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S’pore, US among top destinations for rich Chinese migrants – The Straits Times 4 Nov 11

About 60 percent of the rich Chinese people, each of whom has a net asset of at least 60 million yuan (S$12.12 million), said they intended to migrate from China, a report has found. About 14 per cent of them have either already migrated from China or have applied for migration. The three most favoured […]

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Price of oil for delivery in 2015 hits fresh high

(LONDON) Oil for delivery in future years is extending record highs, a sign that investors are betting that supply concerns and other factors boosting the cost of crude are unlikely to fade soon. Oil for delivery in December 2015 set a record high of US$92.50 a barrel last Friday. When oil for immediate delivery hit […]

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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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Investors abroad don’t feel immune to US woes now

They worry how bad a US recession could get, and how badly it would hit the world (FRANKFURT) Since late last summer, the US economy has demonstrated an enduring power to surprise. And not for the better. Investors worldwide are pondering the prospects for a recession in the United States, their latest and furthestreaching preoccupation […]

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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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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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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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Oil shock, recession top global risks in ’08: report

(GENEVA) A sharp downturn in the global economy is the most likely and the most serious threat to the world in 2008, according to a report released yesterday by the World Economic Forum (WEF). Fears of a US recession coupled with a sudden spike in oil prices replaced terrorism, pandemic disease outbreaks and short- term […]

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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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FOCUS: TRENDS 2008 – Trend-spotting in watershed year

World is so well connected that word of trends in one place can spread across the world in minutes IN THE Internet era, keeping up – with the Joneses, the news or whatever else – is a lot easier than it used to be. But staying ahead of the pack, at a time when bloggers […]

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Rising population adds to climate woes

Socio-economic factors play big part in global warming THREE-QUARTERS of the problems associated with global warming have to do with socio-economic factors like rising population, and only a quarter has to do with the climate itself, according to Andrew Watkinson, director of the Tyndall Centre for Climate Change Research in the UK. ‘The population debate […]

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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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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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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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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 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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Developing markets little hit by turmoil: World Bank

Central bankers see need for multilateral talks to strengthen risk management (WASHINGTON) The impact of recent turbulence in financial markets on developing countries has been limited, and global economic growth remains strong, the World Bank said on Sunday. Finance ministers and central bankers agreed at weekend meetings that while the global economy was on the […]

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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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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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Why the financial world wobbled and what it means for funds

2 recent papers pick over the causes and conclusions of the recent market turmoil (NEW YORK) Smart investors love crises. People panic, everything gets out of whack, securities get cheaper, and the world gets more interesting. Academic types also love crises because they produce data, which prompt questions and every once in a while produce […]

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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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Caution still needed despite market rebound

It may take more than rate cuts by central banks to sustain the recovery IT IS almost certain the United States Federal Reserve will answer the prayers of stock market traders across the globe and cut rates when it meets tomorrow. A lower benchmark interest rate would mean more cash flowing into corporate coffers, which […]

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Dreaded R-word heard again amid credit crunch

THE dreaded R-word is now becoming commonplace as the complex sub-prime and credit crisis takes hold in the US and Europe. The International Monetary Fund (IMF) and the Organisation For Economic Development (OECD) have cut their US and global growth forecasts. Blue Chip Economic Indicators surveyed 50 economists who believe that there is a one […]

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The Fed likely to cut, but cautiously

TO many observers, it appears a foregone conclusion that when the US Federal Reserve meets on Sept 18, it will cut short-term interest rates, possibly by as much as 50 basis points. Some have even called for a 100 basis point cut. It is hoped the subsequent easing of pressure in credit markets will spill […]

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A quick guide to sub-prime issues

How individual loan defaults in a faraway land can have a domino effect all over the world – including here PAUSE for a moment to consider these facts: HSBC, the world’s third-largest bank, announced that 50 per cent of its earnings in 2006 were wiped out by sub-prime losses from its US subsidiary. Since the […]

