What will happen if AIG was to fail?

AIG-Risk- Bankruptcy Report -aka The AIG Blackmail Note

This pdf tells about what will really happen if AIG was not rescued! It tells about :

• General Impact on econmy
• Impact on life Insurance policy holders
• Impact on retirement savings
• Extensive business disruption
• Impact on Global Capital Markets
  

Download it here
https://www.yousendit.com/download/dVlyZGVVQXBwM21Ga1E9PQ

Updated REITs yield and PTB ratios

These REITs look very very tempting! With yields up to 32%! Seems like a good long term investment that will give regular dividends.

Also, I read an article recently that says that property stocks will usually be one of the first few to start running up during an economy recovery, but I am not too sure whether it will apply to REITs.

Anyway, remember to look at the companies refinancing risks too. For example, Suntec REIT, they have a 700 million loan to refinance by the end of this year. 700 million is a big amount, and if they are unable to get the refinancing they will get into big trouble. However if everything works out well, this might also well be a gem! ( I suggest doing your own research first before investing)

Stress results a rumour!

Got this email from another friend of mine..JUST after I posted the article in the afternoon..haha.

Here it is

Treasury does not yet have stress test results......

Mon Apr 20, 12:10 pm ET

WASHINGTON (Reuters) – The U.S. Treasury said on Monday there was "no basis" for a report that said its "stress tests" on the health of the nation's 19 top banks showed several were "technically insolvent." A Treasury spokesman said the department has not yet received the results. The Turner Radio Network, which describes itself as a "free speech" blog, said 16 of the 19 are "technically insolvent," citing what it said was a U.S. government report. Shares of several banks fell sharply on the report. "There is no basis for that report; we do not even have results yet," Treasury Spokesman Andrew Williams said. The Obama administration has said the results would be released on May 4.

Bank stocks, already lower after Bank of America Corp (BAC.N) reported disappointing quarterly results and outlook, fell further. The Select Sector SPDR Financial ETF (XLF.P) was down 5.4 percent after the blog post was widely disseminated by at least two third-party news services. After the market open the KBW Bank Index (.BKX) fell 9.3 percent.

The site, http://turnerradionetwork.blogspot.com/, is not related to Time Warner's Turner Broadcasting System. "It certainly did (move the market) for a while. It raised people's eyebrows. People had associated it with (Ted) Turner's broadcast network," said Lou Brien, market strategist with DRW Trading in Chicago. The blog said: "Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in nonpaying loans.

"If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding," the post added. The blog was picked up by some third-party news services and cited by another trader for the drop in bank shares. The Turner Radio Network is described by some monitoring groups as a white supremacist organization. (Reporting by Corbett B. Daly and Chris Sanders; Editing by James Dalgleish and Dan Grebler)

US Banks Stress Test results leak?

Hi got this email from my broker 2 days ago. Take it with a pinch of salt cos it might be a rumor only... But anyway..if you want to bet on it, short now on the rumor and buy when the news is out.

Here is the email..

*************************************************************************************

The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship.
When the tests were completed, regulators within the Treasury and insidethe Federal Reserve began bickering with each other as to whether or not the test results should be made public. That bickering continues to this very day as evidenced by this "main stream media" report.The Turner Radio Network has obtained the stress test results. They arev ery bad. The most salient points from the stress tests appear below.

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.
3) If any two of the 16 insolvent banks go under, they will totally wipeout all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks areunder capitalized so dangerously, there is serious doubt about theirability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorganChase, Goldman Sachs, HSBC Bank America and Citibank - taking especiallylarge risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!

7) Not only are there serious questions about whether or not JPMorganChase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
The debt crisis is much greater than the government has reported. TheFDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter.Put bluntly, the entire US Banking System is in complete and totalcollapse.More details as they become available. . . . . .

