New movie 'an inconvenient truth' for US economy?
Documentary I.O.U.S.A. warns Americans of being 'held hostage by foreign lenders'
AMERICA, you are in big financial trouble.
10 August 2008
AMERICA, you are in big financial trouble.
That's what a private-equity billionaire, a former government accountant and a newsletter editor are trying to explain to Americans.
And what better way to do it than at the movies.
The three men are part of a new film titled I.O.U.S.A.
The 87-minute documentary attempts to show viewers the magnitude of the country's national debt, caused by the rising national deficit, the trade imbalance and the ageing population, reported The Washington Post.
Early reviewers have dubbed the film An Inconvenient Truth for the US economy.
It's not exactly summer blockbuster material. There are no flashy car chases and nothing blows up.
Except possibly, the entire economic future of the United States.
The central character is David M Walker, former head of the Government Accountability Office (GAO), the audit, evaluation, and investigative arm of the United States Congress.
Since 2005, Mr Walker has been trying to convince Americans that the nation's budget is badly overextended.
He has even been traipsing from state to state on a 'fiscal wake-up tour', but nobody wants to listen.
QUIT HIS JOB
In March, Mr Walker resigned from the GAO so he could be even more vocal on the debt crisis.
He wants to tell Americans this: You've been told that the national deficit is US$9.6 trillion ($13.4 trillion) and rising. But it's actually worse.
The real figure is US$53 trillion.
In the movie, Mr Walker cautions with grim doomsday authority: 'The debt has increased our risk of being held hostage by foreign lenders.
'Our situation is serious, and it is deteriorating with the passage of time.
'The financial condition of the US is worse than advertised.'
The documentary also bombards viewers with shocking figures.
For example, the US debt now accounts for two thirds of the gross national product.
And by 2040, the cost of supporting the ageing population will push that figure to a whopping 244 per cent. That's twice what it was after World War II.
The genesis of the film was the 2005 best-selling book, Empire Of Debt.
It was co-authored by Addison Wiggin, the executive publisher of Agora Financial, a multi-million dollar financial research firm and publishing group based in Baltimore, Maryland.
Picked by Economist magazine as one of the top 10 must-read books in 2005, the book exposes the US debt crisis and the reasons behind it.
Mr Wiggin, who is the film's executive producer, hatched the idea for turning his book into a movie when he was holed up for two days in his Vermont condo because of bad weather.
While waiting it out, he put on a six-hour documentary on the history of the global economy, titled Commanding Heights.
He ended up watching it three times.
I.O.U.S.A. also features a live discussion among Mr Walker, investor Warren Buffett and Peter Peterson, an investment banker who made Forbes' list of 400 Richest Americans in 2007 with a net worth of US$2.5 billion.
The film competed in the Documentary Competition at this year's Sundance Film Festival and received a standing ovation and critical acclaim.
POSITIVE REVIEW
Variety magazine reviewer Justin Chang praises the documentary for its 'superb packaging and timely subject matter'.
But while the film could make in-roads in raising awareness among Americans, does it actually offer any real solutions?
Instead of one particular fix, the documentary recommends a broad overhaul, such as tough budget controls and energy conservation.
To the man on the street, the message is simple: Just don't buy anything you can't afford.
Yet, not everyone agrees that the US is headed for financial disaster.
Economist Arthur Laffer, for example, argues that as long as the debt level stays where it is, it can be financed down over time, like a homeowner with a mortgage.
--------------------------------------------------------------------------------
Copyright © 2005 Singapore Press Holdings Ltd. Co. Regn. No. 198402868E. All rights reserved.
Privacy Statement and Conditions of Access
Sunday, August 10, 2008
BRITAIN is seeing its worst property crisis since the '80s.
UK PROPERTY CRISIS
Demand and home prices plunge
BRITAIN is seeing its worst property crisis since the '80s.
10 August 2008
BRITAIN is seeing its worst property crisis since the '80s.
Home prices plunged by more than 10 per cent last month, the biggest fall since 1983.
And business groups and analysts say huge cuts are needed in the cost of borrowing to pull the country out of its first recession in more than 15 years, reported The Guardian.
Official figures, released on Thursday, say that demand for houses has fallen 33 per cent compared to a year ago.
Similarly, the demand for commercial buildings is down by almost 40 per cent over the same period.
And it's the country's main banks who are seeing the first sign of trouble.
The Royal Bank of Scotland is expected to unveil losses of £1.2 billion ($3.2b) - the biggest in British banking history.
On Thursday, Barclays also announced that its profits are down by a third.
