，若現行的政策與做法，沒有徹底改變，它或將是個自我實現的預言。只是，破產主因不是依德利斯所說的生活必需品津貼（Subsidy），而是惡政劣治（Bad Governance）與腐敗！

一國何以會陷入財政困境？不同國家有不同的起因，如英美兩國是因為把私債轉為公債，假公濟私；冰島與愛爾蘭因不當地搞金融與銀行業，而被2008年金融危機波及；日本則因1989年經濟泡沫破裂後，大搞公共建設，在人煙稀少處建高速公路，大建利用率極低的基建，如大型體育館，跨海大橋等，結果是有投入沒回酬，且還要日復一日賠上管理費與維修費，使原本低於60％的國債，劇升至現階段的220％！成為世界第二，發達國家中Number1的高債務國！

所幸的是，日本的國債有約95％為內債，且舉債率偏低，這才使其免於破產，但前景如何則難料及。希臘、意大利、西班牙等國的國債高昇，主因在於腐敗與不良治理。至於大馬，國債（聯邦政府債務）在2011年已破4000令吉；各州政府也拖欠了聯邦好幾百億令吉。加總起來，已近5,000億令吉！

不具生產性的開銷劇增

我國官方常說，聯邦政府債務僅佔GDP的約53％，尚在控制之內，況且其中外債只佔約160多億令吉，國人大可放心。實則，若把民間部門的外債也算在內，2011年6月底為止，外債總額已高達2417億，其中，政聯公司（GLCs）便佔了約600多億。按歐盟標準，年均赤字與總債務若分別佔到GDP的3％或60％以上，便算是進入危險水平，大馬目前為53％，可說雖不達亦不遠了。

對於這個百分比，應該說，其實只是個便利指標；嚴格來說，也應考慮及其他因素，如政府的債權（而非債務而已）、內外債百分比、舉債利率、公私部門的儲蓄率、債務的用途，如是消耗性的，或是投資性、生產性的。若用低利率舉債投資於生產性活動，由於可推動經濟增長，創造就業與財富高債就不那麼可怕。實則，韓國便是靠舉高債發展起來的。這是韓國發展策略的特色。

大馬的情況則是，債務用途多是消耗性（用了就沒了，不具生產性），用途不明或搞虛而不實的大小項目。如上百億的龐大建築物，或最近的至少5000億令吉以上的捷運（MRT），這個MRT能帶來的經濟效益有限（巴生谷幅員廣，人口密度低，大馬的汽車型社會更不利客運量的培養），但卻肯定會加劇債務，進而促使政府加速推出消費稅（GST），同時削減福利，民生補貼等，導致貧富差異持續擴大。

一個簡單的事實是，這幾年來，油氣收入均佔了聯邦收入的約35％，這樣高的百分比應可使大馬人享有更廣泛的福利或政府盈餘；可事實是，這幾年的赤字均高達幾百億令吉，每年還本付息也高達約200多億。若沒發現新的大油田，隨著人口的增加與能源消耗的遞增，政府財政肯定會加速惡化。

一個基本事實是，近年來的政府「行政開支」相對固定的增長速度，已超越收入的增長速度，迫使政府縮減「發展開支」，伸言之，經濟活動日趨消耗性方向，而非生產性方向發展，更何況許多政府單位愛「報大數」。

實事求是地看，大馬的政治也日趨民粹化（Populist），短期化。朝野均忙著比派錢，用錢來收買人心，而非比政策，比政績，比理念。更令人吃驚的是，連政黨也忙著派錢給黨員！搞政治搞得如此金錢化、商業化、庸俗化，確也令人大開眼界。以我之見，馬華公會若把錢轉移給華校，其政治效應恐怕比派給黨員強得多。看來連派錢收買人心，他們也不懂「把錢花在刀口上」的道理！

大馬財政如此不必要地惡化，一方面是油氣收入來得容易，也去得容易，是所謂的油氣詛咒（OilCurse）；更根本的原因在於我國的政治生態，即「恩庇型政治文化」（Political Patronage）！若不改變這些根本毛病，可以預見，除非有奇跡出現或政策大轉彎，否則破產是遲早的事。歷史地看，從1970年至今，我國只在1993～1997這五年間，出現過小盈餘，而何以1993、1997年會有小盈餘（介於GDP的0～2.3%），則與民營化（Privatisation）有關。

事緣，自1971年新經濟政策（NEP）出台以來，我國便大搞公共企業，使公企從30多間快速升到1980年代中期的近1000間，且大多數經營不善，大幅加重了政府負擔。外加上1980年代中期的衰退，政府財政更是劇升，如下表所示：

缺乏外資產業難升級

可見，大馬在1980年代，也曾出現過債務較GDP更高的破產狀況；只是，隨著馬哈迪政權大搞「利益輸送型私『盈』化」，情況才得以改善。此外，很重要的一點是，自1985年美國、英國、法國、日本、西德簽署《廣場協議》（Plaza Accord）後，日圓、台幣的幣值節節上升，日本、台灣產業也在急速轉型，逼使許多企業南下，遂使大馬獲益不淺，進入了高速增長的1989～1997階段。據知，現階段國油與40多間政聯公司（GLCs）的資產便高達6000多億令吉，其中國油佔了50%。或許脫售國營企業就是未來「以資抵債」的一個可能方式。

