More rate hikes ?

[TehSi99]

Powell wants to hike interest rate until something breaks and causes inflation to go down to 2%.

Things has started breaking inflation has not go down to 2%.

 

[TehSi99]

I believe

if you are China Chinese, I think you won’t put ur family office in US. Singapore low tax and pro foreigner. I doubt you will enjoy this kind of perks in US. Furthermore, what if 1 day US freeze/ sanction your account?

Also to me, US seems very anti-Chinese now.

 

[reddevil0728]

Things has started breaking inflation has not go down to 2%.

not broken enough

 

[d5dude]

Where are the data supporting this storyline?

I should point out that just because someone sets up a "family office" here doesn't mean there's much real impact on Singapore's local economy. There are potentially some wealth management, legal, and accounting labor hours associated with operating a family office based in Singapore, but that's as far as it goes really. (And it's all the government seems to argue, to its credit.) The family office manages whatever assets it has, and those assets typically have no particular connection to Singapore.

https://www.businesstimes.com.sg/si...-inflows-singapore-jump-158-record-s448b-2021

 

[BBCWatcher]

https://www.businesstimes.com.sg/si...-inflows-singapore-jump-158-record-s448b-2021

Yes, I’m aware of that, but the United States also had big foreign direct investment inflows in 2021. According to the IMF the U.S. is #1 in that ranking.

If the data support a particular story, OK, but they don’t seem to support that particular story.

 

[d5dude]

Yes, I’m aware of that, but the United States also had big foreign direct investment inflows in 2021. According to the IMF the U.S. is #1 in that ranking.

If the data support a particular story, OK, but they don’t seem to support that particular story.

Which is why the US stonk market soared in 2021, all that money had to go somewhere...

 

[BBCWatcher]

It's actually surprisingly difficult to tally capital flows. As a simple example, if an asset manager (for a family office) based in Singapore buys shares of SEA Limited, how do you tally that in national accounting terms? SEA Limited does some business in Singapore (but not all), its stock is actually American Depositary Receipts listed/traded in New York, and it has some sort of Bahamian connection. I think the ADRs are linked to a Bahamian corporate structure. (Or Barbados maybe? Bermuda? Somewhere around there.)

As another example, the U.S. balance of payments data (imports/exports) have looked quite strange for decades, but the "gap" is probably explained by capital flows that are just hard to tally.

 

[d5dude]

It's actually surprisingly difficult to tally capital flows. As a simple example, if an asset manager (for a family office) based in Singapore buys shares of SEA Limited, how do you tally that in national accounting terms? SEA Limited does some business in Singapore (but not all), its stock is actually American Depositary Receipts listed/traded in New York, and it has some sort of Bahamian connection. I think the ADRs are linked to a Bahamian corporate structure. (Or Barbados maybe? Bermuda? Somewhere around there.)

Its not difficult at all. The listing venue and corporate struture doesnt matter, what matters is where the capital ultimate ends up (geographically). So if Mark Zuckerburg sells all his meta shares and move his billions to SG, it represents a net capital outflow from US to SG.

As another example, the U.S. balance of payments data (imports/exports) have looked quite strange for decades, but the "gap" is probably explained by capital flows that are just hard to tally.

The US has a current account deficit due to its large trade deficit, this deficit must be offset by an equal amount of surplus in the US capital account.

Singapore has a current account surplus, therefore the capital account should be in deficit or the currency will face upward pressure. This is why the MAS was so concerned about large capital inflows in 2021, there was too much money chasing after too few goods/investments and they were reluctant to allow too much SGD appreciation (SGD is a managed float) because we were just exiting covid restrictions.

 

[BBCWatcher]

Its not difficult at all. The listing venue and corporate struture doesnt matter, what matters is where the capital ultimate ends up (geographically). So if Mark Zuckerburg sells all his meta shares and move his billions to SG, it represents a net capital outflow from US to SG.

But in that hypothetical where would the capital end up? Would Zuckerberg own shophouses in Geylang?

I think it's genuinely difficult to measure capital flows in national terms, but perhaps we disagree about that.

The US has a current account deficit due to its large trade deficit, this deficit must be offset by an equal amount of surplus in the US capital account.

Yes, that's the theory and probably reality. The trouble is counting the capital. There's a lot of handwaving about that portion of the accounting.

 

[d5dude]

But in that hypothetical where would the capital end up? Would Zuckerberg own shophouses in Geylang?

I think it's genuinely difficult to measure capital flows in national terms, but perhaps we disagree about that.

Probably and the sellers of those shophouses would (presumably) be people who will turn around and deposit the proceeds within SG, or it could be sitting in SGS, cash within the SG banking system, etc.

Maybe not with extreme precision, but cross border capital flows are easily captured by most developed countries.

Yes, that's the theory and probably reality. The trouble is counting the capital. There's a lot of handwaving about that portion of the accounting.

I dun get what you are trying to say. I think you are probably confused between capital (which are always measured in dollars and cents) and asset values? Zuck could give up his US citizenship and move to SG but if he doesnt liquidate his meta shares + bring that $$$ over, none of his 77b net worth has actually moved here (other than whatever cash on hand obviously).

 

[BBCWatcher]

The national balance of payments is supposed to be zero. The current account deficit/surplus is supposed to be exactly offset by the capital account surplus/deficit.

However, it's difficult or impossible to get the current and capital accounts to line up well when the statisticians actually go measure them. That's the difficulty I'm referring to, the "handwaving." One frequently cited factor is the underground economy, but there are other explanations too.

 

[d5dude]

The national balance of payments is supposed to be zero. The current account deficit/surplus is supposed to be exactly offset by the capital account surplus/deficit.

However, it's difficult or impossible to get the current and capital accounts to line up well when the statisticians actually go measure them. That's the difficulty I'm referring to, the "handwaving." One frequently cited factor is the underground economy, but there are other explanations too.

Like I said its not perfectly precise mainly because there are many moving parts like exchange rates, but 448b is a very large sum of money for a small economy like SG, we could subtract 10% from this number and it'd still be a very large number.

I'd trust the MAS' numbers when it comes to capital flows since capital movements are closely monitored in SG banks due to concerns about money laundering and terrorism financing.

 

[JuniorLion]

*Eating popcorn*