Recent Major Market melt down.

World's Largest Bond Insurers Collapsing!

Bush's $145 billion stimulus package is for short term relief.

The $145 billion stimulus package cannot help US to pull out of subprime mortgage financial crisis, this stimulus help US and other countries to escape from recession risk but slow growth is unavoidable in the coming future. it will take a long time for a fully recovery stage as right now US Govt. are in huge debts and they just can't simply offer to print more US Dollar notes. (9 trillions plus of bad debts) Why US able to build up so huge debt? They know the way to refinancial by using their huge debts that cause so huge. (They know how to borrow but they don't know how to pay back that huge debts, on one able to settle this problem either their govt. and their Fed too - This will build up a more huge risk in the coming future US if the huge debts is not going to reduce.)

From 16th Jan 2008 and 17th Jan 2008 market movement that tell me most of the countries are depend on US for their major trade partner in that mean once US is falling the whole trade partner to US is falling too.

Anyway Bush take this action that show that he are a responsibility US president even his term is going to be ended soon and recession may avoided in short term (one year?). Compare EU (European Union) and US their action taken in their package is difference, in last year's August, September and Octcber EU have injected more than 250 billions of money into their banking system for the relief. I guess in the coming future's economic superpower maybe not going to be US again that holding more than one century title (next is who? China?).

China maybe want to slow down their overheat economy in the coming future but for 5 year down the road China is still good to be invested in, as the recent UK is looking for China to increase the trade. India is a good choice to be invested in as EU is increasing their investment recently. To have a good investment choice read more newspaper and internet news to know more future market movement.

Referance:-
-Rank Order of countries Debt
-Rank Order of countries Public debt
-Rank Order of countries GDP (purchasing power parity)
-US Debt news

STI drop near to 3000 level.

Now is only begining of the year 2008 and is only the first month of the year 2008. We can see this bad market sell down at this time, this maybe mean we can see even bad than this in the coming future. as What I know those banks bad loan write off will last until mid of 2008 or Q308 the later, after that may will have a turning point in the market.

Now we have to watch Fed Chairman or US president are they able to resolve?

US is a country that alway printing Dollar notes this is one of the way to resolve or US govt. selling their asset to rich nation, selling Military Arm to some money to kill this problem that is second way of doing in US, this is what I know how they rise their money and there is a few method more...

Singapore analysts target STI will go 4000 level at this year end 2008 and 3000 is the expected low for 2008 but right now we already see STI at near 3000 today. no sure how low STI will go? We shall watch.

Another place to put your money at this time.

The US sub prime causing a credit crunch that force the Banks to sell their stock in the market, this may last for 6 month to 1 year time and is depend on the US govt. to take a very effective action to make their economic to go for a growth instead of recession.

I saw this DBS Enhanced income is growing day by day, is a good place to your money in for 6 month to 1 year time. Why 6 month to 1 year time? those bank's write off may will last until 6 month to 1 year time, as the write off is reduce or gone the market may start to have a turning point by that time the market may have a bull rally. This is depend on many other facts that add in to have a bull rally.

This is another place to think of. The DBS Enhanced Income.

Streettracks Gold is on the rise.

The price for 10 Jan. 2008 is at the all time high, it break the 52 weeks high, this maybe tell you that major market cashflow is going to Gold. Gold is a safer place for the cash to place and future Gold price may expected more even higher than present price.

Market now is mostly seller more then buyer and world market are lack of cashflow as this is the effect of credit crunch that causes. Major bank like citibank, Goldman and others will keep selling their share for keeping the cash for running their core business.

On the other side if the Bank stock price keep on down, may can watchout for their bottom and grab it if you can, anyway bank is one to more the country economy by offer loan to those businesses.

Most of the market analysts expected to see Gold price at US$1000, I just keep to see the price to hit this price US$1000 level.

Next we have to watch what can US Govt. do to help their economy in the year of 2008, as Bush expected 2008 will have a growth rather than slow down.

Will US fall into deflation like Japan's 1990 bubble? I shall watch it...

