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SWF CONCERNS: Americans fear impact of foreign funds on economy

Voters do not want them to buy stakes in high-tech firms, key sectors: poll (BOSTON) The majority of Americans fear that the US economy and national security could be hurt if sovereign wealth funds, the investment arms of foreign governments, put more money into US companies, new data show. US voters do not want these […]

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MAS fears Asia will hurt if US engine seizes

A negative spiral can take hold, affecting even the real economy (SINGAPORE) A sharp and deep recession in the United States will hit Asian economies, warned Heng Swee Kiat, managing director, Monetary Authority of Singapore (MAS), yesterday. And in his first public comment on the global financial turmoil, Mr Heng said the credit crisis has […]

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2008 not necessarily like 2007: UBS

(ZURICH) UBS AG does not expect 2008 to be a year like 2007, when the Swiss bank wrote down US $18 billion in bad credits and posted the first loss since its creation, its chief executive was quoted as saying yesterday. ‘I view the environment as difficult due to great uncertainties related to the US […]

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IMPROVING OUTLOOK: UBS expects this year to be a better one

ZURICH – UBS does not expect this year to be like the last, when the Swiss bank wrote down US$18 billion (S$25.5 billion) in bad credits and posted the first loss since its creation, its chief executive officer (CEO) was quoted as saying yesterday. ‘I view the environment as difficult due to great uncertainties related […]

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British home repossessions at 8-year high

(LONDON) British home repossessions last year hit their highest level since 1999 and are likely to increase, the Council of Mortgage Lenders (CML) said last Friday. The trade group said that more than 27,000 homes were repossessed in 2007 and forecast that repossessions would rise to a total 45,000 in 2008 – still far fewer […]

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Soros warns of worst financial crisis since WWII

(VIENNA) Billionaire investor George Soros said the world was facing the worst financial crisis since World War II and the United States was threatened with recession, according to an interview by the Austrian daily Standard. ‘The situation is much more serious than any other financial crisis since the end of World War II,’ Mr Soros […]

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Governments urge calm in face of market turmoil

Ministers in Asia and Europe advise investors to stay rational and not overreact HONG KONG – GOVERNMENTS urged calm yesterday while calling for international cooperation to cope with a global slide in stock markets sparked by fears of a United States recession. Asian markets experienced a day of heavy losses, with Hong Kong share prices […]

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Recession in US, Europe could shake Asia, S’pore

Region still relies heavily on world’s biggest markets, say economists A RECESSION in the United States and Europe would badly hurt Asian economies, including Singapore’s, which still rely heavily on these two export markets for growth, according to economists. Indeed, analysts at Lehman Brothers believe economic growth in Singapore could slump to as low as […]

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UK property shares set for 20% rise: Morgan Stanley

But over longer run, rally could ebb as economic downturn forces rentals to fall IN LONDON UK property shares may surge at least 20 per cent in the first half of 2008 as the Bank of England cuts interest rates, predicts Morgan Stanley. On a longer two year view however, Morgan Stanley is concerned that […]

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MARKET TUMBLE: Bank stocks hit by US recession, sub-prime fears

Sell-off symptomatic of broader sell-down, slowing in S’pore’s economy: analysts BANK stocks were clobbered yesterday on continuing concerns of a possible recession in the United States, subprime lending woes and a general slowing down of the Singapore economy. This comes on the back of the news that Citigroup reported its biggest loss in its 196-year […]

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Markets brace for news of big losses by banks

Citigroup could write off US$24b, lay off 20,000 staff (LONDON) Major American banks are expected to unveil substantial losses and secure more cash from abroad in what is shaping up to be a pivotal week for the global credit crisis. Citigroup could write off as much as US$24 billion and lay off 20,000 workers in […]

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EU seeking partnership with China in Africa

Proposal comes as Chinese presence is eroding Europe’s influence in region LONDON – THE European Union has announced that it is seeking Chinese cooperation in Africa. EU Development Commissioner Louis Michel has pledged to present Beijing with an ‘African partnership’ when he visits China in March. But Mr Michel, a former Belgian foreign minister known […]

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Developing nations to lift world economy amid US slowdown

They will be the biggest drivers of global growth as pace slows to 3.3% this year: World Bank DEVELOPING nations will be key in helping the global economy mitigate the drag from a slowing United States. With their domestic economies coming into their own, poor countries will be the world’s biggest growth driver this year, […]

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Bombs, security fears mar revelry as world greets 2008

