~*Revealing and Getting Rid of Scams | Creating Honest Sustainable Wealth | Offering Happiness, Safety and Legitimacy*~

Tuesday, 31 March 2009

Analysts say outlook for Singapore's stock market poor

By Ng Baoying, Channel NewsAsia | Posted: 31 March 2009 1952 hrs

SINGAPORE : Singapore's benchmark stock index, the Straits Times Index (STI), ended the first quarter this year down 3.5 per cent. The STI closed at 1,699.99 on Tuesday.

However, that is a recovery of 16 per cent over the six-year-low seen in the early part of this month.

Nevertheless, analysts have said the rally is not sustainable and expect a bumpy year ahead for the index.

Most analysts said the recent uptick in the local bourse is unsustainable in the year ahead.

Kevin Scully, executive chairman, NRA Capital, said: "The market is being a bit premature in assuming the worst is over. We will continue to see downgrades in global growth, trade. And I think corporate earnings guidance for first quarter, probably in mid-April, will be quite negative. And that will show that the rally is not supportable."

Looking ahead, analysts said defensive plays like utilities, telcos and transport counters are good bets. In the first quarter, commodity-related stocks stood out, rising about 20 per cent on the back of a rebound in crude prices.

Analysts also recommend firms that pay solid dividends, but warn against sectors such as shipping and airlines, which tend to rally much later than the rest of the market.

Banking counters also face further downside risk.

Mr Scully said: "I am looking at banks going down 0.6, 0.7 price to book to test the levels we saw in the 1997 Asian financial crisis. I think we are just in the beginning of an asset deflation cycle so we haven't seen the effect on bank balance sheets yet. I am looking at bank NPL (non-performing loans) going to about 8 per cent. Now they are at 2 per cent."

The risk premium for small-cap stocks have also increased due to the uncertain outlook.

Overall, the local bourse is not expected to show any sign of a sustained recovery in the next few quarters.

Daryl Liew, chief investment strategist, Providend, said: "Markets will be rallying, correcting, then rallying, then correcting until we solve the major issues plaguing the market today."

He expects the STI to move within a range of 1,400 to 1,900 points.

Mr Scully noted: "We will probably retest the recent low. And I am looking at it to go down to the 1,200 level. I haven't changed my mind. We will probably see that some time in the third quarter. We will see quite negative second-quarter numbers."

One of the reasons for this is the fact that the stock market is less attractive compared to other asset classes.

Mr Liew said: "We prefer things like investment grade corporate bonds. Looking at it from an asset class basis, the yields you get from corporate bonds are pretty decent at this point in time. If you look at most recoveries, your credit spreads improve before the stock market improves."

But analysts also note that Singapore's market index did reasonably well compared to others in the region.

Hong Kong's Hang Seng Index is down 5.6 per cent, while Japan's Nikkei is down 8.5 per cent.

Mr Liew said: "The worst performing markets are the developed markets. (The) US and EU (are) down over 10 to 15 per cent year-to-date. The ones that have done extremely well is the Chinese-Asia market, (with) about 30 per cent returns year-to-date. But that is also because of the speculative money from local retail Chinese basically punting the market. Other Asian economies have been strong too, (with) Korea over 5 per cent and Taiwan over 10 per cent." - CNA/ms

OECD says govt policies will avert Depression

OECD cautiously predicts 'policy-induced' global recovery next year as stimulus spending flows

Emma Vandore, AP Business Writer

PARIS (AP) -- Haunted perhaps by the ghost of Herbert Hoover, global leaders have steered the world away from a 1930s-style Great Depression by a "very, very, high level of awareness" of the policy errors of his era, a top international economist said as he released an OECD study of efforts to save the world economy.

Klaus Schmidt-Hebbel, chief economist for the Organization for Economic Cooperation and Development, spoke to The Associated Press as he slashed forecasts for growth in the 30 rich countries that make up its membership, predicting the economies of the OECD countries will shrink by 4.3 percent this year, and by 0.1 percent next year.

The new forecasts released Tuesday compare with a November forecast that the OECD economy would shrink by 0.4 percent this year and grow by 1.5 percent in 2010.

It would have been worse without government stimulus plans, which will add 0.5 percent to the OECD economy this year and next, according to the Paris based organization. The new spending is a sharp contrast with Hoover-era policy, which saw protectionism and efforts to balance budgets and raise interest rates.

"We would be looking into a Great Depression like scenario if we had done the same policy mistakes which were done in the 1930s," Schmidt-Hebbel said in an interview at the OECD headquarters in Paris.

The club of rich nations predicts a "policy-induced recovery" will start to pull the global economy out of recession in 2010.

Jobless lines could keep growing through 2011, the organization said, noting that the number of unemployed in the Group of Seven rich countries will almost double in mid-2007 to reach some 36 million people in late 2010.

As Group of 20 leaders of rich and developing countries prepare for a summit in London this week, European countries are emphasizing a toughened regulatory system for global finance while the U.S. administration has urged more spending -- an idea that holds little interest for Europeans wary about debt.

Three years of stimulus measures until 2010 add up to 5.6 percent of 2008 gross domestic product in the United States, compared with 3 percent in Germany, 0.6 percent in France, 1.4 percent in Britain and 2 percent in Japan, the OECD study shows.

Thanks to more generous social programs however, European governments require less extra stimulus to cushion the impact of recession and safety nets may need to be strengthened in countries like the United States, the OECD said.

Economies absorb the extra spending in different ways, and only for the United States and Australia will the stimulus package boost growth by more than 1 percent of GDP this year and next.

In Germany, where people are more likely to save, the OECD estimates the impact at 0.5 percent of GDP this year and 0.7 percent in 2010.

When it comes to spending, Germany and Canada could afford more stimulus, the OECD says. High debt levels means Italy and Japan cannot.

Schmidt-Hebbel said governments have mostly avoided the protectionist urges that raged in the 1930s, helping convert a recession into the worst economic quagmire in human memory and toppling U.S. President Hoover, who lost the 1932 election to Franklin Roosevelt.

Even though a World Bank study showed 17 of the G-20 countries have implemented trade-restricting measures since they pledged at a summit in November to avoid protectionism, he said the measures are limited and there "should be sufficient pressure on countries to reverse or remove" them.

The U.S. Federal Reserve, which disastrously tightened monetary policy in 1928, should keep its near zero-rate interest rate policy through 2010 and consider buying more long-term U.S. Treasuries and agency securities to support growth and stave off deflation, the OECD said.

The European Central Bank could cut rates further and expand the supply of money by buying securities, which would support growth, he said. The ECB is restricted by European Union rules that forbid it from buying bonds directly from governments, although it could buy corporate debt or lengthen loans to banks.

High praise is reserved for the Bank of England, which Schmidt-Hebbel says has been "very exemplary" in both quickly cutting borrowing costs and more innovative ways of supporting the economy.

The priority for the G20 should be to fix banks by removing toxic assets -- such as securities for which markets have dried up amid the financial crisis -- from their balance sheets and by getting banks more capital, the OECD said.

Schmidt-Hebbel said President Barack Obama's plan to rid banks of toxic assets by using private and public money, announced after the report was written, "makes a lot of sense," though questions whether there are sufficient funds or private sector interest for the plan to succeed.

The OECD said the United States is likely to contract by 4 percent in 2009 and stagnate in 2010. The 16-nation euro-zone will likely shrink by 4.1 percent this year and by 0.3 percent next year, while Japanese output is expected to contract by 6.6 percent in 2009 followed by 0.5 percent next year.

George Yeo, the man who respects us all enough, not to hurt our brain.

The Great Repricing

Madam Pro-Vice Chancellor, Kate Pretty, my old tutor, Professor Navaratnam, dear friends, ladies and gentlemen, it may seem inauspicious that Cambridge should be celebrating its 800th Anniversary at a time when the world is heading into a deep recession the likes of which have not been seen for a long time. From the perspective of Cambridge’s long history, however, this sharp economic downturn is but another discontinuity in the affairs of man of which the University has seen many and participated in not a few. Whether this crisis marks a major break in world history we don’t know yet. Turning points are only seen for what they are in hindsight.

What is becoming clearer is the severity of the crisis. No one is sure where the bottom is or how long this crisis will last. In the meantime, tens of thousands of companies will go bankrupt and tens of millions of people will lose their jobs ─ at least. What started as a financial crisis has become a full-blown economic crisis. For many countries, worsening economic conditions will lead to political crisis. In some, governments acting hastily in response to short-term political pressure will do further harm to the economy.

In an editorial last December, the Financial Times commented that the US Federal Reserve was flying blind. But, in fact, all governments are flying with poor vision. Markets are volatile precisely because no one knows for sure which policy responses will work.

I remember an old family doctor once explaining how every disease must run its course. In treating an illness, he said, one works with its progression. Attempting to short-cut the process may worsen the underlying condition. While emergency action may be needed and symptoms can be ameliorated, the body must be healed from within after which its immunological status changes.

The Austrian economist Joseph Schumpeter understood the importance of creative destruction. The end of an economic cycle does not return the economy to where it was at the beginning. During the downturn, firms go bankrupt, people lose jobs, institutions are revamped, governments may be changed. And in the process, resources are reallocated and the old gives way to the new.

Charles Darwin, whose 200th birth anniversary we mark this year, understood all that. Life is a struggle with old forms giving way to new forms. And human society is part of this struggle.

