Bad news after bad news and it appears, there are still skeletons in the closet. This week saw among the most bad news reported since the Sub-Prime and Financial Crisis started 1.5 years ago (just after mid 2007).
The International Monetary Fund (IMF) reported in its economic growth forecasts Wednesday, predicting the severe financial crisis would brake global growth to the slowest pace in six decades, and "World growth is projected to fall to 0.5 percent in 2009, its lowest rate since World War II".
It further reported, "A sustained economic recovery will not be possible until the financial sector's functionality is restored and credit markets are unclogged" and that some light at the end of the suffering, saying said it saw a gradual recovery in the global economy in 2010 to growth of 3.0 percent, spurred by "continued efforts to ease credit strains as well as expansionary fiscal and monetary policies."
(source : http://sg.news.yahoo.com/afp/20090129/tts-imf-economy-growth-forecast-c1b2fc3.html)
The Singapore's Finance Minister said the Global economic crisis will take more than a year to unravel. Mr Tharman said "The foreign banks are still in the mode of contraction. I think every large global bank is still looking at building up its capital, much more than it’s looking at extending new loans. So we are still at that phase of the crisis where recapitalisation is still the priority and estimates of the extent of bad assets on their books are still on the upswing. So, we haven’t seen the worst yet."
He further add that is why it is a good move for governments in the West to help these banks recapitalise and incentivise lending.
(Source : http://sg.news.yahoo.com/cna/20090129/tap-698-global-economic-crisis-take-year-231650b.html)
While many countries' government struggled to contain the recessoin, there are disturbing news appearing. Large companies in the US that took government funding are happily pampering and rewarding themselves with more than a total of US$18 billion in bonus.
The top executives of the Wall Street financial companies that the US president targeted, includes shameless heads of such well-known manufacturing and technology giants as IBM, Motorola, Xerox and Corning are still paid handsomely.
Citigroup even planned to take delivery of a new corporate jet with billions of dollars of support from the government. That bank, Citigroup, just canceled the deal earlier this week. Big companies and their top Executives are totally irresponsible, insensitive and only cares for themselves and their lavish spending while the majority of people are suffering.
However, the Obama administration is considering an idea for the creation of a "bad bank" that could take over soured debt, like defaulting mortgages, that have corroded the balance sheets of banks and helped choke off lending. If this plan goes through, it will help ease up banks' bad mortgage and allow them to recapitalise, which in turn, helps them to start lending again in the foreseable future.
(Source : http://sg.news.yahoo.com/ap/20090130/twl-obama-bonuses-1be00ca.html)
The signs of global economic distress multiplied, with more companies worldwide cutting profits and jobs, and protesters swarming the streets of France in anger at the worsening crisis.
Economic fears gripping the middle classes amid waves of cut-backs and stagnant wages spilled over in France, while elsewhere the daily treadmill of layoff announcements and plunging profits rolled on.
(Source : http://sg.news.yahoo.com/afp/20090129/tts-finance-economy-world-c1b2fc3.html)
In the mean time, we can only hope the situation will start improving. So far President Obama appears much more capable than his predecessor, the warmonger Bush.
Friday, January 30, 2009
Thursday, January 8, 2009
Alternate Investment
Despite the bad news all over, I was in a brief conversation with a couple of friends and we discussed a few investment alternatives. I have not done my homework nor am I versed in these areas, but am just thinking out loud.
Forget about big ticket investments like properties or long term investments like land or Unit Trust and Funds. Look towards short term investments, that can even be prolonged or juggled with at our comfort and will.
These investments I like to think aloud, requires lower commitment, and has a short term exit when necessary. One could invest for a period as short as one month, or for years, with little restriction.
GOLD
As the greenback weaken from 2007 t0 2008, price of gold climbed. Gold is the closest alternative to currency thus during uncertain times, gold price tends to head north.
In recent times, as US dollar strengthen, gold price came down, to nearly US$800 per ounce (from above US$1,000 per ounce in 2008). In the second half of 2008, gold price dropped to just above US$700 per ounce before recovering. Recent Israel conflict (started about a week ago) has driven gold price up to nearly US$850 now.
(source : gold http://www.kitco.com/charts/popup/au1825nyb_.html )
Crude oil price hover around US$150 per barrel in June 2008 before heading south till it went below US$40 per barrel in December 2008. Crude oil price started climbing with the Israel conflict too.
(source : Crude Oil http://www.californiagasprices.com/crude_chart.aspx )
Would Gold be a good investment for the short to mid-term? It appears promising but risky. Some organisation/companies offers gold investment with a promised return of between 1.5% to 2% per month. This allows investors to invest in Gold for short terms, thus reducing risk.