(NEW YORK) Millions staged midnight parties at iconic landmarks around the world to ring in 2008, but bomb attacks and security fears quickly darkened New Year festivities in places. In New York, hundreds of thousands of revellers crowded the fabled Times Square, braving cold temperatures and stringent security measures to see Mayor Michael Bloomberg release […]

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Global economy facing threat of stagflation

Growth may slow to 4-year low and inflation could hit 10-year high WASHINGTON – THE world economy is facing the risk of stagflation – the double whammy of suffering both recession and faster inflation. Global growth this quarter and next may be the slowest in four years, while inflation might be the fastest in a […]

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IMF expects to lower global growth outlook

(ZURICH) The International Monetary Fund will lower its growth outlook as the continued credit crisis hurts the US and European economies, while global imbalances also weigh on growth, its top economist was quoted as saying. ‘Given this background, the numbers will indeed be weaker than in our latest World Economic Outlook,’ IMF chief economist Simon […]

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Bank of England cuts interest rates to 5.5%

ECB keeps rates unchanged, lowers next year’s forecast from 2.3% to 2% (LONDON) The Bank of England cut interest rates yesterday as a global credit crunch threatened wider economic damage. But the European Central Bank (ECB) left interest rates unchanged. While it has raised its eurozone growth forecast for 2007 to 2.6 per cent from […]

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Bank of England cuts benchmark rate to 5.5%

LONDON – THE Bank of England has cut its benchmark interest rate for the first time in two years, saying inflation is likely to slow as higher credit costs hurt economic growth. However, the European Central Bank in Frankfurt left interest rates unchanged at 4 per cent, as policymakers weighed the risks of accelerating inflation […]

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UK funds shore up defences

Moves in response to slowing property returns, rising redemption requests (LONDON) Britain’s multi-billion- pound property fund industry shored up some of its defences and eyed contingency plans on Tuesday in the face of a weakening domestic market and growing demands from investors to withdraw funds. Aviva-owned Morley Fund Management said institutional investors in its pooled […]

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Oil price falls below US$90

(LONDON) The price of oil fell back below US$90 yesterday as the market speculated about the chances of an increase in Opec output at the cartel’s meeting next week, dealers said. They said prices also fell after it appeared more likely that an explosion on a key pipeline from Canada into the United States would […]

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Sub-prime crisis takes its toll on European markets

But stability can be expected if the US avoids recession: DTZ (SINGAPORE) Shockwaves from the US sub-prime mortgage crisis a few months ago are reverberating through the real estate markets of the UK and Europe, with deals shelved or abandoned. In its European Quarterly 2007 report, DTZ says the volume of transactions could fall at […]

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US credit woes hurt foreign funds to Asia

While inflow is fast slowing for HK, China and India, S’pore is experiencing outflow THE flood of foreign funds surging into Asian bourses over the past four weeks has been reversed by the ongoing credit woes in the United States. Singapore has started experiencing an outflow, with a net sale of US$2.1 million (S$3 million) […]

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Credit crisis, inflation threaten world growth, says Fukui

GLOBAL economic growth is under increasing threat from two fronts – the United States sub-prime crisis and soaring commodities prices that may push up inflation. The warning came from Bank of Japan governor Toshihiko Fukui at a function in Singapore last night. He said the sub-prime turmoil could severely disrupt financial markets, which could then […]

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High oil price demands good policies

IT would be a fallacy to imagine that the prospect of a US$100 price tag for a barrel of oil will lead to a push for renewable fuels any time soon. Simply put, there is nothing definitive yet on the horizon offering a reliable, continuous and cheap alternative in the face of mounting energy demand. […]

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HIGH OIL PRICES – A bubble that’s hard to prick

OIL prices are testing US$100 (S$144) a barrel, a key psychological threshold. Once over that hump, how¬†much higher will the price go? Of course, given oil’s limited supply and the world’s expanding appetite, lowpriced oil will never come again. That, however, is different from another consideration: Whether current high prices are truly reflective of supply […]

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Sub-prime crisis: New push to review rating firms’ role

IN TOKYO US Securities and Exchange Commission (SEC) chairman Christopher Cox promised yesterday that regulators would ‘aggressively’ pursue the new mandate they have been given to review the role that rating agencies played in the sub-prime mortgage loan crisis. He was speaking at a briefing in Tokyo as new evidence emerged that the fallout from […]

