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World Recession


Cosmo
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That may be true, but I doubt those factors are enough to save Thailand from the knock on effects of a recession hitting the US and Europe (and Japan).

The Thai economy depends on exports far more than investment in the stock market or real estate.

The stronger the baht gets, the less competitive those exports become.

Also, the Thai stock market has a reputation for being a casino and being manipulated. Yes, there are some blue chip companies that are a good bet. But considering all the other factors, I don't see institutional investors going heavy on the Thai market or equities.

Just my two baht.

I think thailand domestic fundamentals remain strong and the increase in exports to the intra-Asia region remained robust and offset the drop in exports to the US.

but than your two baht is stronger than my 2 cents. especially when you need toilet tissue.

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"Even after downgrading almost 10,000 subprime-mortgage bonds," Bloomberg News reports, "Standard & Poor's and Moody's Investors Service haven't cut the ones that matter most: AAA securities that are the mainstays of bank and insurance company investments...A bond sold by Deutsche Bank AG in May 2006 is AAA at both companies even though 43 percent of the underlying mortgages are delinquent."

If Moody's and S&P ever get around to downgrading these so-called AAA bonds to AA or lower, another round of multi-billion losses would ensue. "Sticking to the [stated credit-rating] rules," Bloomberg observes, "would strip at least $120 billion in bonds of their AAA status, extending the pain of a mortgage crisis that's triggered $188 billion in writedowns for the world's largest financial firms. AAA debt [recently] fell as low as 61 cents on the dollar...and a decline to AA may push the value of the debt to 26 cents, according to Credit Suisse Group."

"'The fact that they've kept those ratings where they are is laughable,' says Kyle Bass, chief executive officer of Hayman Capital Partners, a Dallas-based hedge fund. 'Downgrades of AAA and AA bonds are imminent, and they're going to be significant.'"

Seems like this "Subprime Loan" situation has spread to the core of the world's financial system.

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I'm waiting to buy a new apartment at the moment, nearly picked one up a couple of months back but it seems waiting 8-12 months would be a better option. Seeing how the british economy is going **** up, along with the US and Japan and even China (if they had enough time to pull their heads out of the sand to admit it). Housing prices should drop nearly 20% in Thailand in the next few years....... touch wood.

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It is only a day old and the markets around the world has given the thumbs down on the latest attempt by the US Fed to pump more liquidity into the financial system. The spreads are rising again, oil ihas reached $110 and gold is approaching $1000.

Whilst the US dollar is falling dramatically.

Short of a bail out from the US government, the markets - in particular the US market, will continue to go down.

We could have a repeat of the 87 like meltdown soon :shock:

I certainly hope I am wrong..... :(

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This all sounds brilliant from my angle.

In about 18 months, after having re established a modicum of financial stability for myself, all of the important price indexes will have had time to readjust themsleves downwards to what I would hope to be sensible levels.

And not forgetting of course, that it may well have brought many peoples festering piles of money back down to a reasonable level in comparison to the average guy. I have always thought that a lot of people in the world have made far too much money in one way or another. It is about time things were leveled out again...

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Bear Stearns, the second largest underwriter of US mortgage bond has just asked the US Fed and JP Morgan Chase for a temporary funding.

There are rumours that it will need between 3 to 7 billions to survive in the short term.

Its share has so far fallen 50% - it is still falling.

This could be the trigger event for a huge down turn in the stock markets.

Hope you are holding cash............The Bear is out.

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Well, just spending the last hour reading this form. I guess I will "put my 2 cents in" when other countries are having economic and financial problems the U.S. does try to help out in most cases but when the U.S. gets into trouble everybody jumps ship. Why is that?

I know I will probably get hammered on this one but hey I am use to it.

:? :?

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Because USA are the biggest, the richest, the most powerfull, the bravest, the wisest. the greatest and all the others put together are just a joke compared to them. They will always take care and wisely know what and how others should do (otherwise... hmmm). This federation always manages with everything 'cause it trusts in god.

So if USA seems to be too week to manage its own trouble, how could others help no matter how much they wish?

---- apart of irony - most of others right now are too busy not to follow and to monetarize and take off their investments as North America has surely significant financial weight and it's tricky to balance when it suddenly lightens.

