Silver lining in the emerging mkts. Economies have something most others don't: Growth in local demand for goods and services. Setting them up for a major relief rally once the panic selling  has abated.

Unfunded wars, supply-side deficits, twin housing and banking crises enabled by an orgy of regulatory permissiveness — that was the legacy Mr Obama assumed. In our political culture if you inherit a problem and do not fix it, you own it.

UBS chief Gruebel ‘asked to leave’

SINGAPORE

The board meeting — which has stretched over three days — will continue today, a UBS spokesman said yesterday.

The meeting in Singapore was scheduled before the loss emerged, and coincides with the Formula 1 Grand Prix, where the bank is a major sponsor.

Switzerland’s

Discussions at board level are under way concerning his successor, the magazine said.

A UBS spokesman declined to comment on the report.— UBS chief executive Oswald Gruebel (picture), under pressure after a rogue trader at the Swiss bank’s London office lost US$2.3 billion (S$3 billion), kept silent yesterday after a board meeting in Singapore as a Geneva-based magazine reported he had been told to step down.Bilan magazine, citing an unidentified person close to the bank’s board, said Mr Gruebel was asked to leave.

ECB policymaker warns of Greek default

FRANKFURT

The comment sparked a steep decline on the Athens stock exchange even as other markets were mixed, helped by a supportive statement from the G-20 economies.

“The news from Athens is sometimes not encouraging … I am now less positive in ruling out a default than I was a few months ago,” he said in an interview with Dutch daily

While talk of a default on the €350 billion (S$613 billion) debt has been ratcheted up in financial markets in recent weeks, Mr Knot’s comments carry more weight because they come from a policymaker in the ECB’s 23-member governing council.

The European Financial Stability Facility has to be raised should Greece default, Mr Knot said in a separate interview with — European Central Bank (ECB) governing council member Klaas Knot warned yesterday of the possibility of a Greek default, the first euro zone central banker warning outright that the country may go bankrupt.Het Financieele Dagblad.NRC Handelsblad. “It could be €1,000 billion or more” from the current €440 billion, the Dutch newspaper cited Mr Knot as saying.

Temasek Holdings Own Small Part of Alibaba, Valued at US$32 Billion

Unwise for GIC to reveal exact amount: MOF

SINGAPORE

Responding to a reader’s letter published in T

“This is against our national interest. 

[LIST SPECIFIC  NATIONAL  INTERESTS ? ? ? ?  ]

It would make it easier for speculators to attack the Singapore dollar

[gIc And nOt MAS is mAnAgIng the S$ ? ? ? ?]

during periods of vulnerability. Further, our reserves are a strategic asset, especially for a small country with no natural resources or other assets.

“It would be unwise to reveal the exact amount at our disposal for defending our currency, or for use in an emergency,” said the ministry.

It noted that it has been publicly stated that the GIC manages well over US$100 billion (S$130 billion) of assets, and the GIC publishes its 20-year annualised

[sO that new TEAM can benefit from the pAst 19 years' better performance ? ? ? ?]

real rate of return and reports its returns over five- and 10-year periods.

To manage risk, the GIC invests in a well-diversified portfolio, said the MOF.

[#### DiversificatiOn means UNfocused and UNsure and UNdecided ? ? ? ? ####]

[Well Diversified means Invest in EVERYTHING and ANYTHING  ? ? ? ?]

“This, too, is why GIC’s performance has to be measured on the basis of its overall portfolio, rather than by how much it makes or loses on individual investments,” it said.

[Is gIc hOldIng OntO sOme  DEAD  DUCKS ? ? ? ?]

The MOF also clarified that the President does not oversee the investment strategies of the GIC, the MAS or Temasek.

The President’s role is to decide, after consulting the Council of Presidential Advisers, whether to approve the appointments of board members and the CEOs, the ministry said.

lIe  ? ? ? ?— Unlike Temasek Holdings and the Monetary Authority of Singapore (MAS), the Government of Singapore Investment Corporation (GIC) cannot disclose the amount of funds it manages and its annual profit and loss.oday on Wednesday, the Finance Ministry (MOF) said that the GIC manages the Government’s assets, and revealing the exact amount would expose the full size of Singapore’s financial reserves, if taken together with the published assets of the MAS and Temasek.

