Financial crisis

[It's here]

It’s funny how one small country and 27 incompetent EU leaders can mess up the whole world.

Less than one week from the “final” EU Summit and we already know the "solution" to the debt crisis solved nothing. The 50% write-down of Greek debt is not clear if it includes a write-down of Greek obligations to other European governments and agencies, and if not, it's unclear whether the write-down is really large enough to allow Greece to avoid further debt problems.

The EFSF contemplates for "leveraging" its 440 billion euros by issuing credit enhancements that would be sold along with the new debt of European governments. The problem is that nobody wanted to buy (except Japan, with its own debt-GDP ratio of more than 200 per cent!)

The final disaster came two days ago when Greece announced a surprise vote on austerity measures, sending markets diving all around the world. Whatever the outcome will be, the chaos will continue until sometime in January, which is the estimated date for voting. Should Greek voters reject the nation’s latest rescue package, it would lead to catastrophic default in Greece, a possible collapse of euro and bank failures across the world.

So how are global markets affected? Europe is already facing recession and in worst case will sink into a depression like 1930s in the US. Wall Street financial institutions will be paralyzed, latest one being MF Global, the brokerage filing for bankruptcy protection this Monday. Holding European government debt, MF Global is likely to be added to list of the 10 largest bankruptcies in U.S. corporate history. Also investors in Singapore lost their funds.

China is between rock and a hard place. If it refuses to throw more surpluses into sinking Europe, it will face slowdown effects from recession. Other Asian economies have already revised down the growth projections for 2011 and 2012, latest Japan and Thailand last week. Home prices in China have been sinking for two months now.

Where can you invest? Stock markets, property prices and even government bonds are all coming down. Hide the cash under your mattress perhaps?

[Blaze]

I will keep cash in SGD to ride out the storm. Then I'll dump it all into different REITS in Singapore. Good investment. Think about it, every time a Singaporean goes shopping or 'snaps up' a condo, another coin in the coffers.

Sure it might go down 10 per cent in value, but you can hold and still collect good dividends. Private property surely goes down ten percent and you still pay management fee and property tax etc.

US dollar is also good, surprisingly, every time there's a crisis.

[Interesting times ahead]

I don't know what the Greek PM was thinking... Greece is like an old man in a hospital bed, and now disconnecting the tubes by himself!

I think they have given up hope ever to clean up the house and are ready to be kicked out of euro. What will happen now, nobody knows, because it's the first time in history.

[Asia following]

Manufacturing activity in Taiwan, South Korea and Singapore contracted last month

The manufacturing sector in many parts of Asia sputtered last month, data showed yesterday, reflecting strains on the region's export-dependent economy from Europe's debt crisis and efforts to curb inflationary pressures.

A slowdown in Asia's economy could prompt more countries to reverse, at least partly, some of the monetary tightening taken over the past few years to clamp down on price pressures.

Purchasing managers indexes (PMI) showed Taiwanese manufacturing activity contracted at its fastest rate in almost three years last month, while South Korean manufacturing continued to shrink.

China, the world's factory hub, sent mixed messages, but analysts interpreted the data as being consistent with a continued moderation in economic growth.

A PMI released by the Chinese government fell sharply last month, contrary to market expectations for a third straight rise, hitting its lowest level since February 2009 during the global financial crisis.

In Singapore, the PMI stayed in contraction territory for the fourth straight month, but the reading for last month of 49.5 was an increase of 1.2 points from the previous month. The Singapore Institute of Purchasing and Materials Management, which publishes the data, attributed the contraction to a decline in new orders and new export orders.

One of the day's worst figures came from Taiwan, one of Asia's economies most exposed to global demand. Its PMI fell to 43.7 last month from 44.5 in September - the lowest level since January 2009 - as new domestic and export orders both declined. It was the fifth consecutive monthly drop.

South Korea's manufacturing activity contracted for a third straight month, albeit at a slower pace than in September. HSBC said its South Korea PMI was at 48 last month compared with 47.5 in September.

[oncemoreoncemoreoncemore]

Greece does this every few decades. They run up tons of debt, squander it all, make some threats and throw some tantrums and then default. They've been doing the same thing for atleast the past 200 years.

[only hard choices]

Greece does this every few decades. They run up tons of debt, squander it all, make some threats and throw some tantrums and then default. They've been doing the same thing for atleast the past 200 years.

It was different when they were on their own... Now they're with the common currency and they'll cause a chaos. Hard to believe they woulndn't have plan B in case the vote is 'no'. Maybe they are secrectly printing drachmas and change currency overnight? It's the only way to avoid run on banks and collapse of whole Europe.