European banks and goverments are taking measurements for not overheating the jumping Euro because a fast rise would be bad for the exporting and too good for the imports. If this is not assured first, it would be a Wallmart "made in China" situation shich would hurt the domestic industries and grow another recession.

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Well, just spending the last hour reading this form. I guess I will "put my 2 cents in" when other countries are having economic and financial problems the U.S. does try to help out in most cases but when the U.S. gets into trouble everybody jumps ship. Why is that?

I know I will probably get hammered on this one but hey I am use to it.

:? :?

It depends on whether you are talking about private investors or governments.

For private investors, they react as any private investor would - whether they are American or otherwise...they bail out on any bad investment or bad news.

Same situation happened to the Thai SET a little over a year ago.

As to governments; you will note that sovereign wealth funds have been investing in the US over the last few months - basically, they have a long term view, and none of them would want to see the US economy is a severe down turn any way.

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Because USA are the biggest, the richest, the most powerfull, the bravest, the wisest. the greatest and all the others put together are just a joke compared to them. They will always take care and wisely know what and how others should do (otherwise... hmmm). This federation always manages with everything 'cause it trusts in god.

So if USA seems to be too week to manage its own trouble, how could others help no matter how much they wish?

---- apart of irony - most of others right now are too busy not to follow and to monetarize and take off their investments as North America has surely significant financial weight and it's tricky to balance when it suddenly lightens. European banks and goverments are taking measurements for not overheating the jumping Euro because a fast rise would be bad for the exporting industries and too god for the imports.

fair enough point but still I don't see any one staying on the ship to keep if from totally sinking

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Well, just spending the last hour reading this form. I guess I will "put my 2 cents in" when other countries are having economic and financial problems the U.S. does try to help out in most cases but when the U.S. gets into trouble everybody jumps ship. Why is that?

I know I will probably get hammered on this one but hey I am use to it.

:? :?

It depends on whether you are talking about private investors or governments.

For private investors, they react as any private investor would - whether they are American or otherwise...they bail out on any bad investment or bad news.

Same situation happened to the Thai SET a little over a year ago.

As to governments; you will note that sovereign wealth funds have been investing in the US over the last few months - basically, they have a long term view, and none of them would want to see the US economy is a severe down turn any way.

that is a lot better it sounds less like lets cover our own asses. and more like cover the worlds ass for a change

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It's a bit wider.

"Invest in who seems to have temporary trouble and your interest would bring your money doubled. Run the f*ck away of large sinking objects or those already at the bottom of a swamp". There are panic factors of course, deppends when people expect to get their revenues back and what else is on the market.

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Bear Stearns has just been sold for $2 a share :shock: :shock: :shock:

It closed last Friday at $30 a share, after having fallen more than 40% from its opening price.

Damn, would you want to be holding Bear shares now?!? :shock: :cry: :shock:

Wonder if you could give Bear shares as a Dowry!!! (j/k)...Oops, another topic.

On a serious note, Bear Stearn is the fifth largest investment bank in the US, and it going to the wall, suggests there is something seriously wrong with the US financial system at the moment.

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On a serious note, Bear Stearn is the fifth largest investment bank in the US, and it going to the wall, suggests there is something seriously wrong with the US financial system at the moment.

This is my opinion only ;

A bank cannot lose money , if it does then its only because of STUPID executives/directors .

When a bank makes great profit , you never see them share any of it with the government ( apart from taxes ) , but when its going belly up , governments are expected to help out . To me thats just bullshit , bad f*cken luck

You play by the sword ( 100% home loans , no deposit ) then you die by the sword . If people have lost their homes then the banks that lent them the money should also go bankrupt .

Teach every one a valuable lesson , and that is no deposit ; then get the f*ck out of here .

Phil, I do see your point.

I am sure the US government had debated about it throughout Thursday night, Friday and the weekend of last week.

They obviously came to the conclusion that Bear was too big to fail - which I also agree with.

Yes, those executives are getting multi million dollar salaries to run the bank. And yes, it would probably send the signal to other investment bankers that the Fed will standby to bail them out everytime they f*ck up. They are all valid arguments.

But you sholuld weigh that up against the failure of a major investment bank (the fifth largest) and the consequences its has on the economy.

Personally, I believe if Bear had failed, it would have caused a severe recession if not a depression like 1930s.