The question we ask ourselves is, what is the new reality that is struggling to emerge from the old? History is not pre-determined. There is, at any point in time, a number of possible futures, each, as it were, a state of partial equilibrium. And every crisis is a discontinuity from one partial equilibrium state to another within what scenario analysts call a cone of possibilities.

Well, whatever trajectory history takes within that cone of possibilities in the coming years, there will be a great repricing of assets, of factors of production, of countries, of ideas.

Economic Repricing

Let me first talk about economic repricing. Many bubbles have burst in the current crisis starting with sub-prime properties in the US. All over the world, asset prices are plummeting. In the last one year, tens of trillions of dollars have been wiped out. How much further this painful process will continue, no one can be sure. Many months ago, Alan Greenspan, in his usual measured way, peering into the hole said he saw a bottom forming in the fall of asset prices; it turned out to be the darkness of an abyss very few knew existed. That bottom is only reached when assets are sufficiently repriced downwards. Public policies can help or hinder this process. Unfortunately, many stimulus packages being proposed will make the adjustment more difficult. For example, bailing out inefficient automobile companies may end up prolonging the pain of restructuring at tremendous public expense.

The repricing of human beings will be even more traumatic. With globalisation, we have in effect one marketplace for human labour in the world. Directly or indirectly, the wages and salaries of Americans, Europeans and Japanese are being held down by billions of Asians and Africans prepared to work for much less. China and India alone are graduating more scientists and engineers every year than all the developed countries combined. Now, while it is true that trade is a positive sum game, the benefits of trade are never equally distributed. We can therefore expect protectionist pressures to grow in many countries.

Governments will try to protect jobs often at long-term cost to their economies. It is wrong to think that we can force our way out of a recession. Beyond a point, the stress will be taken on exchange rates. If governments try to prevent the repricing of assets and human beings, international markets will force the adjustment on us. A country that is over-leveraged living beyond its means will itself be repriced through its currency. Its currency will be devalued, forcing lower living standards on all its citizens.

The world is in profound imbalance today. All the G7 countries are in recession. The West is consuming too much and saving too little while the East is saving too much and consuming too little. China, India and others need to consume much more of what they produce but they are unable to take up the present slack in global demand because their GDPs are still too small. In 10-20 years, they may be able to but certainly not in the next few years. In the meantime, the global economy may suffer a prolonged recession, a global Keynesian paradox of thrift.

Political Repricing

When this crisis is finally over, which may take some years, out of it will emerge a multi-polar world with clearer contours. Although the US will remain the pre-eminent pole for a long time to come, it will no longer be the hyperpower and power will have to be shared. The Western-dominated developed world will have to share significant power with China, India, Russia, Brazil and other countries. Thus, accompanying the economic repricing will be political repricing.

Following the spectacular opening of the Olympic Games in Beijing, Tony Blair wrote in the Wall Street Journal of August 26 last year: “This is a historic moment of change. Fast forward 10 years and everyone will know it. For centuries, the power has resided in the West, with various European powers including the British Empire and then, in the 20th century, the US. Now we will have to come to terms with a world in which the power is shared with the Far East. I wonder if we quite understand what that means, we whose culture (not just our politics and economies) has dominated for so long. It will be a rather strange, possibly unnerving experience.”

Those words were said by Tony Blair in August last year before the financial meltdown. How much more they ring true today. Sharing power is however easier said than done. But without a major restructuring of international institutions, including the Bretton Woods institutions, many problems in global governance cannot be properly managed. The meeting of G20 leaders started by President George Bush in November last year is a necessary new beginning. But it is a process. Prime Minister Gordon Brown is hoping that the next meeting on 2 April in London will sketch out the main elements of a global bargain. To be sure, the reform of global institutions is a process that will take years to achieve. During the transition, many things can go wrong. In his analysis of the Great Depression in the last century, the economic historian Charles Kindleberger identified a major cause in the absence of global leadership during a critical period when power was shifting across the Atlantic. Great Britain could not exercise leadership while the US would not. In between, the global economy fell.

In the coming decades, the key relationship in the world will be that between the US and China. Putting it starkly, the US is China’s most important export market while China is the most important buyer of US Treasuries. The core challenge is the peaceful incorporation of China into the global system of governance, which in turn will change the global system itself. This was probably what led Secretary Hillary Clinton to make her first overseas visit to East Asia.

Three Points About China

The transformation of China is the most important development in the world today. Much has been written about it, the re-emergence of China. But I would like to touch on three points.

China’s Sense of Itself.

The first point is China’s sense of itself which was written about by Joseph Needham many years ago. Over the centuries, it has been the historical duty of every Chinese dynasty to write the history of the previous one. Twenty-four have been written, the first a hundred years before Christ by Sima Qian in the famous book, Shi Ji. And since then the later Han wrote about the Han and then the Xin, the Three Kingdoms and so on. So twenty-four in all. The last dynasty, the Qing Dynasty, lasted from 1644 to the Republican revolution of 1911. Its official history is only now being written after almost a century.

When I visited the Catholic Society of Foreign Missions of Paris in January this year, I was told by a Mandarin-speaking French priest who served many years in China and in Singapore that out of the 90 volumes envisaged for the official history of the Qing Dynasty, 5 volumes would be on the Christian missions in China. When I was there at the Society, I met a Chinese scholar researching into the history of missionary activities in Sichuan province. No other country or civilisation has this sense of its own continuity. For the official history of the People’s Republic, I suppose we would have to wait a couple of hundred years. It was Needham’s profound insight into China’s sense of itself that led to his remarkable study of Science and Civilization in China. Ironically, China’s sense of itself was mostly about its social and moral achievements within the classical realm. It was Needham who informed the Chinese of their own amazing scientific and technological contributions to the world.

However, China’s sense of itself is both a strength and a weakness. It is a strength because it gives Chinese civilization its self-confidence and its tenacity. Chinese leaders often say that while China should learn from the rest of the world, China would have to find its own way to the future. But it is also a conceit, and this conceit makes it difficult for Chinese ideas and institutions to become global in a diverse world. To be sure, the Chinese have no wish to convert non-Chinese into Chinese-ness. In contrast, the US as a young country, believing its own conception to be novel and exceptional, wants everyone to be American. The software of globalisation today including standards and pop culture is basically American. And therein lies a profound difference between China and the US.

The software of globalisation today, including standards and pop culture, is basically American. If you look at cultures as human operating systems, it is US culture which has hyper-linked all these different cultures together, in a kind of higher HTML or XML language. And even though that software needs some fixing today, it will remain essentially American. And I doubt that the Chinese software will ever be able to unify the world the way it has been because it (Chinese software) has a very different characteristic all of its own. Even when China becomes the biggest economy in the world as it almost certainly will within a few decades.

Cities of the 21st Century

The second point I wish to highlight today about China is the astonishing urban experimentation taking place today. China is urbanising at a speed and on a scale never seen before in human history. Chinese planners know that they do not have the land to build sprawling suburbia like America’s. China has less arable land than India. Although China already has a greater length of highways than the whole of the US, the Chinese are keenly aware that if they were to drive cars on a per capita basis like Americans, the whole world would boil.

Recognising the need to conserve land and energy, the Chinese are now embarked on a stupendous effort to build mega-cities, each accommodating tens of millions of people, each the population size of a major country. And these will not be urban conurbations like Mexico City or Lagos growing higgledy-piggledy, but cities designed to accommodate such enormous populations. This means planned urban infrastructure with high-speed intra-city and inter-city rail, huge airports like Beijing’s, forests of skyscrapers, and high tech parks containing universities, research institutes, start-ups and ancillary facilities.

In March last year, McKinsey Global Institute recommended 15 ’super cities’ with average populations of 25 million or 11 ‘city-clusters’ each with combined populations of more than 60 million. Unlike most countries, China is able to mount massive redevelopment projects because of the Communist re-concentration of land in the hands of the state. If you think about it, the great Chinese revolution was fundamentally about the ownership of land. This is the biggest difference between China and India. In India and most other parts of the world, land acquisition for large-scale projects is a very difficult and laborious process.

As we looked to the US for new patterns of urban development in the 20th century with its very rational grid patterns, we will have to look to China for the cities of the 21st century. Urbanisation on such a colossal scale is reshaping Chinese culture, politics and institutions. The Chinese Communist Party which had its origins in Mao’s countryside faces a huge challenge in the management of urban politics. From an urban population of 20% in Mao’s days, China is 40% urban today and, like all developed countries, will become 80-90% urban in a few decades’ time. Already, China has more mobile phones than anybody else and more internet users than the US.

China’s Political Culture

My third point is about China’s political culture. Over the centuries, China has evolved a political culture that enables a continental-size nation to be governed through a bureaucratic elite. In the People’s Republic, the bureaucratic elite is the Communist Party. When working properly, the mandarinate is meritocratic and imbued with a deep sense of responsibility for the whole country.

During the Ming and Qing Dynasties, there was a rule that no high official could serve within 400 miles of his birthplace so that he did not come under pressure to favour local interests. This would mean that for a place like Singapore, it would never be governed by Singaporeans.

A few years ago, that rule was re-introduced to the People’s Republic, and indeed, in almost all cases, the leader of a Chinese province is not from that province. Neither the Party Secretary nor the Governor, unless it is an autonomous region, in which case the number two job goes to a local, but never the number one job. It is as if on a routine basis, the British PM cannot be British, the French President cannot be French and the German Chancellor cannot be German.

Although politics in China will change radically as the country urbanises in the coming decades, the core principle of a bureaucratic elite holding the entire country together is not likely to change. Too many state functions affecting the well-being of the country as a whole require central coordination. In its historical memory, a China divided always meant chaos, and chaos could last a long time.

