MAS Record Loss! - An explanation

[johnny333]

I don't know where you get your "real" "double-digit" figure from. Take common hawker dish price rising from $2 to $2.50 over 5 years, that's 20% over 5 years and 4% per year. Even the average Mc meal only rose from about $5 to $6 over 10 years. If you talk about flats and houses, that's asset appreciation, not inflation.

I often eat outside & have seen prices go up. At one place it was from $3 to $4. Despite this price increase the stall still closed Other hawkers have increased their prices more gradually but have decreased their portions.

This is the strategy MacD has followed. If you've ever eaten in their outlets in LOS/Malaysia you'll notice how much inferior the Spore product is.

Public transport prices have gone up. Last time they called the fare increase "distance based" fare The night owl buses fare prices were increased by 25%. The recent request for a fare hike look like its going to go though.

They've been increasing the electricity prices. This month the electricity is going up by 12% . Don't forget about the other increases in property tax, ERP, COE, etc I suspect more increases have yet to be announced

 

[johnny333]

If you talk about flats and houses, that's asset appreciation, not inflation.

That's a joke right

It just means the gov't has an excuse to charge higher property tax.

If you are being paid millions like some MPs you might have the $$$ to flip properties but if you are a "lesser mortal" it just means a higher mortgage & taxes.

 

[Forvendet]

That's a joke right

Yeah, that's a GCT and MBT joke. LHL asked them to leave the cabinet after that joke cost so many votes.

 

[palden]

LKY : See what happens when we leave such things to locals. Import more FT!

 

[Unrepented]

Did they up the SGD to cushion the impact of the citibank losses back then?

Those watching SGD will realise that everytime Singapore wants to make a major purchase in arms, aircraft including commercial, renewal of foreign SAF bases or training facilities around the world the SGD will be high.

 

[scroobal]

Yes. Finally someone gets it. Watch March 2012. This is not an investment per se, but a fighting fund for monetary control and for fiscal expenditure.

You cannot sustain high SGD in an economy where high value exports are needed to keep the economy and the MNCs who have invested happy.

So you saying we should be shorting SGD in the future?

 

[Unrepented]

From your POV, what are our high value exports?

You cannot sustain high SGD in an economy where high value exports are needed to keep the economy and the MNCs who have invested happy.

 

[scroobal]

The losses or profits in this particular account does not affect anything. Occasionally the profits go into the consolidated fund but this fund is not meant for speculation or investment. MAS remit does not allow it to venture into speculation or investment.

Take it as a weapon with two barrels. They just moved more ammo into other barrel.

The PAP will quietly bury or hide losses thru various ministries especially in MINDEF. They are happily publishing these losses not because they honest but it is just an accounting exercise. Those in the financial industry will understand those handling high finance.

U did not mention that this manipulation of the singapore dollar to a high level has resulted in inflation in singapore, and I am not talking about the BS 5% or whatever that MAS claims. We the peasants have to pay the price of all this. Everything is more expensive now.

 

[scroobal]

The whole currency operations in forex with MAS is highly secret. Many of us only find out about the playbook after the deed is done. Where MAS issues buy and sell orders thru dealers and where the dealers attempt to ride on it with their own trades when it involves SGD, MAS will ask for the immediate sacking of that dealer. And he or she will not be able to work in Singapor anymore in this field.

Any attempt by any company or individual to affect the SGD by doing significant trades or publishing confidential information or by putting together a view based on a potpourri of confidential information falls under OSA and you will be in Whitley faster than TKL can say the next "many people" comment.

If it can be controlled and preplanned, then would we not be able to hedge effectively to prevent translation losses

 

[Unrepented]

My point is; why didn't MAS themselves hedged to prevent a significant loss amount since there a few components in the translated figures.

The whole currency operations in forex with MAS is highly secret. Many of us only find out about the playbook after the deed is done. Where MAS issues buy and sell orders thru dealers and where the dealers attempt to ride on it with their own trades when it involves SGD, MAS will ask for the immediate sacking of that dealer. And he or she will not be able to work in Singapor anymore in this field.

Any attempt by any company or individual to affect the SGD by doing significant trades or publishing confidential information or by putting together a view based on a potpourri of confidential information falls under OSA and you will be in Whitley faster than TKL can say the next "many people" comment.

 

[Ash007]

Thanks for the tip. I suspect a lot of interesting financial "circumstances" is going to happen during 2012. I'm preparing for it now, lets just hope my predictions are correct. I'll keep a watch out for SGD now that you've mentioned this as well.

