The global market panic driving Tuesday’s United States Federal Reserve rate cut is rooted in the still controversial idea that the US economy has slipped into a recession.Many market participants now take it as an article of faith that the US economy is, or will soon be, in a contractionary phase of economic activity. Some even argue that as long as it “feels” like a recession, it is one. But that sentiment obscures the reality that thus far, there is no definitive view among economists about how weak the economy is or might become.

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The US Federal Reserve’s surprise 75 basis point cut in the Fed Funds rate on Tuesday ‘was certainly the right thing to do’ and ‘more action is warranted’, but the US economy is unlikely to fall into recession, according to the former chairman of President George W Bush’s Council of Economic Advisors.

Glenn Hubbard, who is currently dean of Columbia University’s business school and also holds a chair in economics, added however that it might be a few months before financial markets settle down. He maintained that the effect of the Fed’s rate cut on the US dollar would not necessarily be negative.

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Asian growth story will help it ride turbulence elsewhere, he says

PRIME Minister Lee Hsien Loong believes a US recession is likely, and in the event, Singapore and other Asian economies will not be untouched.

Fundamental valuations in Asia have not changed overnight. Whatever happens to America, China and India will continue to grow. This should give the region a boost.

But he is confident that Singapore will weather the storm, and despite the global turmoil, Asia remains a dynamic market with abundant growth opportunities.

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Government sticking with growth forecast of 4.5%-6.5% despite fears of US slowdown

PRIME Minister Lee Hsien Loong has said that he is confident Singapore will be able to weather the current turmoil in global financial markets and continue to do well economically this year.

While Singapore and Asia could not be sheltered from the ‘chill winds’ buffeting the world economy, and would be hit in the likelihood that the US economy goes into a recession, they were in a good position to face the economic storm ahead.

He said he was ‘confident that we are going to be able to weather this storm’.

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It could send 400 faculty and students here by 2010 for joint projects

Singapore is set to become the largest international research base for the Massachusetts Institute of Technology (MIT), enabling the Republic to benefit from the American institution’s illustrious track record of marrying teaching and research with innovation and entrepreneurship.

A tie-up with the National Research Foundation (NRF), in a research partnership called the Singapore-MIT Alliance for Research and Technology (Smart), could see MIT send as many as 400 faculty staff and students to Singapore to work in local laboratories by 2010.

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Research in Singapore has received a boost with the setting up of the Singapore-MIT Alliance for Research and Technology (SMART) Centre.

The centre is also the largest international research endeavour by the Massachusetts Institute of Technology (MIT) outside the US.

Collaborating with Singapore gives the MIT access to the necessary facilities or information on infectious diseases such as tuberculosis and malaria.

SMART Centre governing board co-chair, MIT provost Prof Rafael Reif said, “Singapore is very unique to offer those kinds of facilities and laboratories. MIT does not have them. We have talent; we have personnel; we have the interest. Singapore also has the talent and personnel and laboratories, and those make a very unique set of opportunities for us to interact and carry out those projects here in Singapore.”

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MAJORITY owners at Regent Garden have denied that they are ‘greedy’ and trying to back out of a collective sale they are challenging in court.

The 25 owners told The Straits Times that they only want the court to clarify if the agreement with Allgreen Properties can proceed even if the price undervalues their property.

They want to know whether the contract is still binding in a case where the development charge is wrong.

The owners are also upset that Allgreen paid more money to the six minority owners, who did not vote for the sale, than it did to those who backed it.

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Rising transport, oil, food costs drive up index; economists still positive, though

COSTLIER food, transport and health care drove Singapore’s inflation rate to a 25-year high of 4.4 per cent last month.

This comes amid growing fears that a possible United States recession will drag the global economy into a slowdown.

Economists, however, do not believe the Republic faces the dreaded spectre of stagflation - when an economy becomes stagnant as inflation gets far worse.

The Department of Statistics announced yesterday that the consumer price index rose 4.4 per cent last month from a year earlier. The index was up 4.2 per cent in November.

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A RESIDENTIAL site released for sale at West Coast Crescent yesterday is expected to draw a good response.

Property consultants said the 1.2ha plot could fetch between $94 million and $112 million.

This works out to $260 per sq ft (psf) to $310 psf of the site’s potential gross floor area which stands at 361,667 sq ft. These expected prices are slightly higher than the $248 psf of gross floor area fetched for a site at Boon Lay Way last month.

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URA site likely to attract top bids of $260 to $400 psf ppr, say analysts

THE Urban Redevelopment Authority (URA) yesterday launched the tender for a 99-year-leasehold condo site next to Blue Horizon condo facing West Coast Park and overlooking the sea.

Property consultants generally expect the site at West Coast Crescent to attract widespread interest from developers given its strong attributes - the plot can be built into a new condo up to 36 storeys high boasting nice views of surrounding parks and the sea and just a 10-minute drive away from shopping and entertainment attractions at VivoCity, St James Power Station and Sentosa.

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