Showing posts from 2008

Bernard Madoff

From Wikipedia, the free encyclopedia

Bernard Lawrence Madoff (IPA: /ˈmeɪdɑf/) (born April 29, 1938) is a businessman and former chairman of the NASDAQ stock market. He started the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960 and was its chairman until December 11, 2008, when he was arrested and charged with securities fraud.

Bernard L. Madoff Investment Securities, which is in the process of liquidation, was one of the top market maker businesses on Wall Street (the sixth-largest in 2008),[1] often functioning as a "third-market" provider that bypassed "specialist" firms and directly executed orders over-the-counter from retail brokers.[2] The firm also encompassed an investment management and advisory division that is now the focus of the fraud investigation.[3]

On December 11, 2008, at 8.30 a.m. Federal Bureau of Investigation agents arrested Madoff on a tip-off from his sons, Andrew and Mark, and charged him with one count of securities fra…

10 Predictions for 2009

ByDavid Sterman, RealMoney Contributor

Here's a list of trends that may play out, both expected and unexpected.

# New jobless claims peak in the second quarter; net job creation takes two to three more quarters. The largest U.S. employers make their biggest restructuring moves by the end of March. A surge in bankruptcies among large and small firms pushes the peak of new unemployment claims out into the second quarter. The Obama stimulus plan helps to create positive employment numbers in the second half of 2009, but private sector employment doesn't start to build up steam until 2010 or 2011.

# Fueled by another large deal, airline stocks deliver the strongest gains. Although demand for air travel remains fairly weak, the sharp drop in oil prices, coupled with recent large headcount reductions, enable the sector to generate an impressive earnings snapback. Investors come to view the sector as poised for record profits when the economy rebounds. Noting the impressive synergies ul…

The Worst Predictions About 2008

By Peter Coy

Here are some of the worst predictions that were made about 2008. Savor them -- a crop like this doesn't come along every year.

1. "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!" -- Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008

At the time of the prediction, the Dow Jones industrial average was at 12,300. By late December it was at 8,500.

2. AIG (NYSE:AIG - News) "could have huge gains in the second quarter." -- Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008

AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat.

3. "I think this is a case where Freddie Mac (NYSE:FRE - News) and Fannie Mae (NYSE:FNM - News) are fundamentally sound. They're not in danger of going under I think they are in goo…

No quick fix for mkt woes

STOCK markets around the world have plummeted with investors spooked by the credit crunch, a swelling rate of unemployment, and a slumping economy - and if the smart money is any indication, do not bet on a quick recovery.

The consensus from a survey of 16 fund managers by OCBC Wealth Management is that equity markets have not bottomed out yet.

Investors should also be prepared for more market weakness and volatility in the months ahead.

But if there is a silver lining, it is the possibility that markets could stage a recovery in the second half of next year if the global economy shows signs of improvement.

The fund managers polled included Aberdeen Asset Management, UBS Global Asset Management, HSBC Global Asset Management, Fortis Investments, Schroder Investment Management, DBS Asset Management and Lion Global Investors.

ING Investment Management warned that caution is 'best heeded' as risk aversion has risen to heights rarely seen before, while Prudential Asset Management has ti…

How to Invest in 2009

The worst bear market since 1937-38 has crushed investors, top fund managers and market strategists. Here's why I still think it's time to hold your stocks -- or buy more.

By Steven Goldberg, Contributing Columnist,

There has been no place to hide in this, the worst bear market since the 1930s. Precious metals, oil and gas, real estate, foreign stocks, small stocks, large stocks-they have all been pummeled this year.

Some of the best fund managers of our time have had their heads handed to them. Most notably, Bill Miller, manager of Legg Mason Value Trust (symbol LMVTX), which beat Standard & Poor's 500-stock index a record 15 years in a row, has lost 57% through December. 22. Longleaf Partners (LLPFX), one of the most storied value funds, has plunged 47% over the same period. Dodge & Cox Stock (DODGX), another value fund with a very long and very good record, is down 40%.

What did the managers of these funds do wrong? I think they became too conditioned …

What to Do When Layoffs Loom

By Elizabeth Brokamp

The possibility of layoffs is very real for a lot of households this year, with some sources estimating that unemployment could reach 10% this year. The sooner you start showing your boss that you're indispensable, the better chance you have of hanging on to your job if tough times hit your place of employment.

Here are some of the things that smart employees do to keep themselves relevant on the job:

* Act as if your job is always on the line, even if you're still on the company payroll. Strive to make yourself more valuable -- not just to your current employer, but to any potential employers you'll need to win over in the future.

* Imagine yourself interviewing for a new position. Can you point to specific ways in which you've improved your skills and grown on the job? If so, keep up the good work.

* Document your own accomplishments. Update your resume regularly to reflect your ever-increasing skills on the job -- you can use this during …

China sees challenges ahead

BEIJING - CHINA'S top economic planner warned on Wednesday that the global economic crisis would pose great challenges for China, as he urged the government to fine tune its large-scale stimulus plan.

