RARELY in economic or financial history has as much turmoil been visited upon the world in a single year as has happened during 2008. To name but a few events, we have seen the collapse of one-time blue-chip institutions like Bear Stearns and Lehman Brothers; the bailouts of others, including the insurance giant AIG, the US government-linked mortgage lenders Fannie Mae and Freddie Mac, and also household names like Citigroup, the Royal Bank of Scotland and Lloyd's Bank. Major international banks have been recapitalised with taxpayer funds and some have been effectively nationalised, which hardly anyone would have dared to predict at the start of the year. There has been wealth destruction on a scale not seen since the Great Depression; indeed, this financial crisis is believed to be the worst since the terrible 1930s - something most of us never experienced.


The US Federal Reserve, after being behind the curve in the run-up to the crisis, has gone into overdrive. It opened various lending windows, funnelling more than US$1 trillion to financial institutions, taking even toxic mortgage debt as collateral. It slashed interest rates aggressively from 4.25 per cent for the Fed funds at the start of the year, to near zero. It also adopted an unorthodox policy of quantitative easing. The US Treasury came up with a US$700 billion financial bailout package.

In the background to all this turmoil was the tension and drama of the US presidential election, which produced the first African-American winner. Early indications suggest that Barack Obama might just be a leader of vision and decisiveness, the singular silver lining amid the dark clouds that dominated 2008. The year ended with news of a mind-boggling financial fraud estimated at US$50 billion, perpetrated by one-time respected financier Bernard Madoff. It was perhaps a fittingly shocking end to an annus horribilis.

For those of us on the other side of the world from the epicentre of the storm, the financial crisis has revealed some sobering truths. One is that the idea of 'decoupling' - that Asia's economies had somehow acquired an independent dynamic of their own - was a fantasy. The Singapore economy has gone from 7.7 per cent growth in 2007 to almost certain recession, and probably negative growth in 2009. Just about every Asian economy is feeling the downdraft of the made-in-America financial crisis. Even China and India, which were assumed to be relatively insulated, have been hard hit; their stock markets have, in fact, been the worst performers in Asia this year.

The financial storm is far from over, but we have some indications what 2009 might have in store. It will be a year of global recession. But it will also be one of dramatic policy moves, including perhaps the biggest-ever economic stimulus packages in history. It will be a year of tighter financial regulation, conservative, 'back-to-basics' banking and risk-averse investing. In short, 2009 promises to be the year of the hangover after a decade of financial excess. Hopefully, it will also be the year of the recovery, however slight.

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There are plenty of technical analysis indicator in the market. I would prefer a simplified but money making indicator. One of it is William Percentage.

I am looking at StraitAsia now. Same signal has generate decent profit 4 times whenever it occurred since September 2008 as per the chart attached herewith. With the signal generated now, this stock shall generate a profit in coming next few days.

Chart:

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Guess what? Recession? no way!

It is time to check your irrational spending habit. Nope, probably your wife/gf!


Picture from : http://www.kennysia.com/archives/2008/12/theres_a_queue.php

Quote BT today:
RECESSION or not, high-end retail brands such as Chanel and Louis Vuitton are still going ahead with plans to launch new stores and expand existing ones.

And with malls such as Ion Orchard, Orchard Central and the new Mandarin Gallery coming on-stream next year, consumers can also look forward to various new-to-Singapore brands.

Chanel, for one, will be launching a new watch and fine jewellery stand-alone store in Singapore at Ngee Ann City in March 2009, the first such store in South-east Asia, although Chanel has already launched its fine jewellery boutique in other parts of Asia such as China and Korea.

Chanel remains upbeat that the new store will do well, even with the deteriorating economy and dampening consumer sentiment. 'We've done our research,' said a Chanel spokesman, adding that the new concept will fulfil customer demands for such a store.

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The industrial property sector, which had grown at a steady pace for most of 2008, is unlikely to escape from the economic downturn that has hit its residential and office counterparts.

