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S&P: Asian countries will be hit harder by another financial crisis

Rogue Trader

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S&P: Asia would be hit harder by a second global crisis
reuters_85x27.gif


On Monday 8 August 2011, 11:32 SGT
SYDNEY (Reuters) - A new global financial crisis would hit Asia harder than the last one, especially nations heavily exposed to offshore markets or still repairing budgets from the 2008-2009 crisis, credit ratings agency Standard and Poor's said on Monday.

The agency, which incurred Washington's wrath at the weekend by cutting its AAA rating by a notch to AA+, said it was not predicting a rerun of the credit crisis that crippled markets and tipped the world economy into recession three years ago.


But it warned of more sovereign downgrades in Asia next time around, if its assumptions turned out to be wrong.


"If a renewed slowdown comes, it would likely create a deeper and more prolonged impact than the last one," S&P said in a statement.


"The implications for sovereign creditworthiness in Asia-Pacific would likely be more negative than previously experienced, and a larger number of negative rating actions would follow. We wait to see."


S&P said it assumed Europe's debt crisis and Washington's debt problems were unlikely to lead to "abrupt dislocations" in the financial systems and economies of major developed nations.


On that basis, it added, its historic downgrade of the U.S. credit rating would have no immediate knock-on impact on sovereign borrowers in the Asia-Pacific.


It cited the Asia Pacific region's sound domestic demand, relatively healthy corporate and household sectors, plentiful external liquidity and high savings rates -- though it listed New Zealand, Japan and Vietnam as exceptions to this.

The S&P statement took on a much darker tone when considering the possibility that its assumptions were too rosy, noting that Asia still relied heavily on exports to the West.


"Given the interconnectivity of the global markets, an unexpectedly sharp disruption in developed-world financial markets could change the picture," it said, noting that the U.S. and European economies could again contract or stagnate.


"In this scenario, the experience of the global financial crisis of 2008-2009 shows that export-dependent economies with large exposures to the U.S. and/or Europe would feel the most pronounced economic impacts," S&P said.


"It's not likely things would be very different this time."


The agency listed those countries particularly vulnerable to disruptions in offshore capital markets as Pakistan, Sri Lanka, Fiji, Australia, New Zealand, South Korea and Indonesia.

It also said several nations, again including New Zealand, were also still repairing their government finances and could be more constrained in responding to a fresh global crisis.

"The adverse impact on Asia Pacific in that scenario would likely require governments to use their balance sheets to support their economies and financial sectors once again," S&P said.


"And in our opinion, most governments would promptly oblige. But some of them continue to bear the scars of the recent downturn -- the fiscal capacities of Japan, India, Malaysia, Taiwan and New Zealand have shrunk relative to pre-2008 levels."


(Reporting by Mark Bendeich; Editing by Balazs Koranyi and Ramya Venugopal)
 

LeMans2011

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hahaha maybe the S&P executives kanna death threat now faster divert attention say some bad things about Asia
 

Rogue Trader

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hahaha maybe the S&P executives kanna death threat now faster divert attention say some bad things about Asia

I absolutely agree. publicly listed credit rating agencies like S&p and moody's are crooks who deserved to go down with lehman bros for allowing the subprime crisis to happen.
 

