Probably no elections until end 2010

A little more than a month ago, I was contemplating in a post here if there will be a general election (GE) at the end of this year. Since then, after all the "hints" I've see in the global economy, I have come to a conclusion that there will not be a GE end of this year. I see the next GE at maybe somewhere end of next year earliest, which is 2010.

Initially, I thought that a GE this year is almost certain. Our MM has pointed out that the current climate will persist for a minimum of 2 or 3 years. Either that or it will persist for more than 4 years. Our MM has also gave a dismal GDP growth prediction of -10% for this year. Furthermore, I have also spied improvement works being done in many estates. At that point in time, I really see the worse end of the prediction coming through.

However, there are a few indications that I've seen which points to a "NO GE" this year:

1. The original global crisis came about due to the collapse of the housing market in the US. If anyone noticed, they would have seen recently that the fixed mortgage and ARM rates in US going down to below 5% (Before, it was above 6.x%). The rates has even went down to almost 4.5%.
   
   This would bring a welcome relief to many of the prime borrowers. This however does not point to a recovery, but instead I would say this is an indication that the market is finding a bottom.
   
   Everyone is worried that the toxic assets in all the major banks balance sheets will be further written down. The problem is still there, with all the record job losses. But I suspect in the coming months, the jobless rate will start to decrease. I do not see the US jobless rates going above 9%. In fact, I will not be surprised that the 2Q jobless rates go below 8%.
   
   In short, I find that the global economy is establishing a base, on which it can grow upon. Things seem to be slowly recovering after President Obama took over. This is not a time for conservatism.
   
   
2. Singapore recently did a "portfolio reshuffle" where some key personnel shifted to other portfolios. From a corporate perspective, this will not happen if a GE is coming.
   
   It makes no sense that you will shift personnel around when a GE is around the corner.
   
   
3. Our property and stock market have been showing signs of revival. I won't say that it has recovered, but to me, it's an indication that credit is really flowing again after the recent budget measures.
   
   Once credit is flowing, the economy will revive itself, from a business perspective. I also do not see that the Singapore banks are in any sort of trouble, which puzzles me on the valuation the market is giving to the 3 local banks.
   
   In short, Singapore economy seems to be reviving in the 2Q, and the budget measures seem to be working. Therefore, I would see that the economy would somehow find a footing and recover somewhat by next year or 2011.
   

Of course it's too early to say that we're well on the road to recovery. Many things could still go wrong. People are still worried for example, that GM may file for Chapter 11 for example. However, they should note that filing for Chapter 11, and folding is different. Lehman Brothers folded up.

Judging from my own personal indicators, I think that the economy is finding its footing, and that a GE at this point in time is of no use to any party. In fact, a GE at this time may throw a spanner in the recovery by diverting attention away from the real problems. I also do not see a second budget measure soon, unless things take a turn for the worse after the 2Q.

There's also disenchantment on the ground on the recent Lehman Brothers fiasco. Our own unemployment numbers to be released soon may also cause some areas of concern among all Singaporeans. In fact, I've seen some graffiti with some chosen words about a political party.

A recovery will not be immediate, for Singapore or globally. US is definitely saving more now for their future. I was so surprised last year when I saw the household savings rate for the US. Those countries with high saving rates will have to "earn their keep", so as to speak. This will lead to some social policies change, and mindset change. Products and services will also soon be customised more for Aseans.

This year is definitely a year of change, not only globally, but for Singapore too. However, I do not think that a election will happen this year, as I do not yet see a prolonged recession hitting us.