Struck By Lightning
Two suicides at NTU in a week. The stock market continues its endless slide. Citibank’s troubles, thought to be over last year, seem worse than anticipated. North Korea “defends” its airspace, causing costly diversions. My implant supplier didn’t send me a birthday cake this year. Our beloved Merlion was struck by the proverbial lightning. Fans of geomancy say that the last incident spell bad omen for Singapore.
It would seem that we can run but not hide from this destructive lightning. Our local media does a very good job of “balancing” the bad news. We’re not the only ones in trouble. Other countries are also facing problems and affecting us. No decision maker in singapore is responsible for all this mess. No investments are bad investments. Everything will bounce back - eventually. How reassuring.
But little more than a year ago, my landlord at Lucky Plaza had plenty of ammunition from market information and predictions to justify a doubling of rental. They managed to sell their medical suites at ridiculous prices. The property market was hotter than the most fiery tom yam goong and even alamak people could pronounce “en bloc” as “ong block”. Faced with a new leasing contract, my former neighbour, a microbiologist, decided to sell his lab and retire. Our landlord told him that he just missed the chance of a lifetime to snap up a medical suite for a comfortable retirement. The rest of us didn’t have the retirement option. I spoke to the gynae next door. We concluded that we were sitting on a bubble and decided not to commit ourselves to a length, hefty mortgage. Yet, even though we were concerned about the crazy valuations, our landlord had the upper hand and decided that their medical suites were in demand. We bargained hard (with little ammunition) and managed to get a small discount. Luckily, we didn’t fall for their sales pitch and bought our units for $2M each like some people did.
We don’t need a very good memory to recall all sorts of positive news and assurances that rained down on us from above, drenching everyone with unbridled optimism. The Beijing Olympics. The upcoming integrated resorts. F1. Nobody said “so what?”. Our leaders have been telling us not to worry about rising costs. One senior minister said that the rising costs were due to rising standard of living and not with property prices being overvalued. Many people were persuaded to bank hard on property and stocks. Even when the sub-prime crisis started to surface in the first months of last year, we have been reassured that Singapore will be safe due to our limited exposure to such risks. Foreign businesses (quite a number of my expat friends) were finding the rentals and other costs here ridiculous and packing up. Neither landlords nor the authorities addressed their concerns when they could still be retained. It was take it or leave it. Cost is not an issue as it has all to do with “branding”. There was no voice of reason loud enough to warn everybody that we were facing a financial meltdown on a global scale.
It all seemed like yesterday. The situation now is a complete reverse of “ong block” days little more than a year ago. The other day, I met the retired microbiologist at Lucky Plaza. He was so proud of his decision to retire. He just came back from a holiday in China. He visited a friend at Mt Elizabeth who was in deep trouble. The poor doctor bought up a unit at Mt E (over $3M) and a piece of private property (almost $2M) early last year. Facing difficulties servicing his mortgage now, he has been calling up friends who might be able to buy over his house. Please. Please. Please… poor thing.
All of a sudden, banks are posting horrendous losses. Assets suddenly become toxic. Imports are down. Exports are down. Manufacturers are laying off staff and tycoons are abadoning their mistresses. Costs are everything. Airlines like Thai Airways post unprecedented losses of USD592M while budget airlines have their day in spite of one Singaporean expert’s view that they will never make it. Online shopping, often frowned upon by many Singaporeans, is now becoming popular as we realise that most sellers out there are honest and things shipped in from the US can cost less than the same items displayed on expensive showcases in Singapore. In his book The Long Tail, Chris Anderson has argued so cogently that an online 24/7 store can have an unlimited shelf space unlike the traditional store in a mall where every item in the store, depending on its size, consumes a certain display cost every month.
Let’s apply our common sense, sack the experts and think hard about what is going to work in these times. I’ve already touched on budget services and unlimited online catalogues. If I were granted a wish now, I might be tempted to wish I can run my practice on the streets with no need to pay rentals. But operating under such conditions would not be very good for the patient’s well-being. Perhaps I could do something less invasive like selling wanton mee.
The best place to sell wanton mee now? Kathmandu! Rentals may have gone up a lot, but there is real wealth being created in the valley. With peace restored, hordes of unemployed Europeans are flocking there to make better use of their unemployment allowances. My friend Jyoti may need to build another hotel.
