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Economic News

FHBH12

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NYT journalist tells of unravelling Jho Low’s luxury condo purchases in New York
The Malaysian InsiderThe Malaysian Insider – Thu, Feb 12, 2015

The New York Times (NYT) journalist who co-wrote the story about the ownership of high-end properties in the United States by Malaysian investor Jho Low, told a local radio station the story was born simply out of the need to uncover the reason behind rising real estate prices in New York.

Noting that prices for luxury properties in cities like Los Angeles, Miami and New York were rising, Louise Story told business radio station BFM how she and her colleague, Stephanie Saul, had heard people say that a lot of units in high-end developments were purchased by foreigners.

In her February 9 article "Well connected at home, young Malaysian has an appetite for New York", it described how Low, whose full name is Low Taek Jho, in 2010, began by making some very expensive real estate deals in the US, using shell companies.

Story had set out to uncover who these foreign buyers were, only to find that there were few details.

"Today, more than half of the buying in New York and nearly half of the buying across the country in high-end property are purchased by shell companies, which are corporate entities set up just for the purpose of buying real estate.

"What they do is generally keep the owner secret, so no one really knows who the buyers of the properties are," she told BFM radio in an interview on the The Evening Edition show today.

Story said she wanted to lift the veil on these shell companies and started looking at a handful of buildings in New York City, including the famous Plaza Hotel which had been converted into condominium units.

"We ended up deciding to zero in on one complex called the Time Warner Center which is next to Central Park in Manhattan," Story said of her investigation that started in the middle of 2013.

The journalists – methodically, unit by unit – started to crack through the shell companies and found that some units had multiple layers of ownership.

"Some of them took weeks just to uncover one (owner) because it was one shell that was owned by another shell which was owned by another shell which is owned by a trust which is owned by another company before you even got to a person's name behind it.

"And behind one of these units, we ended up getting to a person named Jho Low," she told radio presenter Umapagan Ampikaipakan in the interview.

She said that when she looked at the macro picture of capital outflow of countries, she found China, Russia, India and Mexico on the list, but said she found it interesting that Malaysia was ranked along with these countries as well, despite being a smaller country in terms of population.

Story said Malaysia was interesting to her because during her time reporting here, she found that people were concerned over a culture of corruption and about money leaving the country.

"But it is not necessarily all nefarious," she said.

Asked what kind of effect she thought the story might have, Story said she expected that many would be watching Low's next steps with interests as he did a lot of "interesting and big deals".

She also said that for this story, it was the first time the paper ran a summary of the story in Bahasa Malaysia.

The NYT story on Low was part of a series of five articles which began on February 7 on how the influx of global money has fuelled New York City's high-end real estate boom.

Investigations by NYT journalists took more than a year and found that "nearly half of the most expensive residential properties in the United States are now purchased anonymously through shell companies and that the real estate industry does little examination of buyers’ identities or backgrounds”. – February 12, 2015.

https://sg.news.yahoo.com/nyt-journalist-tells-unravelling-jho-low-luxury-condo-132624839.html
 

cow138

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They are determined to bring down the entire gang.
Lack of transparency couple with easy money and arrogance is the root cause of this. Unless a leader is determined to change it will just be a case of next better player.
Everything will be swept under the carpet and all will be forgotten.
The rot will just continue.
 

snowbird

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The dipping oil prices, the weakening ringgit, a bigger national budget deficit, the problems of GST, burden of a possible RM42 billion debt..............stress is surfacing.
Putrajaya has frozen the hiring of civil servants, earlier than I expected.
This the first bad news, later followed by high employment rate because the civil services is the biggest employer for the local grads.
 

Funniman

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The dipping oil prices, the weakening ringgit, a bigger national budget deficit, the problems of GST, burden of a possible RM42 billion debt..............stress is surfacing.
Putrajaya has frozen the hiring of civil servants, earlier than I expected.
This the first bad news, later followed by high employment rate because the civil services is the biggest employer for the local grads.

Cheap properties in the horizon as the country's economy plummets. :smile:
 

snowbird

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Cheap properties in the horizon as the country's economy plummets. :smile:

Its a double-edged sword, depending whether you are a buyer or a seller.
If you are a buyer, then you better have deep pockets to tide thru that turbulent period which may be long.
But certainly, it'll be dreadful news for all our investors here!
 

Funniman

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Its a double-edged sword, depending whether you are a buyer or a seller.
If you are a buyer, then you better have deep pockets to tide thru that turbulent period which may be long.
But certainly, it'll be dreadful news for all our investors here!

At times of uncertainties, cash is the king. It is the best time to pick up high value properties at low cost. Property and economic cycles come around every 10 years on the average. Yes, the highly geared investors will have torrid time.
 

Funniman

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Sounds like a scary scenario.

Not trying to frighten but good to be realistic.
USD will rise when their interest rate rise end of this year.
MYR value will drop as a result. Bank negara will increase interest rate to defend the RM. Bank borrowers will suffer.

Inevitable the glut will be there when all projects are completed. It is going to be a tenant's market. What is the take up rate is any body's guess. One thing for sure, the rentals can only subsidise mortagage repayments, not to pay in full.
There will be many flippers. Hopefully prices sold are not at loss. But upside is going to be minimal.

The political climate in Malaysia is not stable as well. GST, 1MDB, Oil prices will spook buyers.

The only consolation is RM is weak against Singapore Dollars, and that will mitigate any further pain if the money earned from Singapore is used to pay for the mortgage.

Just hold tight. It is just another roller coaster "SCREAM" ride.
 

cow138

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Sounds very likely.
it's a matter of holding power now.
Developers will be trying to offload as much as possible if the project is quite advanced and that will just pile on the selling pressure.
 

snowbird

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Sounds like a scary scenario.