To be sure, China is experimenting with democracy at the lower levels of government because it acts as a useful check against abuse of power. However, at the level of cities and provinces, leaders are chosen from above after carefully canvassing the views of peers and subordinates. As with socialism, China will evolve a form of ‘democracy with Chinese characteristics’ quite different from Western liberal democracy. The current world crisis will convince the Chinese even more that they are right not to give up state control of the commanding heights of the economy.

With the world in turmoil, many developing countries are studying the Chinese system wondering whether it might not offer them lessons on good governance. For the first time in a long time, the Western model has a serious competitor.

I make these three points about China to illustrate how complex the process of incorporating China into a new multi-polar global system will be. The challenge is not only economic, it is also political and cultural. Yet, it must be met and the result will be a world quite different from what we are used to. Developing countries will no longer look only to the West for inspiration; they will also turn to China and, maybe, to India as well.

The Nalanda Revival

The simultaneous re-emergence of India and China, together making up 40% of the world’s population, is endlessly fascinating. Two countries cannot be more different. One is Confucianist and strait-laced, the other is democratic and rambunctious. Or to use Amartya Sen’s words, “The Indian is argumentative”. Yet, in both countries, we can feel an organic vitality changing the lives of huge numbers of people.

The re-encounter of these two ancient civilizations is itself another drama. Separated by high mountains and vast deserts, their historical contact over the centuries was sporadic and largely peaceful. In recent years, trade between them has grown hugely, making China India’s biggest trading partner today. But of course, we must remember that during the Raj, China was also British India’s biggest trading partner. But they are suspicious of each other. India remains scarred by its defeat by China in 1962 during the border war, a point which Chinese leaders seem not to understand fully.

We in Southeast Asia have a strong vested interest in these two great nations who are our immediate neighbours having peaceful, cooperative relations. Let me talk briefly about a project which may help bring South, Southeast and East Asia together again. This is the revival of the old Nalanda University in the Indian state of Bihar.

Through Chinese historical records, the world is aware of the existence of an ancient Buddhist university in India which for centuries drew students from all over Asia. At its peak, Nalanda accommodated ten thousand students, mostly monks. It had a magnificent campus with a nine-storey library and towers reaching into the clouds, according to the extravagant but remarkably accurate account of the 7th century Tang Dynasty Buddhist monk Xuan Zang. Xuan Zang’s journey to India to bring back Buddhist sutras was such an odyssey, it has long been mythologized in Chinese folklore – the Journey to the West. He spent a number of years in Nalanda. Unfortunately, Nalanda was destroyed by Afghan invaders at about the time Oxford and Cambridge were established 800 years ago and again initially, mostly for monks.

The Indian Government has recently decided to revive this ancient university as a secular university, offering it for international collaboration. A 500-acre site not far from the ruins of the old has already been acquired. Like the old, it will be multi-disciplinary, drawing on the Buddhist philosophy of man living in harmony with man, man living in harmony with nature, and man living as part of nature. A mentors group chaired by Amartya Sen has been appointed by the Indian Government to conceptualise its establishment, of which I am privileged to be a member. I hope the new Nalanda University will help usher in a new era of peace and understanding in Asia. I also hope it will have strong links to Cambridge.

Cultural Repricing

A multi-polar world is a messy world. It means that no particular value system will hold complete sway over others. The current crisis has already caused many people to question the nature of capitalism, socialism and democracy. Chemically-pure capitalism, to use a phrase coined by former French Premier Lionel Jospin, has become a dirty word. In contrast, John Maynard Keynes seems to have been repriced upwards again and all of us have been dusting the old copies of The General Theory that we have on our shelves. A recent Newsweek cover proclaimed that “we are all socialists now”. Even Karl Marx is being re-read. Ideas, cultural norms are all being repriced as countries search for ways out of the crisis. If high unemployment persists for many more years, dangerous ideas and ideologies may reappear as they did in the 30’s.

Without American leadership, multi-polarity can easily lead to global instability. And there is much expectation of what a new Obama Administration, sensitive to cultural nuances, can do to restore order and growth in the world. Unfortunately, there are no quick or easy solutions. We should expect instead a fairly long period of untidiness and confusion. Most importantly, we should be sceptical of absolute or ultimate solutions for these are often the most dangerous.

The Inspiration of Darwin and Needham

In responding to the current crisis, let us be inspired by two Cambridge men, Darwin and Needham. Darwin’s publication of The Origin of Species 150 years ago represented one of the greatest intellectual leaps by mankind. At the British Museum of Natural History, they call it “The Big Idea”. It was a very big idea. Natural selection has an obvious analogue in man’s intellectual and social development. Like biological species, human ideas and systems are also subject to selection through wars, revolutions, elections, economic crises, academic debates and market competition. Those which survive and flourish should, we hope, raise civilization to a higher level.

Needham understood China like few other men did. As Simon Winchester wrote in his recent book on Needham, The Man Who Loved China, Needham might not be surprised to see the huge transformation of China today.

Both Darwin and Needham were drawn from our university tradition of being sceptical without losing our moral sense. Only by being sceptical can we be objective, can we see ourselves critically and learn from others. Only with a moral sense will we be motivated to work for a larger social good. It was China’s corruption and inability to learn from others in an earlier period that led to its long decline. The Qian Long Emperor told George III during Lord McCartney’s mission in 1793 that China had nothing to learn from the West. That marked the beginning of China’s long decline.

Human civilisations learn from one another more than they realise, more than we realise. In a collection of essays published by Needham on the historic dialogue of East and West in 1969, he chose for his title Within the Four Seas. That title was from the Analects of Confucius, who said, “Within the Four Seas, all men are brothers”. In the heyday of Third World solidarity in the 50’s, the Indians had a saying ─ “Hindi-Chini, bhai bhai” ─ Indians and Chinese are brothers. In these confused times, we need to learn from one another on the basis of a deep respect for each other as human beings.

Gen George Yeo.

Commentary by Kathy Lien: Leaked Draft of G20 Communique is Dollar Bullish

One of the biggest event risks this week for the foreign exchange market is the G20 meeting held on April 2nd in London. Unfortunately even before the start of the meeting, it is proving to be a big disappointment. The Financial Times has gotten its hands on a draft of the communique or "statement" that the leaders of the world's 20 largest economies will release on Thursday. The communique mentioned nothing about currencies in contrast to all of the hype about a global reserve currency last week and no fresh announcement about a new fiscal stimulus. This of course is just a draft and many changes could be made at the meeting but on a day when the market is worried about a GM or Chrysler bankruptcy, the failure to provide any specific financial commitment to boosting the global economy has been a huge disappointment. The dollar's rally reflects the increased pessimism and relief that a global reserve currency to replace the greenback was not mentioned at the meeting.

Interestingly, we did not see any clear indications of China's hand in drafting the communique. There was no subtle criticism or direct attack on the U.S.' efforts to stimulate the economy.

What Did The Communique Cover?

In general, G20 leaders tried to remain optimistic. They talked about all of the "unprecedented and concerted" fiscal actions that they have already taken. These global initiatives are expected to help the world economy begin growing again next year and should generate 20 million jobs and increase output by 2 percent over the next few years.

The G20 also committed more money to the IMF. No specific dollar amount was listed in the draft, but the street estimate is $500 billion. Giving the IMF more money will help developing countries that are at the brink of bankruptcy. The group also pledged to avoid protectionism, reform financial regulations, take action on bankers' pay and bonuses and crackdown on tax havens.

The communique ends with an agreement to meet again before the end of this year to review progress on their commitments.

OECD: Jobless may near 10%

ROME - UNEMPLOYMENT may near 10 per cent in the member states of Organisation of Economic Cooperation and Development except Japan by 2010, the OECD said in a paper released on Sunday.

'By the end of 2010, the unemployment rates could be approaching a double-digit figure in all G8 countries with the sole exception of Japan, as well as in the OECD area as a whole,' the OECD said in a background paper for a labour ministers' meeting in Rome.

'If these projections were to materialise, the number of unemployed people in the OECD area would have risen in the three years to 2010 by an amount even larger than that observed ... over the ten-year period to the early 1980s, which included the two oil shocks,' the document said.

'Historical experience suggests that it can take a long time to overcome such large increases in unemployment,' the paper said.

'Indeed, some G-8 countries never got back to the pre-crisis unemployment lows,' it added. While the paper was released to journalists on Sunday, the OECD said it would formally release the 'interim projections' on Tuesday.

The OECD, the International Labour Organisation and the International Organisation of Employers are all taking part in a three-day meeting of labour and social ministers to discuss the human cost of the world financial crisis.

The OECD, which groups 30 industrialised democratic countries, serves as a policy adviser and a forum for debate about economic and political issues.

The paper said average OECD unemployment was 6.9 pe rcent in January 2009 - almost one per cent higher than a year earlier.

'This implies that in the year to January 2009, almost 7.2 million more workers joined the unemployment ranks in the OECD area,' the paper said.

'Previous economic downturns indicate that youth, low-skilled and temporary workers, as well as immigrants, are likely to bear the brunt of rapidly rising unemployment and working hours,' the document said.

'So far, this is also the case in the current downturn,' it added. -- AFP

Sunday, 29 March 2009

First signs of recovery

After several long wintry months of economic gloom, the first green shoots of a possible recovery have finally emerged in recent weeks.

Stock markets are rallying around the world, home sales rose unexpectedly in United States and Singapore last month, and exports and manufacturing data appear to be stabilising in a number of economies, including in Singapore.