Then the only ones who will not be at risked are people in government jobs.

I am not sure whether we could cope with a 20 to 30% unemployment rate.

What is happening now in the US financial system has serious consequences for the world credit markets - and if not handled properly, it will bring about a severe downturn on the rest of the world economies.

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  • 3 months later...

There are reports from New York that Fannie Mae and Freddy Mac need a government rescue.

Just to let you know the size of the problem - these two firms together hold about 6 trillion dollars in US mortgages. :shock: :shock: :shock:

It is reported that they will need 77 billions of new capital just to survive.

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There are reports from New York that Fannie Mae and Freddy Mac need a government rescue.

Just to let you know the size of the problem - these two firms together hold about 6 trillion dollars in US mortgages. :shock: :shock: :shock:

It is reported that they will need 77 billions of new capital just to survive.

Shock, horror....erm not. It was all kinda predictable given the current housing debt situation.Though with these 2 being creations from the last savings and loans crisis there is a certain continuation of history here.And we all know how the Yanks go all soft and gooey when its comes round to sentimentality.

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  • 1 month later...

Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.

For months Roubini has been arguing that the true cost of the housing crisis will not be a mere $300 billion ? the amount allowed for by the housing legislation sponsored by Representative Barney Frank and Senator Christopher Dodd ? but something between a trillion and a trillion and a half dollars. But most important, in Roubini?s opinion, is to realize that the problem is deeper than the housing crisis. ?Reckless people have deluded themselves that this was a subprime crisis,? he told me. ?But we have problems with credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts.? All of these forms of debt, he argues, suffer from some or all of the same traits that first surfaced in the housing market: shoddy underwriting, securitization, negligence on the part of the credit-rating agencies and lax government oversight. ?We have a subprime financial system,? he said, ?not a subprime mortgage market.?

Roubini argues that most of the losses from this bad debt have yet to be written off, and the toll from bad commercial real estate loans alone may help send hundreds of local banks into the arms of the Federal Deposit Insurance Corporation. ?A good third of the regional banks won?t make it,? he predicted. In turn, these bailouts will add hundreds of billions of dollars to an already gargantuan federal debt, and someone, somewhere, is going to have to finance that debt, along with all the other debt accumulated by consumers and corporations. ?Our biggest financiers are China, Russia and the gulf states,? Roubini noted. ?These are rivals, not allies.?

http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?ref=magazine

Add worldwide environmental problems (cost money), high oil prices, and political instability, China, Russia, and the middle East.

How about this one, today 800,000,000 people in Asia don't have electricity. By 2030 electrical power consumption in Asia will rise 50%. Coal plants everywhere?

Well that's all folks, time for martini :)

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Im sure the US will recover even if it takes a decade, unless everyone takes all thier money out of the US and invests in China and India, therefor transfering wealth, that would suck. Then mabey one day they can hire all the US scientists to build better war machines and space crafts ? Lol I dont think it will ever go that far.

:roll:

Mabey the US should tarrif Imports more and keep the money at home?

Nah really I bet its back to normal soon, everything will adjust and they will still be on top, and anyone that has managed not to sell there stocks will be pleasently surprised.

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I tend to think and believe that a recession benefits the very rich and powerful . The difference between the rich and poor becomes even greater during a recession .

My very over-simplified theory ;

Middle class man working very hard to pay mortgage . Loses job due to recession and becomes unemployed . With so many unemployed ; fat rich boss pays less .

Middle class man can't afford mortgage anymore and is forced to sell home . Fat rich boss goes to the auction and buys the home at a bargain price because not many people have money . Middle class man has sold at a loss .

Fat rich boss tells middle class man that he can stay in the house as a renter . The rent is very expensive because many people renting now .

Fat rich boss has a grand plan ;

He wants middle class man to work hard over the next 5-10 years while getting paid very little . When the economy gets better again and middle class man saves a deposit ; rich fat boss will sell the home back to him but at a premium .

Fat rich boss makes a great profit from middle class man after 7 years . He is now eagerly planning for the next recession .

Middle class man is stuck in a vicious circle , always a slave to the fat rich boss .

Yeah this is whats really wrong with the world for us average working class Joes. I just wanted to quote this, because I thought it was worth a quote.

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