S'pore home prices still falling

[specuvestor]

Yes global economy is softening but don't see a major shock coming; not even the incoming interest rate increase which will be slow and mild in next few yrs. I think the only one to look out for is BREXIT if the Europeans are stupid enough to go on a feeding frenzy and shoot their own foot.

The obvious potential big external shocks are, IMO

- A hard Brexit opted in UK
- A "Trump" president in US
- A "hard-landing" in China

I agree, the US interest rate hike, will be slow and mild, hardly quality for a "shock".

What do you think? Anyone to add into the list?  

I'll add another black swan event:

War/Terrorism

Between.... I dunno. Seems like everyone has an axe to grind with everyone these days!

It's actually quite eerie that 2 of the unthinkable happened Will China also hard land?

Personally I don't see a sharp US i/r rate increase but at most once a year for next 4 years, and I think USD strength will be reversed but yield curve is probably right on ie I think negative US interest rate will continue next 4 years.

Watch Singapore the canary in the coal mine. I still think 2017 is a recession year

Personally I'm starting to think that US will be going into a stagflation stage. The yield curve will be steeper not because of much higher fed fund rates but much higher inflation, especially with Trump's expansionary policy and higher oil prices. That means I am thinking US will be at at 2-2.5% fed funds rate while inflation will be north of 3% by end of 4 years. The implication for borrowers will be significant

(Bloomberg) -- 
Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said interest rates may climb to 3 percent on 10-year Treasuries by next year as deficits and inflation rise under a Donald Trump presidency, a move that would hurt markets.
Gundlach, who has called the president-elect’s policies bond unfriendly, said the effects would be felt across the U.S. economy. The benchmark Treasuries are currently trading at close to 2.5 percent.

“We’re getting to the point where further rises in Treasuries, certainly above 3 percent, would start to have a real impact on market liquidity in corporate bonds and junk bonds,” Gundlach said Tuesday during a webcast presentation on his DoubleLine Total Return Bond Fund. “Also, a 10-year Treasury above 3 percent in my view starts to bring into question some of the aspects of the stock market and of the housing market in particular.”

--snip--

Greenspan once famously say to the extent that nobody can identify a bubble. I disagree. At least both of us here and I'm sure many more don't see an equity bubble, except valuations are stretched due to low interest rate. In a bubble valuations usually doesn't matter

And we all know a bubble when we see it example property bubble in China. The problem with bubble is NOT that they are unidentifiable but that we don't know what is the tipping point of bursting. That creates a even greater hazard to policy makers who can be blamed.

We know there is a bubble in the bond market, where valuations or negative return didn't matter cause everyone chasing yield. Personally I thought it burst last year May. Maybe second time lucky for nov 2016 instead