Currency
Currency investment (forex) has always been around, be it good or bad times. In times when a country's currency is strengthening, it is worthy of investment. Apart from higher interest earned for Time Deposit with the banks, the appreciation of the currency gives more returns than what interest you could earn.
Before considering which currency to place your funds into, do your home work on what is the driving factor for the currency to appreciate or depreciate, before putting your money where your heart is.
Example. US Dollar was as low as about S$1.25 vs US$1.00 but had climbed in recent times. Australian dollar had plunge to A$0.944 against S$1 today.
Knowing the driving factor can help investor spot the upward or downward trend and avoid unforeseen losses.
Most work hard for their money. Why not make money work hard for you?
Forget about big ticket investments like properties or long term investments like land or Unit Trust and Funds. Look towards short term investments, that can even be prolonged or juggled with at our comfort and will.
These investments I like to think aloud, requires lower commitment, and has a short term exit when necessary. One could invest for a period as short as one month, or for years, with little restriction.
GOLD
As the greenback weaken from 2007 t0 2008, price of gold climbed. Gold is the closest alternative to currency thus during uncertain times, gold price tends to head north.
In recent times, as US dollar strengthen, gold price came down, to nearly US$800 per ounce (from above US$1,000 per ounce in 2008). In the second half of 2008, gold price dropped to just above US$700 per ounce before recovering. Recent Israel conflict (started about a week ago) has driven gold price up to nearly US$850 now.
(source : gold http://www.kitco.com/charts/popup/au1825nyb_.html )
Crude oil price hover around US$150 per barrel in June 2008 before heading south till it went below US$40 per barrel in December 2008. Crude oil price started climbing with the Israel conflict too.
(source : Crude Oil http://www.californiagasprices.com/crude_chart.aspx )
Would Gold be a good investment for the short to mid-term? It appears promising but risky. Some organisation/companies offers gold investment with a promised return of between 1.5% to 2% per month. This allows investors to invest in Gold for short terms, thus reducing risk.
Currency
Currency investment (forex) has always been around, be it good or bad times. In times when a country's currency is strengthening, it is worthy of investment. Apart from higher interest earned for Time Deposit with the banks, the appreciation of the currency gives more returns than what interest you could earn.
Before considering which currency to place your funds into, do your home work on what is the driving factor for the currency to appreciate or depreciate, before putting your money where your heart is.
Example. US Dollar was as low as about S$1.25 vs US$1.00 but had climbed in recent times. Australian dollar had plunge to A$0.944 against S$1 today.
Knowing the driving factor can help investor spot the upward or downward trend and avoid unforeseen losses.
Most work hard for their money. Why not make money work hard for you?
Are We Heading Towards A Great Depression?
US Sub-prime, Financial Meltdown, Global Financial Crisis, Recession, Retrenchment, Huge MNC Collapse, Bailouts, Trade Deficit, what not?
Those are familar words in the last few months, all thanks to inefficient governance of the US Giant. No point talking about blame, we all know it by now.
President Elect Obama's first challenge should have to do with an budget deficit of $1.2 trillion for fiscal year 2009, just as he steps into office. He have to thank the years of poor administration. How he can reduce the deficit and create job, create consumer confidence, etc, to recover the World's No 1 economy remains a challenge.
(source : http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B53217752%2D6CF9%2D4AEB%2D89D5%2D99EA412DA5FF%7D )
More and more large MNCs are coming out to admit the skeleton in the closet. I believe we have not seen all yet, suspecting there will be more decomposing corpse to be exposed in the coming few months.
Retrenchments have increased. London's Marks & Spenser, China's Lenovo, Japan's TDK, etc, have all announced retrenchment news. With more jobless, spending power will decline even further, thus resulting in more hits on retails, food & beverage industry, tourism, etc. This will result in even more joblessness in the coming months.
Even the porno industry is asking for US$5 billion bailout, claiming people are too depressed with the financial situation that they lost interest in sex. So what is the big deal and why does the government even want to rescue an industry where these people are paid to have wild sex? Afterall, when the economy is so uncertain for an uncertain extended period as well, who has the money to have childrens? This joke came as an awakening that some organisation are making use of the situation to rob the people.
(source : http://news.aol.com/political-machine/2009/01/07/porn-industry-to-request-bailout/ )
Stock market had taken a huge beating in the last half a year. Most indexes have plunge to all time low, crude oil were largely inflated and had plunged. Crude oil peaked at above $150 per barrel, while Gold peaked at above US$1,000 per ounce, before falling deeply. Oil and Gold price climbed recently due to the Israel's conflict with Hamas (Gaza) and new attack by Hezbollah militants (Lebanon) today.
