http://www.bloomberg.com/apps/news?pid=20601039&sid=aiFx.vaF6eXs&refer=home
Another of my favorite Bloomberg author has stated today that China and India (2 of BRIC countries) are not really decoupling from US's economic woes. The initial thought was that China and India should be able to chug along fine with high GDP growth even though US and Europe are entering recession. But, China's economy is too dependent on US consumer whims, and that is the biggest problem here. And US consumers account for 2/3 of the economy.
As Americans are cutting spending like crazy, so too will China's GDP which is decelerating to 7% or even lower next year.
My prediction: All 4 BRIC countries will have to do more from now to counter the recession and possibly deflation.
Tuesday, December 2, 2008
How much are Citi's troubled assets really worth?!
http://clusterstock.alleyinsider.com/2008/12/how-much-are-those-assets-at-citi-c-worth-
According to my favorite Clusterstock author, questions have come out regarding the true worth of Citi's troubled assets. The fed govt is putting a backstop of $306 billion, but experts are only estimating the assets to be worth $230 billion only. US taxpayers are already on the hook for $40++ billion for starters.
My prediction: More financial institutions including JPM would go to Uncle Sam begging for similar financial bailout in the next few months.
According to my favorite Clusterstock author, questions have come out regarding the true worth of Citi's troubled assets. The fed govt is putting a backstop of $306 billion, but experts are only estimating the assets to be worth $230 billion only. US taxpayers are already on the hook for $40++ billion for starters.
My prediction: More financial institutions including JPM would go to Uncle Sam begging for similar financial bailout in the next few months.
AIG is a financial BLACK HOLE!
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20081202&id=9417688
Today, AIG is asking for federal guaranty for its counterparty collateral requirements, further draining funds from Fed Reserve. The company is not allowed to go bankrupt, however, it will continue in its present form requiring government funds to cover its obligations. It needs to shed assets in order to raise funds.
Otherwise, when will this "suckin" vortex stop?
Today, AIG is asking for federal guaranty for its counterparty collateral requirements, further draining funds from Fed Reserve. The company is not allowed to go bankrupt, however, it will continue in its present form requiring government funds to cover its obligations. It needs to shed assets in order to raise funds.
Otherwise, when will this "suckin" vortex stop?
Stats for today
TED Spread= 2.17
Financial institutions are still fearful of lending to each other. The spread has been around 2 ish for a few weeks already.
Baltic Dry Index= 700
Down 95++% from mid-year high. World shipping(trade) is slumping.
1USD=Yen93.7
Trend is that Yen keeps making high againt almighty Dollar. Yen carry trade is unwinding at a furious pace.
Financial institutions are still fearful of lending to each other. The spread has been around 2 ish for a few weeks already.
Baltic Dry Index= 700
Down 95++% from mid-year high. World shipping(trade) is slumping.
1USD=Yen93.7
Trend is that Yen keeps making high againt almighty Dollar. Yen carry trade is unwinding at a furious pace.
Starting to blog today
This is my first attempt to blog about my favorite topics, economy and investing. I will share clippings from my favorite websites.
First sharing:
On Dec 1, US stock markets plummetted. S&P500 (my favorite index) has tanked 9% to around 816 from an NBER report which stated that recession has started since Dec 07. Subsequently, global stocks dropped as well. US Fed Chief has rubbed salt into wound by saying the economy would be under "considerable stress" for some time. Certainly, President Bush did not help by saying "I'm sorry this is happening" to the public.
My prediction: The direction for the market this week would mostly depend on US automakers' bailout outcome from Congress.
First sharing:
On Dec 1, US stock markets plummetted. S&P500 (my favorite index) has tanked 9% to around 816 from an NBER report which stated that recession has started since Dec 07. Subsequently, global stocks dropped as well. US Fed Chief has rubbed salt into wound by saying the economy would be under "considerable stress" for some time. Certainly, President Bush did not help by saying "I'm sorry this is happening" to the public.
My prediction: The direction for the market this week would mostly depend on US automakers' bailout outcome from Congress.
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