'We are confronted with great challenges resulting from a dramatic change in the world economic and financial situation,' Zhang Ping, head of the National Development and Reform Commission, China's planning agency, told parliament.

'If we are unable to properly deal with the difficulties, we might be faced with grave risks in failing to realise our strategic goals in economic and social development.'

In the remarks carried by the official Xinhua news agency, Mr Zhang was referring to the government's hope to maintain fast-paced and sustainable growth to ensure employment for its huge population of 1.3 billion people.

The economic planner told parliament that since the third quarter the impact of the global meltdown had spread from China's coastal regions to it…

UAE may see massive layoffs

DUBAI - UP to 45 per cent of the construction workforce in the United Arab Emirates could be laid off, with thousands already having lost their jobs due to the global financial crisis, a report said on Wednesday.

The Khaleej Times newspaper quoted Khalfan Al-Kaabi, a member of the board of directors at Abu Dhabi Chamber of Commerce, as saying the job cuts would occur in the new year if private sector projects in the UAE are delayed or cancelled.

'It is only but natural for the industry to cut those jobs,' Mr Khalfan told the paper.

The report said that thousands of workers have applied to the ministry of labour to finalise the termination of their contracts. The ministry said it is quickly processing those applications to enable the workers to look for new jobs.

In the UAE taking a new job is only possible when the old contract is terminated.

The report said most of those laid off are South Asians employed by companies in the booming city-state Dubai where property development has …

US economy shrinks as IMF warns of Great Depression

LONDON (AFP) - - The US economy shrank by 0.5 percent in the third quarter, official data showed on Tuesday as Britain edged ever closer to a recession and the IMF's top economist warned of a second Great Depression.

The abrupt contraction of gross domestic product (GDP) in the world's largest economy, confirming a first estimate, was seen by analysts as marking the start of a steep downturn for the United States after GPD growth of 2.8 percent in the second quarter.

Britain's economy also shrank by 0.6 percent in the three months to September compared to the previous quarter, against a previous estimate of 0.5-percent contraction, the Office for National Statistics said.

Britain and the United States will be in recession if their economies contract again in the fourth quarter, according to the traditional definition of a recession as two consecutive quarters of negative economic growth.

The IMF's top economist, Olivier Blanchard, warned governments around the world should…

Bleak outlook for construction

THE construction sector in South-East Asia and Hong Kong faces bleak times next year, a new report by information provider BCI Asia has found.

The value of projects under construction in the region would contract by at least 16 per cent next year, and in a worst-case scenario, would shrink by a hefty 32 per cent - or about one-third.

The preliminary forecast is part of a major study on the construction industry due to be released next month.

'All the data indicates that construction spending in this region peaked in 2008. The value of projects at design and documentation phases has contracted two per cent this year and we have seen major projects abandoned for lack of finance,' said BCI Asia's managing director Thor Kerr.

'There will be far fewer new industrial facilities and utilities being constructed from 2009. As local economic conditions deteriorate further, developers will postpone the construction of new offices, hotels, recreation facilities and downtown retail cen…

After 30 Years, Economic Perils on China’s Path

Published: December 18, 2008

SHENZHEN, China — The ruling Communist Party threw itself a big party on Thursday. The country’s leadership marked the 30th anniversary of the reform era that transformed China into a global economic power and, in doing so, changed the world.

At a triumphant ceremony at the Great Hall of the People in Beijing, President Hu Jintao invoked Deng Xiaoping, who consolidated power in 1978 and began “reform and opening.” Mr. Hu emphasized the party’s unwavering focus on economic development. “Only development makes sense,” said Mr. Hu, quoting Deng.

But beyond the oratory, Mr. Hu and other Chinese leaders are now facing a new era in which Deng’s export-led economic model, as well as his iron-fisted political control, face unprecedented challenges. Global demand for Chinese goods has slumped, unrest is on the rise in the industrial heartland, and China is scrambling for a new formula to preserve stability and ensure growth.

The downturn is so swift — exp…

Global economy seen sinking into 'severe' 2009 recession: report

TOKYO (AFP) - - A major banking group warned the global economy will sink into "severe" recession next year as Japan's battle to stave off a prolonged contraction was Friday hit by predictions of zero growth into 2010.

The Japanese cabinet approved the country's first zero growth forecast in real terms in seven years, which came as the central bank continued a two-day meeting to consider slashing interest rates to rock-bottom.

With the world's second largest economy battered by slumps in domestic demand and exports, the Washington-based Institute of International Finance (IIF) said the global economy would shrink 0.4 percent in 2009, after 2.0 percent growth this year.

Charles Dallara, managing director of the IIF -- which represents more than 375 of the world's major banks and financial institutions -- called it "the most severe, globally synchronised recession in modern economic history".

The global crisis requires a global coordinated response, he sa…

Singapore says 10,000 homes bought via deferred payment

SINGAPORE, Dec 19 - Singapore said on Friday there were 10,450 uncompleted private homes purchased under the country's deferred payment scheme, revealing for the first time the potential number of homes that may be returned to developers.