With so much bad news, would it mean, we are heading towards the Great Depression, or is it going to be unavoidable? Too much coincidence. The last Great Depression was in 1929, and lasted for about 10 years.
During the Great Depression (btw, that Depression also originated from the United States), stock market crashed globally, joblessness was at all time high, etc. The last Depression reached its end when the World War II started in 1938.
With so much coincidence, we better be wary.
Those are familar words in the last few months, all thanks to inefficient governance of the US Giant. No point talking about blame, we all know it by now.
President Elect Obama's first challenge should have to do with an budget deficit of $1.2 trillion for fiscal year 2009, just as he steps into office. He have to thank the years of poor administration. How he can reduce the deficit and create job, create consumer confidence, etc, to recover the World's No 1 economy remains a challenge.
(source : http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B53217752%2D6CF9%2D4AEB%2D89D5%2D99EA412DA5FF%7D )
More and more large MNCs are coming out to admit the skeleton in the closet. I believe we have not seen all yet, suspecting there will be more decomposing corpse to be exposed in the coming few months.
Retrenchments have increased. London's Marks & Spenser, China's Lenovo, Japan's TDK, etc, have all announced retrenchment news. With more jobless, spending power will decline even further, thus resulting in more hits on retails, food & beverage industry, tourism, etc. This will result in even more joblessness in the coming months.
Even the porno industry is asking for US$5 billion bailout, claiming people are too depressed with the financial situation that they lost interest in sex. So what is the big deal and why does the government even want to rescue an industry where these people are paid to have wild sex? Afterall, when the economy is so uncertain for an uncertain extended period as well, who has the money to have childrens? This joke came as an awakening that some organisation are making use of the situation to rob the people.
(source : http://news.aol.com/political-machine/2009/01/07/porn-industry-to-request-bailout/ )
Stock market had taken a huge beating in the last half a year. Most indexes have plunge to all time low, crude oil were largely inflated and had plunged. Crude oil peaked at above $150 per barrel, while Gold peaked at above US$1,000 per ounce, before falling deeply. Oil and Gold price climbed recently due to the Israel's conflict with Hamas (Gaza) and new attack by Hezbollah militants (Lebanon) today.
With so much bad news, would it mean, we are heading towards the Great Depression, or is it going to be unavoidable? Too much coincidence. The last Great Depression was in 1929, and lasted for about 10 years.
During the Great Depression (btw, that Depression also originated from the United States), stock market crashed globally, joblessness was at all time high, etc. The last Depression reached its end when the World War II started in 1938.
With so much coincidence, we better be wary.
Friday, January 2, 2009
Singapore sees biggest-ever quarterly GDP fall: govt
Year 2009 didn't start off well and not expected to produce much positive news from the economy.
It was reported by AFP today, that Singapore's economy could contract by as much as 2% this year (based on deepening recession).
Real gross domestic product (GDP) fell by 12.5% in the 4th Quarter 2008. The 4th quarter figures are advance estimates based largely on October and November figures. Global economy crisis worsened since November 2008 with sharp decline in global demand, trade and investment.
2009 growth forecast, which now ranges between a contraction of 2.0 percent and expansion of 1.0 percent.
Singapore's economy rely on the movement of goods and services in the region, thus weaker global demand has affected Singapore's electronics and precision engineering industries, pulling the entire manufacturing sector down by an estimated 9.0 percent in the fourth quarter compared to the same time last year, the trade ministry said.
With such bad news, those who had been prudent in 2007 and early 2008, could benefit from their savings than those who had spludge excessively during boom times. For those looking at investing would be able to get good bargains in the near future. Be prudent, be cautious, and do sufficient homework.
It was reported by AFP today, that Singapore's economy could contract by as much as 2% this year (based on deepening recession).
Real gross domestic product (GDP) fell by 12.5% in the 4th Quarter 2008. The 4th quarter figures are advance estimates based largely on October and November figures. Global economy crisis worsened since November 2008 with sharp decline in global demand, trade and investment.
2009 growth forecast, which now ranges between a contraction of 2.0 percent and expansion of 1.0 percent.
Singapore's economy rely on the movement of goods and services in the region, thus weaker global demand has affected Singapore's electronics and precision engineering industries, pulling the entire manufacturing sector down by an estimated 9.0 percent in the fourth quarter compared to the same time last year, the trade ministry said.
With such bad news, those who had been prudent in 2007 and early 2008, could benefit from their savings than those who had spludge excessively during boom times. For those looking at investing would be able to get good bargains in the near future. Be prudent, be cautious, and do sufficient homework.
Subscribe to:
Posts (Atom)