只是，若脫售了國營企業，或有高回酬的國有資產以資足抵債之後，政府的收入也可能劇減；且這收入不過是一次性的，反而資產脫售了，會削減政府交叉補貼（Cross-Subsidization）的財力，使其不得不節流開源，也就是加稅，並減少福利開支。果真如此，依然是普羅大眾受罪，尤其是低收入階層受打擊更深。

更嚴重的是，在區域化與全球化的時代，除非有奇跡，若否，大馬對資金的吸引力也將遞減，而產業又升不了級，結果將是不郎不秀，持續卡在「中等收入陷阱」中。顯見，不大事改革，尤其是反腐倡廉與良政善治，財富的大量不當流失、漏失（Leakage），只會加速國家破產。而流失與漏失當然就是失血的主因。

一國若破產，其後果不外是：政府大印鈔票，製造高通膨來抵消債務；以高利率舉新債還舊債；債留子孫；加稅減開支，尤其是福利開支；貨幣貶值以求抑止進口，促進出口；內部貶值（Internal Devaluation），也就是全面降低生活水平，大調薪資、物價以待再出發；出售國有資產，或讓債主以股權抵債（Debtfor Equity）的方式入股國營企業；要求債主減債減息；或若是內債，乾脆一筆勾銷，從新開始，也就是要求債權人「犧牲小我，成全國家」。

有道是「天下沒有白吃的午餐」，借來的是債，而非創造出來的財富，遲早得連本帶息還回去。顯見，最明智的出路就是，在尚未無可救藥時，進行「先發制人」的必要改革，以求突圍。

Gillard’s hold: Labor MPs nervous, says minister

Labor frontbencher Stephen Conroy has confirmed Labor MPs are nervous as senior government ministers rallied for the third day around the Prime Minister, Julia Gillard, who is reported to be losing her grasp on the leadership.

A key factional backer of Ms Gillard was reported by Fairfax Media today as saying the Prime Minister had lost the support of a substantial number of MPs over the parliamentary break.

The senior factional boss said “there’s been quite a shift over summer” and “she’s in trouble”.

The report comes after a turbulent week for Labor in which former leader Simon Crean labelled the former prime minister, Kevin Rudd, as a “prima donna”, who was not a team player.

Responding to Mr Crean’s comments – which included an admonition to drop any plans to return to the leadership - Mr Rudd said yesterday he was “proud to be a member of this ministerial team, which is very strong, very dedicated, very hard-working and in which Simon himself plays a very positive role”.

Senator Conroy said questions over the Labor leadership were due to the government making “the hard decisions” in its policy agenda.

He said Ms Gillard had the full support of the party but also said there was a level of unrest among the Labor backbench.

“We’ve been taking hard decisions,” he said. “Some popular and some unpopular and we are going through some challenging times. [These are] decisions which will cause some people to be nervous.”

The Climate Change Minister, Greg Combet, said he was tired of political sources leaking to journalists.

“We’ve got a huge job to do and I focus on my job and I think all of my colleagues do their best to focus on theirs,” Mr Combet told ABC Radio this morning.

“I lose patience with people who are talking to journalists and there’s no name attached to it and you wonder who on earth it was.”

Ms Gillard’s deputy, the Treasurer, Wayne Swan, tried to hose down the leadership speculation before attending a prayer service to mark the first anniversary of cyclone Yasi hitting Queensland.

“[Ms Gillard's] got strong support because she is a really strong leader,” he said. “She’s demonstrated that time and time again.”

He said Labor was unified as a team and that Mr Rudd was “the Foreign Minister doing a good job”.

“I’m out there all of the time, I’m working with all our other ministers,” he said. “We’ve got a good team.”

Labor backbencher Andrew Leigh said constant leadership speculation was of no interest to the public except “a small tight political coterie who are constantly engaged in gossip mongering”.

“Of course I’ve got strong support for the Prime Minister and I think the Foreign Minister is doing a terrific job,” he said.

“But I just don’t think they’re the top issues of the morning.”

Liberal backbencher Kelly O’Dwyer likened the situation to a hostage crisis, saying Australia was beholden to a siege of its political leaders.

Read more: http://www.theage.com.au/national/gillards-hold–labor-mps-nervous-says-minister-20120202-1qujl.html#ixzz1lDIJgh4r

The Star

By Henry Fong | February 1, 2012

Whether a property has good Feng Shui forces, is usually determined by considering the location, facing  direction of a house, the surrounding landform and the completion period of the house.

In terms of location, you should not buy a house located on the top of a hill or in low-lying areas. Strong wind force at the hilltop is a kind of Sha (killing force) element which you should avoid while low-lying ground may be prone to flooding.

Direction
The direction which the house faces, in turn, is used to determine the auspicious and inauspicious sectors within a house. As a rule, you would want to have the main door, bedroom and kitchen in the auspicious sectors so that you can benefit from the auspicious ‘qi’ that is present in these sectors.