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Rate cut not always needed: Fed official

Market disruptions can be addressed using tools available (NEW YORK) Federal Reserve Bank of Philadelphia president Charles Plosser said there is an ‘underlying stability’ in the US economy and officials need not always cut interest rates in response to turmoil in financial markets. ‘Disruptions in financial markets can be addressed using the tools available to […]

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Fed has effectively cut funds rate: analysts

They say unusually large spread between fed funds target and effective rates signals Fed’s next move (NEW YORK) Here’s a secret: The Federal Reserve has already cut the fed funds rate. Yes, the Fed’s target rate is still the same 5.25 per cent it has been since June 2006, and the US central bank has […]

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ECB, Britain’s central bank leave rates unchanged

This comes as US Fed pumps $48b into banking system to bring down lending rate LONDON – THE European Central Bank (ECB) and Bank of England (BOE) held interest rates steady yesterday, saying it was too soon to gauge the damage wrought by a global credit crisis. The ECB also pumped 42.2 billion euros (S$87.6 […]

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Property bubble may burst: Daiwa House

A concerned CEO of Japan homebuilder aims to cut costs and expand in China (TOKYO) Daiwa House Industry Co, Japan’s second biggest homebuilder by market value, wants to cut local costs and expand in China as the developer is concerned a property ‘bubble’ may burst, slashing land prices. ‘The property market has become dangerous,’ Takeo […]

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Hedge fund investors withdrew US$32b in July

Outflows may increase in August, industry survey finds (NEW YORK) Investors withdrew a net US$32 billion from hedge funds in July, the most in any month since at least 2000, helping to spark global stock and bond sell-offs, according to a new industry survey. Funds of hedge funds, which invest clients’ money with other managers, […]

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ECB hints it may cut rate today if volatility persists

FRANKFURT – THE European Central Bank (ECB) said yesterday it is prepared to ‘act accordingly’ in the light of renewed market volatility, a sign that instead of keeping its benchmark interest rate unchanged at 4 per cent, it could actually lower it. It did not explain why it issued the statement, a surprise that caught […]

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Sub-prime rout less severe than in ’98: BIS

Swiss body’s view contrasts with grim outlook of S&P (BASEL, Switzerland) The market fallout from the sub-prime mortgage slump is less severe than in 1998 after Russia’s default and the collapse of Long-Term Capital Management (LTCM), the Bank for International Settlements said. The assessment from the BIS, which monitors financial markets for central banks and […]

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Sub-prime will hit global economy: bank CEO

(FRANKFURT) Global economic growth will take a hit as a result of the US sub-prime mortgage crisis, says the chief executive of Deutsche Bank, Germany’s biggest bank. ‘Growth, especially of private consumption in the United States, will suffer because of the housing crisis and that can naturally not go without negatively affecting the world economy […]

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Harvard economist warns of recession, urges rate cut

FED CONFERENCE Key rate slash to shield US economy from sub-prime fallout: Feldstein (JACKSON HOLE, WYOMING) Harvard University economist Martin Feldstein said that the United States housing slump threatens a broader recession, and the Federal Reserve should lower interest rates. ‘The economy could suffer a very serious downturn,’ Mr Feldstein, head of the group that […]

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Wild ride for investors ahead: analysts

WALL STREET INSIGHT But they expect rally once sub-prime uncertainty clears IN NEW YORK ON Wall Street, stock market analysts and money managers see stocks ready to register gains once the considerable cloud of dust kicked up by the turmoil in the world’s credit markets sparked by the sub-prime mortgage market settles in the weeks […]

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Outsourcing firms on edge as sub-prime crisis buffet US clients

Fallout for now limited to those that process mortgages (BANGALORE) Indian outsourcing firms nervously hope the US loan crisis does not deteriorate as the business of processing mortgages in their biggest market dries up and some clients keel over. Firms such as iGate Global Solutions and WNS that serviced American mortgage lenders are already feeling […]

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