<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Sep 28, 2008
THE EX-PAT FILES
</TR><!-- headline one : start --><TR>From sub-prime to sublime
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Linda Collins
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Stock prices tumbling. Credit crunches. Big banks going bust.
The events of the past fortnight - when the finance world wobbled in the wake of the sub-prime mortgage crisis - probably seem all too familiar to any long-term expat who has been through economic booms and busts in various countries over the years.
Before I arrived in Singapore in the early 1990s, I'd already experienced recessions in Auckland, Sydney and London.
Singapore was a shock after that. The stock market was entering a fantastic bull run and the economy going great guns. Property prices were going through the roof.
Young, thin, pretty people strutted along Orchard Road, looking shiny and upbeat. They flaunted bags with brand names and wore expensive watches that I'd only ever seen before on the wrists of upper-crust, British trust-fund babes.
The local attitude reminded me a little of London in the glitzy 1980s, minus the appalling big hair and shoulder pads.
At Holland Village Cold Storage, I was dumbstruck when the customer in front of me at the checkout casually tendered a $1,000 bill just to pay for a couple of cans of soft drink.
At an ATM, I was agog at the balance I saw on the screen after a frail, elderly woman in a samfoo had finished her transaction - she had more than $100,000 sitting in her cheque account.
But as I came to learn, she was the flipside to the conspicuous consumption of the younger generation. Their parents and grandparents were thrifty savers.
In fact, till this day, Singapore is the only country I have encountered where the queue for the cash-deposit machine can be longer than the one for the ATM cash withdrawal.
I learnt, too, that the Government controlled the spending habits of its citizens. Rather than leave banks to judge an individual's credit risk, it chose not to allow them to issue credit cards to people earning less than $30,000 a year, and unsecured credit was capped at two months of a person's salary.
It was part of a social policy of protecting individuals from spending beyond their means.
To a Westerner - even one who vaguely understood the need for financial prudence - it was like the Monetary Authority of Singapore was some annoyingly uncool parent.
However, I went on to also learn about the monetary miracle that is the Central Provident Fund (CPF) - back then, Employment Pass holders were included in the scheme.
The monthly compulsory savings, boosted by employers' contributions, made me realise that, maybe, having the Government as an uncool parent might not be a bad thing.
Meanwhile, the West's economies recovered, and then Asia's bubble burst. One memory I have of the Asian financial crisis is receiving a call from a local acquaintance, a talented editor, who sobbed as she told me she had just been retrenched.
Compared with colleagues back in Sydney and London, I began to feel left behind. Some were suddenly a lot richer than I was, purely by virtue of having bought their homes cheaply and seen the values of those properties rocket over time.
Still, I stuck it out in Singapore, through the bursting of the dot.com bubble, the recovery of the local stock market and the unleashing of easy credit in the West.
Back home, people felt rich and - with equity borrowed from the rapidly increasing paper value of their houses - splashed out on the good life as if tomorrow would never come. It was like they believed they had a right to live like the people they saw in TV's Lifestyles Of The Rich And Famous, although they were neither really rich nor famous.
Singaporeans joined the party - within limits. No doubt some would have loved to rip out their CPF money and blow it on fun times. Or be able to say, 'Never mind the kids. Let's spend their inheritance.'
But they couldn't. Various rules kept the worst of consumer excess in check.
Luckily, as an expat, I'd learnt to safeguard savings and expect the unexpected. You have to, because as a global family, you are affected by fluctuating currency movements - especially if you remit money home, and your financial planning involves managing assets and retirement plans in several countries.
So, another economic downturn is coming. I hate to say it, but, phew! I was getting tired of waiting for the next one.
The writer is a copy editor with The Straits Times and has lived in Singapore for 15 years. Send your comments to [email protected]
THE EX-PAT FILES
</TR><!-- headline one : start --><TR>From sub-prime to sublime
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Linda Collins
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Stock prices tumbling. Credit crunches. Big banks going bust.
The events of the past fortnight - when the finance world wobbled in the wake of the sub-prime mortgage crisis - probably seem all too familiar to any long-term expat who has been through economic booms and busts in various countries over the years.
Before I arrived in Singapore in the early 1990s, I'd already experienced recessions in Auckland, Sydney and London.
Singapore was a shock after that. The stock market was entering a fantastic bull run and the economy going great guns. Property prices were going through the roof.
Young, thin, pretty people strutted along Orchard Road, looking shiny and upbeat. They flaunted bags with brand names and wore expensive watches that I'd only ever seen before on the wrists of upper-crust, British trust-fund babes.
The local attitude reminded me a little of London in the glitzy 1980s, minus the appalling big hair and shoulder pads.
At Holland Village Cold Storage, I was dumbstruck when the customer in front of me at the checkout casually tendered a $1,000 bill just to pay for a couple of cans of soft drink.
At an ATM, I was agog at the balance I saw on the screen after a frail, elderly woman in a samfoo had finished her transaction - she had more than $100,000 sitting in her cheque account.
But as I came to learn, she was the flipside to the conspicuous consumption of the younger generation. Their parents and grandparents were thrifty savers.
In fact, till this day, Singapore is the only country I have encountered where the queue for the cash-deposit machine can be longer than the one for the ATM cash withdrawal.
I learnt, too, that the Government controlled the spending habits of its citizens. Rather than leave banks to judge an individual's credit risk, it chose not to allow them to issue credit cards to people earning less than $30,000 a year, and unsecured credit was capped at two months of a person's salary.
It was part of a social policy of protecting individuals from spending beyond their means.
To a Westerner - even one who vaguely understood the need for financial prudence - it was like the Monetary Authority of Singapore was some annoyingly uncool parent.
However, I went on to also learn about the monetary miracle that is the Central Provident Fund (CPF) - back then, Employment Pass holders were included in the scheme.
The monthly compulsory savings, boosted by employers' contributions, made me realise that, maybe, having the Government as an uncool parent might not be a bad thing.
Meanwhile, the West's economies recovered, and then Asia's bubble burst. One memory I have of the Asian financial crisis is receiving a call from a local acquaintance, a talented editor, who sobbed as she told me she had just been retrenched.
Compared with colleagues back in Sydney and London, I began to feel left behind. Some were suddenly a lot richer than I was, purely by virtue of having bought their homes cheaply and seen the values of those properties rocket over time.
Still, I stuck it out in Singapore, through the bursting of the dot.com bubble, the recovery of the local stock market and the unleashing of easy credit in the West.
Back home, people felt rich and - with equity borrowed from the rapidly increasing paper value of their houses - splashed out on the good life as if tomorrow would never come. It was like they believed they had a right to live like the people they saw in TV's Lifestyles Of The Rich And Famous, although they were neither really rich nor famous.
Singaporeans joined the party - within limits. No doubt some would have loved to rip out their CPF money and blow it on fun times. Or be able to say, 'Never mind the kids. Let's spend their inheritance.'
But they couldn't. Various rules kept the worst of consumer excess in check.
Luckily, as an expat, I'd learnt to safeguard savings and expect the unexpected. You have to, because as a global family, you are affected by fluctuating currency movements - especially if you remit money home, and your financial planning involves managing assets and retirement plans in several countries.
So, another economic downturn is coming. I hate to say it, but, phew! I was getting tired of waiting for the next one.
The writer is a copy editor with The Straits Times and has lived in Singapore for 15 years. Send your comments to [email protected]