Reccession Odds- Greenspan 50%, Merrill 100%

In an interview this morning with NPR, former Fed Chairman Alan Greenspan said that the odds of a recession are "clearly rising" and are now about 50%.
click for NPR radio broadcastEarlier on Thursday, CNBC reported that Greenspan raised his view of chances of a U.S. recession to 50%, from 30%:

"Greenspan said it's too soon to say whether a recession is coming, "but the odds are clearly rising."
"We're getting close to stall speed" in economic growth, he said. "And we are far more vulnerable at levels where growth is so slow than we would be otherwise. Indeed ... somebody who has an immune system which is not working very well is subject to all sorts of diseases, and the economy at this level of growth is subject to all sorts of potential shocks."
~~~
The former Fed chair is downright chipper compared with some of the data crunchers over at Merrill Lynch: They look at the simple formula involving the Yield Curve and Corporate Spreads. This correctly forecast the 2001 and 1990-91 recessions.
Based on Merrill's read of these two elements -- and I don't know precisely what they do to generate this chart based on those factors -- they have a much more distraught view of the economy than the Maestro:>100% Chance of Showers

Chart courtesy of Merrill Lynch, Gartman Letter
>
If any one can tell me how this chart gets assembled and massaged, it would be greatly appreciated . . .
>
Sources:Greenspan: Recession Odds 'Clearly Rising'NPR, Morning Edition, December 14, 2007http://www.npr.org/templates/story/story.php?storyId=17210282
Merrill Lynch Global Research
Greenspan Says Recession Odds Are `Clearly Rising' Vivien Lou ChenBloomberg, Dec. 14 2007http://www.bloomberg.com/apps/news?pid=20601087&sid=aGyhKOCi4xdU&

Economists say 2008 may will be a year to forget.

Analysts at American Economic Association now see recession as a given

NEW ORLEANS -- Gathered in this city struggling to regain its footing after Hurricane Katrina, a group of leading economists said the U.S. is getting hit by another damaging storm: the global credit crunch.

Many analysts gathered at the American Economic Association's two-day annual meeting spoke of a recession as almost a given but differed over how severe it will be.
"The recession is likely to be a serious one," said Dean Baker, co-director of the Center for Economic and Policy Research.

He estimated losses in prime mortgages will be two to three times the $160-$200 billion hit seen in the subprime sector. This, he said, will lead to large losses at banks and difficulty for Fannie Mae and Freddie Mac.

University of Chicago professor of finance and former chief economist at the International Monetary Fund, Raghuram Rajan, said questions in the media over whether the U.S. economy will fall into recession are really only about semantics.

"We are going to have very low growth in the first two quarters of the year. Whether it is negative or zero, it is going to feel like the same thing," Rajan said.
But he added that it remains an "open question" whether an even more serious slowdown develops in the second half of the year.

"One of the big issues is the extent to which the credit crunch initiated by the subprime crisis starts spreading and how much does it affect smaller corporations and poorly rated corporations," he said. "Do we have a bank credit crunch which starts impacting on retail credit for small and medium enterprises? There is some uncertainty."

Alistair Milne, a professor at the City University of London's Cass Business School, told MarketWatch he's expecting "a really weak year," but added that "it is too early to say how deep the crisis is going to get."

"There has been a substantial credit expansion in many areas -- not just subprime -- over the past five to 10 years," he said. But now, with credit now under pressure, he sees the risk of a vicious cycle developing where the decline in bank lending pushes down growth, which further reduces bank lending.

"If there is a severe enough downturn, it will make all the credit problems worse," he said, adding that the crisis would also hit credit card debt and leverages buyout loans.
But Milne also pointed to a bright spot, namely sovereign wealth funds pouring money into troubled banks, which shores up capital and could help prevent an extreme economic downturn.
He also said that the Federal Reserve is moving in the right direction and that the European Central Bank is likely to follow with rate cuts within six months, adding that a negative economic shock will take the pressure off inflation eventually.

Still, he said, the economy won't likely get back on track until 2010 and will require more capital from overseas.

Can the government help?

Several economists at the conference said attention needs to turn to a possible government stimulus package to take the punch out of the downturn.