Its chief executive Mr John Varley said: 'It would be wrong to suggest that the market conditions over the foreseeable future will be anything other than tough.'
Currently, inflation is now hovering at 2 per cent and expected to rise to 5 per cent in the coming months, along with more expensive energy prices.
Mr Suren Thiru, an economist at commercial bank Halifax, said: 'Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial crisis, is constraining potential house buyers' ability to enter the market.
'This is resulting in both lower prices and activity levels.'
Figures show that home repossessions have jumped by more than 40 per cent in the first half of this year, the highest level in 12 years.
Analysts are now urging banks to lower their interest rates.
--------------------------------------
Copyright © 2005 Singapore Press Holdings Ltd. Co. Regn. No. 198402868E. All rights reserved.
Privacy Statement and Conditions of Access
Demand and home prices plunge
BRITAIN is seeing its worst property crisis since the '80s.
10 August 2008
BRITAIN is seeing its worst property crisis since the '80s.
Home prices plunged by more than 10 per cent last month, the biggest fall since 1983.
And business groups and analysts say huge cuts are needed in the cost of borrowing to pull the country out of its first recession in more than 15 years, reported The Guardian.
Official figures, released on Thursday, say that demand for houses has fallen 33 per cent compared to a year ago.
Similarly, the demand for commercial buildings is down by almost 40 per cent over the same period.
And it's the country's main banks who are seeing the first sign of trouble.
The Royal Bank of Scotland is expected to unveil losses of £1.2 billion ($3.2b) - the biggest in British banking history.
On Thursday, Barclays also announced that its profits are down by a third.
Its chief executive Mr John Varley said: 'It would be wrong to suggest that the market conditions over the foreseeable future will be anything other than tough.'
Currently, inflation is now hovering at 2 per cent and expected to rise to 5 per cent in the coming months, along with more expensive energy prices.
Mr Suren Thiru, an economist at commercial bank Halifax, said: 'Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial crisis, is constraining potential house buyers' ability to enter the market.
'This is resulting in both lower prices and activity levels.'
Figures show that home repossessions have jumped by more than 40 per cent in the first half of this year, the highest level in 12 years.
Analysts are now urging banks to lower their interest rates.
--------------------------------------
Copyright © 2005 Singapore Press Holdings Ltd. Co. Regn. No. 198402868E. All rights reserved.
Privacy Statement and Conditions of Access
Property market haunted by Hungry Ghost? Maybe not
Aug 10, 2008
Property market haunted by Hungry Ghost? Maybe not
Practicality overriding superstition when buyers see attractive options in 7th Month
By Joyce Teo
It has been a week since the Hungry Ghost Festival started.
For potential home buyers, this means that they can forget about new launches until the festival wraps up at the end of the month.
The good news: There are plenty of homes to choose from in the resale market during this period if you are not superstitious.
Sellers have finally become more flexible, even if it is just a tad more, market watchers say.
The Hungry Ghost Festival, which falls on the seventh month of the lunar calendar, started on Aug1 this year and will end on Aug30.
The property market traditionally goes into a lull during this period, as some consider it inauspicious to make housing commitments, move house or start renovation work at this time.
However, the past few years have shown that practicality largely overrides superstition when buyers are presented with attractive options.
The property market was active last year during the Hungry Ghost Festival, for instance.
This year, the festival appears to be having a more significant impact on the market, since it comes on top of bad news generally. It is largely weak sentiment causing the current quiet, market watchers say.
Those who are keen to buy will continue to look around, they say.
But developers are sitting out the lull.
'Generally, people are not keen to commit, so developers are not launching,' says Savills Singapore's director of marketing and business development, Mr Ku Swee Yong.
Nevertheless, there are still many individual sellers.
'Buyers are the ones who want to wait, not the sellers,' says Colliers International's deputy managing director for agency and business services, Ms Grace Ng.
Indeed, market watchers say they sense that sellers have in the past month or two become a bit more willing to negotiate their prices.
Buyers might be kept away by the bad news, but some sellers have become more realistic after waiting in vain for half a year for the market to pick up, says Ms Ng.
'When the sentiment is poor, buyers will ask for discounts regardless of the period,' she says.
'They will use the sub-prime crisis, slower economic growth, and so on, to ask for discounts to insulate them from further falls.'
A reasonable discount would be around 5 to 10 per cent, she says.
What to look for
Owner-occupiers can look for older developments, which are typically realistically priced, or check out developments that have obtained temporary occupation permits recently, say market watchers.
The latter developments are likely to have more sellers as some investors may want to cash out.
For instance, there are quite a number of units for sale at newly built developments such as Park Infinia at Wee Nam and The Sea View.
