The Olympic village is draining another $22 Million out of our coffers http://tinyurl.com/mpzjou . The opening ceremony will cost $8.3 Million more than originally forecast.
The security amount at $900 Million is five times the original budget. Makes you wonder whether the original budgets were artificially rosy to try and convince the sheep (us) to buy in.
With 220 days to go, you can expect the estimates for cost 'over-runs' to keep going up, and revenues to keep going down. I expect big cuts, at the the city and Provincial level, post Olympics to deal with the shortfall.
Bet PyeongChang and Salzburg are breathing a big sigh of relief to have failed in their bid.
.....................................................................
Now a perfect example of why we need to break up Media monopolies like Canwest. Canwest owns all most all the newspapers in BC, and in fact most newspapers in Canada, as well as Global and other Tv and radio stations.
They keep trimming down their staff (whom they have just asked to take a 5% paycut) and have debased journalism.
Here is an excellent example picked up by the gang at Vancouver Condo. The title blares out "Vancouver area prices UP 16% from last May". The truth is they are DOWN 6.6% from last May.
This newspaper cannot tell the difference between PRICES and SALES! That's assuming the mistake was not intentional. Lets wait and see if they publish anything correcting their mistake.
http://vancouvercondo.info/2009/06/province-prices-up-16-yoy.html
Little wonder the group is near bankruptcy. (in fact it would be if the bond holders insist on payment of interest which the company has been unable to meet)
Wednesday, June 17, 2009
Mutual Fund vs Unit Trust
Practically both the terms Mutual Fund and Unit Trust can be used interchangeably in Malaysia but there could actually be slight differences between the 2.
Mutual Fund is more a USA term while Unit Trust is a UK term.
Instinctly implied, Mutual Fund is just a pool of collected investment money. The money is usually pooled for a specific purpose. Its also implied some special people are 'in charge' of the pool of money to achieve the purpose.
Unit is a special measurement method when there are more than one type of items to refer to; And yet one needs to use ONE system to measure all the items. So generally instead of gram, meter etc. 'Unit' is used instead. Trust instinctly implied confidence and someone who we can rely on. So Unit Trust is basically a 'system' you can rely on while it may consist of multiple elements in it. Despite its potential complexity, it should be easily understood by using its 'unit'.
As you may see by comparison now, Mutual Fund does not necessary have to have the Trust element in it. Unit Trust on the other hand, doesn't have to have more than 1 investor. In short, I can pool up all my friend's money and invest for them as a mutual fund. Nonetheless an illegal one because such activity require licenses in most part of the world. On the other hand, I can use part of my wealth to set up a unit trust to earn money from Melbourne real estates.
A little more than just layman talks
Trust is also a finance term where a 3rd party is brought into the transaction between 2 persons, acting as a balance entity fullfilling the interest for all. For example, Sandy has a oil mill that she wants to pass down to Benny but Benny doesn't know anything about it. So Sandy passes the ownership to Tan with the agreement that Tan will manage the whole operation but pass all the benefits to Benny.
Sandy is usually caleed the Settlor
Tan is Trustee
Benny is the Beneficiary
Usually Tan will charge a service fee and usually only large and stable finance institution can be considered as the real Trustee.
There are also some sayings that Unit Trust is part of Mutual Fund because Unit Trust is basically a Mutual Fund that has an extra element of Trust in it. The reason why both of these terms are used interchangeably is because all legitime Mutual Funds must setup a Trust in Malaysia. Which mean the fund company can manage the money but can NEVER take the money to their own possession as its own by the Trustee, not them. That way, the investors' money is safeguarded.
Frequently the corporate finance guys may also refer Mutual Fund and Unit Trust as Open End Fund. Which basically means investors buy and sell directly with the Fund Manager without the need to worry about other investors.
Tuesday, June 16, 2009
No Changes to FBM KLCI
extracted from OSK circulation - for full report, subscribe OSK services :)
FTSE and Bursa Malaysia announced in their half-yearly review yesterday that there is no
revision to the component stocks in the FBM30 index. As such, all existing FBM30 members will
make up the new FBM KLCI on July 6, ‘09. The weightage of the Banking, Plantation, Utilities,
Telco and Gaming sectors on the new FBM KLCI will go up, with Resorts, YTL Power and
Parkson being the biggest beneficiaries given that they are now members of the new FBM30
although they are not part of the present KLCI. IJM, Gamuda and Lafarge are the 3 biggest dropouts
from the new index. Over the next 1 month, stocks ranked 31st to 50th in the current 100-
member KLCI may experience the most selling pressure except for IJM, Gamuda and Lafarge,
due to portfolio rebalancing.
Sunday, June 14, 2009
Some YTD numbers
For North and West Van. In case you missed them.
