Could the COE prices for car be an indicator of the economy and stock market?

When things are rosy like now, COE prices for car are at $80,000, a 5- year high, home prices like Bishan flats broke the million dollar mark in recent history; the economy is in a boom which is about to go into a downturn. It is as predictable as the four seasons.

Recently, the government has introduced new measures to cool the car market and this means the car COE prices will likely go down by next year. If these new measures to regulate car and house prices are coupled with a credit crunch, the prices for cars and houses will fall by at least half.

As a proof of this theory, year 2009, just after the credit crisis of 2008, we witnessed the low of COE prices at $5,000 to $10,000. When the economy is flushed with cash in year 2012, COE prices went up to $80,000.

The coming weaker COE prices may also mean a weak stock market and economy. Let us await and see.