But does this mean the worst is over?

Some economists warn that the improved data is just a temporary blip before another downward dip, as in a 'W-shaped' recession. Others say it may have reached the bottom but with no glimmer of a recovery ahead, as in an 'L-shaped' path.

Still, there is some reason to cheer, at least for now. Leading indicators seem to point to a bottoming out in the world's most severe recession since the 1930s. US Treasury Secretary Timothy Geithner has unveiled a bank rescue plan that appears to have been well-received by markets. Whether this will lead to a true recovery remains to be seen, but if better news leads to improved sentiment, it could very well be the first step.




'We are beginning to see signs of progress... We're also beginning to see signs of increased sales and stabilising home prices for the first time in a very long time. We'll recover...but it will take time, it will take patience.'

US President Barack Obama last Tuesday


'One month does not make a recovery so we have to be careful not to react too strongly... Most of the data...appears to signal a continuing recession, at least a few more months.'

Atlanta Federal Reserve president Dennis Lockhart


'The February manufacturing data suggests that economic conditions remain soft despite some improvement. Moreover, external headwinds remain considerable, which implies that any recovery from a bottom will likely be slow, with every risk of a relapse and a W-shaped, double-dip recession.'

Citigroup economist Kit Wei Zheng

Saturday, 28 March 2009

Unrest looms in Asia-Pacific amid financial crisis

Asia and the Pacific face a "marked risk" of social unrest as the global financial crisis bites, but the region continues to lead international prospects for recovery, a UN survey said Thursday. The annual survey said that the region faces multiple layers of crisis ranging from financial breakdown, food and fuel price instability and climate change that could have wide-ranging effects throughout 2009. There was "fresh evidence mounting that the worst has yet to come," with a big slump in trade, the region's engine of growth, according to the Economic and Social Survey of Asia and the Pacific 2009. "There is a marked risk that the financial crisis could converge on itself in a downward spiral of deepening recession, social unrest and political instability," said the survey. A key trigger for unrest was that millions of Asian migrants are returning to their rural homes in search of work after losing jobs in the crisis-hit export sector, UN Undersecretary General Noeleen Heyzer said. "Asia Pacific is under multiple threats and the gains that have been made in terms of development can be lost very easily," Heyzer told AFP in an interview ahead of the report's launch in Bangkok. Investment in job security and social safety nets for the poor must be sought urgently, she said. "If we do not address the growing disparities we are going to find it's going to create social unrest," she added. But the UN report said that reforms introduced in recent years, especially following the 1997 Asian Financial Crisis, meant the region could be a future bright spot in the global situation. Its developing countries "would emerge as primary sources of any world economic growth that might take place in 2009, thus providing some global stability," the report said.

4 Skills Every Trader Should Master

Austin Passamonte

Austin Passamonte is a full-time professional trader who specializes in E-mini stock index futures and commodity markets. Mr. Passamonte's trading approach uses proprietary chart patterns found on an intraday basis. Austin trades privately in the Finger Lakes region of New York. Go to to visit CoiledMarkets.

The mental (emotional) aspect of trading is hands down the toughest hurdle between aspiring traders and consistent success. For sure our technical nuts & bolts portion is vital. It goes without saying that we need some type of method, system or approach for trade entry, management and exit parameters that create a defined edge. The truth is there are countless ways to create such a viable "edge" over the long-term, but human management of such is the weakest link in that chain.

Out there in the real world we are taught to set tangible goals. Timelines, limits, targets and objectives are all part of the path to success. Need a roadmap to get where you're going in order to get there, right? At some point in our career we realize trading is a whole lot different than any other mainstream profession. Most of the rules that apply elsewhere are null & void in our world. Fiscal goal-setting is one of those. It's natural for traders in general and day traders in particular to set structured daily goals. We work a defined set of hours in our given shift... our time is exchanged for monetary reward expected. The people that we know have similar expectations. "How much did you make today?" "How were the markets today?" I see on the news that stocks went up (down) big... how did you do today?"

The word "today" is sprinkled into every question we hear. Yesterday is history, tomorrow remains a mystery. The only measurement of success is today... one day at a time. But in reality our profession is nothing more than a series of wins and losses strung together over (hopefully) long periods of time. There is no way to eliminate risk or loss, because risk is an equal part to reward in our equation. Focus on keeping loss controlled is a very different aspect than fixation on avoiding all losses, period. One is a normal part of operation, the other is a path to failure.

Many times we'll read somewhere and/or hear about traders who never have a losing day. It is said they string together weeks, months or years worth of stretches with nothing but wins in the end. We've also heard about bigfoot sightings all over the world for over a hundred years now. To my knowledge no one has ever produced a physical specimen of the latter or real-money proof of the former. Perhaps traders who never lose and sasquatch each exist, I wouldn't rule either completely out. A little bit of solid evidence would be nice.

Meanwhile, those of us in the real world approach each trading day with one overall goal in mind: perform our functions correctly, follow our script and let the law of large numbers work our mathematical edge in favor. That includes taking valid trade signals after a string of losses. That includes letting the fourth trade work towards its intended profit objective following three straight controlled losses prior. That includes trading through some adverse sessions where nothing we can do results in net-profit for the day.

Punching Clocks Thru Wins And Losses

Just because markets are open at a set time every day does not mean similar opportunities for profit and loss exist. Some sessions make it seem like money falls from the sky between both bells. Other times the morning or the afternoon is generous while the other half is stingy. There are days, sometimes several of them in succession where it appears the market is closed for business. Price action goes nowhere, there is nil chance to make money and nothing can be done about that fact.

Traders revel in those single days where favorable price movement results in profits that would normally reflect an entire week or even month's worth of effort. With the human-nature outlook of exchanging time for reward, we readily accept those occasions without a second thought. Such windfall but infrequent sessions are outside the norm, just like a true choppy or whipsaw congested session where it's all but impossible to avoid stiff losses let alone make two dimes of profit. But we view those impossible-to-profit event differently. Whereas investing one day's worth of effort for a week's average profit result is just fine, investing a second day's worth of effort for one day's average net loss is not fine. To some it is downright terrible.

Patience & Discipline

The worst trading sessions are often followed by the best. Dull, flat, volume-less sessions usually lead to high volume and range expansion the next day. If there are two or three dead sessions back to back, that period usually resolves with several days of hyper-active price movement. Stored energy is released, released energy eventually exhausts movement. It's a fundamental part of financial market behavior. Knowing this cycle exists and expecting it to repeat as usual is important. When we struggle to make headway for a day or two, better get ready for some very active tapes ahead. It's coming.

Obviously we'd all love to have every trading day result in new all-time high profits. None of us would ever opt to experience a net-loss session again. That's just one of numerous human emotions in the mix. Reality is, wins and losses distributed intraday and likewise day to day are all part of the natural course. Traders with gambling tendencies or ultra-competitive personalities tend to struggle with accepting loss as part of our profession. They take various small to extreme measures in fighting the natural process. Sometimes the result is benign, other times career ending.

Personal Pursuit

There are four segments one needs to harness = master before consistent success is possible. They are:

#1 - Ability to read charts/markets and determine whether price is more probable to go up, down or continue sideways from any bar forward. We need to know whether visible clues give odds of probability for pending direction, or not. We need to know this information inside all market conditions: low volatility, normal volatility and high volatility. Intraday traders will commonly face all three varied conditions one or more times daily. We especially need to know when we cannot know what is probable to happen next. When price movement goes from favorable to unfavorable per your method or approach, we need to know that through the shift of change.

#2 - Ability to determine where high-odds trade entry locations exist. Mastery of step #1 makes this process possible. There are no shortcuts... no red arrow/green arrow, no automated systems, no blind following dual indicators, no shortcuts exist to overcome ignorance of reading market action. Everything the market knows at any moment in time is reflected in its chart(s). The ability to weigh = measure = read that collective information determines our ability to identify exactly where long or short entry signal locations with greater than 50% odds to succeed exist in front of us.

#3 - Ability to determine your own method of trade management. I can promise you this: no one on earth can teach you how to manage your trades when your real money is live in the market. When your real money is ebbing & flowing in your account, anything else that anyone tells you will be forgotten. The only thing that will matter to you is making yourself feel good about the end results of that individual trade. That is not an opinion... it is an absolute law of human-nature fact.

#4 - Ability to manage yourself through all aspects of reading market action, determining trade entry and managing live trades from entry through execution to exit. That includes self-honesty of admitting when price action appears measured and predictable versus unruly. Honoring and acting on trade entry signals when confirmed, instead of succumbing to trigger-shy hesitation and/or chasing trade fills well past ideal entry locations due to fears of loss on both counts. Holding stop-loss orders to contain risk at predetermined levels based on logic and reason rather than crowded too close or pulled to avoid loss out of emotional fear.

Those are the four separate legs of our profession that overlap but stand apart. The first two aspects can be taught by someone to others. Managing live trades and managing ourselves through the entire process are learned on your own, because they can't be taught by anyone else.

Survival Instincts

The very moment someone places a live trade in their account, mental = emotional mode shifts from objective gathering of information to tunnel-vision focus on outcome results of the trade. All else ceases to matter from there as survival mode instincts kick in. Voices are tuned out, text is ignored and advice doesn't even almost begin to reach closed minds. The only thing that trader cares about then is exiting this trade in a manner which makes him (her) feel good about the whole experience. That's it... all about the feelings. Any type of profit beats any type of loss, obviously. The measures a trader will take in managing or mismanaging their trade is directly related to emotional comfort needs at that stage of their development.