As manufacturing activity dips and relocations from offices slow, some property consultants believe that industrial rents and capital values could register double-digit percentage falls starting from Q4 2008. Industries could also start sub-letting space that they no longer need.

'With an expected slowdown in GDP growth and poor expectations of the performance of the manufacturing sector, demand for industrial space is likely to moderate,' said DTZ's senior director of research Chua Chor Hoon.

'The fourth quarter could be the turning point,' noted Knight Frank's head of industrial business space Lim Kien Kim.

According to DTZ data, growth within the industrial sector in the first three quarters of the year pushed the average rent of first-storey private industrial space up 6.8 per cent to $2.35 per sq ft per month (psf pm) in Q3. That of upper-storey space rose 7.9 per cent to $2.05 psf pm.

But rents could slide in Q4 as the manufacturing sector cools, said Ms Chua. The Singapore Purchasing Managers' Index fell for the third straight month in November, reflecting tougher times for manufacturers.

DTZ estimates that average rents of first-storey and upper-storey private industrial space could each drop by more than 2 per cent from the previous quarter to $2.30 and $2.00 psf pm, respectively, in Q4.

High-tech and business park spaces are likely to face the same sinking fate. Rents had jumped 15.4 per cent to $4.50 psf pm in the first three quarters, largely because more companies were moving over to avoid soaring office rentals.

The average occupancy rate in private sector business parks notched up 6.3 percentage points from Q4 last year to 93.2 per cent in Q3 2008, said DTZ.

'Businesses, including those occupying prime office space, increasingly found business parks to be attractive alternatives for housing approved back- end operations,' said Mr Lim.

But such spillover demand could slow as office rents fall amid a weakening economy. DTZ projects that the average rent of high-tech and business park space could drop to $4.30 psf pm in Q4, more than 4 per cent down from Q3.

As Colliers International's research and advisory director Tay Huey Ying said: 'Modern light-industrial and hi-specs industrial buildings would be worst hit as they will suffer from the double whammy of slowdown in demand from industrialists as well as from office users.'

She noted, however, that the industrial property sector had started to cool from the second half of 2008. Colliers's data pointed to a slight fall in rents of hi-specs space in H2, while those of factories and warehouses stayed flat in the same period.

As the downturn hits businesses, industrial tenants could start moving to cheaper locations, said Ms Tay. She also expects more downsizing companies to sub-let part of their premises.

DTZ's Ms Chua shared similar views. 'We may see some shadow space in the industrial sector next year, like what we are beginning to see in the office sector, as more companies consolidate their operations.'

Industrial landlord JTC Corporation has been taking back more space as manufacturing and related companies merged their operations. According to its quarterly facilities report for Q3 2008, termination at its ready-built facilities surged 25.7 per cent quarter-on-quarter and 45 per cent year-on-year.

'Industrial landlords could be more flexible in the coming months in order to maintain the occupancy levels of their industrial portfolio,' said Knight Frank's Mr Lim.

He estimates that for 2009, industrial rents could slide 7-12 per cent and prices by 10-15 per cent, with modern industrial space and business parks facing greater declines.

Ms Tay from Colliers believes that rents of conventional flatted factories and warehouses could drop by 12-15 per cent next year, while those of hi-specs industrial space could fall further by up to 20 per cent.

'Capital values are expected to soften by the same quantum as industrialists choose to conserve cash for their business operations instead of investing in an industrial unit,' she said.

Economic uncertainty has already spurred the Trade and Industry Ministry to suspend sales of state-owned industrial land on the Confirmed List for the first half of 2009.

While industrial rents and prices will fall, the sector is nowhere near a crash. 'The speculative element in industrial sector is not major,' said Mr Lim. As prices moderate to more realistic levels, 'the correction will be good as it will again draw investments back into industrial activities for Singapore'.

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After successful breakout of Biosensor last week, this week the turn is China Milk to get the caption of “Poised for Breakout”.

“Poised for Breakout” seems likely to be more attractive in comparison to “Breaking out” as the former means the price has not moved and the latter means whoever buy now is buying at height.