Mr Ku says buyers can check out the new mid-tier developments located on the fringe of Orchard such as the River Valley and Balestier areas.
Investors have bought quite a number of units in these new developments in the past year or two, and if they are holding a few properties, they are likely to want to offload some, he suggests.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
Keen to bargain
'When the sentiment is poor, buyers will ask for discounts regardless of the period. They will use the sub-prime crisis, slower economic growth, and so on, to ask for discounts.'
MS GRACE NG, Colliers International's deputy managing director for agency and business services
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Property market haunted by Hungry Ghost? Maybe not
Practicality overriding superstition when buyers see attractive options in 7th Month
By Joyce Teo
It has been a week since the Hungry Ghost Festival started.
For potential home buyers, this means that they can forget about new launches until the festival wraps up at the end of the month.
The good news: There are plenty of homes to choose from in the resale market during this period if you are not superstitious.
Sellers have finally become more flexible, even if it is just a tad more, market watchers say.
The Hungry Ghost Festival, which falls on the seventh month of the lunar calendar, started on Aug1 this year and will end on Aug30.
The property market traditionally goes into a lull during this period, as some consider it inauspicious to make housing commitments, move house or start renovation work at this time.
However, the past few years have shown that practicality largely overrides superstition when buyers are presented with attractive options.
The property market was active last year during the Hungry Ghost Festival, for instance.
This year, the festival appears to be having a more significant impact on the market, since it comes on top of bad news generally. It is largely weak sentiment causing the current quiet, market watchers say.
Those who are keen to buy will continue to look around, they say.
But developers are sitting out the lull.
'Generally, people are not keen to commit, so developers are not launching,' says Savills Singapore's director of marketing and business development, Mr Ku Swee Yong.
Nevertheless, there are still many individual sellers.
'Buyers are the ones who want to wait, not the sellers,' says Colliers International's deputy managing director for agency and business services, Ms Grace Ng.
Indeed, market watchers say they sense that sellers have in the past month or two become a bit more willing to negotiate their prices.
Buyers might be kept away by the bad news, but some sellers have become more realistic after waiting in vain for half a year for the market to pick up, says Ms Ng.
'When the sentiment is poor, buyers will ask for discounts regardless of the period,' she says.
'They will use the sub-prime crisis, slower economic growth, and so on, to ask for discounts to insulate them from further falls.'
A reasonable discount would be around 5 to 10 per cent, she says.
What to look for
Owner-occupiers can look for older developments, which are typically realistically priced, or check out developments that have obtained temporary occupation permits recently, say market watchers.
The latter developments are likely to have more sellers as some investors may want to cash out.
For instance, there are quite a number of units for sale at newly built developments such as Park Infinia at Wee Nam and The Sea View.
Mr Ku says buyers can check out the new mid-tier developments located on the fringe of Orchard such as the River Valley and Balestier areas.
Investors have bought quite a number of units in these new developments in the past year or two, and if they are holding a few properties, they are likely to want to offload some, he suggests.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
Keen to bargain
'When the sentiment is poor, buyers will ask for discounts regardless of the period. They will use the sub-prime crisis, slower economic growth, and so on, to ask for discounts.'
MS GRACE NG, Colliers International's deputy managing director for agency and business services
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Er...what is a reverse mortgage?
Aug 10, 2008
FINANCIAL QUOTIENT
Er...what is a reverse mortgage?
Where do you see this?
In articles on property and retirement planning.
What does it mean?
A reverse mortgage is a financial scheme that allows a property owner to use his home to obtain a sum of cash. Like a line of credit, it provides a regular stream of income.
It is the opposite of a mortgage, in which the property owner pays a monthly instalment to the financial institution in return for a loan with which to buy his home.
With a reverse mortgage, the financial institution pays the borrower, referred to as the mortgagor. The latter is charged interest on the amount he receives.
Why is it important?
A reverse mortgage is an option for those who need additional income, in particular to meet retirement needs.
To qualify, the mortgagor must own a home and attain a certain age; usually, he has to be at least 60. In addition, his home must be fully paid up.
The reverse mortgage is granted based on the age of the borrower, the prevailing value of the property, the projected property appreciation rate and the interest rate. The loan is repayable only when the property is sold, usually upon the death of the borrower, or upon the expiry of the loan term.
In the event of death, the financial institution will sell the property for the estate of the deceased. However, it may allow the children to keep the house if they can repay the loan.
In Singapore, such services are offered by NTUC Income and OCBC Bank.
So you want to use the term. Just say...
My retired uncle, who has no children, has taken out a reverse mortgage on his flat so that he can have an additional stream of income.
