>>Singapore falls into technical recession

Yes, the word is TECHNICAL recession. Not Recession.  According to textbook definition (as far as I could remember from my JC Econs stuffs, haha…), it means that the economy is experiencing a two consecutive quarters of contractions in the real national output.

So as mentioned, Singapore, being a trade-sensitive economy, falls into a technical recession since 2002 ( full recession during 2001) as manufacturing sector slump and experiencing negative growth for the last two quarters.  Haiz…..

Since opening, STI was down about 7%. Our dear good friend, Dow Jones in New York, experienced the 6th consecutive triple digit plunge, closing at region slightly above 8,500 points after a registering a 679 points (7.7%) fall last night. Our brother Japan, fell more than 10%, and another khaki of ours, Hong Kong Hang Seng, fell 7.7%.

We have come to a stage where fundamentals of companies are no longer taken into the picture. Basically at this stage, the market is just in panic and when will this panic end? Nobody knows….

So what is Monetary Authority of Singapore (our central bank) doing? 

With the top central banks cutting interest rates during the week, Singapore too, followed suit by announcing to loosen the monetary policy for the first time in four years (last time was during SARS period).  MAS shifted its currency policy to seek ZERO appreciation in the trade-weighted band for the our dollar. It retained the band in which the currency is allowed to trade and will intervene if necessary.

Well, you may ask why the monetary policy for Singapore is so special? Instead of relying on short-term interest rates, conducts policy by managing trade-weighted enchange rate index.

Let’s see, we need to bear in mind that Singapore economy is a small but yet open economy, where it centers on imports and exports. With that, managing the SGD against a basket of currencies of the country’s major trading partners and competitors will make our export prices competitive. The central bank will not reveal the band, and they will be able to appreciate or depreciate our currency based on the world’s situation like inflation and other economic deteminants.  With this system, it will also allow the central bank to intervene in the forex market to prevent too much fluctuations in the Singapore Dollar.

Hope my 5 cents worth of stuff is able to explain things…

Right… time to go for a run!

Ta!

(References: Bloomberg, my home page… CNN Money… CNA Business)

>>US House of Reps approved $700Bn Rescue Package

The time now is 3.07am. Don’t ask me why I’m still up at this hour.  Took a nap and woke up just now. Right now, I am just montitoring the US market and at the same time, constantly refreshing Bloomberg on the update of the House of Reps voting on the revised $700Bn Rescue Package Plan.

The market went into a dramatic turmoil when the House of Representatives rejected the bailout package on Monday by 228 votes to 205.

As of 3.04am (Sat, Perth Time), the house voted 263 in favor to 171 against in favor of the revised rescue package, which is the largest US government economic intervention since the Great Depression of the 1930s.

Hopefully, this huge intervention will restore the confidence the US banking system and sort out the troubled financial institutions…

Alright… hope this is the beginning of the end… for a better outlook… Cheers!

(Info extracted from Bloomberg and CNN Money)

This was taken in Year 2006 X’mas Eve along Wall Street.

Those were the days that the economy was doing so well!

Another random pic… Close-up on New York Stock Exchange..

…Alright, time to go back to lala-land. Ta! =)