The current financial turmoil has started to meltdown after the falling of Lehman Bros and Bear Stearn follow by the capital assistance to Freddie and Fannie as well as AIG. How many more financial institutions are facing bankruptcy? How long will this crisis end?
US government has injected tax payers money (US$85B) into AIG to increase their solvency or liquidity on the expense of Americans. In addition, US is planning for another US500B to US$700B to rescue troubled investment banks. IS this viable and feasible? What impacts could US face in long-term?
First of all, US government bailout make more sense than private banking bailout. The reason is the undercovered risks and no one knows how big is the blackhole on the troubled bank. If the acquirer does not have strong financial and capital to withstand the hit for 1 to 2 years, it may trigger another huge bankruptcy that will hurt the market more seriously. As such, Bank of America must be prepared to absorb all the risks generated by AIG and we do not want to witness the second Lehman's destiny. Market consolidation is naturally better than government rescue where the risks are not spread to the nations. The troubled banking should shoulder whatever risks and crisis they have caused.
Secondly, how much can US government raise to rescue the credit crisis? We understand that US has already issued US$300B to US$500B since last year. Are they still viable and competent after approving another US$700B package to market? US reserve is far more less than US$800B and this will increase the burden of Americans in the world. Americans are carrying more debts than any other nations.
Thirdly, US will run into recession albeit they could rescue the current financial crisis. Government has spent all the future monies to rescue the US market and public development and infrastructure development will begin to slow down. This will aggravate the commercial market, properties and high tech sectors. US government will cut spending as well as other private sectors and their economy will revolve in shrinking direction. As a result, this will impact the rest of the world particularly in EU and Asia. Despite it, China is experiencing another setback after the dairy scandal and the world economy will move into depression.
Perhaps, US should only bailout those banks and finance institutes that have great impact to the world other than US only. As for domestic and smaller ones, US should encourage and allow merger and acquition or file for bankruptcy since they are incompetent and inviable. Thus far, I believe that the financial crisis is just in the midway and we shall see more in the next 6 months. Then, it will start to hit high tech sectors especially in IT sector. The recovery is anticipated to begin in early 2010 if not, 2nd half of 2010.
Sunday, September 21, 2008
Tuesday, September 9, 2008
Taiwan - Former President Corruption and Money Laundering
The former Taiwan President Mr. Chen Sui Bian is currently under corruption and money laundering investigation. It has been 3 months wihtout much progress until the information from Egmont and Swiss leaked out by the Taiwanese MP. This is a disgrace to Taiwan and worst still, under an incompetent President, Mr Ma that only protect his own interest and do not wish to interfere the case. The question about Taiwan is not really on Mr Chen Sui Bian but the competency of President Ma to bring justice to the Taiwanese and the ability to lead the country. He is not a good and agressive leader afterall and manipulated by other parties such as DPP and former President Chen.
Secondly, President Ma is indecisive to revamp the current jurisdiction and unwilling to change the incompetent cabinets that cause the shares to drop and shaky economy. Courage is something that Mr Ma is lacking. If this persist, Mr Ma might not able to extend his presidential election for another term. If Mr Ma wish to improve Taiwan's predication, I would suggest him to execute the following to win the votees.
1) Since former DPP has messed up the entire country's economic growth and incompetent to revamp the systems, KMT should be aggressive enough to execute the new strategic plan without hesistation and able to resist DPP attack.
2) Mr Ma should confiscate and freeze all the assets and money of Mr Chen Sui Bian and his family until they could prove their innocence otherwise the assets and money will be given to the Taiwanese or donate to charity.
3) Stop listening to Mr Chen's arguement or defense, amend the current law and system to prosecute him. This will act as a warning to all the civil servants and gain the confidence from investor.
4) Dismantle and change all the current prosecutors. Remove the former DPP people and replace with new one. A new force or government must remove the old influence in order to realize the new plan and change. Else, every policy will be stucked and blocked and still under heavy influence from DPP and Mr Chen.
5) Impose a free tax zone to attract investors to move their operations to Taiwan.
6) Lastly, Mr Chen will surrender if his son and daughter-in-law are prosecuted and arrested. Try to work the case on his son and daughter and not wasting time on him and his wife. To defeat the enemy, on must capture their leader.
Secondly, President Ma is indecisive to revamp the current jurisdiction and unwilling to change the incompetent cabinets that cause the shares to drop and shaky economy. Courage is something that Mr Ma is lacking. If this persist, Mr Ma might not able to extend his presidential election for another term. If Mr Ma wish to improve Taiwan's predication, I would suggest him to execute the following to win the votees.
1) Since former DPP has messed up the entire country's economic growth and incompetent to revamp the systems, KMT should be aggressive enough to execute the new strategic plan without hesistation and able to resist DPP attack.
2) Mr Ma should confiscate and freeze all the assets and money of Mr Chen Sui Bian and his family until they could prove their innocence otherwise the assets and money will be given to the Taiwanese or donate to charity.
3) Stop listening to Mr Chen's arguement or defense, amend the current law and system to prosecute him. This will act as a warning to all the civil servants and gain the confidence from investor.
4) Dismantle and change all the current prosecutors. Remove the former DPP people and replace with new one. A new force or government must remove the old influence in order to realize the new plan and change. Else, every policy will be stucked and blocked and still under heavy influence from DPP and Mr Chen.
5) Impose a free tax zone to attract investors to move their operations to Taiwan.
6) Lastly, Mr Chen will surrender if his son and daughter-in-law are prosecuted and arrested. Try to work the case on his son and daughter and not wasting time on him and his wife. To defeat the enemy, on must capture their leader.
Sunday, September 7, 2008
Earthquake Prediction
I happened to meet a guy that claimed to have the ability to predict earthquake. He could hear the geopathic sounds generated by the earth before the earthquake strikes. Generally, the earth will release such sounds 1 day to 2 weeks before the earthquake hits. Out of ten predictions, he got all right but he could not tell where exactly the location of the earthquake. That's a big surprise to me and I am amazed by his natural ability. He told me that this extra supernatural power is exactly what animals are experiencing and everyone should have possessed by nature. Perhaps, he is right and afterall, we are poluted by modernization and relying on technological stuff too much.
According to him, there will be some earthquakes with richter scale of 8.2 and above will hit countries from North East Asia and Islands. Tsunami will also affect countries from the north and south. The period will start from Sept 08 until Jan 09. Scientifically, we need to conduct more experiments and statistics on such predictions to assess the generability and replicability as to substantiate the accuracy of such predictions.
I do not deny that people do have such natural ability since we are part of the living things on earth but we need more tests and proves to justify such claims.
According to him, there will be some earthquakes with richter scale of 8.2 and above will hit countries from North East Asia and Islands. Tsunami will also affect countries from the north and south. The period will start from Sept 08 until Jan 09. Scientifically, we need to conduct more experiments and statistics on such predictions to assess the generability and replicability as to substantiate the accuracy of such predictions.
I do not deny that people do have such natural ability since we are part of the living things on earth but we need more tests and proves to justify such claims.
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