Disclaimer:
This email may contain privileged and/or confidential information intended only for the use of the addressee. If you are not the addressee, or the person responsible for delivering it to the addressee, you may not use, copy or deliver this to anyone else. If you receive this email by mistake, please immediately notify us.
Opinions contained herein may be the personal opinion of the sender and do not necessarily represent the views of the Company. If you are in any doubt as to whether the opinions are officially endorsed by the Company, please contact our Compliance Dept at (+65) 6225 1228 for clarification.

*************************************************************************************

STI Information

Read an article published by DBS Group Research ( This was around the time BEFORE the run up). Here are certain graphs that I feel is a good to know..

• This picture show how events have been pushing the index in certain directions. This will tell what kind of information has a greater impact on the index and hence general market direction.

• Year on year (YOY) Change. This tells us the growth/recession rates of Singapore. Looks like we are at the worst YOY change so far..
  

• Price to Book value. This show the prices that the STI stocks are trading to their book value. The center line shows the mean value, the outer 2 lines shows a standard deviation of 1. Currently we are way way low of the mean, and its even below 1! meaning the price of the stock is BELOW its book value.
  

• Forward Price to earning ratio (PE). This show's the expectation of the Singapore market. Now it is low, meaning the price of the stock is just a few times of its earnings => high potential growth. High PE is usually associated with strong good companies, as the their earning are thought to be stable, hence people do not mind paying a higher price for a small amount of earnings. So in our low PE case, it sort of implies lost of faith in the Singapore economy.
  

Business Networking Review

Had a great session today at Phillip Investor Hub! There were 10 of us present, coming from various background and age groups.

The session started off with me introducing some of my ideas, followed by us splitting into 3 groups namely

• E shop business
• Trading/charting
• Food Business

After that, we came together to share a little of what we discussed within each group.

Personally I was in the food business group, which eventually carried on all the way to 5pm. It was fruitful, and most probably something will come out of it.

Here is the brief summary of the meeting

1. E shop business
This discussion was mainly done between 2 of our IT specialist friends with a friend from SMU.

This involves setting up an online retail shop to bring in other small retail shops. Sounds complicated? But its essentially, its like setting up a shopping mall like Takashimaya, Tampines Mall (i.e. this business) and bringing in various shops like Hang Ten, Nike ,Addias. etc ( for example those bloggers who are currently selling stuff on their own blog shop).


2. Trading/ Charting
This discussion was done between a broker friend and 2 TA specialist from http://chartistsunited.com/

This discussion involves helping to build up the web base subscribers due to the moving of their web site.

3. Food business
This discussion involves a man who has been helping people set up food business for the past 20 years. Also, this is the topic that everyone finally converged into and a possible business plan was formed.

This involves setting up a culinary business. However, we do not only teach people HOW to cook. But also HOW to SETUP a food business.
The business aspect will involved education on stuff like...things to look out for like preventing your takings from being stolen etc.
Also, because of the IT specialists, we discussed the feasibility to help put this business online too.
The cooking aspect will be targeted to housewives, maids etc. and might extend to even selling cooking products to them.

This particular business will be seeing another meet up (but is closed to new people) soon to further develop the idea as we have the man to provide the technical know-how. So now its up to the marketing and the further development of the idea.

Review of : Insight to being a professional trade @ SGX academy

I attended a seminar that is hosted by with Ong First and SGX at SGX Academy on Tuesday 15 Apr 2009 at the SGX building. The talk lasted from 7pm-9.30pm.

The speaker talked about his personal experience ranging from why he started trading,including the time when he was still a floor trader. ( Floor trading has stopped already, i.e. no more shouting with high signals in the stock market like you see on TV. As Singapore has chosen to go electronic.) And the present day, when is still a broker and a trader.

However, the 'real content' as basically catagorized into these 3 points, which he briefly touched on:

1. Money management



2. Psychological factors



3. Having a trading system

To learn more, you will have to attend his course, which will cost $900 by him, and $3000 if it is conducted by a more 'PRO' person.