The Edge---> China Milk ($0.41) is in a base formation. Quarterly momentum has strengthened notably. The breakout level is 41 cents and a successful breakout indicates a target of 56 cents.

Chart here:

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I think they should have better way to position the news.

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One week after the comment that Biosensor is 'poised for a breakout', let's take a look at the actual performance now.

The stock did broke out on Monday as predicted to $0.34 from $0.29 with unusual high volume. However, the initial target of $0.40 has not been achieved. Instead of that, it falled back to close at $0.315 last Friday, very close to its base formation level at $0.31.

Nonetheless, the high at $0.345 is indeed a bullish sign. Initial target of $0.40 is still achievable if the base can hold.

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PROPERTY stocks savoured a sweet respite over the last two days from the market gloom after China announced plans to boost the real estate market.

But the rally is likely to be short-lived, some analysts argued, noting that the measures might have a limited impact on propping up sales amid a difficult economic climate.

The Chinese government said on Wednesday that it would abolish urban real estate tax, as well as cut the transaction tax for properties with ownership of two years or less.

It added that it would encourage banks to extend credit lines to developments in the mass-market housing segment.

Bigwigs in the property market - CapitaLand and Keppel Land - saw the biggest jump among sector peers with their exposure to the mid-tier Chinese market.

Shares of property bigwig CapitaLand surged 16.6 per cent over the last two days to end at $3.30 yesterday while shares of Keppel Land jumped 20.9 per cent to finish at $1.79.

Yanlord Land Group - which targets the Chinese luxury segment - rose on the dovetails of the rally in property stocks on Thursday, rising 17.4 per cent to $1.01.

But the stock fell back 2 per cent to 99 cents yesterday, with analysts noting that these measures are not targeted at luxury players.

'As the overall policy still focuses on supporting the housing needs of the low to middle income homebuyers, high-end developers might not benefit substantially from these changes,' wrote DBS Vickers Securities analyst Carol Wu.

'While the policy environment has continued to improve, full recovery of the sector remains uncertain amid the deteriorating economic outlook,' she said, adding that excessive inventory would prompt developers to cut prices and that the property downcycle trend in China could drag on for as long as two years.

Reuters reported yesterday that an analyst from Morgan Stanley saw the sharp increases in shares of Keppel Land as 'premature and unjustifiable' as solvency and refinancing risks were non-issues for the firm.

It would take time before such fiscal measures filter down to the provinces, said Brandon Lee, an analyst from DMG & Securities.

These steps are also aimed at cushioning a fall in demand rather than to engineer sales given the expected rise in unemployment in China, said Barclays Capital economist Leong Wai Ho.

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I think there all many experts mastering in the art of looking into crystal ball and potentially getting noble prize for it. Their only problem is that they are conveniently add in an extra zero or just omitting it.

I don’t think oil producing nations will keen to continue to pump out oil from ground just to sell it below cost for long.

“There is no precedent in fact in the modern era for oil prices to hit a bottom and just go sideways,” he said. “They hit a bottom and [the rebound] is U-shaped or Vshaped. It starts moving up quite quickly.

Oil is still searching for a bottom, and we’re not there yet. Analysts have been one upping each other lately with calls of US$20, US$25, US$30 oil. Mr. Bradford believes the bottom is in the US$30-toUS$40 range because that’s when significant Russian production comes under stress.

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Chinese say: 祸不单行. I think this is what happening to General Motor.

Investors who put their fortunes in the hands of arrested New York money manager Bernard Madoff are waiting to hear how much of their stake is left.

The roster of potential victims in what prosecutors said was a $50 billion Ponzi scheme has grown exponentially longer in the past few days.

Madoff, 70, said in regulatory filings that he only had around 25 clients, but it has become apparent that the list of people who lost money may number in the hundreds or even thousands.

Among those who have acknowledged potential losses so far: Former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services, which owned by Cerebrus Capital Management, which holds a 51-percent stake, and General Motors.

