Plunging US Economy.. Are we in trouble?

[visa]

the future looks bleak.

but to paraphrase what James once said (and I have to agree, unusually)-

even in the wealthiest of times and places, there will be poor people.
even in the poorest of times and places, there will be rich people.

whether you are in trouble or not, at the end of the day, depends on how you handle your finances and live your life.

 

[snuffleupagus]

Temasek is supposed to make USD1.5 billion from Merrill Lynch if they decide to cash in now. So how is that a bad investment?

 

[meekahsoh]

*shrug. Singapore's investment policies tend to look at the extremely long term, which might not actually make sense, but I guess they're banking on people forgetting then reaping a giant profit out of it.

 

[betsybug]

snuffle=Temasek is supposed to make USD1.5 billion from Merrill Lynch if they decide to cash in now. So how is that a bad investment?

It's not. But the thing is they haven't cashed in yet, and they can't, given market conditions now. It's not selling 1 or 2 lots like a retail investor; it's a substantial stake. So, whether Temasek comes out ahead, we will have to wait and see.

Remember they said at the time of the initial purchase that they are looking at this within a 4-5 years timeframe (ie. initially it will be rough, but it will go up eventually)? I think they didn't realise then that months later Lehman will go bust and that ML will get sold to BoA. It could so easily have been the reverse (Lehman get sold and ML go bust). Then our money would have been down the drain.

Hope BoA is strong enough. Trouble is when someone falls into a muddy pool, everyone around gets splattered as well.

 

[snuffleupagus]

Betsy- Yes but given the current climate, the sensible thing for any savvy investor is to get out and cut their losses. Therefore for unforeseen circumstances like these(read bankruptcy),if they were to follow the logical trend of getting while they can, they will stand to make USD 1.5 Billion. Also remember that initially the price per share was valued at 48 USD, but protection clauses and the summary compensation clause devalued them to USD24 per share as the purchase price, factoring in the compensation returns as ML had to kick in their pre-arranged provisional clause by raising the capital at below USD48 per share since the initial 18%? buy-out from Temasek.

Therefore, I think that temasek's investment is sound as there are safety barriers in place for this case, and if they had any sense, they can cut their losses now and bail and ironically actually make the estimated USD1.5 Billion. On paper they can run, if they want to sell now and forgo the 4-5 year holding period, they should be able to rite?

 

[Weiht]

Its gd news if u got money on the sidelines waiting to load up for MID-LONG term. Check out this man jesse livermoore, made 100m in the great depression. So moral of story is, dun let the gd or bad times tell u wat or how u shld expect ur life to be. If not, half ur life will be miserable and the other half will be gd, based on mkt cycle.

We are in a mess that has been storing up for decades until now. The whole system is built on debt, and irony is to help them ride thru these perilous time, they end up borrowing more. Most of the regulations that these banks adhere to are almost 100yrs old, and the way of doing business has changed a great deal, just look at the internet. So allow them time to really revamp and overhaul the thing.

buy low sell high is always easiest said then done. JUST STAY AWAY FROM GREED.

 

[betsybug]

=snuffle

Ya lah, if it's you or me. But I don't think a Temasek-class entity can just dump a whole mess of shares into the market just like that. Consider:

1. They need to find a willing buyer with that kind of money
2. They need to consider the kind of signal they are sending to the market with this jump-ship sale
3. They need to be mindful that any sudden moves of this magnitude wll upset an already-volatile market affecting its own shareholdings in other assets
4. They need to consider the repercussions on future deals of this sort (people will look askance at you if they think you are unreliable) - remember all the earlier hoohaa about sovereign funds buying US assets?

We need a banker-type to come in and comment on this. Is Shinobi one? :mrgreen:

 

[mrekoj]

so many giants are going down

i think there's only this much the us government can help
hope wall street will not crush again

 

[betsybug]

Greed is Good

weiht=JUST STAY AWAY FROM GREED

Suddenly I have an urge to watch Wall Street. Where's dir?

Gordon Gecko's memorable quotes:

"greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

"It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another."

"The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market."

Mr Gecko is plenty scary.

 

[Weiht]

HAha, if reality now is just a movie then gd alr. Then we can call it reality tv LOL. But i feel sad for the tens of thousands of ppl out of jobs overnight.

 

[THOA]

i think there's only this much the us government can help

When the chips are down, they are either the ultimate savior or the ultimate scape goat. :lol:

The circumstances of this crisis is all too familiar; the Great Depression of the 30s also started cos the economy leans too much on one seemingly fail-proof industry.

 

[wyldeboon]

haiya... guess i must withdraw back the billions i invested...

 

[KissMyAxe]

haiya... guess i must withdraw back the billions i invested...

Hope that they are in singapore dollars and not rupiah

 

[wyldeboon]

Hope that they are in singapore dollars and not rupiah

dun tell ppl la!!!!!!!!!

 

[robboster]

Wow, I hope we're not in for another Great Depression... the currencies all dropping liao, seems like the world is in for trouble!

I don't really understand the companies and how this all started, but I know that now is a good time to invest in something... provided the price of it goes up later, but also a bad time to invest as if the thing you invest in drop price... good luck to you.

 

[jeepers]

Wow, I hope we're not in for another Great Depression... the currencies all dropping liao, seems like the world is in for trouble!

I don't really understand the companies and how this all started, but I know that now is a good time to invest in something... provided the price of it goes up later, but also a bad time to invest as if the thing you invest in drop price... good luck to you.

Could you back yourself up with regards to which currencies are dropping?

Gibberish. You're basically pointing out what everyone knows, in bad English.

 

[empihsrow]

Actually, the future doesn't look that bleak.

In my opinion, I don't think the aftermath of this disaster will be as horrifying as the Great Depression 70 years ago. The market needs some good check now. And it's good to hear that the US government have decided to cash in and help AIG.

It's in inevitable that the US will slump into a recession. When US does, the whole world will too. But despite the volatile factor, we still have other markets to bank on. Ultimately, people will have to pick up and go. The faster they move, the less problematic things will turn out.

 

[THOA]

haiya... guess i must withdraw back the billions i invested...

You mean the ones you invested through CPF, GST, cigarette tax, transportation cost, costly medical and dental needs etc etc?

That one can withdraw meh? :lol:

 

[robboster]

Could you back yourself up with regards to which currencies are dropping?

Gibberish. You're basically pointing out what everyone knows, in bad English.

Well, not all, but if you read the news, alot of them are dropping. Like the Singapore dollar oso dropped quite abit, though the US dollar drop is the main focus to people.

 

[visa]

Currencies are pegged to other currencies, they can only fall in value against other currencies. I don't think it's possible for "all currencies to drop" simultaneously.

A global recession will eventually pick itself up and recover. It's not the end of the world.