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Markets shudder as Citigroup’s profit engine stalls, writedowns rise

CEO steps down; bank’s sub-prime hit may reach US$11b (NEW YORK) Citigroup Inc, the profit engine built by Sanford ‘Sandy’ Weill, has seized up. The biggest US bank by assets said yesterday that sub-prime mortgages and related securities lost as much as US $11 billion of their value in the past month, a decline that […]

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US rate cuts won’t defuse sub-prime mess: ‘Mr Yen’

Asia, though not much affected so far, must be vigilant (SINGAPORE) Interest rate cuts by the US Federal Reserve – which have amounted to 75 basis points since Sept 18 – are unlikely to defuse the US sub-prime mortgage crisis, according to the influential economist Eisuke Sakakibara. Mr Sakakibara, formerly Japan’s vice-minister for finance and […]

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Sovereign funds pose little risk to the world

UK Chancellor Alistair Darling doesn’t like them. Italian Prime Minister Romano Prodi and European Union Trade Commissioner Peter Mandelson don’t either. Sovereign wealth funds, the huge pools of capital built up by a small group of mainly oil-rich nations to invest their assets around the world, are becoming very unpopular. As the funds grow in […]

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Won, pound latest stars of US$ slide

IT WAS the turn of the British pound and the Korean won to stand out in Asian currency trading yesterday, as the US dollar continued its slide to new multi-year lows in anticipation of another US interest rate cut. After the sharper-than-expected fall in US consumer confidence for October reported overnight, traders are fearful that […]

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An age of market resilience?

BIOLOGISTS believe that diversity increases stability and resilience in an ecosystem – a complex system where participants go about looking out for their own interest with the ultimate goal of surviving and thriving. What is true of a biological ecosystem may also hold good for the financial system, which, too, is complex. In which case, […]

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Sub-prime crisis negligible: Infosys CEO

The challenge to the company was the sudden appreciation of the rupee (NEW YORK) India’s No 2 software services exporter, Infosys Technologies Ltd, has felt a ‘negligible’ impact on its business from the US sub-prime mortgage crisis, its chief executive said on Monday. ‘Given our size, impact has been negligible,’ S Gopalakrishnan said in an […]

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Sub-prime rescue bid will do more harm than good

By PAUL KRUGMAN IT pains me to say this, but this time former Federal Reserve chairman Alan Greenspan is right about US housing. Mr Greenspan was wrong in 2004, when he sang the praises of adjustable-rate mortgages. He was wrong in 2005, when he dismissed the idea that there was a national housing bubble, suggesting […]

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Credit crunch puts global growth at risk: IMF chief

Champions of super fund to rescue mortgage market seen losing case (WASHINGTON/ZURICH) World credit markets ‘have lived through an earthquake’ and the question is now whether the global economy has reached a turning point after five years of strong growth, the head of the International Monetary Fund said yesterday. Addressing the IMF’s 185 member countries, […]

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Widen moves to calm markets: global finance chiefs

Steps include tighter IMF scrutiny of state investment funds (WASHINGTON) Global finance chiefs on Saturday called for a more broad-based effort to calm financial markets, including tighter scrutiny by the International Monetary Fund and other institutions of increasingly powerful state-owned investment funds. This year’s fall meetings of the International Monetary Fund and World Bank come […]

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A confused message from the G-7?

WHAT are we to make of it when spokesmen for the world’s most powerful economies and financial institutions begin to contradict each other in public – or make remarks which appear less than consistent with reality? Today, the finance ministers and central bankers of the G-7 – namely the countries of the US, Britain, Canada, […]

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Greenspan: No $ plunge if China offloads Treasuries

Markets are clever enough not to over- react, he says (SEOUL) Alan Greenspan doesn’t expect a rapid decline in the dollar should China sell more of its holdings of US Treasuries, according to people attending a forum here yesterday. ‘When asked whether there will be a plunge in the dollar in case China offloads its […]

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Possible 2008 recession in US will hit Asia: Stephen Roach

Asia needs to take events in US more seriously, he says IN SEOUL THE United States could face a consumer-induced recession next year, which will also hit Asian economies, said Morgan Stanley’s chairman for Asia, Stephen Roach. Speaking at the World Knowledge Forum in Seoul, Mr Roach – well known for his bearish views – […]

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Foreigners sell record US financial assets in Aug

