With recent rallies that started from March till now, its almost forgiveable that one thinks that recovery has begun. All the more convincing, with the news that our May report showed some "green signs". Notwithstanding the fact that there were also 6 BIG rallies in the crash of 1929.. That BIG one lasted approximately 34 months and was down 89.2 percent! The truth be told: U can still make money in a down-turn! But the difference between winners and losers is this: U just got to have more winning position compared to losing position. But it will be foolhardy not to consider economic trending of the world at large.
Lets look at the numbers:
1. Singapore's trade remains in the Red despite talks of green shoots. In fact May's numbers got wiped out: Slumping global consumption continues to punish exporters... Consider this: Exports to European Union down 36.2 percent, Exports to Malaysia down 23.5 percent and Exports to Japan down 22.4 percent!
2. Layoffs may have plunged by 70 percent in the last three months but there will be retrenchments between next month and November. It is worthy to note that the number of layoffs and workers on a shorter work week is high - it is more than double that of the Asian Financial Crisis.
3. The loss of man-days ( term for number of work days per worker) is 4 times that of 1998 and as high as in 2001.
4. For the US: Indeed, the delinquency rate on U.S. mortgages surged to a record 9.12 percent in the first quarter of this year. Late payments rose in ALL categories, including prime fixed-rate loans.
That said, however, rallies should abound from now till end of the year. But come next year, when the picture from US becomes clearer, it should be pretty evident whether we are in recovery or whether it will be a deepening of the crisis.
No comments:
Post a Comment