THE CREDIT CRISIS AND MARKET TURMOIL
Lehman Brothers files for bankruptcy and Merrill Lynch gets taken over.
Morgan Stanley and Wachovia Corp. are in merger talks.
I asked our US correspondent Daniel Ryntjes how these latest developments are reshaping Wall Street?
He says: ” We come from a place wherein these names were giants of Wall Street. Now we see the biggest investment banks such as UBS and Morgan Stanley forming a global consortium of banks, with a liquidity pool of 70 billion US dollars to lend to troubled financial companies. We’ll see a Wall Street dominated by risk managers but not the high flyers. We’ll see a Wall Street operating on safe mode.”
Meantime, as I was making calls to market players ( which is a regular part of my mornings), I spoke with the head of treasury research in one of the regional banks about the contagion effect on Asia . He says the impact will be seen in credit risk and deleveraging. He also sees volatile trade in the coming weeks.
I also called the chief investment officer of a European private bank as to the best investment strategy in this troubled trading environment. Put simply, he said, ” Don’t play the hero. Hold on to cash”.
But a chat with an economist from a regional research firm, really struck me. He said he and others like him now have to carefully think before they speak because investors are so jittery — it’s so easy to push the panic button in these uncertain times. It’s quite scary.
Do the recent developments in the financial world affect you? Who do you think is to blame? How are you restructuring your investment portfolio? Are the sharp market drops making you shudder? Do let me know your thoughts.
This crisis is a financial crisis where many fear . it affect people around the world .It is called an inflation hedge . We need to invest in different types of investments if one crush like an egg ,we still got another one .The higher the risks , the higher the return .
we need to know what the diffrences between assets and liabilities as well.The market go up and down unknownly
Comment by xw | September 25, 2008
i would say all dept to be blamed especially finance dept
Comment by xw | September 25, 2008
1. Who is not effected in one way or other in recent developments in the financial world.
2. To put placed who to be blame? I will say from the naive common people to top people in the gov., banks and company.
3. Not surprise. History and stat had shown. The outcome is when?
4. Everything will sooner or later will come to a point, when it correct itself and carry on. Sadly, people don’t learn.
Comment by sz | September 27, 2008
Just my silly thoughts…It looks to me as a case of ‘Chicken Little(s)’ running the markets now, what with all the gloomy outlook and impacts on the various economies…It is as though the whole world is screaming, “The sky is falling! Hide!”
Things are definitely working in favour of the doomsayers, with the downward trend of stock markets worldwide, and it is gaining momentum, as evidenced by the queues of people waiting to return their AIA policies, or by depositors seeking to withdraw their money from BEA. Honestly speaking, if I had invested my money before the credit crisis occured till now, I would have been very upset. It certainly takes great courage for people to really take the plunge into the stock market in such unsettling times.
Having said that, I am intrigued by the current situation. During sales, especially where really great bargains can be found, you would find masses of people scrambling to snap up the items on sale, no matter the location, be it in Singapore or overseas. In fact, people will do their best to capitalise on such bargains, using coupons and discount vouchers etc…However, when stocks are constantly being battered to new lows, investors will try to avoid stocks as if they were plagues. It is very amusing if one would
look at it objectively.
With all of the above said, I do not wish to point fingers at anyonefor the current crisis. Let the others do the finger pointing…after all, it can’t change the current situation, right? I have mixed feelings about the topic, feeling sad that the current crisis have affected or will affect the livelihood of many innocent people; on the other hand, I am excited at how a great opportunity this crisis might turn out to be in the end. I am very envious of you, Jennifer, for being in a job that allows you to talk to various market players. It is truly something that I would wish for, provided I know what questions to ask. I will end my thoughts here with a question to you, Jennifer. “What can I do to be able to talk to these market players?”
Comment by JCa | September 27, 2008