From: http://www.cnbc.com/id/28212100

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This may go crazy on Monday. There are rumours for takeover or M&A.

They are last traded at 29 cents. With an initial target of 40 cents from The Edge as follow, that is a 38% potential upside. Very tempting!

Biosensor is probably the most interesting chart from a punter’s perspective. Prices are approaching the top of the base formation at 31 cents. A breakout looks achievable. Quarterly momentum has turned up. Prices themselves have moved above the 50 DMA; RSI has risen above 50 and looks strong.

ADX has turned up from a low level, on the back of positively placed DIs. This is a bullish endorsement and should support a price break. Volume is expanding too. A successful break indicates an initial target of 40 cents.

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Not much posting lately because the market has just started to turn bullish. I am busy to make real money now, ya, trying. :-)

I am long only retail investor in stock, except warrant.

Trade with care. Good luck!

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Another month, another ghost without leg is coming out?
http://investsgx.blogspot.com/2008/11/rally-have-no-legs-it-is-ghost.html

BT:
On the back of hundreds of billions of dollars worth of stimulus packages, stock markets around the world have bounced off their lows of October and November - some by as much as a third.

But beware, say most market watchers. This is likely to be a bear market rally - its sustainability is questionable and it may retest previous lows again.

'It's hard to call it a bottom,' said Timothy Wong, head of regional equity research with DBS Vickers Securities. 'There's been a lot of selling the last couple of months. The market is oversold in terms of valuation. But there is still no clarity of the underlying economic fundamentals recovering.'

Terence Wong, head of research at DMG & Partners, shared this view. 'When news of more retrenchments and negative data comes out, prices are going to be hit again even though people say it's all been factored in.'

Meanwhile, a fund manager described what we have seen in the last few sessions as a 'relief rally'.

'Markets are relieved that governments around the world are pledging to spend billions to soften the worst economic downturn in our lifetime. However, there is no assurance that the problems we are in can be readily remedied by throwing money around,' he said.

Still, the rally - be it bear or bull - is much welcome. And some markets have enjoyed a much bigger surge than others. For example, Hong Kong's Hang Seng Index - despite shedding 2 per cent yesterday - is now a whopping 34 per cent off its low on Oct 28. China's CSI Index, which measures the 300 most representative A-shares on the Shanghai and Shenzhen stock exchanges, has rebounded by 25 per cent from its low on Nov 4.

At its Monday close, the US S&P 500 Index was 21 per cent above its Nov 20 low.

The Straits Times Index (STI), however, is a laggard. Following its strong 5.8 per cent surge yesterday, it is still only 9.6 per cent above its Oct 24 low of 1,600 points.

Bear market rallies can bounce as high as 50 per cent off their lows.

Norman Villamin, head of research and strategy, Citi Global Wealth Management Asia Pacific, has been expecting a bear rally.

'The backdrop today is very similar to what we saw in Japan in the 1990s,' he said. 'Prices have fallen significantly, down to book value everywhere except the US. What we are seeing now, which was missing in the past one year, is a sense of confidence that there will be some demand out there.'

US President-elect Barack Obama's details over the weekend of a stimulus plan to put 2.5 million people back to work in the next two years and talk of a second stimulus package from China give the market confidence that there will be some demand which can be counted on, said Mr Villamin.

But based on past experience - the most recent being the US$150 billion package announced by the US government in May - the effect of an injection on the markets lasts just 4-6 months.

'For a sustainable recovery, we need to see one or more of the following taking place,' said Mr Villamin.

One, in addition to the public sector spending, demand must also come from the private sector. And this will happen only when there are signs that the private sector's focus has moved away from deleveraging.

Two, the government stimulus package encourages US corporates to start investing again.

Three, government spending is able to create enough jobs to make up for all the lost positions in the private sector.

Four, there is aggressive debt relief for individuals and private sector balance sheets. But this is unlikely to be a top priority.

Adding to that, a fund manager said the market also needs to see US housing prices stop declining.