Source: Alan Skinner a realtor, in North Shore Homes:
Comparison of Jan-May 2009 v Jan-May 2008
North Van
Detached: 17% less homes old. Average price down -18%
Townhouses: 7% less T/h sold. Average prices down -12%
Condos: 23% less Condos sold. Average prices down -16%
Inventory down a few % from 2008.
West Van
Detached: 30% less homes sold. Average prices down -21%
Townhouses: 70% less T/h sold. Average price down -29%
Condos: 27% less condos sold. Average price down -21%.
Inventory almost the same.
Both these areas had reached psychotic levels of over-pricing and I think they could come under further pressure if the economy and stock market falter.
Source: Alan Skinner a realtor, in North Shore Homes:
Comparison of Jan-May 2009 v Jan-May 2008
North Van
Detached: 17% less homes old. Average price down -18%
Townhouses: 7% less T/h sold. Average prices down -12%
Condos: 23% less Condos sold. Average prices down -16%
Inventory down a few % from 2008.
West Van
Detached: 30% less homes sold. Average prices down -21%
Townhouses: 70% less T/h sold. Average price down -29%
Condos: 27% less condos sold. Average price down -21%.
Inventory almost the same.
Both these areas had reached psychotic levels of over-pricing and I think they could come under further pressure if the economy and stock market falter.
Friday, June 12, 2009
$50 Billion in the Hole
After telling us for a year there would be a surplus, then a small deficit, then a moderately large deficit, the Harper Government finally had to come out and told the truth. We are heading into an enormous $50 Billion hole, and very likely don't know is that is the bottom either.
The 'good news' was that big chunks of money were being rapidly dispatched from Ottawa to build things that we may or may not need.
Add this to the Provincial debts, and in one year , we are back to the Mulroney days of unsustainable deficits.
Such is human nature- here in Canada and everywhere. When things are hot, the politicians take the credit, when they are not they point at the sad state of affairs in the world as the cause.
When the asset rise was red hot, they did nothing but watch and in fact made sure fiscal measures where so lax as to ignite the asset fire even more.
Now that the pyramid has collapsed of it's own weight, they are doing the only thing they know how, which is throw more money at it.
Back to housing. Housing is just one asset. As you noticed all assets have been roaring back since March...RE, stocks, Oil , copper and gold. They were in free-fall. This is a good thing, the alternative is that we all KYAGB. However I think this is an interlude. I don't think this is a new bull market in any of these assets.
When things go up, we can see nothing but blue skies ahead, when they dropping, we see the pits of despair. Such is human nature.
No one can deny that RE has shown strength for the last 3-4 months and prices have stabilised. Some buyer's have got panicked into bidding wars, buying well over listed. Where they smart? In a few months we will find out.
The 'good news' was that big chunks of money were being rapidly dispatched from Ottawa to build things that we may or may not need.
Add this to the Provincial debts, and in one year , we are back to the Mulroney days of unsustainable deficits.
Such is human nature- here in Canada and everywhere. When things are hot, the politicians take the credit, when they are not they point at the sad state of affairs in the world as the cause.
When the asset rise was red hot, they did nothing but watch and in fact made sure fiscal measures where so lax as to ignite the asset fire even more.
Now that the pyramid has collapsed of it's own weight, they are doing the only thing they know how, which is throw more money at it.
Back to housing. Housing is just one asset. As you noticed all assets have been roaring back since March...RE, stocks, Oil , copper and gold. They were in free-fall. This is a good thing, the alternative is that we all KYAGB. However I think this is an interlude. I don't think this is a new bull market in any of these assets.
When things go up, we can see nothing but blue skies ahead, when they dropping, we see the pits of despair. Such is human nature.
No one can deny that RE has shown strength for the last 3-4 months and prices have stabilised. Some buyer's have got panicked into bidding wars, buying well over listed. Where they smart? In a few months we will find out.
Sunday, June 7, 2009
MALPF : 21st Century Personal Finance
A very good day to all who are reading this page right now! MalPF is an initiative promoting TRUE personal finance especially in this 21st century.
About 50 years ago, personal insurance was perceived very negatively and talking about it was like hinting earlier death. 30 years ago, mutual fund or unit trust was once considered a Big Scam among the wet market talks. Then 15 years ago, Personal Finance has slowly sipped into both insurance and unit trust industries.
Today enough evidences have shown that the introduction of Personal Finance is splitted by both insurance and unit trust industries. Despite their differences, both are tweaked into a revenue generating machine rather than true education to general public. Many certifications are adopted, created and twisted with the purpose of earning more course and exam fees; At the cost of more confusion if not deeper ignorance in True Personal Finance.