For these core human instincts, any attempts for one trader to follow another through the process of trade management and exit verbatim will always fail to meet the objective. No two traders, let alone any group of traders will ever hold all of their trades through the same curve of stop management and exit for profit or loss result. Never has happened, never will happen, cannot happen until nature repeals the human nature of survival instincts.


Too many traders never get past the shallower thinking levels from the point where beginners begin. Yes the technical nuts & bolts aspect of trading is important. Fancy charts filled with arrows, pointers and text instructing someone on where to get in a trade and why always hold everyone's attention. And for good reason. But then what? What do you do once that trade, the next trade and the next ninety-eight to follow all behave somewhat differently from one another? That is where the real measure of success or failure begins to unfold.

Should You Forgive Your Fund?

By Michael Breen

The late John Templeton was a patient investor who kept his head while others lost theirs. He didn't let near-term events push him off course. When times were bleakest, he'd produce a chart showing all the bull and bear markets back through the Great Depression. FAM Funds recently gave me an updated version of that chart, and it still makes its point: Bear markets are followed by bull markets that tend to be longer in duration and greater in appreciation. But looking backward from deep inside a bear market, it can be hard to foresee better things for stocks.

Now is such a time. We've blown through the losses of the 1974 bear market and the tech-inspired downturn of the early 2000s. The S&P 500 Index has lost an average of 2.5% annually over the trailing 10 years--its worst run since the 1930s. Stocks have shown signs of life lately but have a long way to go before they crawl out of the hole they're in.

Mind the Midstream Changes
In such an environment, you need to fight human nature. People tend to overemphasize what's happened lately and adjust their behavior based on it. Sociologists call this recency bias. And it's a big reason there's been a stampede out of stocks and into cash over the past year. But you can't go back in time. Switching to cash now won't get you the protection you needed before the crash. Rather, it is a bet that cash will defy historical trends and outperform equities in the future. The longer your time horizon, the more unlikely that is. And research shows that a tiny percentage of trading days generate the bulk of the stock market's returns over time, so trying to time the changing tides is nearly impossible. Review your plan to avoid rash, ex-post facto allocation moves that could hamper your progress toward a long-term goal.

The same forces apply to fund picks. Many top equity-fund managers have posted huge losses in the current bear market, while others have lost less. But that doesn't mean you should conduct a wholesale swap of the former for the latter. Mistakes were made and piles of capital were destroyed. But be leery of trying to win the last war. Just as it's not wise to chase performance into hot funds after they've had a big run-up, moving into more-moderate funds near the bottom of a trough could limit your returns in a rebound. If you've underestimated your risk tolerance or your goals have changed, adjustments should be made. But if your long-term target remains unchanged, tread lightly.

A Short Checklist
Before ditching a fund, review its long-term record, the stability of its investment process and personnel, and the portfolio's prospects. If it passes muster on all three, you should think twice about ditching it.

Below we test a couple of funds that have taken heat lately and suffered outflows: Dodge & Cox Stock (NASDAQ:DODGX - News) and Oakmark Select (NASDAQ:OAKLX - News).

First, let's look at the funds' long-term record alone. This is a good sanity check because it helps limit the impact of recency bias. Below are the 10-year returns for some of our large-blend and large-value Fund Analyst Picks, funds we consider good core holdings.

To view the table, click here.

Looking at this data alone, Dodge & Cox Stock and Oakmark Select look like stalwarts. Everyone is struggling, but they've made more money for investors over the past decade than nearly all the other Analyst Picks, easily topping their category peers and benchmark indexes.

Adding near-term performance drastically changes the picture. Below the same funds are sorted by three-year returns. Dodge & Cox Stock and Oakmark Select fall to the bottom of the pack because they've made mistakes lately. So, looking at just near-term returns the funds appear poor. But the damage hasn't been fatal: Their long-term records remain better than the funds that have lost less in recent years, such as Sequoia (NASDAQ:SEQUX - News), Jensen (NASDAQ:JENSX - News), and Sound Shore (NASDAQ:SSHFX - News).

To view the table, click here.

This begs the next and most important question: Do the recent stumbles by Dodge & Cox Stock and Oakmark Select indicate a deteriorating investment process or staff? We don't think so. Big mistakes were made by both and we aren't diminishing those. Dodge & Cox Stock blew it on a number of financials picks, while Oakmark Select got hurt by a big bet on Washington Mutual. But we think those mistakes were isolated and lessons have been learned. The process and teams that built the funds' strong long-term records remain intact. We see nothing to indicate these funds have permanently lost their touch. And we think the long-term record is more indicative than its recent record of what a shop can do. As my colleague Karen Dolan points out in this Fund Spy, poor performance triggers a review of a fund's approach. But it takes weakness in the approach itself for us to change our opinion.

Finally, we check the fund's current portfolios for red flags. Nothing jumps out. Both are full of low-valuation stocks with solid cash flows and manageable debt levels. These are same type of stocks they've always owned and with which they built their strong long-term records. Oakmark Select remains concentrated in its top holdings, which brings risk. But, that has always been its formula and it has worked more often than not over time.

One Size Doesn't Fit All
There are fine funds of every stripe. The key is to pick one with a risk/reward profile that matches your tolerances. Warren Buffett has said he'd much rather earn a lumpy 15% a year over time than a smooth 12%. But not everyone can stomach that. The thing to guard against is making changes at inopportune times based solely on a fund's recent performance. Remember, changes made today are a bet on the future--not the recent past--and the former rarely looks like the latter.

Michael Breen does not own shares in any of the securities mentioned above.

How NOT to Get Your Kid Into Harvard

by Hana R. Alberts

If you are looking to get your offspring into Harvard or any other elite school, here are several ways to NOT do it.

No Intellectual Podcasts

Beaming podcasts about Foucault, Tolstoy or Heidegger into the womb will not increase your child's intellectual capacity. In fact, he (or she) will probably be so scarred by the polysyllabic words that he won't talk until the age of 5.

Skip the Emblazoned Clothing

You think wearing paraphernalia emblazoned with the Harvard crest makes your child look cool? Think again or, better still, visit Harvard Square. Only townies sport logo-laden gear. Harvard students wouldn't be caught dead in it (except maybe band members).

No Payoffs

Some parents mistakenly believe that paying their children to read, or awarding cash for the number of A's on their report cards, will make them love learning, not to mention history, literature and philosophy. Nah. It will only make them love one thing: money.

Bank Bound

That love of money, in turn, will direct their ambitions toward a profitable future at a large investment bank like Bear Stearns. Make that Lehman Brothers. Wait a minute... In fact, the specific bank they select really hinges on how stock options in their lemonade stands are faring.

Early Reading Not Needed

Reading before age 2 is not a sign of intelligence. It's only a sign that your child has a prematurely inflated ego after he encouraged inferiority complexes in all of the kids at his playgroup.

Board Games Won't Help

Board games like Monopoly won't make your kids smart. In fact, these hours-long contests of will can only foster qualities of manipulation and greed, which will no doubt serve them well in the financial services industry.

Athletic Myth

Your child doesn't have to be a varsity athlete capable of singlehandedly steering lackluster teams to Division I titles. As a matter of fact, that's only a marketable skill when applying to be a camp counselor.

No Polo

Please don't force your poor children to excel at niche sports, like polo. That can only be good training for a move to Kentucky to work for the U.S. Polo Association. That said, there is the Harvard Polo Club, which has been begging for recognition at the college for a century and a half.

Honestly, does your child really need a $200-an-hour SAT tutor in order to "keep up" with the other applicants? No. You could probably get by for a cheap one who only charges $100. Seriously, though. Buy a review book for $29.99. It's all the same stuff.

Forget the Tutor

Honestly, does your child really need a $200-an-hour SAT tutor in order to "keep up" with the other applicants? No. You could probably get by for a cheap one who only charges $100. Seriously, though. Buy a review book for $29.99. It's all the same stuff.

Not All A's

It is a commonly held misconception that all Harvard students earned straight A's in high school. That's not true. Some of us occasionally earned a B in some really important subject. Like gym.

The Right Donation

It is patently false that, in order to curry favor with a college, parents must include the school in their wills and fund the construction of at least one building to the campus before their children can get in. Depending on the school, it would probably only take a few desks, or an LCD projector. But for Harvard? Definitely a small science laboratory, at a minimum.

Getting the Recommendations

Don't believe that students need to suck up to their high school teachers--and deliver hugs on a regular basis--in order to secure a good recommendation. Those glowing letters should emerge out of your child's natural ability in class, or some other more tangible inducement--like a week at your oceanfront estate in Southampton.

Copyrighted, All rights reserved.

Friday, 27 March 2009

The Street - Kass: Why the Bears Are Wrong

Doug Kass:

On Feb. 17, I presented a watch list of conditions that, if in an improving trend, would likely indicate that a sustainable up move is possible for equities.

It is time to review this checklist (and add one more factor) to determine the market's standing. Our new grades and those of two weeks ago are in parentheses and will be updated in the weeks and months ahead.

* Bank balance sheets must be recapitalized. Yesterday a comprehensive bank rescue package was introduced. It is obviously too early to consider its full impact, but the details of the program suggest to this observer that it will likely be effective in clearing toxic bank assets. (We grade the package a B+, up from a D+ only two weeks ago.)

* Bank lending must be restored. While bank lending standards remain tight, my view is that yesterday's announcement of ring-fencing toxic bank assets will almost unquestionably succeed in unclogging the transmission of credit. (Grade B, up from a C previously.)