numero uno

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great news:biggrin::biggrin::biggrin: can't wait to see all those cr@p !diots who speculate and hold 3-5 properties and huge mortgage loans!!!! really screww their @ss this time. interest rates going to go up and repos going to come knocking on their doors. I already know of such speculators sh!tting in their pants now. STI has drop 10% on two days and more red ink to come. alot of fools just do not know they are being suckerred by the bankers. these are the real crooks of the 21st century. they get everyone on false hope and print out more money and lowered interest rates to almost 0% and get everyone indebted by huge housing loans(just delaying the pain) , then pull the rug from under the public feet by crashing the market, sharply increasing interest rates overnight and getting them to top up once valuations is below the mortgage valua, repo if they can't pay and re-auction on the open market. either way the bank always get away with it. any idiiot can see that they are always the last person to suffer. First you have lehman bros in 2008 selling CDOs and useless "financial products" that drop like a bomb- no wonder so many lawsuits in ST recently by investors who lost their shirts and pants. Now they have hatched in another form of asking you to take huge loans to buy useless properties.
when you have crap property speculators telling people to buy 70-100 properties like in ST adverts , you know these are the real b@stards conning everyone.
once we have US feds idiots like ben bernake(a former wall street crooked banker himself protecting his friends) saying" banks are too big to fail" in 2008, and Obama keeps bailing them out, they sent a bigger message to the bankers that they can cheat more and get away with it. No bank is too big to fail and no banker/crook is too importatnt to be fired. even China is fed up and would not bail the US out. there is no recovery in fact. only a dead cat's bounce. look at the Dow Jones past few days. Std and poors cutting of their ratings is correct. Soon PIGS would stand for (portugal, italy, greece and USA). it's is going to be worse than 2008 and 1997 financial crises as Europe is dead, US is dying from a poor economy and the costly fight against Afghan, Iraq and pakistan insurgents, China is false hope and Japan still has not recover from the Tsunami /quake debt/disaster(at least in the next 5 years). :biggrin::biggrin::biggrin::biggrin: cash is king!!!
 
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borom

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..............being suckerred by the bankers. these are the real crooks of the 21st century.....the bank always get away with it. any idiiot can see that they are always the last person to suffer. First you have lehman bros in 2008 selling CDOs and useless "financial products" that drop like a bomb.........these are the real b@stards conning everyone. ......like ben bernake(a former wall street crooked banker himself protecting his friends) saying" banks are too big to fail" in 2008, and Obama keeps bailing them out......

What does that say about Tony Tan, a career banker and now President wannabe.

Temasek/GIC biggest investments are in banks and what does it say about them?
People who have info should reveal how many of the decision to invest in failed banks were made during TT tenure.
During his time in OCBC, the bank was well known to be lagging behind in most areas-ask Tony what has he achieved when he was in OCBC?
 

LeMans2011

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Quotes from TT:

A year ago: "Asia is poised for a decade of growth"
A month ago: "Asia is poised for a few decades of growth"

A month later (haha just prediction lah): "The world economies are interdependant, Singapore cannot escape the fallout from US, we need to be united at times like this, PAP will lead Singapore out of this recession"
 

Unrepented

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:*: I get a headache reading this. Better go sleep liao.:*:

Quotes from TT:

A year ago: "Asia is poised for a decade of growth"
A month ago: "Asia is poised for a few decades of growth"

A month later (haha just prediction lah): "The world economies are interdependant, Singapore cannot escape the fallout from US, we need to be united at times like this, PAP will lead Singapore out of this recession"
 

jw5

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I absolutely agree. publicly listed credit rating agencies like S&p and moody's are crooks who deserved to go down with lehman bros for allowing the subprime crisis to happen.

Could it be their payback cos the US government lambested them after they way they handled Bear Stearns and Lehman?
Seems rather silly.
They lent someone money, surely they cannot expect to be 100% sure that they will repay. AAA to AA+ and everybody shivering in their underwear. :o
 

johnny333

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Fts get to keep their jobs while sinkies get retrenched.

Last GE the issues were about bread & butter issues: jobs, cost of living,..... . I guess some Sporeans are not hungry yet & they are willing to keep on feeding the PAP fat cats.

With the world still in recession & likely to be so in the next few years, attitudes "may" chanhe & we may see a "fluke" result in the next GE:rolleyes:
 
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Unrepented

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Don't worry if you believe LHL Spore's economy will grow by 5% to 6%:rolleyes:

1) What it means to have 7% growth year on year?
2) Watch the video.
3) Then go outside and look around you.
5) How many % growth were we told we were having over the last three GEs?
6) Look around you again
7) How many % new migrants and FT growing year on year? Infrastructure etc?

Simple arithmetic, but easy to overlook its application and logic in our daily pursuits.

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