Financial Tsunami

As the people coined it, we are currently experiencing a financial tusnami. Something like this has never happened before. It all started with a credit crunch where people in the US actually borrowed money to buy houses and then they couldn't pay up the instalments. More and more people faced with the same situation. They called it the "Sub-prime crisis".

Major banks started to have lots of bad debt written off. And they see negative in their P/L. And suddenly you hear of some unknown US banks went bankrupt. Nobody thought it was that bad. Then Freddie Mac and Fannie Mae got into trouble. They were US backed banks which main business was to lend money to not so prime people to buy houses. And so... to prevent them from going bankrupt and having the whole of US going into recession or something, the US govt intervened and put in money to save the two banks.

And just when things seem to get a little better, big investment banks like Lehman Brothers went bankrupt. Familar insurance companies like American Insurance Group (AIG) also got into serious trouble. Merill Lynch got bought over by Bank of America. And perhaps other episodes. And investment banks like Goldman Sachs and Morgan Stanley or something are no longer allowed to do big time investment and have to become normal banks like DBS. Haha. And then the US govt approved a bill to put in US$7b to save the economy.

Following the US, europe also got into some financial crisis and lots and lots of money from the govt is needed to save their own economy. In short, the financial sector is going into big big problems.

And the Dow Jones went below 10,000 pts. The other two US indicators S&P and whatever also crashed like mad. Straits Times Index (STI) went below 2,000 pts.

And then crude oil is now below US$70/bbl compared to a few months back where it was like almost or at times hit above US$140/bbl.

Yesterday, our PM said in a speech that Singapore is going into a recession. The next year is going to be very volatile.

Such a economy crisis is really unprecendented. And those consultants and all said that this crisis is going to be a deep one and has not reached its peak. And its going to take longer than usual to recover. The next hit most probably will be the credit card crisis. Oh man.....

Let's all brace ourselves up for the bad bad times to come!!!!!!