* Financial stocks' performance must improve. Financial stocks have finally awakened from the dead, and the recent outsized move to the upside could foreshadow continued market strength. Historically strong relative performance in the shares of asset managers -- such as Franklin Resources (BEN Quote - Cramer on BEN - Stock Picks), T. Rowe Price (TROW Quote - Cramer on TROW - Stock Picks) and AllianceBernstein (AB Quote - Cramer on AB - Stock Picks) -- presage a better equity market, and Monday's strong group action was conspicuous in its outperformance. (Grade B+, up from a D.)

* Commodity prices must rise as a confirmation of worldwide economic growth. Beginning two weeks ago, commodities' prices began to strengthen, and the Fed's message last week accelerated that trend. Gold, copper (at the highest level since November) and crude oil (over $54 a barrel) continued to rise yesterday, reflecting a combination of continuing inflationary and currency debasement fears coupled with the possibility that worldwide economic growth might stabilize sooner than later. Finally, the TIPS market is forecasting some higher inflation, and a little inflation is better than a lot of deflation. (Grade B, up from a C+.)

* Credit spreads and credit availability must improve. Spreads remain worrisome and the transmission of credit remains poor, but the economy should gain traction as public policy is implemented, money is made more available and lending terms are liberalized. (Grade D, flat from two weeks ago.)

* We need evidence of a bottom in the economy, housing markets and housing prices. The retail industry has exhibited evidence of sequential improvement in the January through March period. Other economic signs are somewhat more ambiguous but, nevertheless, are showing some life. Months of inventory of unsold homes are declining and so are mortgage rates, but home prices have yet to stabilize despite an improvement in the affordability indices and a better relationship between home ownership and rental costs. Nevertheless, yesterday's strong existing homes sales release raises the specter of a better spring selling season than most anticipate. I contend that housing could surprise to the upside and might lead most other economic indicators higher. (Grade C+, up from a C-.)

* We need evidence of more favorable reactions to disappointing earnings and weak guidance. I am encouraged by the better price action in the face of poor earnings results and guidance in a wide range of companies, including Freeport-McMoRan Copper & Gold (FCX Quote - Cramer on FCX - Stock Picks), FedEx (FDX Quote - Cramer on FDX - Stock Picks), Airgas (ARG Quote - Cramer on ARG - Stock Picks) and General Electric (GE Quote - Cramer on GE - Stock Picks). (Grade B+, up from a C+.)

* Emerging markets must improve. China's economy (PMI and retail sales) and the performance of its year-to-date stock market have turned decidedly more constructive, but other emerging markets remain moribund. (Grade B up from a C.)

* Market volatility must decline. The world's stock markets remain more volatile than a Mexican jumping bean. (Grade C+, flat with two weeks ago.)

* Hedge fund and mutual fund redemptions must ease. I am comfortable writing that the worst of the redemptions are behind the asset management industry. Nevertheless, the disintermediation and disarray in the hedge fund and fund of fund industries still have a ways to go. And while brokerage account liquidations appeared to have decelerated last week (coincident with rising share prices), my high net worth brokerage contacts continue to experience account closures and a panicked constituency. (Grade C, up from a D.)

* Marginal buyers must emerge. Low invested positions at hedge funds and by individual investors no doubt fueled March's market rise as the fear of being out has begun to replace the fear of being in. These two classes could continue to be the near-term marginal buyers fueling stocks. Corporate acquirers could also emerge as important marginal buyers, and the recent step up in merger and acquisition activity -- for example, Genentech (DNA Quote - Cramer on DNA - Stock Picks), Petro-Canada (PCZ Quote - Cramer on PCZ - Stock Picks), Schering-Plough (SGP Quote - Cramer on SGP - Stock Picks) and Daimler (DAI Quote - Cramer on DAI - Stock Picks) -- is a concrete indicator that another important marginal buyer has surfaced. As the year progresses, a meaningful upside move awaits a broad asset allocation move of pension funds out of fixed income and into equities. (Grade B, up from a C.)

And I am adding a twelfth factor to my watch list:

* The market's internals must improve. I am comforted by a number of improving technical conditions that have emerged since the March low and that have continued in force over the past two weeks since the market has made program off that nadir. Indeed, the conditions of the recent low were different than others -- in sentiment, volume, number of new lows and in intensity. The move from the October lows to the March lows indicated growing fear and gave way to rising cash positions and the loss of hope, but the market's internals were improving. November's DJIA low of 7,552 was nearly 11% below the October low of 8,451, and the March low of 6,547 was 22.5% under October's low. While each new low was more frightening than the prior one, however, there were improving technical and sentiment signals. For example, NYSE volume at the October low expanded to 2.85 billion shares; at the November low, volume dropped to 2.23 billion shares; and at the March low, volume was only 1.56 billion shares. As well, new lows traced decreasing levels: At the October low, there were 2,900 new lows; at the November low, there were 1,515 lows; and at the March low, there were only 855 new lows on the NYSE. Moreover, the combination of last Tuesday's 12:1 ratio of advancing stocks over declining stocks coupled with that day's 27:1 up-to-down volume ratio has not occurred in almost 65 years. Remarkably, yesterday was the fifth 90% upside day in March, which is clear evidence of a broadening market.

In summary, 10 out of 12 factors (including our newest, market internals) on my watch list are in an improving mode. Though many variables are currently accorded relatively low grades and the outlook remains debatable, the delta (rate of change) in almost my entire watch list is improving and flashing a green light for the U.S. stock market.

A classic "wall of worry" is being reinforced by an overwhelming consensus that the recent advance was a bear market rally. Moreover, the negative chatter appears loosely constructed and fails to credibly argue against the salutary effect that $4 trillion of stimulus will have on the domestic economy.

Based on the 12 considerations comprising my watch list, I respectfully disagree with the prevailing negative consensus, most of whose members failed to properly analyze the cracks in the foundation of credit, in the economy and in equities two years ago. Indeed, it remains my view that the fear of further investment losses and possible investor redemptions are clouding many managers' objectivity in assessing the markets.

In the fullness of time, public policy aimed at stimulating the economy (in general) and in housing (in particular) should bear fruit, as will the ring-fencing of toxic bank assets serve to unclog the transmission of credit.

While it is unrealistic to expect a straight up move, I am growing increasingly confident in my variant and optimistic view that the early March low was not only a yearly low but, quite possibly, a generational low.

Doug Kass writes daily for RealMoney Silver, a premium bundle service from

World trade growth 'to plummet 9% in 2009'

GENEVA (AFP) - - World trade volumes are expected to drop by an average of nine percent in 2009, the sharpest fall since World War II, the World Trade Organisation said Monday.

But the WTO said in its latest forecast for global trade flows that data from key Asian traders like China last month suggested that the worst of the global trade decline may be over soon.

"The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly nine percent in volume terms in 2009, the biggest such contraction since the Second World War," the forecast said.

Trading volumes of the developed economies should contract 10 percent this year, while trade in developing economies should slip 2 to 3 percent.

Despite the dismal projections for the full year, the WTO pointed out that import data for China, Singapore, Taiwan and Vietnam turned positive in February following successive months of decline.

China posted an increase of 17 percent in imports compared to January, while Singapore posted growth of one percent.

"While this is only a single month of data, and should therefore be interpreted cautiously, it could be evidence of slowing decline and perhaps a 'bottoming out' of negative trade growth trends," said the report.

In Vietnam, February imports were up 32 percent compared to January, which in turn was down 38 percent from December 2008.

February imports in Taiwan gained 22 percent over January, a sharp reversal from the 24 percent in January compared to December.

Year-on-year comparisons of trade data are usually deemed more accurate as they factor in seasonal effects such as festive holidays.

But in this instance, after consecutive months of sharp decline, analysts have been watching for the point of reversal.

In 2008, world trade growth reached 2 percent, but it "tapered off in the last six months," said the WTO.

The WTO added that it was "implausible" that trade volumes could continue to fall at the rate they been declining in the past few months.

Citing China as an example, the WTO noted that if the downturn were extrapolated according to recent export figures, then "China's exports would be approaching zero within ten months to a year".

Thursday, 26 March 2009

Bull run? Yes, but...

Markets have bottomed out but spectacular gains unlikely: Analysts

By Yang Huiwen

WHAT a difference a few weeks make.
Earlier this month, as bourses almost everywhere continued to spiral downwards, it seemed almost unthinkable that a major rally was just around the corner.

Some markets including Singapore took a breather yesterday, but nevertheless the recent run-ups are striking.

The most closely watched barometer of all, the Dow Jones Industrial Average in New York, has gained 17 per cent since its March 9 closing low.

Asian markets are also up 15 to 20 per cent from their early March lows. The Straits Times Index (STI), for instance, is up 16.1 per cent since March 9.

All this stock market cheer is prompting a nervous thought: Is the worst for stock markets really over?

Crystal ball-gazing is a business fraught with uncertainty but some analysts are willing to cautiously suggest the answer might be yes.

They say optimism started pouring into markets after the US government's long-awaited plan to purge banks' toxic assets, as well as Treasury Secretary Timothy Geithner's programme to unfreeze credit markets, began to take shape.

US President Barack Obama said on March 3 that buying US shares 'is a potentially good deal' for long-term investors, and since then, the index has added about 14 per cent.

The enthusiasm has since faded slightly with the Dow Jones' 1.5 per cent fall overnight and some key Asian markets, including Hong Kong, Tokyo and Singapore, ending in the red on Wednesday.

