I decided to publish analysts' economic forecast (just an excerpt) frequently on my blog so as to increase awareness, to help us to monitor the situation and to make adjustment along the way. My advise to all - be defensive. Keep more cash or cash equivalent. For those who are still bullish, all the best and good luck.=========================
Business Times - 22 Dec 2007
SUB-PRIME WORRIES
Defaults to pick up next year on US recession risk: S&P
(NEW YORK) US corporate defaults will increase next year as the worst housing slump in 16 years threatens to send the world's largest economy into recession, according to Standard & Poor's (S&P).
The rating assessor expects high-yield, high-risk borrowers in the US to default on 3.4 per cent of their bonds outstanding by November, from a record low of almost one per cent, New York-based Diane Vazza, head of global fixed income research group said in a report dated on Thursday. Defaults will rise more noticeably in the later half of next year and in 2009.
'Our projections are based on a decidedly gloomy economic outlook for 2008, underpinned by expectations that the world's largest economy will falter on the cliff of recession,' Ms Vazza said in the report.
'The housing decline will have its biggest impact during this period, and orders data suggest slower capital spending. A serious risk confronts the US consumer, as households feel the pinch of lower home prices and higher energy costs.'
High-yield bonds are rated below Baa3 by Moody's and BBB- by Standard & Poor's.
The 15 largest US homebuilders have lost 56 per cent of their market value this year as home prices declined for the first time since the Great Depression, according to the National Association of Realtors in Chicago.
SUB-PRIME WORRIES
Defaults to pick up next year on US recession risk: S&P
(NEW YORK) US corporate defaults will increase next year as the worst housing slump in 16 years threatens to send the world's largest economy into recession, according to Standard & Poor's (S&P).
The rating assessor expects high-yield, high-risk borrowers in the US to default on 3.4 per cent of their bonds outstanding by November, from a record low of almost one per cent, New York-based Diane Vazza, head of global fixed income research group said in a report dated on Thursday. Defaults will rise more noticeably in the later half of next year and in 2009.
'Our projections are based on a decidedly gloomy economic outlook for 2008, underpinned by expectations that the world's largest economy will falter on the cliff of recession,' Ms Vazza said in the report.
'The housing decline will have its biggest impact during this period, and orders data suggest slower capital spending. A serious risk confronts the US consumer, as households feel the pinch of lower home prices and higher energy costs.'
High-yield bonds are rated below Baa3 by Moody's and BBB- by Standard & Poor's.
The 15 largest US homebuilders have lost 56 per cent of their market value this year as home prices declined for the first time since the Great Depression, according to the National Association of Realtors in Chicago.