[tosh]

Singapore will not be affected by whats happening in the west.  They wont let it go down.  One thing to remember, Singapore is good at reinventing itself and riding out these storms.  This is a mess created by the west not by asia.  China's economy is booming and as long as China is good, Singapore will always be the financial hub of SE Asia.  Beijing, HK and Singapore are and always will be the main financial pillars of asia.  Dont listen to negativity of those who would like to see it go down.  Its just not going to happen - they wont let it.

[Dr. Phil]

The Greek PM is covering his @ss.

The Greek referendum on austerity measures will be a damp squib because the referendum will ask the question "do you want Greece to remain in the EU?"
Most Greeks do and the question is effectively an ultimatum by France to the Greek population, if they leave the Euro they will be persona non grata.

The fact is if Greece dumps the Euro, the write-down will become a write-off and the ECB will become de facto bankrupt and Europe belly-up.
 
In any event any bailout and write-down will be no more than a patch. Structural improvements can only come with dumping the Euro. A Drachma will make Greece highly competitive and will create jobs. Greek will attract investment. As its been said, Greece can't drink itself sober.

Greeks need not worry that their exports will be unwelcome in Europe, China's exports have flooded all of Europe and they aren't members.

If China has to invest in Europe to preserve its export markets, that will be no more than USA has practiced for decades. Sweet.

I wish Greece luck. They will set a trend that will spread across the EU and will hopefully shrivel the EU Commissioners who are the architects of a reckless EU expansion in their quest for power; more power than elected officials.

 

[Your clever mate]

Singapore will not be affected by whats happening in the west.  They wont let it go down.  One thing to remember, Singapore is good at reinventing itself and riding out these storms.  This is a mess created by the west not by asia.  China's economy is booming and as long as China is good, Singapore will always be the financial hub of SE Asia.  Beijing, HK and Singapore are and always will be the main financial pillars of asia.  Dont listen to negativity of those who would like to see it go down.  Its just not going to happen - they wont let it.

It looks like you didn't learn anything from Financial Crisis 'in the west' 2008. Singapore was very much affected, and the first country in Asia to sink into recession.

[tosh]

Singapore will not be affected by whats happening in the west.  They wont let it go down.  One thing to remember, Singapore is good at reinventing itself and riding out these storms.  This is a mess created by the west not by asia.  China's economy is booming and as long as China is good, Singapore will always be the financial hub of SE Asia.  Beijing, HK and Singapore are and always will be the main financial pillars of asia.  Dont listen to negativity of those who would like to see it go down.  Its just not going to happen - they wont let it.

It looks like you didn't learn anything from Financial Crisis 'in the west' 2008. Singapore was very much affected, and the first country in Asia to sink into recession.

Many lessons learned - they wont let it get affected again.  This is singapore youre in remember.  One word - Re-invent.  Something the west doesnt do.

[funny how]

Funny how in 2007 the talk was the United States had all the problems and Europe and Asia were in good shape... now the narrative has changed to all the West has problems and Asia is still in good shape.

Face it, the entire globe is screwed up.

[strange]

Singapore will not be affected by whats happening in the west.  They wont let it go down.  One thing to remember, Singapore is good at reinventing itself and riding out these storms.  This is a mess created by the west not by asia.  China's economy is booming and as long as China is good, Singapore will always be the financial hub of SE Asia.  Beijing, HK and Singapore are and always will be the main financial pillars of asia.  Dont listen to negativity of those who would like to see it go down.  Its just not going to happen - they wont let it.

It looks like you didn't learn anything from Financial Crisis 'in the west' 2008. Singapore was very much affected, and the first country in Asia to sink into recession.

Many lessons learned - they wont let it get affected again.  This is singapore youre in remember.  One word - Re-invent.  Something the west doesnt do.

Who are these mysterious 'they' you keep mentioning? And what have they re-invented?

You sound like a broken record.

[tosh]

The leaders of asia.  Asia has decoupled remember.  The rules of yesterday no longer apply.  Asia is strong and always will be. It wont ever go down here. Youll see.

[Decoupled]

The leaders of asia.  Asia has decoupled remember.  The rules of yesterday no longer apply.  Asia is strong and always will be. It wont ever go down here. Youll see.

Year To Date

TOPIX - 17.8%
Nikkei

[Decoupled]

The leaders of asia.  Asia has decoupled remember.  The rules of yesterday no longer apply.  Asia is strong and always will be. It wont ever go down here. Youll see.

Year To Date

TOPIX      -17.8%
Nikkei     -15.5%
HSI        -16.5%
Taiwan     -16.8%
KOSPI      - 8.8%
ASX        -10.1%
STI        -11.9%

DOW        + 4.0%
S&P        + 0.3%
NASDAQ     + 1.7%