Lorna Tan
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
FINANCIAL QUOTIENT
Er...what is a reverse mortgage?
Where do you see this?
In articles on property and retirement planning.
What does it mean?
A reverse mortgage is a financial scheme that allows a property owner to use his home to obtain a sum of cash. Like a line of credit, it provides a regular stream of income.
It is the opposite of a mortgage, in which the property owner pays a monthly instalment to the financial institution in return for a loan with which to buy his home.
With a reverse mortgage, the financial institution pays the borrower, referred to as the mortgagor. The latter is charged interest on the amount he receives.
Why is it important?
A reverse mortgage is an option for those who need additional income, in particular to meet retirement needs.
To qualify, the mortgagor must own a home and attain a certain age; usually, he has to be at least 60. In addition, his home must be fully paid up.
The reverse mortgage is granted based on the age of the borrower, the prevailing value of the property, the projected property appreciation rate and the interest rate. The loan is repayable only when the property is sold, usually upon the death of the borrower, or upon the expiry of the loan term.
In the event of death, the financial institution will sell the property for the estate of the deceased. However, it may allow the children to keep the house if they can repay the loan.
In Singapore, such services are offered by NTUC Income and OCBC Bank.
So you want to use the term. Just say...
My retired uncle, who has no children, has taken out a reverse mortgage on his flat so that he can have an additional stream of income.
Lorna Tan
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
I don't want hubby to get share of flat
I don't want hubby to get share of flat
Q My daughter and I bought a private apartment with our savings and Central Provident Fund (CPF) monies.
I'm estranged from my husband. He sold our matrimonial home, most of which I paid for, to settle his gambling debts.
I want to make a will that excludes him completely.
Please tell me how I can prevent him from getting a share of my apartment or other personal assets.
A In your case, it is imperative you make a will. Otherwise, your assets would be distributed in accordance with the Intestate Succession Act. Your legal spouse would get half of your assets and your children would share the other half.
One exception would be properties held by you and another person in joint tenancy. If the apartment is held by you and your daughter as joint tenants, the survivor would get the entire property; intestacy rules would not apply.
Under the Inheritance (Family Provision) Act, any dependant of a deceased person may apply to court to challenge a will if no reasonable provision was made for him or her. If the court believes the terms of the will do not make reasonable provision for his or her maintenance, it may order that such provision be made out of the deceased's estate.
The court will consider the applicant's conduct and financial standing, and whether reasonable provision was made for him or her when the deceased was alive.
Based on the facts given by you, I do not think your husband would have a strong case for challenging your will.
A will protects assets other than the monies in your CPF account. For those, you need to nominate a beneficiary by sending a nomination form to the CPF Board.
You should also check your insurance policies. If you named your husband as a beneficiary, a statutory trust has been set up and any payout would go to him.
Finally, you can get a Deed of Separation so your current status would be legally reflected. Have a lawyer advise you regarding the implications.
Ang Kim Lan
Goodwins
Law Corporation
Advice provided is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Q My daughter and I bought a private apartment with our savings and Central Provident Fund (CPF) monies.
I'm estranged from my husband. He sold our matrimonial home, most of which I paid for, to settle his gambling debts.
I want to make a will that excludes him completely.
Please tell me how I can prevent him from getting a share of my apartment or other personal assets.
A In your case, it is imperative you make a will. Otherwise, your assets would be distributed in accordance with the Intestate Succession Act. Your legal spouse would get half of your assets and your children would share the other half.
One exception would be properties held by you and another person in joint tenancy. If the apartment is held by you and your daughter as joint tenants, the survivor would get the entire property; intestacy rules would not apply.
Under the Inheritance (Family Provision) Act, any dependant of a deceased person may apply to court to challenge a will if no reasonable provision was made for him or her. If the court believes the terms of the will do not make reasonable provision for his or her maintenance, it may order that such provision be made out of the deceased's estate.
The court will consider the applicant's conduct and financial standing, and whether reasonable provision was made for him or her when the deceased was alive.
Based on the facts given by you, I do not think your husband would have a strong case for challenging your will.
A will protects assets other than the monies in your CPF account. For those, you need to nominate a beneficiary by sending a nomination form to the CPF Board.
You should also check your insurance policies. If you named your husband as a beneficiary, a statutory trust has been set up and any payout would go to him.
Finally, you can get a Deed of Separation so your current status would be legally reflected. Have a lawyer advise you regarding the implications.
Ang Kim Lan
Goodwins
Law Corporation
Advice provided is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Subscribe to:
Posts (Atom)