(WASHINGTON) International investors sold a record amount of US financial assets in August as tightening access to credit threatened economic growth and spurred an exodus from American equities. Total holdings of equities, notes and bonds fell a net US$69.3 billion after an increase of US$19.2 billion in July, the Treasury Department said on Tuesday in […]

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CEO survey finds 37% chance of US recession

(WASHINGTON) Leading Wall Street chief executives predicted a 37 per cent chance of a US economic recession in the next 12 months, according to a Financial Services Forum survey released yesterday. The forum is a policy group made up of the chief executives of 20 of the world’s largest financial institutions, including Citigroup Inc, Morgan […]

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Investors’ short memory is worrying

Granted, the sub-prime crisis has passed. But the US economy has other major problems. So it’s advisable to be prudent By WONG SUI JAU WHAT a difference two months makes. In mid-August, the sub-prime loans scare had just rocked markets around the world, causing them to fall for two weeks. The air was heavy with […]

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Making that next crash insignificant

Shield your money to ensure that you won’t be devastated by what markets do in any particular time period WHAT were you doing and feeling during the 1987 stockmarket crash, which will be 20 years ago this week? Having married just two weeks before the crash, I was about a year into a great new […]

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Expected volatility may hit investors: Principal Global CEO

They should diversify portfolios in this period of increased volatility, he says JIM McCaughan, chief executive of US asset manager Principal Global, has turned cautious on the market, warning that expected volatility could cause worried investors to exit at a loss. His broad market outlook, however, is for a number of interest rate cuts which […]

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US credit crunch may test global economic growth

Broader slowdown cannot be ruled out after sub-prime fallout: IMF (WASHINGTON) The recent global credit squeeze caused by the meltdown of risky US mortgage loans may test the ability of the world’s economy to keep expanding as it has over the past several years, the International Monetary Fund (IMF) said on Wednesday. The IMF also […]

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IMF cuts growth forecasts, warns of downside risks

World growth seen at 4.8% next year, driven mainly by emerging economies ROME – THE International Monetary Fund (IMF) has slashed its forecast for growth in the United States next year and made more modest downward revisions to its outlook for the euro zone and Japan, Italian news agency Ansa reported yesterday. Citing a draft […]

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Is the sub-prime crisis really behind us?

TOKYO CORRESPONDENT THE fact that the world – its richer countries at least – has been living through a bubble economy period¬†financed by junk (sub-prime) mortgages and funny money (carry trade) borrowing should be obvious enough to anyone observing events over the past few weeks. But anyone who doubts it need only consider the startling […]

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US spending slowdown won’t hit Asia hard

But risk from China equity correction is a threat: economist THE threat to Asian economic growth from a slowdown in US consumer spending may not be as great as widely feared, said a senior HSBC economist last week. Economic growth in Asia is increasingly driven by domestic demand, while the historical relationship between US consumer […]

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Is the worst over?

Investors and analysts clash over whether the global sub-prime mortgage crisis has turned the corner Yes, say investors POSITIVE OUTLOOK Banking giants disclose sub-prime related losses on Monday but investors take the disclosures as a sign that the worst may be over. DOW’S RECORD CLOSE Investors push US stocks to its highest-ever close on optimism […]

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Fresh sub-prime concerns in Europe?

Local session turns more sober with ST Index down 41.9 points and a weak broad market IT’S possible to argue that since the Straits Times Index had rocketed by almost 117 points on Wednesday, it would be reasonable to expect some kind of pullback yesterday. This, indeed, was the case, with the index dropping 41.9 […]

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Fed’s aggressive rate cut sparks global markets

A BIGGER-THAN-EXPECTED interest rate cut by the United States central bank sent global bourses sprinting ahead yesterday. The half-percentage point cut by the US Federal Reserve was double the quarter-percentage point cut that most analysts expected – and immediately caused a surge in US stocks. Last night, the optimism continued on Wall Street, with the […]

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Your money is safe, bank customers told

France and Spain reassure them after run on a British bank (PARIS) French and Spanish authorities reassured bank customers their money was safe yesterday amid a run on Northern Rock, a British bank suffering from the US sub-prime credit crisis. France’s major banks are ‘solid’, Economy and Finance Minister Christine Lagarde told a press conference […]

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Pound plunges on UK lender worries

THE British pound unexpectedly stole the show as the heaviest loser in Asia yesterday, ahead of a key US interest rate decision later this evening. Traders reported that the pound fell back below US$2 for the first time in more than a fortnight, tumbled to a fresh 14-month low versus the euro, and slid to […]

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