Not all are evil, some used to be great concepts are just getting old by nature and may no longer be applicable in today's world. Likewise, some very distinctive fundamentals are never taught and has caused all sort of finance problems even among the most 'qualified' personal finance consultants.
MalPF or short for Multiple Attitudes and Leverages Personal Finance will try to focus on discussing all the above issues. If enough momentum can be gathered, hopefully such an effort can be continued in a systematic manner through all education channels.
MalPF can also be short for Malaysia Personal Finance, Major At Laugh PF etc. Can you think of some other funny names for MalPF ? suggest here ...
some of MalPF sharings ...
- income is NOT a part of Personal Fniance
- Getting RICH has NOTHING to do with Personal Finance
- Truly understand the Concepts is Great but NOT a MUST
- Executing the RIGHT actions bluntly may mean more than you can ever think of
.
.
.
Wednesday, June 3, 2009
Now that May is gone...what next?
As we all know housing prices have been stabilising for the past three months.
They were in free-fall in October with no bids and a 20 MOI at one stage. Now prices have ticked up from last month (though still down 10% YOY) and inventory has dropped YOY and MOI is around 4.
Larry Yatkowsky has a quick summary here:
http://www.yattermatters.com/real-estate/real-estate-headlines/
Is that it? Are we off to the races again?
Everyone has their view, but I for one doubt it.
What we have had for the last three months is the coming together of several factors:
1) The irresponsible financial entities around the world have been pulled out of near collapse by the infusion of Hundreds of Billion of dollars of US and European tax-payers money.
2) Interest rates around the world have been slashed to near zero to try and prop up assets. We have the lowest mortgage rates on record.
3) Commodities have got a bid, admittedly from catastrophic levels (especially oil, gold and copper), and that has helped mining and oil producers. However natural gas for which provide the Province a huge % of it's revenue has continued to drop.
4) We had the normal seasonal bounce in sales that occurs in spring.
Now it gets interesting. I think the fun on economic front has just started. The US is losing 500,000 jobs a month! We are their largest trading partner. We will continue to get hit. Interest rates have been ticking up here and in the US, a trend which I hope reverses soon or our collective goose is cooked. Weak demand and higher interest rates would be disastrous.
I expect the recession to start biting deeper soon. I don't want that, but I cannot believe that we skate so close to world-wide economic collapse and then are back to normal a few months later. There are huge swaths of debt that cannot be repaid, on anything from Commercial RE to Machinery.
Employment is likely going to be weak for some time. The job-buying program of both the US and Canadian governments have still to have any appreciable affect. Meanwhile they are all sinking into deeper deficits. Pretty soon we will get Provincial and Federal cut-backs to try and contain these deficits, at the same time as they will talking about job creation.
So, I see this as a brief interlude. I could be wrong of course, and if I see strength in the economy returning over the next few months and housing to continue strong, I will reconsider my views.
They were in free-fall in October with no bids and a 20 MOI at one stage. Now prices have ticked up from last month (though still down 10% YOY) and inventory has dropped YOY and MOI is around 4.
Larry Yatkowsky has a quick summary here:
http://www.yattermatters.com/real-estate/real-estate-headlines/
Is that it? Are we off to the races again?
Everyone has their view, but I for one doubt it.
What we have had for the last three months is the coming together of several factors:
1) The irresponsible financial entities around the world have been pulled out of near collapse by the infusion of Hundreds of Billion of dollars of US and European tax-payers money.
2) Interest rates around the world have been slashed to near zero to try and prop up assets. We have the lowest mortgage rates on record.
3) Commodities have got a bid, admittedly from catastrophic levels (especially oil, gold and copper), and that has helped mining and oil producers. However natural gas for which provide the Province a huge % of it's revenue has continued to drop.
4) We had the normal seasonal bounce in sales that occurs in spring.
Now it gets interesting. I think the fun on economic front has just started. The US is losing 500,000 jobs a month! We are their largest trading partner. We will continue to get hit. Interest rates have been ticking up here and in the US, a trend which I hope reverses soon or our collective goose is cooked. Weak demand and higher interest rates would be disastrous.
I expect the recession to start biting deeper soon. I don't want that, but I cannot believe that we skate so close to world-wide economic collapse and then are back to normal a few months later. There are huge swaths of debt that cannot be repaid, on anything from Commercial RE to Machinery.
Employment is likely going to be weak for some time. The job-buying program of both the US and Canadian governments have still to have any appreciable affect. Meanwhile they are all sinking into deeper deficits. Pretty soon we will get Provincial and Federal cut-backs to try and contain these deficits, at the same time as they will talking about job creation.
So, I see this as a brief interlude. I could be wrong of course, and if I see strength in the economy returning over the next few months and housing to continue strong, I will reconsider my views.
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