Recession panic grips global markets

World markets buckled under a frenzied sell-off Thursday as investors panicked the global economy was headed for another slump, one which policymakers may be ill-equipped to prevent.

Under its criteria, S& P generally capped most bank issues ratings at the level of the foreign currency long-term rating at the level of the sovereign if they had at least 40 per cent of their assets located in that country, and Intesa Sanpaolo, UniCredit, Mediobanca and Banca Fideuram fell into this category. The negative outlooks on the long-term ratings on the 15 banks reflect the possibility that S& P could lower their ratings, all other things being equal, should S& P further lower its ratings on the Republic of Italy, but did not factor in a potential further deterioration in the economic and operating environment of the Italian banking sector.

China FX purchases last month surge amid yuan strength

BEIJING

The so-called position for foreign exchange purchase is often used as a measure of capital inflows to China. Economists at China International Capital Corp wrote in a research report that a stronger yuan last month may have boosted hot money flows into China.

The yuan rose by 0.8 per cent last month against the dollar, one of the strongest monthly gains since China de-pegged the yuan from the dollar in July 2005.

The yuan strengthened by 0.03 per cent to close at 6.3823 per dollar yesterday, according to the China Foreign Exchange Trade System. August foreign exchange purchases were the highest since March this year and exceeded the monthly average of 335.6 billion yuan in the first eight months.

To keep the yuan largely stable, the People’s Bank of China buys foreign exchange inflows generated by China’s trade surplus and foreign investment from commercial banks, resulting in an injection of yuan into the banking system.

The central bank then soaks up excess yuan in the system via open-market operations and higher bank reserve requirements to prevent the money from flowing into the economy and fuelling inflation.

But as long as foreign funds keep flowing into China, the central bank’s efforts to soak up liquidity are not entirely effective because the surfeit of yuan in the banking system often leads banks to increased lending.

— China’s central bank and other financial institutions spent 376.9 billion yuan (S$74.3 billion) buying foreign currencies in August, a five-month high and a 71.6-per-cent jump from July, according to official data published yesterday.AGENCIES

Singapore dollar’s recent weakness to benefit some firms

SINGAPORE

According to a report by UOB Kay Hian, companies may benefit if a significant amount of their revenue is held in a basket of foreign currencies.

For Singapore Airlines, about 64 per cent of its revenue is denominated in a basket of foreign currencies, UOB Kay Hian said. And with every 1 per cent depreciation of the Singapore dollar against its exposed foreign currencies, SIA’s net profit will rise by 1.3 per cent, it added.

It is not just weakness against the US dollar that is good for Singapore businesses.

UOB Kay Hian said that the recent Singapore dollar weakness against the Australian dollar, Thai baht and Philippine peso has benefited SingTel as Optus and regional associates account for 20 per cent and 46 per cent respectively of SingTel’s EBITDA (earnings before interest, taxes, depreciation and amortisation) in its first fiscal quarter 2012.

Indofood Agri reports earnings in rupiah, and a 5 per cent depreciation of the Indonesian currency against the US dollar would result in a 2.9 per cent rise in its net profit, said UOB Kay Hian.

Some REITs, such as Mapletree Logistics and Parkway Life, are also beneficiaries of the Singapore currency depreciating against the Hong Kong dollar and Japanese yen, considering between 13 per cent and 36 per cent of their revenue is denominated in these two currencies.

But where there are winners, there are also losers.

Tiger Airways will be adversely affected by the weakening Singapore dollar against the US dollar as only 6 per cent of its revenue is US dollar-denominated, compared to 54 per cent of its operating costs that are denominated in US dollars, UOB Kay Hian said.— The Singapore dollar has weakened by 5 per cent against the US dollar since the middle of last month and this is good news for some companies.