David Lee, managing director and chief investment officer of hedge fund Ferrell Asset Management, added two more negatives which need to subside for stocks to see meaningful rallies: banks need to start lending again, and refinancing rates need to decline - and credit spreads must fall as a result.

But he's seeing some positives already. Redemptions lately have been much smaller than anticipated, and money supply in the US is growing rapidly.

Further, Mr Obama's economic strategy and his new team are seen as having a lot of credibility. Meanwhile, exchange rates have been fairly stable, and 'market participants, especially analysts, are beginning to focus on fundamentals as doomsday scenarios are norm and are no more an unanticipated event', he said.

'This Christmas is early and if we do not see aggressive selling in the third week of December, the market should be looking brighter ahead!'

So what should investors do?

Take profit on trading positions, said Mr Wong of DMG.

For longer-term investors, here is some advice from Citi's Mr Villamin: 'Take the current rally to rebalance your portfolio. Relook your liquidity needs and take the opportunity to reallocate your assets so as to meet your long-term investment objectives. On a three- to five-year horizon, one can find value in the current market.'

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Morgan Stanley Chief Executive John Mack told employees on Monday he would not get a bonus for a second straight year and announced compensation changes designed to more closely link pay with the bank's long-term performance.

Three weeks after Goldman Sachs and UBS executives announced plans to forgo bonuses, Mack in a memo said he and co-Presidents Walid Chammah and James Gorman will not receive bonuses this year. Mack also did not receive a bonus for last year, which was wrecked by nearly $10 billion of fourth-quarter trading losses.

"Our entire bonus pool will be down dramatically this year, reflecting the difficult market conditions, stock price performance and our full-year revenues in this challenging environment," Mack said in the memo.

Later Monday, CNBC reported that Merrill Lynch EO John Thain also asked that he not receive a 2008 bonus. A Wall Street Journal report had said he was seeking as much as $10 million for helping the giant brokerage avoid an even bigger crisis by selling to Bank of America

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Technically, it looks like everyone who wanted to abandon ship has already done so, leading to an oversold condition in the counter. Price appear to be forming a possible double bottom, and perhaps a triple bottom.
While it’s early days, quarterly momentum has made a clear positive divergence with price, and appears poised to break out of resistance and its own moving average.

Twenty0ne-day RSI has broken out and is rising after a classic three-point positive divergence. The top of the double bottom provides resistance at 97 cents. A successful break would indicate a target of $1.24

Update: For some insight into China prospect:
https://www.dollardex.com/sg/investUT/pfiles/Market%20Focus%20China%20Nov.pdf
"While the Chinese economy has slowed more than expected, its economic fundamentals have remained intact. Strong retail sales figures showed that one of China’s central pillars of growth, domestic consumption, has so far helped cushion its economy against the slowdown in exports. Additionally, the government has already made a series of macro-economic policy adjustments which should ensure steady and sound economic development."

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A widely expected U.S. cut later this month would take the target for the key federal funds rate to 0.5 per cent from 1 per cent.

The problem with zero is that it dashes market expectations, which are based not on existing rates but on their direction.

In fact, once nominal rates reach bottom, most people will base their lending and spending plans on the assumption the only direction rates can take is back up. So cutting all the way to the bottom might be counterproductive.

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Wait till you see this!
A scene in London's Tube.

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Got the following news from an UK publication.

Seems like the western developed nation is started to shift the blame to China.

Not surprising.

CHINA has begun to devalue the yuan for the first time in more than a decade, raising fears that it will set off a 1930sstyle race to the bottom and tip the global economy into an even deeper slump.

The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.

The futures markets are pricing in a 6pc devaluation over the next year. “This is clearly a big shift in policy and we are now on alert,” said Simon Derrick, currency chief at the Bank of New York Mellon.

The move follows a speech by President Hu Jintao warning that China is “losing competitive edge in the world market”.

China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of PresidentElect Barack Obama in Washington. Mr Obama called China a “currency manipulator” during the campaign, a term that carries penalties under US trade law. Outgoing US Treasury Secretary Hank Paulson is viewed as a “friend of China”. He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms.