How would the layman know what are the auspicious and inauspicious sectors of a house? They do not. They would have to take a course or read a lot to figure it out. But all is not lost.

An auspicious or inauspicious sector is not automatically good or bad. It must be activated by an external landform. For example, the highly auspicious wealth sector of a house needs to have a matching landform, e.g. river, lake, field or lower land for it to work. Similarly, an inauspicious sector must be activated usually with some form of Sha (killing force) element before it becomes dangerous.

Sha elements
Therefore, if the surroundings of a house are free from any form of Sha element then the property is generally considered safe. So, if you are not going to use the services of a consultant to help you select a house, then at least, focus on getting a home with surroundings that are free from any Sha-generating landform or structure.

But what are they? Here are some common examples.

A fast flowing river is considered a Sha element. In Feng Shui, a good river is one that is clean and flows slowly, that is, not stagnant. In urban areas, roads and highways are regarded as rivers. Therefore, you should also stay away from busy roads and highways.

Mountains in the surrounding area, are usually good, provided they are green with plenty of vegetation and wildlife. A rocky mountain or one with a collapsed side, which faces your choice of a house, is considered a Sha element. You should avoid it or at least stay very far away.

A stagnant pond with rotting vegetation and which emit a bad smell is an obvious Sha element. So are high-tension pylon cables. While at it, I would also suggest that you avoid mobile phone, radio base stations, usually located on rooftops of commercial buildings.

Gap
Ensure that your house does not face the gap between two buildings. Such a form creates a “venturi effect” or flow that can cause a strong force of wind to bombard your house. This is a Sha element.

T-junctions and Y-junctions also generate Sha elements. Also, avoid houses that face a road leading inward or a river that changes course in an abrupt manner in front of your house.

The edge of a nearby building can be a Sha element, if it is oriented in such a way that it ‘pokes’ your house. Such a feature is common in apartment complexes. Look out the balcony or bedroom and see if the nearby building ‘cuts’ into yours.

The buildings near you, should also not be much bigger. For example, if your home is a two-storey house and the building across the road is huge and 42-storey high, it can affect you.

Look at the roads surrounding your house. Watch out for those that form a reverse bow. They can be a problem if the traffic flow tends to be heavy.

There are other forms of Sha elements but the ones mentioned above, are common.

Ba Zi
Most of us have an “unbalanced” birth chart. It is either too much of this element or too little of that. This in turn affects our destiny and luck.

For example, one may have a strong element of luck in career and wealth but has weaker luck in relationship (say, spousal and with the children). Another person may have poor luck in wealth and career but great in health and relationship. The lucky ones will have a balance of everything but they are rare cases.

Such an imbalance can affect our quality of life. Money is not everything. I am sure you have come across highly successful people who are lonely, do not have affinity with their children or worry too much (mental health).

There are many ways to “balance” your destiny and luck. Using the direction that your house faces or the side that receives the most energy can help to “correct” this imbalance. Each direction is associated with an element. For example, water is associated with the north, fire with the south, etc. Selecting a facing direction that has the element most needed by you, is a powerful way to “correct”  the path to your destiny and  achieved your goals.

Based on experience, I find it to be a highly effective way to achieve goals by selecting the right direction. Every house that you buy has a direction that it faces. Why not get one that faces the direction just “right” for you?

AFP

1 2 2012

Australian Prime Minister Julia Gillard Wednesday warned the Aussie dollar would likely remain at a high level for years as it came to be seen as a “safe haven” amid global turmoil.

The currency has soared past parity with the greenback on the back of Australia’s commodities boom and relatively high interest rates over the past two years, reaching its highest levels since it was first floated in 1983.

Gillard said as European economies suffered — with even traditional currency strongholds such as Switzerland affected — “for the first time in history Australia is being referred to as something of a global ‘safe haven’.”

“It’s a striking development in our economic history that in a period of global uncertainty, the Australian currency is holding its value,” the prime minister told an Australia-Israel Chamber of Commerce lunch in Melbourne.

“What is certain from all of this is our dollar is likely to remain relatively high for years to come.”

The commodities-linked Aussie had a stellar run against the greenback in 2011, breaking through 110 US cents in July. It was trading Wednesday at about 106.16 US cents.

Gillard said there was growing evidence that the strong dollar — which first breached parity with the greenback in October 2010 — was best explained by confidence in the economy.

“It’s well known that Asia’s demand for our mining output — together with the domestic investment to expand our mineral capacity — has lifted demand for our currency, with its value up almost 60 percent against the US dollar since 2009,” she said.

“There’s another driver: investors looking to the Australian dollar as a substitute for betting directly on growth in our region — especially in China.”

The flipside was that the high currency had hurt some sectors badly, including tourism, education exports and manufacturing, she said.

“The level of the dollar — and the pace of its rise — has broken some business models and forced economic restructuring.”

But she said the strong dollar was driving change and in doing so making the economy leaner and stronger.

Australia survived the global financial crisis without dipping into recession but delivered a stimulus package that cut into the budget.

Gillard said she would bring the budget back to surplus in 2012/13 despite the difficulties of the global turmoil.