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A couple of my friends are taking part in the Singapore Complaints Choir, so here’s a shameless plug for them.  Actually I know at least one of them wouldn’t want us to turn up, but I attribute it to false modesty.

26 Jan / Saturday
3.00pm - The Chamber at The Arts House
4.00pm - Merlion Park
4.45pm - Speakers Corner
5.45pm - Front Lawn at Singapore Art Museum

27 Jan / Sunday
12 - 3pm - Recording at The Chamber at The Art House
3.00pm - Performance at The Chamber at The Arts House
4.45pm - Esplanade Waterfront Canopy
5.45pm - VivoCity Amphitheatre

Oddly enough, the idea started with the Finns and I always thought they were happy with their social compact.  Perhaps we have become truly world-class.

If you have money invested in any stock market in the world, then you’re probably feeling pain, and a lot of it. (Except for Malaysia. Two words: pump-priming. Do hyphenated words count separately?) After putting the market through a lot of grief, Bernanke has finally decided to stop “standing ready to act” and simply “act”. But will a 75 basis point cut do anything significant for the market. More importantly, will it stop the inevitable recession from taking root?

The last time “credit crunch” was being bandied about was in 1991.  The story is similar - housing and other asset price bubbles, with financial companies having weak balance sheets and unable to re-capitalise.  Fast-forward to 2007 and the story is similar - just replace the saving & loans crisis with the words “sub prime”.  The good news is that the crisis in 1991 was relatively mild.  US GDP Growth was down -0.7% in Q390, -3.2% in Q490 and -2.0% in Q191.

There are some important differences though.  Oil prices spiked higher in 1990 too (although to just above US$35/bbl, which must seem like a joke compared to what they are now.  Adjusted for inflation, this would roughly be around US$50+/bbl in today’s dollars.)  Also recession had come on the back of tight credit - Fed funds rates ranged from 9 to 19% at its peak in the 1980s.  [Some commentators even argued that this is what caused the recession.] The crisis today was brought about by easy credit and indeed financial innovation motivated by easy credit.

So where does this all lead us?  Not sure.  Bad news is that when credit is constricted it’s a lot less clear how effective monetary policy is, or rather, it becomes much more difficult to know how tight credit conditions really are.  The good news is that even if we are in for a recession, it probably won’t last too long.

While sovereign wealth funds have been racing around the world bailing out beleaguered global banks, none of them have given British bank Northern Rock a second look.  In fact, nationalisation is on the cards, although the UK government is hoping not to have to use that politically unpopular last resort.  Instead, it is hoped that private players like Goldman Sachs and Richard Branson might fly to its aid.  (As one shareholder put it, paraphrased, “I don’t want it to be called Virgin Rock or something vulgar like that.”)

I think European markets are only beginning to come to terms with how exposed they are to credit issues and a US recession.  While Asian economies are often characterised as export-led and therefore have to grapple with how ‘coupled’ they are to the US economy, Europe has always been expected to grow slowly and steadily.  And as far as SWFs are concerned, they’re clearly not as optimistic about Europe as they are about the US.

Article below.

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