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Financial Crisis and Man in the Street needs know
- Thread starter scroobal
- Start date
I have complete confidence in HSBC! thanks to you.
No, the above is exactly the message that I do not want to send. I suspected that most people still cannot understand what actually happened. This is not a market downturn. This is a collapse of a model.
We are not looking at winners at all. No investment should take place until recovery signals are clear.
As an example, value of a share is a combination of fundamentals and sentiments. Many of the shares are valued well below fundamentals and sentiments. Common sense will tell you to grab it as it is undervalued. Unfortunately this is an extraordinary event.
I will cite Las Vegas Sands as an example. Very well run company, great balance sheet, good mgmt, great money making projects coming on stream etc. Unfortunately because of this funding crisis, they have not been able to roll over their loan commitments in the capital market as funds have completely dried up.
Hello Scroobal,
If this is a collapse of the current model, then:
(1) how will the recovery be structured? Will a new model emerge? If so, in what form will it take?
(2) as this is different from the great depression, is the possibility of unemployment being more than 25%? In singapore's case, since there are plenty of foreign talents, they will probably go off to another country and that will maintain an official low unemployment rate, disguising the decline in the number of jobs...?
Thanks!
If this is a collapse of the current model, then:
(1) how will the recovery be structured? Will a new model emerge? If so, in what form will it take?
(2) as this is different from the great depression, is the possibility of unemployment being more than 25%? In singapore's case, since there are plenty of foreign talents, they will probably go off to another country and that will maintain an official low unemployment rate, disguising the decline in the number of jobs...?
Thanks!
Why u want to know? R u trying to slander me on my integrity?*hee*hee*
Ya lor.. *hee*hee*
The primary effect currently is loss of confidence and banks are not prepared to lend to one another as they do not know who has impaired loans sitting in their books. Remember Citi, Merrill Lynch, UBS kept saying they have seen the worst, yet kept writing off more losses every quarter.
The attempt is to inject more cash into the system and buy over the bad loans by the statutory bodies.
The first indications are that investment banking model is gone as they are now being replaced by "bank holding " companies to allow greater supervision and raise their own deposits for lending.
The great depression was a good lesson for all. The error they made then was to increase interest rate and more or less kill off all economic activity and then sat on their hands. This time around, they are stoking the economy contiunously so that it does not stall. I doubt the effect will come anywhere close to the great depression as the initiatives are pretty much spot on.
Yes, you are right about FT who leave and their numbers won't show. As they now also show job created numbers wonder if they will carry showing that.
The patient is still in ICU and the prognosis is not clear. Remember its the most unusual event. Though the US has seen bank runs many times before, the UK saw it for the first time in 140 years.
The attempts to recover is also unprecendented. Repeated injection of funds into the lending system by central banks, buying over of bad bank loans and injections of capital to shore up banks.
Mahathir actually did something similar while Indonesia, Thailand and Korea went to the cleaners during the asian currency crisis.
There are 2 parts to this (a) the patient must first come out of ICU and I am sure it will (b) the recovery period which I speculate will be at least 18 mths. One can consider picking the lows for investment during the B phase.
what? ww2 bankrupt UK. that is why they abandon singapore and malaysia.
I am sure ww2 was a worse financial crisis, so it cannot be first in 140 yrs.
hahaha, if i am TKL, i will organise the 700 plus investors to queue up at DBS main branch everyday. till they pay up.
Bro Scroobal,
This is the best thread started in this new sammyboy forum. Thanks!
Cheers!
DOM
Bro, we are not at war. The good things about war is that you do have to pay back loan, no foreclosures and you come back and make your claims. The banks will honour it. Basically a moratorum for you to hit nature and eat tapioca.
After what some people said about DBS claiming that the risk was relatively low, I went to check the documentation. I got the funny feeling that anyone suing any of the banks is likely to lose.
I am also pretty sure, that Banks will resist pressure to compensate except for the vulnerable to avoid getting sued by their shareholders especially investment funds and major shareholders who will suffer in terms of dividends. Their only hope is suing the party that packaged it or the ratings agencies.
MAS is keeping quiet as they know there is more to come.
Thanks bro, just trying to help. This period only the first rate speculator with deep pocket, discipline and acumen has a chance. I know of 3 in this and old SBF forum. Real Tuakee, IFU2 and Silverfox. The rest need to lim kopi and watch.
Happy to help bro.
The casino is the weekday coffee and 2 eggs for him. His expertise is in stocks snd properties.
Well said Bro. George Soros wrote an interesting article (published in 18/11 ST) talking about a "new paradigm" to explain what has happened, a beakdown of market fundamentalism.
Btw can you explain the difference between "principal protected" and "principal guaranteed" in simple succinct layman terms?
Cheers
Btw can you explain the difference between "principal protected" and "principal guaranteed" in simple succinct layman terms?
Cheers
Yes. Even David Lawrence of Wheelock made a wrong bet on SC Global bought at almost $7 and today less than $1, apparently loss of $100m plus for Wheelock. Just one eg.
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