I’ve not been contributing anything to my blog for weeks due to extremely poor market sentiment. Global stock markets are in very bad shape especially the Dow Jones. The economic outlook is still as gloomy and there seems to be no light at the end of the tunnel. US elected its first black President but could Obama really get US out of the recession threat? If you are sensible in your analysis, you should know that the Frederal Reserve has really done a lot to avoid a recession. I mean they used people’s money to bail out banks and financial companies and dropped interest rate to 1%. What else can be done? I think Obama may protect local industries and jobs. If this happens, in my opinion, the first victim will be China – China’s cheap import. Of course, China is not going to keep quiet. They will complaint to WTO and then bilateral relation will turn soar etc etc.
The following are some worrisome headlines in Business Times this week:
- DBS chops 900 jobs.
- The US unemployment rate bolted to a 14-year high of 6.5 per cent in October as another 240,000 jobs were cut, the government said yesterday. Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 per cent in June 2003.
- Shares of Las Vegas Sands Corp fell 29 per cent yesterday after the casino operator's auditor said in a regulatory filing that there are doubts about the company's ability to continue as a going concern.
- Planned layoffs at US firms surged to their highest in nearly five years during October, with cuts in the financial and auto sectors leading the charge as the economic outlook worsened, a report by outplacement firm Challenger, Gray & Christmas said on Wednesday.
- Australia's central bank cut its benchmark interest rate yesterday by a bigger-than-expected three- quarters of a percentage point as the global financial meltdown threatens to drag the country into recession.
I don’t intend to write a long story. But to my friends and colleagues reading my blog, my advice remains the same:
1) Avoid investment during this highly uncertain period. If you place your money with the bank, the value will be eroded due to inflation. Unfortunately, you don’t have a choice. If you invest it, chances are, you may make tremendous losses. I repeat again, you have to study the economy if you want to invest successfully. Monitor the US economy and its impact on Singapore. My bet, as of today, is we are heading to a global recession and hopefully not a DEPRESSION.
2) If you really want your money to work hard, you can consider our lovely CPF. CPF offers very attractive risk-free returns, which I had repeated many times in my blog. For more info, you can visit CPF website for updates.
3) As for job wise, stick to company with strong fundamental. Avoid joining company whose business has a strong correlation to the economy such the manufacturing sector and construction sector. Also avoid joining SMEs, sorry to my fellow countrymen. Let’s face it, we had heard of stories during previous economic downturn on how smaller companies “control cost” - cut in performance bonus, freeze annual increment, deferring the AWS, retrenchment etc. Also smaller companies may fold up.
Sentiment and confidence around the world is quite bad now. Employers' are holding back recruitment and now with retrenchment on the headline. And I bet that household are controlling their expenditures. Therefore you must understand that this may cause recession to become a self-fulfil prophesy. Not even Warren Buffett can stop it. Although Singapore will not be spared if US enters into recession, I strongly believe that we have great leaders governing the country, strong fundamental and solid reserve. We are certainly capable of surviving next recession.
The following are some worrisome headlines in Business Times this week:
- DBS chops 900 jobs.
- The US unemployment rate bolted to a 14-year high of 6.5 per cent in October as another 240,000 jobs were cut, the government said yesterday. Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 per cent in June 2003.
- Shares of Las Vegas Sands Corp fell 29 per cent yesterday after the casino operator's auditor said in a regulatory filing that there are doubts about the company's ability to continue as a going concern.
- Planned layoffs at US firms surged to their highest in nearly five years during October, with cuts in the financial and auto sectors leading the charge as the economic outlook worsened, a report by outplacement firm Challenger, Gray & Christmas said on Wednesday.
- Australia's central bank cut its benchmark interest rate yesterday by a bigger-than-expected three- quarters of a percentage point as the global financial meltdown threatens to drag the country into recession.
I don’t intend to write a long story. But to my friends and colleagues reading my blog, my advice remains the same:
1) Avoid investment during this highly uncertain period. If you place your money with the bank, the value will be eroded due to inflation. Unfortunately, you don’t have a choice. If you invest it, chances are, you may make tremendous losses. I repeat again, you have to study the economy if you want to invest successfully. Monitor the US economy and its impact on Singapore. My bet, as of today, is we are heading to a global recession and hopefully not a DEPRESSION.
2) If you really want your money to work hard, you can consider our lovely CPF. CPF offers very attractive risk-free returns, which I had repeated many times in my blog. For more info, you can visit CPF website for updates.
3) As for job wise, stick to company with strong fundamental. Avoid joining company whose business has a strong correlation to the economy such the manufacturing sector and construction sector. Also avoid joining SMEs, sorry to my fellow countrymen. Let’s face it, we had heard of stories during previous economic downturn on how smaller companies “control cost” - cut in performance bonus, freeze annual increment, deferring the AWS, retrenchment etc. Also smaller companies may fold up.
Sentiment and confidence around the world is quite bad now. Employers' are holding back recruitment and now with retrenchment on the headline. And I bet that household are controlling their expenditures. Therefore you must understand that this may cause recession to become a self-fulfil prophesy. Not even Warren Buffett can stop it. Although Singapore will not be spared if US enters into recession, I strongly believe that we have great leaders governing the country, strong fundamental and solid reserve. We are certainly capable of surviving next recession.
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