Monday, June 29, 2009

How to subscribe to rights?

I got this in the email from my broker which I think might be useful for some of you all out there.

Anyway, I think Singapore should have ATMs that we can cash cheques in!! In the US, they have ATMs that are to read cheque and immediately credit the money into your account.

The machine basically scans the scan, and read off the amount that is on it. Amazing right! I wonder if it can detect if the cheque is a fake...

Tuesday, June 23, 2009

Looks fine in the US

Sorry for the updates. Have been really busy in the US. Besides school stuff, I have been traveling quite a lot too.

From what I observed, even though people are talking about how bad the economy is, it really does not look like the people around me are having much financial problems.

For example:
  • One of my US professors is getting a lower annual pay rise of 1% instead of the usual 4%
  • Even though staff/American friends were saying that car rentals might not be good due to the 'bad' economy, when I asked the car rental people, they said that all's fine for their business. ( The economy does not look as bad from the outside as it sounds from the news)

I also found out that students over can have really high credit limits! In Singapore, student credit cards have only S$500. However I have an American friend who holds 3 credit cards which have a total credit limit of about USD$10,000. Yup that's right, 10 thousand!

He also mentioned that US is the country where people are always in debt. They choose to just pay the minimum sum every month for their bills. And often, they bring along their debt to the grave. Which I think is quite different from Singaporeans.

Personally, I have not been keeping track of the stock market. But I do still read some reports that my broker sends me. Looks like our economy is not expect to recover so soon. So...if you start seeing a few more reports turning bearish, do start lessening your holdings. Cos the bear market might be arriving soon!

Saturday, June 13, 2009

Off to the USA

Hi Fellow readers, I will leaving for the US today for my school stuff.

Though I will be in the US, I will still continue to update this financial blog. And hopefully I will be able to get a non bias evaluation of the US economy as I see it.

I will be in Los Angeles for the next 3 weeks, after which I will be traveling to San Fransisco and Las Vegas for a week.

*Btw, the economy has a few bad signals.. rallies are not strong, and oil is rising...

Saturday, June 6, 2009

What is Bankruptcy Chaper 11?

On June 1st, General Motors filed for bankruptcy.

They filed for voluntary chapter 11 bankruptcy protection. I am sure many of us have seen these this in many articles in recent months. But what exactly are is it?

Chapter 11

The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership ( Wikipedia).

This is different from
the normal kind of bankruptcy that we know, i.e company closes down and sell all its assets. This kind of bankruptcy code can be found in Chapter 7.

Chapter 11 allows the company to continue running, even though its bankrupt. But of course under the 'care' of the court. It also allows them to continue getting refinancing and money from from different sources (but usually the company have to give some assurance to the money lenders like first priority to business earnings etc.) Its like giving the company a 2nd chance to reorganize itself, and hopefully pull through.

In the process, there will also be this 'automatic stay' clause that states that no debtor to stop collecting money from this bankrupted company. (So good! Bankrupt already can still borrow $$)

Frankly, after reading up more on chapter 11, I personally find that this law a little crappy (no offense, just that I can't think of politically correct word to use) I mean if a company fails, does it seriously deserve a second chance? By giving them a second chance, you are being unfair to the other companies who are doing well. What incentives do companies then have to work hard?

I can understand the reason for saving such big companies (because a lot of people depends on them for their jobs!)..but in the world out there, sometimes its inevitable. By 'rewarding' the bad, there is no point being good. Its like finding a quick way out but creating more problems in the future.

Looking at all these recently Chapter 11 cases, I really feel that USA is going to have bigger problems in the future with their businesses. There is really no more incentive to do things right because there is always a safety net, but at the expense of the tax payers money.