Hans Redeker, currency head at BNP Paribas, said that China’s policy switch could set off a dangerous chain of events. “If they play this beggar-thy-neighbour game, it will cause a deflationary shock The devaluation of the yuan being priced in by futures markets over the next year for the whole world,” he said.

It makes sense for countries with current account deficits such as the UK, US or Turkey to let their currencies fall, but China has the world’s biggest trade surplus.

Michael Pettis, a professor at Beijing University, said it was “very worrying” that a prodevaluation bloc seemed to be gaining the upper hand in the Communist Party. “We are on the brink of a very ugly period for trade relations,” he said. China has relied on exports to North America and Europe as its growth engine, making it acutely vulnerable to the contraction in global demand.

Prof Pettis said this recalls the role played by the US in the 1920s, a parallel fraught with danger. “In the 1930s, the US tried to dump capacity abroad, but the furious reaction of trading partners caused the strategy to misfire. China already seems to be in the process of engineering its own Smott-Hawley,” he said, referring to the infamous US Tariff Act in 1930.

China showed restraint during the Asian crisis in 1998, holding the line against domino devaluations. It may yet hold the line this time. However, this crisis is more serious. The manufacturing sector has seen the steepest decline since the records began. Civil unrest has begun to rock the Guangdong and Longnan regions.

Beijing has slashed rates and unveiled a fiscal stimulus of 14pc of GDP. However, most of the spending comes in the form of instructions to local governments to spend more – but without giving them the money.

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1. European shares declined in early trading
2. DJ Future plunging lower by -144 (sure die die)
3. Oil price slump again to $47
4. Infineon Technologies reported a wider quarterly loss and warned that first-quarter revenue will fall 30%.
5. YOU ARE PESSIMISTIC !

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American likes to talk about free market.

They used to criticize third world countries’ governments for subsidizing their farmers, manufacturing sector and etc.

However, their privately own public listed company is like a crying baby asking the government to bail them out. Isn’t that violating the rules of free market?

Read these news today:
GM's stock first fell after the automaker said its sales plunged 41.3% in November. The automaker then presented its plan to return to profitability, saying it would require up to $18 billion in federal money.

And these:

Away from the Dow, Ford Motor Co. said its sales slumped 31% in November. It then asked for $9 billion to return to profitability by 2011.

They should let the market decide the fate of these automobile giants if they really appreciate the spirit of FREE MARKET!

Perhaps, it is time for Hongqi to replace Chevrolet and Ford car.

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Top UAW officials from across the country will meet in Detroit on Wednesday to consider key concessions in hopes of helping Detroit's automakers gain congressional approval of $25 billion in federal loans.

Automakers must submit plans to Congress today to show how they will use the loans. Ford Motor Co. planned to give Congress a clear picture of future, more-efficient models and General Motors Corp. readied a blueprint for cuts across the board.

UAW officials from Ford, GM and Chrysler LLC will meet Wednesday and later break off into meetings of representatives of the individual automakers.

One UAW local official who plans to attend expects the issues considered to include eliminating the jobs bank and further concessions in the way automakers fund the retiree health care trust.

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Dark December
In the wake of the most volatile month in memory, investors are looking for the smartest strategies for December. http://www.marketwatch.com/newscommentary/tradingstrategies

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Stocks will enter the month of December with a sense of optimism that much of the dismal environment for corporate profits has already been discounted by the market, even as upcoming reports, including the key jobs report on Friday, are expected to show the economic picture is still worsening.

Next week, "we'll have a slew of economic numbers, including what I expect to be a rise to 6.7% in unemployment in November," said Peter Cardillo, market economist at Avalon Partners.

However, "the market has already priced in another quarter or two of real bad economic news, and that things could start to stabilize in the second quarter" of next year, he said.

Dow's best 5-day gain ever

The market gained on so-called Black Friday, marking its fifth-straight session of gains, with grim prospects for retailers failing to dent optimism at the traditional start of the U.S. holiday-shopping season.

MarketWatch

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