In general, I find the course structure very similar to all those trading books..so I don't think its particular useful to spend a few thousands to learn these. Unless you want to learn their enter/exit strategy, i.e their systems. However I think a real trader would not want to reveal their winning system to anyone else..

The only thing that I found useful, was one of his trading style. He calls it the opera house system, but essentially its a 'head and shoulder formation' as called in technical analysis. Essentially, the break out would attain a peak of roughly the magnitude of the previous trough. The diagram below will give a better description.

Happy trying around with his strategy!

Review of Far East Organisation talk & show rooms 'Jardin' and 'Gardenvista' Part 2, with Citibank Home loan

Garden Vista is nice. The place has its own private lift. I.e the lift starts from the ground floor and the basement car park and goes straight up INTO your apartment. Yup, that's right, the lift opens into your home. Privacy is preserved as only by using your unique access card, can you access that particular level of the lift.

Amenities looks good, swimming pool, Teppanyaki station, gym etc. With its own tennis court ( something that Jardin does not have).


After that, I met up with the Citibank home loan specialist. This cash management account (CMA) with an interest off set feature is quite a good one, and I would recommend it to people who are trying to get a home loan.

Here are the rough details :

• Floating rate pegged to the either 1/3/6/12 mth SIBOR rate + X% ( where X is 0.85% for the first year, and 1% for subsequent years)
• Concurrently, Citibank lets you open this CMA that pays you 70% of the effective interest rate from your home loan on your money in this CMA. For example, if the SIBOR in the 2nd year is at 1%, In the 2nd year, your effective rate is 1% + X% (where X is 1%), hence your pay an interest rate of 2% to the bank. The CMA will let you earn 70% X 2%interest rate =1.4% on the $$ in your CMA.
• This interest earned, cannot be withdrawn. It is used to offset the monthly interest component on your monthly home loan, hence a higher percentage of your monthly installments is used to pay off your principle amount, leading to a shorter loan tenure.
• The maximum amount that you can put into this CMA is the same as the loan amount.
• This floating rate can be interchanged betwen 1,3,6 or 12 mths are any time of the loan duration. However it will only be free if the change is done at the Expiry date of each term. I.e if you take up a 3 months loan, you can only change your 'plan' after 3mths, 12mths loan means you have to wait for 12mth...etc.

The website of Citibank (click here) does not say much about this plan in detail, so I hope the above information is useful for all of you out there!

Review of Far East Organisation talk & show rooms 'Jardin' and 'Gardenvista' Part 1

Note: I have decided to reopen my 'Power to trade blog' as I believe the time to trade is here!



I was there around 4pm which was early, because the talk starts at 4.30pm. Meanwhile from 4-4.30 pm, Mr Chen from Far East Organization brought me around to see their show flats and told me more about their project 'Jardin', which is situation in Bukit Timah

The price of Jardin is @ SGD1250 psf . Though it is freehold, it is rather pricey as I found from 'The Edge Magazine' that a nearby Maplewoods condo, that is also freehold was transacted at $817 psf just within the week of 13-26 March.

Here is the rough cost of an apartment:
2 Bedroom => 958 sq feet => SGD 1.12 million
2+1 Bedroom => 1098 sq feet => SGD 1.39 million

Now back to the talk, it lasted from 4.30pm to around 5.30pm. It was rather informative, a little more than what I can find from the property reports that my broker sends me. These are some details :

• Most high private property prices has drop 30% since its peak.
  
• 80% of buyers are Singaporeans, while the rest foreigners.
  
• Out of these 20% of foreigners, around 25% are made up of Malaysians, the other 25% Indonesians.
• Usually the volume of the number of transacted property units coincides with the general price trend of the property market. I.e when the prices were sky rocketing a few months back, there was A LOT of sales transaction. And now, with the crisis, though volume has dropped..but the price has not dropped as much. The reason being, developers are still hesitant to do a major adjustment of their prices.
• The government is spending around S$40 billion on the Integrated Resorts.
• And another S$40 billion on transport and infrastructures.
• Government is pushing forward the bukit timah's MRT construction by a year or two.