Yes it is.
Assuming you bought a property with Singdollar 3,4 years ago for RM1m at the rate then about 2.4.
Now the rate is touching 2.7!
So, if you are selling the property now, you have to fetch at least RM1.15 to break even!
Technically speaking, your property had devalued with the sliding currency.
 

FHBH12

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Not trying to frighten but good to be realistic.
USD will rise when their interest rate rise end of this year.
MYR value will drop as a result. Bank negara will increase interest rate to defend the RM. Bank borrowers will suffer.

Inevitable the glut will be there when all projects are completed. It is going to be a tenant's market. What is the take up rate is any body's guess. One thing for sure, the rentals can only subsidise mortagage repayments, not to pay in full.
There will be many flippers. Hopefully prices sold are not at loss. But upside is going to be minimal.

The political climate in Malaysia is not stable as well. GST, 1MDB, Oil prices will spook buyers.

The only consolation is RM is weak against Singapore Dollars, and that will mitigate any further pain if the money earned from Singapore is used to pay for the mortgage.

Just hold tight. It is just another roller coaster "SCREAM" ride.

Many owners who are buying for own use and paying in RM are looking forward to weaker RM. This could help to offset increase in interest rate. There is nothing very wrong with MY economy. Just that the government will be poorer with weaker RM, but oil price will recover after Opec has killed off majority of the fracking oil fields in US. Property prices are still quite low in MY, especially in JB. I view this lull as temporary. You can't stop rising costs in SG.
 

Valdez

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Yes it is.
Assuming you bought a property with Singdollar 3,4 years ago for RM1m at the rate then about 2.4.
Now the rate is touching 2.7!
So, if you are selling the property now, you have to fetch at least RM1.15 to break even!
Technically speaking, your property had devalued with the sliding currency.

But if you are still paying your mortgage and converting from sgd to myr monthly it still not so bad.
 

cow138

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I think it's a balance of forces.
People who are taking loan will want the weaker ringgit to offset any increase in financing costs
People who paid up but not selling will just be sitting on lesser paper gains less the holding costs of the property.
The property game is a medium to long term.
Must have holding power
 

snowbird

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But if you are still paying your mortgage and converting from sgd to myr monthly it still not so bad.

For those who had bought for self stay, yes, they may ended up paying lesser with the sliding ringgit, only worry is the loan interest rate.
Its for those investors who intend to sell after the 5th year, so as to to avoid the higher RPGT.
But with the current situation, selling a property bought 4 years ago, including in all the legal fee, broker fees, tax and whatnots, 20% above buying price is still losing money!
 

FHBH12

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Dollar mixed as June Fed rate hike seen as unlikely

The dollar rose against the euro and the yen, but fell against the pound after Federal Reserve monetary policy meeting minutes said a June interest rate hike was unlikely.


POSTED: 21 May 2015 05:55

NEW YORK: The dollar rose against the euro and the yen on Wednesday (May 20), but fell against the pound after Federal Reserve monetary policy meeting minutes said a June interest rate hike was unlikely.

"Many participants" at the US central bank's April monetary policy meeting "thought it unlikely that the data available in June" would meet conditions required for a rate hike, the minutes of the April 28-29 meeting said.

Policy makers expressed concern about weak economic reports in the first quarter, although these data were generally viewed as due to "transitory" factors, such as severe winter weather and the West Coast port strike that ended in late February.

Matt Weller, an analyst at Forex.com, said the Federal Open Market Committee (FOMC) minutes suggested September would be the "absolute earliest" the Fed is would hike rates.

But Chris Low, chief economist at FTN Financial, said while the minutes showed almost no chance of a June rate hike, a liftoff will probably come sooner than some prognosticators think. The Fed's view of the economic weakness as largely transitory suggests central bank staff "appears confident as ever in the prospects for a quick economic rebound," Low said.

"The FOMC is not likely to tighten in June, but their discussion will take the possibility seriously," Low said. "We read the minutes as confirmation September is still very much in play."

- AFP/fl

http://www.channelnewsasia.com/news/business/dollar-mixed-as-june-fed/1861510.html
 

Jetstream

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Singapore overtakes Tokyo to bag top spot in Asia, third globally in 'Business of Cities' ranking. The Business of Cities study ranks Singapore in third place worldwide, behind New York and London, and also names it the No. 1 city globally for business friendliness. - See more at: http://www.straitstimes.com/news/bu...spot-asia-third-globally#sthash.j4YMkwDo.dpuf

However, economist Song Seng Wun noted that one needs to be careful with such comparisons as London and Tokyo have a hinterland, unlike Singapore.

Song Seng Wun's point seems to suggest that hinterland is important. If so, I can only see Singapore seeking to integrate itself even more seamlessly with Iskandar, which could then develop into what may be S'pore's 'hinterland'. I suppose this is what S'pore is already trying to do when it re-affirmed its support for Iskandar at the recent leaders' retreat.
 

snowbird

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After 2 tragic air disasters last year and with the hiring of a new Angmoh CEO this month, Malaysian Airlines will be totally revamped to restart the airline as a new startup.
According to the report, all the staff except the CEO will be first fired and then rehire but out of the original 20,000 staff strength, only 2/3 will be hire back and on new terms.
That means that suddenly about 7,000 staff across the board will be out of job!
This is really a piece of bad news especially when the govt's recent announcement on freezing new employment, who will be able to absorb that many?
Worse, the govt will be trimming down the current bloated staff strength under the guise of improving productivity, so more unemployment are expected.
Massive unemployment for a longer period will always be the beginning of more depressing thing to come like car repro, home loan default, and more.........
 
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