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Sunday, Sep 09, 2018 - 21:29 SGT
Posted By: Gilbert

Overviews

The trouble with getting behind on blogging, is the speed at which events pass by; topics, once fresh and recent, can go stale with astounding rapidity. But, like an unfortunate serviceman who's neglected to exercise for too long, we've all got to restart somewhere...


VERS

As the incumbents might have realised with UMNO's fall back in May, political fortunes can turn on a whim (see also: the steady rise of the anti-immigration right in Europe), and one of the admittedly relatively few triggers that might have locals turn on their longstanding rulers would be a big hit to their pocketbooks (admittedly, much the same as most elsewhere). Following this chain of reasoning, given that a large proportion of local wealth has been plunked into property, the fate of HDB prices is of paramount importance.

As repeatedly noted here, the issue of leaseholds preserving value indefinitely is difficult to reconcile with reality, and the administration's tack has, up till very recently, been to double down on "HDB value will only go up". Of course, the hard truth would have to hit eventually, with our brave Minister for National Development courageously admitting that not all flats would be SERS-ed. Of course, this was by far the most likely outcome, but it was still a rude awakening to citizens who had blissfully assumed the best; and, dare we say, irresponsibly encouraged by those in charge about this illusion.

Quite a lot of the debate has returned to whether HDB flats are owned or leased, with the official line remaining that they are owned. Now, this is broadly true in the sense of owning a leasehold; note that there have been rather less rumblings about whether 99-year private property owners are lessees (The State's Times has put their best face on it by referring to the HDB as a "super landlord", but you've got to pay to read sloppy propaganda nowadays). However, this is missing the actual point, which is the expected residual value of the units.

Explaining this more concretely, existing HDB prices likely have incorporated an expectation that the government will reclaim old flats at SERS market value, which is more or less effectively topping-up the lease. As such, lease period becomes largely immaterial, since the owner just gets recycled into a spanking new pad. While owners and agents probably recognized that not all flats would be SERS-ed, it was reasonable to hold out hope, encouraged by the government's intentional vagueness on the SERS scheme (no doubt leaving the option of wielding it as a political weapon, as upgrading - quite shamelessly touted as a "subsidized benefit" by The State's Times - had been)

This ad-hocness, however, becomes very troubling when housing prices have become more or less synonymous with retirement benefits by design, given all the CPF funds that have been drained by the HDB. Proper planning no doubt becomes very difficult given that the bedrock upon which the ultimate value of a HDB flat rests - its residual/buyback value - is left undefined. This has led to a response, the Voluntary Early Redevelopment Scheme (VERS), in which 70 year-old flats may be bought back by the government.

The trouble is that there are next to no details on VERS as yet, which is probably at least partly a side-effect of co-mingling housing and retirement funding. To wit, a public retirement fund should be well-diversified and equitable, in the sense that citizen retirees should receive the same payouts, irrespective of the location of their home (at least for a city-state). However, forcing a disproportionate amount of retirement savings into a home disobeys the diversification and equity principles - should one fellow receive a significantly better return, simply because he chose a flat in a new hub area (e.g. Jurong East?) long ago? This is definitely an issue where the Opposition can have plenty to work with, if they can keep it together.


Crazy Rich Asians

Read the book, watched the movie, saw the outrage over how it isn't representative of Singapore, to which I have to concur with Calvin Cheng for once - it's a bloody Hollywood movie! I mean, fine, they could have thrown in a handful of Malays and Indians to quell the loudest critics, but considering the male lead isn't even Chinese as originally written (English-Iban instead), it's not like Hollywood often lets authenticity concerns trump over marketability in any case. It's sort of as if New Yorkers had complained about how The Great Gatsby didn't represent their everyman - it simply was never meant to.

Seen as an exotic rom-com, it was alright, I suppose. Fiona Xie overacted a little to me, but hey, there's an upcoming lead role in it for her (which reminds me, remember when we recommended that the Suicide Squad producers just milk Harley Quinn for all she's worth? That's just what they're doing). A couple of nice touches too, such as the dead fish the mean rich girl clique put in Rachel Chu's bed (thoughtful symbolism, with whiffs of Godfather), as well as the usage of mahjong in the finale (Chu's game theory background, plus reference to Hollywood's last Asian-centered work, Amy Tan's The Joy Luck Club)

The more concerning aspect is perhaps the revelation that not all Singaporeans are created equal, which while not exactly a secret, got heavily rubbed in. Case in point, book author Kevin Kwan (and sorta-rich Asian himself) implying that he had returned to Singapore several times despite having defaulted on National Service, to which the Ministry of Home Affairs could only sniff that they had no records of that - clearly not a good look, either way this goes.

More generally, fault lines are opening between rentiers (landlords of all forms) and rentees (largely coinciding with HDB dwellers, whetever the government might say) locally, which is reflected in the freehold/99-year tenure divide - in one case, value accures perpetually; in the other, it simply doesn't. Personally, it's not hard to suspect that inflation is higher than the official figures (the OCK curry puff now S$1.80 for one, doubled from S$0.90 a decade ago, translating to a 7% per annum rate that I think representative of food prices), which may not be fully appreciated by those in charge (which, to be fair, extends to America's out-of-touch Democrats too)


BCash Dumpster Fire

Deferring the general crypto discussion for a bit (yeah, not been the best of weeks for the altcoins in particular), it's been sort of funny to watch the aftermath of the Bitcoin Cash fork unfold (drama previously documented in Men Against The Machine and Maxican Standoff). The bigblocker diehards had flocked to Bitcoin Cash (BCash) following the UASF event, recall, with BCash value struggling to maintain the 0.10 ratio against Bitcoin, after early hype (as expected)

As it so happens, that unsavoury cabal of ne'er-do-wells is squabbling over the spoils yet again, with Bitmain's Jihan challenged by nChain, backed by Craig Wright (a.k.a. Fake Satoshi, who has gone as far as to try and patent Bitcoin [??]) and a billionaire pal. Jihan has apparently finally recognized our dear Dr. Wright as a fraud, which given how patently obvious it was, sounds like just desserts for this alliance of convenience.

Other crypto personalities couldn't pass up the chance to get some top-grade trolling in, with Vitalik making a personal appearance at the BCash summit (where, we're guessing, he didn't get on too well with Fake Satoshi). This may however be topped by a proposal to keep the existing BCash chain running as-is (similar to Ethereum Classic), making the contentious fork produce not two, but three chains. We tip our hats.

Bitmain has other largely self-inflicted troubles of its own, foremost of which must be their dedication to propping BCash up with their mining power, which has left them holding a humongous illiquid stash of the token... even as their ASICs are getting obsoleted by new offerings from a former engineer (there's a limit to how much one can stiff the tech guys who are actually designing the product, after all)

This has brought an off-hand suggestion to switch to proof-of-stake (conveniently, given that they're stuck with much of the stake), but more significantly, an attempt at a US$3 billion IPO, ostensibly to move into A.I. [?!], but which not a few have analyzed as trying to cash out on an inferior position while the going's tolerably good. Our Most Successful Investment Firm were for one rumoured to be a potential key investor, which does feel like their usual modus operandi. They have fortunately denied any involvement, to the great relief of my CPF account.


It could have been so sad, Alexa play Despacito!




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