Yes. Finally someone gets it. Watch March 2012. This is not an investment per se, but a fighting fund for monetary control and for fiscal expenditure.

You cannot sustain high SGD in an economy where high value exports are needed to keep the economy and the MNCs who have invested happy.

 

[scroobal]

No. Citibank losses or all the other losses are a drop in the ocean. MAS is key to everything this country does. Their most important role is setting monetary and fiscal policies. The value of SGD is key.

Did they up the SGD to cushion the impact of the citibank losses back then?

 

[scroobal]

Pharmaceuticals, precision engineering, medical technology, aerospace etc.

From your POV, what are our high value exports?

 

[Ash007]

Pharmaceuticals, precision engineering, medical technology, aerospace etc.

Is petroleum included as well?

 

[scroobal]

There is no hedging required. They are buying foreign currencies and squirrelling it away. So their foreign currency book is growing bigger than SGD book. For accounting purposes, the figures are reported in SGD as we are Singapore. If I used a hypothetical neutral currency, I can bet you that in real terms, we made a lot.

Hedging is done not for currency trading per se but for the purchase or sale of goods and services that you wish to incur in the near future. There are no good and services involved here. They are using the extra strong SGD to buy more USD and Euros which are at record low. Airlines have to hedge against rising oil prices. This involves a product.

Say they buy USD 5B with SGD 6B in 2011. In 2012, they are likely sell the USD after devaluing SGD and make another record profit as they did in 2010. Though the idea is not to make a profit or a loss but to continue to build a fighting fund. We are in an envious spot because we can control our currency better than any country. Imagine one man Soros, brought down the sterling and citibank brought down the Thai Baht. Our fundamentals are strong and we can fly by wire when it comes to SGD. Even the Japanese can't control the yen.

My point is; why didn't MAS themselves hedged to prevent a significant loss amount since there a few components in the translated figures.

 

[scroobal]

As you are in Australia be careful. It's a major trading partner and MAS for the last 20 years has been operating the AUD/SGD pair between 119 to 133, a narrow band with the occasional dips that will bring it to par and just below for a few weeks and then back to the narrow band.

This is more towards USD / Euro. The danger is this regard is that bottom might fall out the Euro due to the PIGS. Greece nearly collapsed on Thursday.

Thanks for the tip. I suspect a lot of interesting financial "circumstances" is going to happen during 2012. I'm preparing for it now, lets just hope my predictions are correct. I'll keep a watch out for SGD now that you've mentioned this as well.

 

[Ash007]

Yes, I've realised that, hence SGD was never interesting to me. Now that you've mentioned this, it makes more sense why this is the case. Chinese RMB would be interesting to see how this falls out.

As you are in Australia be careful. It's a major trading partner and MAS for the last 20 years has been operating the AUD/SGD pair between 119 to 133, a narrow band with the occasional dips that will bring it to par and just below for a few weeks and then back to the narrow band.

This is more towards USD / Euro. The danger is this regard is that bottom might fall out the Euro due to the PIGS. Greece nearly collapsed on Thursday.

 

[scroobal]

Yes and no. It's is product that Singapore has little control. Interestingly the benchmark price for petroleum for AP including OZ is quoted on Singapore crude.

Is petroleum included as well?

 

[Papsmearer]

I don't know where you get your "real" "double-digit" figure from. Take common hawker dish price rising from $2 to $2.50 over 5 years, that's 20% over 5 years and 4% per year. Even the average Mc meal only rose from about $5 to $6 over 10 years. If you talk about flats and houses, that's asset appreciation, not inflation.

I believe that housing is a component in the calculation of the CPI, so when u say housing go up, it adds to the inflation number. By the way, since u don't own the flat, its not an asset.

 

[Forvendet]

I believe that housing is a component in the calculation of the CPI, so when u say housing go up, it adds to the inflation number. By the way, since u don't own the flat, its not an asset.

I do believe housing as a component of CPI and even property tax are computed on a rental value basis. Property price is a separate thing. For example, you bought a property at $500k. It appreciated to $1m 5 years later. That's not inflation for you, that's asset price appreciation for you. You've already owned it at $500k. If you missed buying it 5 years ago at $500k, you have to pay $1m for it if you want it now. That's also not inflation. That's still asset price appreciation except you're on the wrong side of it. If you count this as inflation, car prices and share prices would also have to be counted. CPI would be gyrating in 20 to 30% band annually.