Posts Tagged ‘double-dip recession’

Bear Market Blues

September 27, 2011 by · 2 Comments
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(As written for My Paper on 27 September 2011. Click here to enlarge)

We are officially in a bear market.

The bloodshed in the markets last week was breath-taking, with more than US$3.4 trillion (s$4.4 trillion) erased from equity values and over US $1 trillion in the US equity market alone.

Here’s a snapshot of some of the carnage:

1. The Dow Jones Industrial Average suffered its biggest loss since 2008

2. Gold had its biggest one day drop in almost three years, shedding 5per cent

3. Asian currencies had their biggest weekly drop since 1998

Even the MSCI All-Country World Index sank 7.6per cent, entering a bear market for the first time in more than two years. Read more…

Will the Fed announce QE3 this week

September 20, 2011 by · 4 Comments
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(As written for My Paper on 20 September 2011. Click here to enlarge)

Two news have taken centre-stage in the currency world – the trading loss of UBS, Switzerland’s biggest bank, and the announcement of a possible QE3 by the Fed this week.

UBS said that its loss came from unauthorized trading over the past three months. The trader responsible for the loss was Kweku Adoboli, has since been arrested for fraud and false accounting. Read more…

Euro Under Pressure

September 13, 2011 by · Leave a Comment
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(As written for My Paper on 13 September 2011. Click here to enlarge)

When Lehman Brothers fell in 2008, the bankruptcy filing of USD640 billion was the largest ever filed in the history of the United States, far exceeding that of Enron and WorldCom.

3 years on, the ghost of Lehman has returned, and the memories of a painful credit crunch are starting to surface yet again.

The 600-pip fall by the EUR/USD has centred around one sentence – “Will Greece default on its payments and exit the Euro?”

As concerns over Greece and contagion fears escalate, European banks have been dealt another blow. A Bloomberg index shows that 46 banks are trading at just 0.58 times book value, the lowest since the post-Lehman lows of March 2009.

This simply means that investors are estimating their assets to be worth just over half what the companies claim. Read more…