Just five months ago, it would be difficult to envisage the air of prosperity now pervading Singapore.
In February, the mood was grim as Singapore grappled with a severe global economic slowdown triggered by a series of high-profile bankruptcies such as the collapse of investment banking giant Lehman Brothers in the United States.
Since then, the pendulum has swung the other way as the mood seems to have turned wildly exuberant. The stock market is on a roll, having climbed over 15 per cent in the past three weeks.
Meanwhile, posh condos and HDB flats are again being snapped up by hungry home-buyers.
This was despite a brief scare late last year over a possible rise in the number of defaults, by investors who had deferred the bulk of their payments until the properties were completed, as the economy nose-dived.
One market watcher likens the current buying spree or even panic to the huge gold rush experienced in California in the 19th century when the precious metal was discovered there.
Yet, as the history books attest, few of those who made it to California struck it rich. Most gold-diggers went home empty-handed - poorer and wiser from the experience.
Still, it would be churlish to dismiss the powerful rally - now witnessed not just in Singapore but also all over Asia - as a mirage conjured up by savvy investment bankers and stockbrokers to lure investors back into the stock market.
The retail community, for instance, has greeted the return of consumers with great relief.
The boss of one Orchard Road shopping mall observed that in February, all her tenants were losing money as the aisles literally emptied of shoppers. Singaporeans were so fearful of losing their jobs that they had stopped spending altogether after the Chinese New Year, she recounted.
So she was grateful to get the shopping crowd back.
'I don't understand why the stock market is surging and everyone is crazy about properties. But people are taking out their accumulated wealth to spend and spend. It is good for business,' she said.
But her happy experience is not shared by everybody.
The manager of one electronics retailer noted that most HDB heartlanders remained tight-fisted, keeping purchases of new TV sets on hold as they agonised over job security and a drop in income after suffering a cut in their salaries.
Still, despite his dour experience, there is no denying that a powerful dose of confidence is coasting through the economy and this has perked up Singaporeans in a big way.
It has left plenty of market watchers scratching their heads in amazement, even though the sputtering economies of the United States and Europe - Singapore's biggest trading partners - show no signs of reviving just yet.
Some cynics claim that this is simply complacency setting in, after people got over the initial shock of job losses at big organisations such as DBS Bank and Citibank last year.
Despite the headline-grabbing retrenchments, most Singaporeans have stayed gainfully employed, and life goes on as usual. If they had taken a pay cut, they have obviously not been too hurt by it.
Then there is the reported argument put forward by French bank BNP Paribas chief economist Chan Kok Peng that unlike the average American or European struggling to pay off his credit card debt, Singaporeans are sitting on a fat cushion of savings piled up during the boom years. This has enabled them to weather the current recession far better than the rest of the world.
Still, it fails to explain the gung-ho buying binge which we are witnessing in the stock market and the residential property sector.
In early March, when sentiment was at its bleakest, I wrote a column arguing against a then mindless rush into gold as global financial markets went into free-fall.
Hoarding lumps of gold under our mattresses is not going to boost our living standards. In extreme circumstances, it can even cause the real economy to crash by starving it of much-needed cash that keeps it humming.
Since then, gold prices have hardly moved. Instead, badly battered stock markets around the world have staged a miraculous recovery after plunging to their lowest levels in years.
What we are experiencing may be a manifestation of the confidence which Singaporeans have in their future as they strive to get ahead in life. It is only when living standards go up that assets like houses appreciate in value.
For many market watchers, a country's stock market is perhaps the best indicator of how investors are viewing its future.
Against this backdrop, it is not surprising to find that Asian bourses are among the best-performing in the world, as people in this region are among the most confident of their future.
In Singapore, the benchmark Straits Times Index has risen 49 per cent so far this year, while Shanghai - the world's best-performing bourse - is up 88.8 per cent.
A word of caution is needed here though. Despite the beguiling calm now prevailing in financial markets, the skies may still be overcast as global lenders struggle to purge billions of dollars worth of toxic assets from their balance sheets.
Investors who are plunging headlong into the stock market, in the perhaps mistaken belief that clear blue skies lie ahead, must factor in the dangers.
Source: Sunday Times, 2 Aug 2009