After the talk, while waiting to speak to one of the Citibank's Home Loan specialist, regarding an interesting Cash Management Account,Mr Chen brought me to the condo next door, Garden Vista to look at their last remaining unit. I shall update this is my next post...

Singapore Property 1Q 2009

This is a review of an article by Phillip Securities Research plus some of my inputs. ( The number facts are from the article) Found out a few things:


1. Price of non-landed private residential properties decreased by (from URA)

• 15.2% - core central region
• 17.2% - rest of core central region
• 7.55 - outside central region

Reason of the highest decrease in the core central region is because these prices has been high, and are expected to decline further than the 'outside central region', hence due to the lack of demand, the price drop.
The other reason is the HDB up graders find the outside central region more affordable and hence are the people creating the demand.

2. Revaluation losses

• Expect property companies ( eg. SPH how hold some properties, wheel lock, REITs etc.) to write down assets by 20-30% in 2009) This is because in 4Q 2008, the write downs less than 10%, as property markets have not dipped much.

3. Interest Absorption Scheme (IAS)

• After the Singapore government scarpped the Deferred Payment scheme to curb property speculation ( the scheme that allows buyers to start paying for their house only after it obtain the Temporary Occupation Permit (TOP), developers have comed up with some similar, called the IAS. Under this system, the buyer pays a 20% downpayment when they book,and will not need to make progressive payments untill the house has obatains the TOP. However, there have to pay a premium of about 3% for this IAS

So in general, the property market is expected to decline!

The Voca People

I know that this is non finance related. But i think this is one really cool video..besides the weird outfit..

Enjoy the video!




Anyway..my previous post on support line looks quite accurate right? Always try to buy on support!

Time to trade with the market?

I feel that the market might still be in a short time uptrend. Support line is at around 1770. If you would like to trade, its time to buy in now (1765 as of 1.24pm). Cut loss at 1700.

Trade at your own risk!

Far East Organization Property Talk

I got this so called 'exclusive invitation' to a high tea reception organized by Far East Organization via email 2 days ago. However i think its should actually be open to the public too.

At the talk, the following with be addressed :

• Singapore Property Market Update
• Update of Housing Loan Packages available in the market
• Complimentary Property Tour

Details as follows :

Date : 12 April 2009 , Sunday
Time: 2pm ( However when i emailed, they said the slot if full, and allocated to me the 4pm slot)
Venue : Jardine Sales Gallery, 966-968 Dunearn Road

I will be attending this reception. Those of you who are interested to meet up and go together, do drop me an email at ntuchartist@hotmail.com

50 world's safest banks

The list of World's safest banks 2009 were selected through a comparison of long term credit ratings and total assets of the 500 largest banks around the world. The ratings from Moody's Standard & Poor's and Fitch were used.

The rating agencies determined these banks have demonstrated a more prudent and sustainable approach to risk than their peers. This is important, as now is the time when customers all around the world are viewing long term creditworthiness as key features of a bank.

Notice the common/local banks in Singapore are rated as such :

• HSBC (19)
• DBS (28)
• UOB (37)
• OCBC (38)

However, actually most of the banks on the list are in Singapore. For the full list of available banks in Singapore. Click here

Elliott wave principle ( STI to recover ?)

Just a little more about the Elliott Wave Principle. ( For more info, click here )


It consists of 5 wave patterns that contributes to the major move ( in our case, it led up to the peak in 2007)
Followed by 3 correction waves. ( Namely A,B,C in our case..as shown in the diagram )

So does this mean its almost time to buy into the market?

• The period of 1 year 6 mths ( the average bear market) is going to end in around Apr this year
• It seems that the Elliott Wave Principle is pointing at the same time frame

* Since I did mention about the Joseph's 7 year cycle before, i suggest the buy and hold for LONG term strategy should not be practiced. But rather buy and hold for the medium term, and sell when u find that its almost at the peak of the economic cycle.