The likely magnitude of coming economic difficulties makes it important for Congress to take action on the fiscal side, complimenting easing by the Federal Reserve, they said.

President Bush has also indicated support for crafting a stimulus package to help the economy.
But many analysts argued that the government may be powerless to prevent a downturn.
"My sense is that even though the government wants to be seen as reactive, there is not that much they can do at this point," Rajan said. "Monetary policy has lags of a year. It can't revive lending that isn't taking place because banks have capital constraints."

Baker said he supports the idea of a stimulus package but added that it has to be big -- over $100 billion -- and it has to be fast.

Princeton economist and New York Times columnist Paul Krugman was skeptical that Congress would put aside partisan politics over tax policy in order to pass such measures.
"One side will not accept tax cuts for rich people, and the other side won't take fiscal action without tax cuts for the rich," he said.

The news are from MarketWatch.

There maybe stand a chance for recession...

This is cause by US economy slow down that may hurt other country like Japan. there is news on Goldman Sach that comment Japan economy will stand a 50% chance of recession. Here is the news:-

Date: 10 Jan. 2008.
Goldman Sachs Group cut its economic growth estimate for Japan and said there's a 50 percent chance of a recession in the world's second-largest economy. ``The probability of a recession in Japan has risen to the danger level,'' Tetsufumi Yamakawa, chief Japan economist at Goldman,
said in a report to clients today. ``We project weaker- thanexpected growth in Japan.'' The nation's economy will continue to slow ``for the time being,'' Bank of Japan Deputy Governor Toshiro Muto said today. The housing slump in the U.S., which Goldman yesterday said may
already be in recession, could prompt overseas investors to sell real estate holdings in Japan, Credit Suisse Group said today.

Yamakawa cut his 2008 growth estimate to 1 percent from 1.2 percent, citing slower demand from emerging markets. Stocks including Mitsubishi Estate Co. declined today after the Credit Suisse report. Japan's leading index, a gauge of growth in the next three to six months, stalled in November, a report today showed.
``Goldman's report highlighting the increasing chances of a recession, as well as the leading index's poor showing, indicates the outlook for external and internal demand is nonexistent,'' said Hiroaki Osakabe, who helps oversee $365 million at Chiba-Gin Asset Management Co. in Tokyo.

Sluggish spending by consumers has left Japan more dependant on overseas markets, just as cooling U.S. demand threatens to spread to Asia, where Japan sells half its exports.

Slashing Interest Rates.
Goldman yesterday said slower growth in the world's largest- economy may force the U.S. Federal Reserve to slash interest rates. It predicts the Fed to cut its benchmark rate to 2.5 percent by the third quarter, after saying in November it would reduce the key rate, currently at 4.25 percent, to 3 percent by the middle of 2008.

Earnings gains among Standard & Poor's 500 Index members may have averaged 8.1 percent from a year earlier, the slowest growth in six years, according to data compiled by Bloomberg.
The Bank of Japan probably won't be able to raise its key interest rate, the lowest among industrialized nations, this year because of the recession risk, Yamakawa said. The cycle of rising corporate profits feeding into wages and consumer spending is losing momentum and the bank will conduct policy ``with discretion,'' Muto said in a speech in Sapporo, northern Japan.

`Increasingly Cautious'
``Muto is signaling the Bank of Japan is becoming increasingly cautious about the downside risks for the economy,'' said Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo. ``The central bank is already veering from its path of raising rates.''

And there is news that comment on Alan Greenspan:-

Date: 10 Jan. 2008.
The next bubble to deflate may be Alan Greenspan's reputation. Hailed as perhaps the greatest central banker who ever lived when he left the Federal Reserve in 2006, Greenspan is under
attack from critics ranging from the New York Times to economists at the American Enterprise Institute for his handling of the 2000-2005 housing boom. The former Fed chairman has taken to the media to defend himself, writing in the Wall Street Journal and appearing on network television.

``He's had a bubble reputation that derived from the growth of U.S. household wealth,'' said Edward Chancellor, author of ``Devil Take the Hindmost: A History of Financial Speculation.'' ``As that goes down, his standing as a superstar will suffer.''
At stake is not only Greenspan's legacy but also the future of policies he espoused during 18-1/2 years atop the central bank. Critics blame his aversion to regulation and reluctance to use interest rates to puncture asset bubbles for the boom in house prices and mortgage lending that has since gone bust, threatening to throw the economy into recession.