Signs of US revival

WASHINGTON - NEW orders for long-lasting US-made goods rose in February for the first time in seven months and new home sales rebounded, government data showed on Wednesday, suggesting the economic downturn might be easing a bit.
The Commerce Department said durable goods orders rose 3.4 per cent to US$165.6 billion (S$249 billion) in February, the biggest gain since December 2007, after a 7.3 per cent drop the prior month. Sales of newly built US single-family homes rose at their fastest pace in 10 months in February, it said in another report.

US stocks rallied on the data, with the Dow Jones industrial average ending 89.84 points higher at 7,749.81 and the S&P 500 closing up 7.76 at 813.88.

The upbeat economic reports and tepid demand in a record-large auction of five-year US Treasury notes sent benchmark government bond yields, which move inversely to prices, rising to their highest in a week.

Recent data, including retail sales and housing, have pointed to some signs of a moderation in the pace of the 15 month housing-led recession.

New durable goods orders excluding transportation rose 3.9 per cent in February, the largest gain since August 2005, the Commerce Department said. Orders for machinery soared 13.5 per cent in February, the biggest increase since March 2004.

In a separate report the Commerce Department said sales of newly built U.S. homes rose 4.7 per cent to a 337,000 annual pace, the fastest increase since last April, from 322,000 in January.

Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said. Economists, who had forecast another decline in sales, were still encouraged.

Sales of previously owned homes rose 5.1 per cent in February, while housing starts soared 22.2 per cent that month.

Stabilising the housing market, the main trigger of the current economic slump, is crucial for the economy's recovery.

The median sales price in February fell a record 18.1 per cent to US$200,900 from a year earlier, the department said.

The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month's worth. -- REUTERS

Wednesday, 25 March 2009

Obama rejects China's call for new global currency

WASHINGTON (AFP) — US President Barack Obama has defended the dollar as "extraordinarily strong" and rejected China's call for a new global currency as an alternative to the dollar.

He said investors considered the United States "the strongest economy in the world with the most stable political system in the world" even as it was reeling from a prolonged recession stemming from financial turmoil.

People's Bank of China Governor Zhou Xiaochuan had called for a replacement of the dollar, installed as the reserve currency after World War II, with a different standard run by the International Monetary Fund.

"As far as confidence in the US economy or the dollar, I would just point out that the dollar is extraordinarily strong right now," Obama told a White House press conference on Tuesday.

He said that although the United States was "going through a rough patch" at present, it enjoyed a "great deal of confidence" from investors.

"So you don't have to take my word for it," he said.

"I don't believe there is a need for a global currency," Obama said, in what appeared to be a break from tradition among US presidents not to comment directly on the dollar's value.

Zhou suggested the IMF's Special Drawing Rights, a currency basket comprising dollars, euros, sterling and yen, could serve as a super-sovereign reserve currency, saying it would not be easily influenced by the policies of individual countries.

China is the largest creditor to the United States, being the top holder of US Treasury bonds worth 739.6 billion dollars as of January, according to US figures. It is also the world's largest holder of US dollars as a reserve currency, at more than one trillion dollars.

Zhou's comments came just two weeks after Chinese Premier Wen Jiabao, in a rare expression of concern, called on US economic planners to safeguard Chinese assets.

"We have lent huge amounts of money to the United States. Of course we are concerned about the safety of our assets," Wen said as the United States grappled with the worst financial turmoil since the Great Depression.

The latest Chinese concern came as the dollar took a beating following the Federal Reserve's decision last week to buy up to 300 billion dollars in long-term US Treasury bonds and boost its purchases of mortgage securities by 750 billion dollars in an effort to revive the ailing economy.

The decision, according to foreign exchange dealers, made US assets less attractive to investors worried that the Fed move would end up debasing the world's reserve currency.

Despite the financial meltdown at home, the dollar has been mostly regarded as "safe haven" by investors averting risks amid a global economic slump.

Before Obama spoke, the dollar ended higher Tuesday against key currencies.

The euro fell to 1,3469 dollars in late New York trading from 1,3617 a day earlier while the greenback rose to 97.88 yen from 97.13.

US Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner on Tuesday also defended the dollar at a congressional hearing.

At the hearing, a lawmaker asked the two financial chiefs: "Would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested by China?"

Geithner immediately responded, "I would."

"And the chair?" the lawmaker asked, turning to Fed chairman Bernanke.

"I would also," Bernanke said.

The idea of a global currency determined by multilateral organizations is not new, said John Lipsky, the IMF's first deputy managing director.

"But it's a serious proposal," he said in Washington.

And he hastened to add, "I don't think even the proponents think it as a short-term issue but as a longer-term issue that merits serious study and consideration."

EU Economic and Monetary Affairs Commissioner Joaquin Almunia said the dollar would remain unchallenged as the top reserve currency even as emerging economies such as China play a more critical role in the global economy.

He said, "I don't expect major structural changes in the role that the dollar plays today as a reserve currency."

The debate over the dollar's role came ahead of the G20 summit of developing and industrialized nations on April 2 in London, where world leaders and international organizations, including the IMF, are to discuss reforming the financial system.

Russia has also proposed the summit discuss creating a supranational reserve currency. The IMF created the SDR as an international reserve asset in 1969, but it is only used by governments and international institutions.

'S'pore Madoff' cons investors of nearly $900,000

By Elysa Chen

HE could well be Singapore's Bernard Madoff, give or take billions of dollars.

Yugoslavian national Stefanovic Nenad, 34, used a Ponzi scheme to cheat his victims here of more than $880,000 over two years.

It was a scheme similar to Madoff's, though on a much smaller scale. Madoff pleaded guilty to a $100 billion fraud in the US and was hauled to jail to await sentencing.

Nenad, a derivatives trader, approached his victims promising returns as high as 30 per cent within a year.

He told them he had an account with brokerage Fimat Singapore, through which he would invest. Fimat Singapore is part of the Fimat Group of companies owned by French bank Societe Generale.

Nenad lied that he would invest their money using his account and pay them the promised returns.

Nenad used the money to cover his personal expenses and to repay earlier victims whom he had cheated the same way.

$50,000 cheque

One of his victims, Singapore permanent resident Skinner David Hamilton, 41, wrote him a cheque for $50,000 on November 2, 2006 at Raffles Place.

Mr Hamilton, a British national, gave Nenad another $100,000 cheque on March 14, 2007.

But the funds were never credited into the Fimat account.

In November 2007, when the returns were due, Nenad lied to Mr Hamilton that his $50,000 investment had grown to $65,000, and could be reinvested for more returns for another year.

Mr Hamilton agreed to do so.

He was also paid $6,000 as referral fees for introducing his friends to Nenad.

In March last year, Mr Hamilton asked to encash the March 2007 investment of $100,000.

Nenad then paid him $130,000 - a sum he obtained from cheating other victims - and claimed that the money was Mr Hamilton's investment return.

After collecting the money, Mr Hamilton decided not to continue investing with Nenad.

But he did not recover the $50,000 that he had given to Nenad in 2006 and lodged a police report against him on November 29.

Mr Hamilton was one of the luckier ones.

Singaporean Margaret Ng, 45, and her husband, met Nenad through a mutual friend. On March 13 last year, they were cheated of £60,000 (valued at $167,600 then).

By then, Nenad's account with Fimat had been closed. Investigations later revealed that the account had ceased on May 2, 2007.

Didn't return money

Nenad did not return any money to Madam Ng.

She and her husband lodged a police report on November 30 last year.

Another victim, Mr Greenville Andrew James, 45, a British national, got to know Nenad in June 2007.

About a month later, Nenad phoned Mr James and told him about the 'investment scheme' with a guaranteed 30 per cent return after a year.

Falling for Nenad's lies, Mr James transferred $165,000 into his bank account.

When the one-year period expired on July 9 last year, Mr James checked with Fimat and, to his horror, discovered that Nenad's trading account had been closed for more than a year.

Mr James lodged a police report on August 25.

Nenad was finally hauled to court to face 11 charges. There were eight charges of cheating, two of criminal breach of trust and one of forgery.

In his written judgment, district court judge Liew Thiam Leng noted that Nenad 'took great pains in covering his deception in the investment scam'.

Nenad had cheated his victims of a 'substantial' amount on eight occasions over two years.

Judge Liew added: 'The long period in which the offences were committed without detection is a relevant factor to be taken into consideration as it showed the attitude of the offender in repeating the offences time and again without any regard on the impact of the crime on the innocent victims.'

The judge also said that by failing to return the funds invested to his victims, Nenad had shaken confidence in Singapore's financial markets.

Nenad said in mitigation that he was a first offender who had been living in Singapore for eight years. He pleaded guilty to the four charges of cheating that the prosecution proceeded with and was sentenced to 64 months' jail.

Nenad is appealing against the sentence.

Spare us the dinner-time economics lecture, dad

By Bryan Toh

THERE is a new dish during dinner time at my home: Economic Recession.

It has become a daily staple and comes in a variety of flavours. Some days it is sprinkled with hints of Credit Crunch, other days it is dressed with Job Loss.

The recent recession has not left anyone untouched, including my parents, who feel its impact on their spending habits and at their workplace.

They want to ensure I also feel their pain - albeit in a different manner.

What used to be a time when my family would come together, talk and laugh about our day has become somewhat of an economics lecture.

Most of the lecturing comes from my dad. Each day, he reminds us of the difficulties he and my mum are facing, how we should be helping them more, and laments that the stock market is not going his way.