About 4,560 of these homes are scheduled for completion next year while another 2,540 will be ready in 2010, the Urban Redevelopment Authority said in a statement.

Singapore introduced the deferred payment scheme in 1997 in a bid to boost the then-moribond property market. The scheme, which was withdrawn in 2007, allowed buyers to buy property under construction without lining up bank financing in advance so long as they made a downpayment of 10-20 percent.

The recent fall in Singapore home prices, coupled with the financial crisis that has made banks reluctant to lend, has led to concerns about a jump in the supply of unsold homes due to the failure of buyers to get loans.

"The data is provided to enable the public to make a better informed ass…
look at how the news headlines has changed from last year till now...

from optimistic, to denial, to fear, to acceptance...

'Worldwide problem' in '09

WORLD Bank president Robert Zoellick has warned that the global economic slowdown will weigh on Asia well into the first half of next year.

'I'm afraid that the first six months of 2009 are going to be a problem worldwide, including in Asia and South-east Asia,' said Mr Zoellick on Thursday.

'This is a region that has gained enormously from international trade, and it will feel some of the dangers from the slowdown and actual decline that we're now forecasting in international trade for next year.'

Even in China, leaders who had expected to see a decline in growth were 'struck by the sharpness and the depth of the fall off in exports', Mr Zoellick said. China reported last week that exports fell last month for the first time in seven years.

'We've gone from a financial crisis to an economic crisis, and in early 2009 we'll see an unemployment crisis,' he added, paraphrasing Australian prime minister Kevin Rudd.

Whether the downturn will persis…

Singapore economy worsens

Singapore's economy continued to worsen as the new year approaches. Everything from shipping to air traffic is slowing down, wage cuts are being planned, and layoffs are expected to increase significantly.

Singapore to convene wage council, may cut pensions
Kevin Lim

Singapore will convene its National Wages Council (NWC) in early January, four months ahead of schedule, in what economists say may be a prelude to a cut in employers' pension contributions.

"Given the weakening economic situation, there is a need for the NWC to take stock of the new situation and review its May guidelines to help companies and workers manage the downturn," the Manpower Ministry said in a statement on Tuesday.

The ministry did not immediately respond to questions about the detailed agenda for the NWC's January meeting.

"At the last crisis, they cut the CPF (Central Provident Fund) and I won't be surprised if they did it again," said Joseph Tan, Singapore-based Asia c…

The storm ahead

Han Ming Wen
Guest Writer

There is a financial tsunami coming. It is slowly picking up speed and power. It will be devastating.

Of utter concern to us are the effects of the international crisis on Singapore. What is in store for us in the next 3 to 5 years (this is probably how long the U-shape recession will last)?

The Government may not be able to stimulate the economy on infrastructure projects anymore. Firstly, there are already too many white elephants around like the airport (especially T3), esplanade, "country" clubs (Safra, police, and grass roots ones) just to name a few.

Secondly, as a little red dot, there is only so much space that we can build things on before inefficiency sets in.

Singapore will have to be realistic or in our local army lingo: "We have to wake up our ideas!" To see Singapore through the next 5 years, we too need reforms like the rest of the world.

On the economic front

We have to wake up to the fact that we are a small geographic entity. …

Grim '09 for venture capitalists

SAN FRANCISCO - THE coming year threatens to challenge the survival skills of startups and venture capital firms alike, but superstars may rise in 2010 from the world's scorched economic landscape.

Such was the sentiment reflected on Wednesday in the results of an annual 'predictions survey' of members of the National Venture Capital Association.

A survey of some 400 US venture capitalists (VCs) between November 24 and December 12 revealed that most expect Darwinian forces to be brutal for fledgling businesses and their investors in the coming year.

'We think things will be better in 2010 after a very rotten 2009,' said association president Mark Heeson.

'The operative word is 'survive'.

'Venture capitalists in general think 2010 will be an important year in that there will be many phoenixes rising from the ashes of 2009.' Investors see startups in clean fuel and biotechnology industries poised for starring roles in the evolving global economy.

Nov key exports fall 17.5%

SINGAPORE'S exports last month suffered their deepest plunge in almost seven years, signalling that the economy could shrink again in the fourth quarter.
Non-oil domestic exports dived for the seventh month in a row, down 17.5 per cent on top of a 15 per cent drop in October.

The 'usual suspects' - electronics and pharmaceuticals, which together make up half of exports - were mainly to blame, said HSBC economist Prakriti Sofat.

Electronics shipments fell for the 20th straight month by 17 per cent, while drug exports logged their ninth consecutive drop, falling almost 50 per cent.

But the decline has now gone beyond specific sectors and markets.

Demand for exports sank across all of Singapore's top 10 markets and most of its products, according to data released by IE Singapore yesterday.

Even excluding electronics and pharmaceutical products, exports dropped by nearly 10 per cent, the worst in at least five years, said Ms Sofat.

Shipments to the United States, Europe an…