I read an article in the newspapers today and it confirmed my fears that Singapore could once again suffer a severe downturn if the US government does not raise its debt ceiling come 2 August. Many would have to face extreme hardship once more.
Salient points in the article:
1. US banks account for some 15% of domestic lending in Singapore.
2. If US defaults, US banks will withdraw their funds from Singapore.
'Should the US default and a credit crunch happen, it would make the fall of Lehman look like a picnic,' Robert Prior-Wandesforde, Credit Suisse.
I remember what happened when Lehman Brothers collapsed. The stock markets went into tailspins. All the buyers disappeared. Real estate was similarly affected as prices of condominiums here in Singapore declined some 30% in some cases.
I remember at the time, Soleil at Sinaran was newly launched and many buyers actually forfeited their 5% deposits ......