Like any good lecturer, he also insists on restating what he has taught - in fact, up to two or three times. Because he does not like to be interrupted, we cannot tell him that we are, in fact, bored.

From his point of view, this economic crisis is big. It is also the first to have happened in my short 17-year life that I am old enough to comprehend.

Though I may not be able to fully grasp the nuances of terms such as liquidation and mortgage, I do get the gist: Money is becoming harder to come by, and I should not be spending so much.

As a teenager, that is more or less what I need to know.

What good is lamenting to me about the stock market, or how you might lose your job tomorrow, when there is absolutely nothing I can do?

I do not play stocks. I am not your boss. I am just a student.

As long as I control my spending and am not totally oblivious to the financial difficulties of those around me, I think I am fine. (After a month of dinner-time talk at my place, it is hard to forget.)

So to all parents out there who are doing the same as mine, please give your children more credit for their general knowledge.

We are not an ignorant generation.

We know you are not having an easy time. And we are helping, in our own way, by cutting personal spending.

So please, can we let dinner time, or any other family time for that matter, be for family bonding?

The writer, 17, is a first-year mass communications student at Ngee Ann Polytechnic.

I will survive - as my parents did

By Eef Gerard Van Emmerik

MY PARENTS' tales of their early struggles have stayed with me.

As baby boomers, they and the majority of their peers had to toil hard to rise up their career ladders - without university degrees. They knew tough times and enabled their children - those of my generation - to stand on their shoulders.

They gave me the choice to pursue law, which I saw as a safe bet. After all, lawyers always make up part of society's upper-middle class; even when they do not make tons of money, most enjoy a relatively comfortable life.

Now here I am, staring at a downturn far worse than all others, in which so much global wealth has been wiped out that we may as well be starting from scratch.

The end is a long way off, too - up to 10 years, if sombre forecasters are to be believed. This, in spite of lawmakers being hard at work to contain the damage.

Though I am still four years from completing university and joining the labour market, I must admit I am finding it hard to 'keep calm and carry on'.

I cannot help but feel disheartened.

Today, I find myself interning at a local law firm - for free - just so I can gain experience to give myself an edge when I finally graduate.

When I called law firms in a search of an internship, I was told by several that they had frozen new hires for now, even that of interns.

In fact, the current downturn is so bad, even allowances for interns with A levels have become a considerable expense - a custom introduced at the end of last year.

It has got me wondering just how resilient the law profession is, and whether my choices are as safe as I thought.

Millennials like me are still grappling with the situation.

We see ourselves as globalised citizens entitled to fulfilling careers - unlike our parents, who tolerated their jobs as a means to a salary. As children of the Internet revolution, we were also expecting to achieve more of a work-life balance.

Still, we are no strangers to crises, having grown up with recessions of the past decade - the ones following the Sept 11 attacks in 2001, the Bali bombings of 2002, Sars in 2003 and the tsunami of 2004.

Of course, the process of downsizing dreams still feels hollow, starting with my, uh, pro bono internship. I know I must rein in the visions I had for my adult life until the economy stabilises.

But I am not cowed. I still believe it is possible to thrive. After all, my parents have done it already, and with far less.

The writer, 20, will read law at Singapore Management University later this year.

Top five tips for managing your career in a downturn

1. Communication skills: Strong communication and interpersonal skills are essential, including the ability to work closely with a variety of stakeholders within, and outside, your department.

2. Technology expertise: It’s critical to stay up-to-date on the latest technological innovations. Being able to maximise the use of new technology not only makes your job easier but also increases your value to a potential employer. If you need to learn how to make best use of a new application, consider taking a computer or software class through a college or university programme, or participate in a local software users’ group for the product you would like to learn more about.

3. Global perspective: There’s a strong demand for certain professionals (such as accountants and IT specialists) with international business skills. Indeed, organisations are seeking professionals who are not only familiar with global trends, but possess an understanding of practices in other countries. For example, in the accounting field, many firms have for some time been interested in hiring those with expertise in International Financial Reporting Standards (IFRS) to meet new industry regulations.

4. Never stop learning: Continuing to build your professional skills and knowledge is a key way to increase your marketability. How? Businesses actively recruit candidates who’ve taken the initiative to further their education, from obtaining an MBA to pursuing a relevant regional certification program. And here’s another bonus to additional education: research from Robert Half shows that a graduate degree or professional certification can increase your starting salary in a new job by up to 10 percent.

5. Recharge your network: That next big break might come from your network. To evaluate how active your own contact list is, ask yourself when the last time was that a colleague or industry peer asked you for advice or information. If nothing comes to mind, it may be time to recharge your network. One key tip is to pick up the phone. Call one of your contacts and invite him or her to lunch; face-to-face meetings can do a lot to build your future efforts. And if you’re worried about lay-offs, networking becomes essential. Now is the time to reactivate your network. Attend industry events, update your LinkedIn profile, and get in touch with recruiters who can give you a sense of the job market and keep an eye out for you.

A final piece of advice: You’ll have a hard time achieving your full potential unless others are aware of your expertise and accomplishments. Pursuing new challenges, such as volunteering to participate on special project teams – particularly those that save the company time or money – will help you steadily build visibility and better position you for future advancement opportunities.

Signs of economic progress

WASHINGTON - US President Barack Obama on Tuesday told his crisis-weary nation he sees signs of economic progress but pleaded for time to navigate out of the worst financial maelstrom in decades.

Mr Obama used a prime-time news conference to tout his US$3.6-trillion (S$5.44 trillion) budget as the key to national recovery, during an intense week of economic and foreign policy rollouts ahead of his first big trip abroad next week.

The president said his government, in its first two hectic months in office, had framed a comprehensive strategy to attack the crisis on 'all fronts'. 'It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long term. And we are beginning to see signs of progress.

'We'll recover from this recession, but it will take time, it will take patience,' Obama said at his second full-blown press conference.

The president said his budget, which opposition Republicans argue will run up huge deficits for years, would create clean energy jobs, promote a highly skilled workforce and make health care affordable.

'That's why this budget is inseparable from this recovery - because it is what lays the foundation for a secure and lasting prosperity.' Treasury Secretary Timothy Geithner, fresh from outlining long-awaited details of a banking rescue, asked Congress Tuesday for unprecedented powers to seize non-bank financial firms if needed to maintain stability.

Obama anticipated 'strong support from the American people and from Congress to provide that authority' so that a non-banking company such as giant insurer American International Group cannot hold the entire economy hostage.

The showpiece White House press event was the culmination of a week-long public relations offensive designed to raise Obama's agenda above the clamor of a row over AIG bonus payments and doubts about his recovery plans.

The news conference followed the president's interviews on iconic network programs 'The Tonight Show' and '60 Minutes' and a swing through California last week.

Obama next week takes his first big steps on the world stage at the Group of 20 summit in London on April 2 - when he will have his first encounters with Chinese President Hu Jintao and Russian President Dmitry Medvedev.

He will then go to a NATO summit on the France-German border on April 3 and 4, visit the Czech Republic and then go to Turkey in his first visit to a Muslim nation as president. -- AFP

Bottoming out soon?

THE Singapore economy could reach a bottom within the next six months, Finance Minister Tharman Shanmugaratnam said at the Singapore Business Awards (SBA) on Tuesday.

'On current indications, we expect to see a bottom in the economy within the next two quarters,' he told business leaders at the Shangri-La Hotel.

'But growth thereafter is likely to remain weak till at least the end of the year, and possibly 2010 as well if there are no clear signs of recovery in the global economy,' said Mr Tharman.

Although the downturn is likely to be 'our deepest recession', he is confident that Singapore can weather the storm, even if it lasts for some time.

'We will emerge from this crisis fitter and stronger, as we have done before.'

The Government will also do its part to help businesses by reducing administrative speed-bumps and removing regulatory roadblocks wherever possible.

He cited an initiative introduced last April allowing firms to file just one full set of financial statements with the Accounting and Corporate Regulatory Authority, and not have to repeat the process with the Inland Revenue Authority of Singapore.

He said a similar initiative is in the works that includes private sector partners such as the Singapore Exchange.

Mr Tharman was the guest of honour at the awards - organised by The Business Times and DHL Express.

While the awards come during one of the most severe downturns to hit Singapore, this year's winners are taking the crisis as an opportunity.

Read the full story in today's edition of The Straits Times.

Worst may be over soon

THE worst of the economic crisis may soon be over, according to an economist from the Nanyang Technological University (NTU).

Drawing from selected leading indicators that appear be to signalling a turning point, Assistant Professor Choy Keen Meng predicts that Singapore's recession will bottom out in the current first quarter and turn the corner by year's end.

He expects the economy to shrink by 4 per cent this year, a forecast that is more optimistic than most.

Although the official projection is for a contraction of between 2 per cent and 5 per cent, some private sector economists have predicted a decline as severe as 10 per cent.

'The leading indicators suggest that the worst will be in the first quarter and we will see improvements in the second and third quarters,' Prof Choy said during a presentation on the economic outlook at NTU yesterday.

One of these key indicators is the United States' purchasing managers' index, which rebounded in January and last month after seeing a steep plunge towards the end of last year.

This index is a forward-looking signal of manufacturing output in the US.

Other indicators used include the Straits Times Index, business expectations surveys, as well as the amount of non-oil cargo loaded and discharged at Singapore's sea ports.

'Some of these indicators are showing signs of improvement, and while others are declining, the declines have moderated,' he said.

Goldman Sachs Information, Comments, Opinions and Facts