In an interview, Greenspan said such criticism ignores limits on what regulation and monetary policy can achieve.


Fed Chairman Ben S. Bernanke has already moved away from the laissez-faire approach of his
predecessor by proposing new restrictions on subprime mortgages.

High Marks
Academics, including Princeton University professor and former Fed Vice Chairman Alan Blinder, Fed historian and Carnegie Mellon University economist Allan Meltzer and Stephen Cecchetti, a former Fed official now at Brandeis University, generally give Greenspan high marks for his performance as chairman. During his tenure, the economy weathered two recessions, each lasting less than a year, and enjoyed its longest expansion ever.

Some of the earlier enthusiasm for Greenspan's tenure has been tempered by the performance of the economy, particularly the housing market, since he left. Blinder, who wrote in a 2005 paper that Greenspan might be the greatest central banker, now hedges on whether that assessment still stands.

Greenspan still merits a ``summa cum laude'' for his conduct of monetary policy, he said. The 81-year old former Fed chief falls short of that lofty grade, though, for his oversight of the banking industry, Blinder said.

`Slow on the Draw'
``The Fed and the other regulatory agencies were slow on the draw,'' Blinder said. ``They could have made this debacle substantially smaller, not by better monetary policy, but by better regulatory and supervisory policy.''

Desmond Lachman, a former International Monetary Fund official now at the American Enterprise Institute in Washington, blames Greenspan's libertarian bent for his failure to curb lending abuses:

``That philosophy got us into a lot of trouble.''
Greenspan said in the interview that, while the Fed's bank examiners were hard at work during the mortgage-lending boom, ``we have to be realistic about what regulators can and cannot do.''
``It is extremely rare to uncover fraud other than through whistle-blowers,'' he said. ``You don't get at it through internal audits, you don't get it through outside audits and you certainly don't get it through bank examinations.''


Rates Too Low
Some economists, including Blinder, also fault Greenspan for fostering the housing bubble by keeping interest rates too low for too long. The Fed cut its benchmark rate to a 45-year low of 1 percent in June 2003, held it there for a year, then raised it only gradually, in quarter-percentage-point increments.

``For that episode of monetary policy, I would probably give him a B, where my overall grade is A or Aplus,'' Blinder said.

A simulation by Stanford University professor John Taylor suggested that much of the housing boom could have been avoided if the Fed hadn't cut rates so deeply and had raised them back up more quickly.

Meltzer said that while Greenspan was a ``great Fed chairman,'' he erred in ignoring warnings about the risks of keeping rates low.

``I think he lets himself off much too easy,'' Meltzer said, adding that he told Greenspan at the time that he was exaggerating the danger of deflation and thus making a mistake in cutting interest rates to 1 percent.

Rethinking Approach

Allen Sinai, chief economist at Decision Economics Inc. in New York, said the Fed's experience is leading other central banks to rethink their approach to asset bubbles.

``There is a growing body of thinking in central banking that one should not let these bubbles run and allow them to burst,'' he said. ``They should lean against them.''
Greenspan disagrees with such a strategy. ``There is no evidence that it works other than in computer models,'' the former Fed chief said. He noted that the stock market merely leveled off when the Fed doubled interest rates to 6 percent in 1994-95, then resumed its climb.
Greenspan maintained that the housing bubble was inflated not by the Fed's monetary policy but by a global savings glut that held down long-term interest rates worldwide.
As evidence, he pointed out that the U.S. wasn't alone in experiencing a housing boom in the early 2000s. The IMF said in its World Economic Outlook last October that other nations, including Britain, Spain and Australia, experienced bigger house price run-ups than the U.S.
Cecchetti, professor of international economics at Brandeis' International Business School, said it's natural that Greenspan's legacy is being reassessed.

``With distance, you get perspective,'' he said. ``We'll get a much more balanced view of the
Greenspan legacy as the years go by.''

The above two news are from Bloomberg.

Gold can be look at it in 2008.

2008 outlook equity in singapore market will still affected in first half of 2008 by US's SubPrime crisis chain reaction. Therefore Gold can be looking for it.





Is there a recession in 2008?