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The US sysytem of housing loan is different.
If the value of ur house is below the housing loan,one just just walk away from the loan and dont have to worry about the difference.
Unlike spore system.
Thus more and more bad loans in US.
Putting bad debt into a fund and manage it, well it sounds great! But I certainly don't think it's the taxpayers' problem and responsibility. When companies make $$, they dun give the extra profit to the tax payer, right! Now when they fail, the taxpayer has to be reponsibility for them....no logic!
Since we are all in a pessimistic mood.Let me join in too.
The one area of the worst to come is the private equity syndicate.During the good time the borrow cheap $$
and went to buy companies over the world.If they failed to renew the loan then again big trouble.
Also,credit card debt.
It is esti.that due to the current crisis,the US has got like 2 trillion of bad debt.So far 1 trillion has been 'discovered",thus there is another 1 trillion to come forward.Maybe some more banks gg down under soon.
The US reserve bank start up the so call bad debt fund.Thus banks with bad debt can transfer their bad debt into this fund and the reserve bank will lend them with good $$.Where these $$ come from????
Sources said they will probably print more $$$........which means inflation and no body will have faith in US$.
Alas.......so gloomy.The sky is falling down liao.
Airline , auto industries..go under...unemployment rise..consumer hit..bank cannot get back their $ loan out to them..
Financial institution will be even worse..other then morgagte ..subprime crises..now bad loan to bankrupt auto induatries and airline..next credit card crises on the way..
The US economy is 2/3 consumer driven..consumer down ,the world cannot sell to them...
Recession for sure!!!no escape..
Fed wouldn't bother abt those consumer industries; company takeovers and collapses are part and parcel of the real economy.
But Fed cannot afford to have a total financial collapse of banks and lending institutions - because that's where the real economic leverage is.
Please dont think i am raining on the parade...AIG got loan is safe for the next few quarter..if still cannot make it thro...which is most likely it cannot make thro bercause the US economiy is in a very bad shape..then it is still as broke and worse than now.
The housing which cause the subprime which lead to all these messe is still getting worse..expert say it is still got 20% to go down from here. That means to say it take another come close to 2 yrs!!!
Do you know other than financial, GM,Ford and all the auto are in deep trouble...and also airline are going to go under...
When these come on the scenec together,..i think Fed can do nohting..
Current, since market behave such, we just play along, but be aware of that the problem is still very real and can only get worse..
Right now it seem we have got $ to make in the market..play along and make $ and put some into Gold nad Silver...NEXT YEAR and maybe end of this year..gold and silver going to soar..
righ now , ..just in and out fastr,dont be greedy.
Actually, during Sars time and last year, I've thought of giving up all my policies 1/2 way to maturity (meaning about break even) from any companies. I've thought of using the money to buy good blue chips and keep till bull run. I did not do it, however, as fear steps in. On hindsight, if i were to do it, i think i can easily outrun insurance company returns. In fact, anybody can, so long as you buy on bear and keep for few years (use the Sars time frame which was what i was thinking because I did not have much bullets then).
One example, if coverage is 50k (old days, many bought this, big at that time but now small). Your surrender value is about 25k, you are uncovered by only 25k. Invest the 25k and keep for few yrs, might be able to recover some. Just a rough est only.
For those whose policies are near maturity can consider this, provided you do not really need the insurance coverage anymore.
My opinion only.
I'd suggest you to keep your policies instead of surrender it but making losses. Even if AIG cant make it, they can still sell part of their subsidies such as AIA as there are potential companies willing to buy over some of AIG's businesses. If a new company buy over AIA, the new company will take care of all AIA's policies holders....As what happened to John Handcok's polices which take care by Manulife when the company took over by Manulife in 2004.
Andrew ( Date: 17-Sep-2008 17:42) Posted:
Since AIG is saved for now. Take your time to think about it.
And make a decision that you think is the best. Don't have to panic and head for Raffles Place immediately.
Good Luck!! |
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For those had surrender their AIA policies the past few days (15-18 Sep), AIA allow them to reinstate their policies back w/o interest or panalty charges (reinstatement must be done within 14 days).
limhpp ( Date: 17-Sep-2008 11:06) Posted:
| What happen to those who have terminated their policy yesterday with AIA? Many people may have lost money.... |
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Very good article indeed...makes me consider letting go of my 20k investment in AIA now...
Do you know why AIG and the like dies so horribly...read this..
http://www.kitco.com/ind/Laird/sep172008.html
Leveraging and now deleveraging...poor fellow...Amen.
10 o'clock news said that O'Dell run road loh....or resigned...!!
no more "AIG" on Man Utd jersey liao...
maybe "NTUC" ?
AIG involvements:
VStocks Shares (m)
FIRST SHIP LEASE TRUST 40.422
STX PAN OCEAN 37.241
HO BEE INVESTMENT 0.72
HOTEL PROPERTIES 0.4238
FIBRECHEM TECH 2.062
FERROCHINA LTD 1.055
JIUTIAN 5.09
MMP 104.516
RAFFLES MEDICAL 1.002
RAFFLES EDUCATION 1.812
SWIBER HOLDINGS 0.733
SYNEAR FOOD HLDG 1.385
Source: Bloomberg
May be he was on margin trading leh. Wah 33.333333333 % profit. Should hv collected kg of $$ last few weeks.
CO plunges from 145 to now just below 100 per barrel... that's 1/3 drop.. ouch! Suddenly a lot of $$ went up in smoke... One of them invested heavily in Citibank last year... maybe leaking wounds now.
left_bug ( Date: 18-Sep-2008 16:39) Posted:
| How come the middle easterners not doing anything?
|
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Take a breather from the roller coaster ride of the market... quite ingenious.
Abbrev. used
FRB - Federal Reserve Board,
JP - JP Morgan
Let It Be - Beatles' version One Remiser's version
When I find myself in times of trouble, When I find myself in times of trouble,
Mother Mary comes to me, FRB will come to me,
speaking words of wisdom, let it be. Flashing stacks of greenback,
Let it be. "I'll guarantee!"
And in my hour of darkness, And in my hour of darkness
she is standing right in front of me, FRB is always there for me,
speaking words of wisdom, Flashing stacks of greenback,
Let it be. "I'll guarantee!"
Let it be (repeat 4 times) "I'll guarantee!" (repeat 4 times)
Whisper words of wisdom, let it be. Flashing stacks of greenback, "I'll guarantee!"
And when the broken hearted people And when Bear Stearns had to bite the dust,
living in the world agree, to the rescue, came JP
there will be an answer, With FRB exalting,
let it be "I'll guarantee!"
For though they may be parted Though Fred & Fannie are gone,
there is still a chance that they will see, There is still Paul & Benny
there will be an answer. Flashing stacks of greenback,
let it be. "I'll guarantee!"
Let it be, let it be, ... "I'll guarantee!","I'll guarantee!" ...
How come the middle easterners not doing anything?
AIG will not go under...not truth..the situation now is that they got the cash from fed to function...on borrow money,,if they are still unable to rise $ and with this market condition they may not rise enough..then 2 quater from now ,they are also as good as broke.
They can survive if only economy turn around, we see ..but whwn time come more will follow sue...what can the fed do...bail out everyone.
With freddie and fannie,,,their debt is double..they also got a limit..if everyone start to break down,,,that is...DEPRESSION...fed cannot save the whole NYSE!!!
The fed is just as broke as anyone,,,they just keep printing money..
today, the credit crunch drives all local bks down 2 d drain. their respective preference shares dive telok telok, min $2. $7 is d champion.
eat grass also dun hv liao.
d market is very panic now. next support pt of 2300 is at stake, AK guess only.
