2008 in my memory is the most dramatic. On all fronts, politics, sport, environment, nature and economic, the news were just too captivating and consuming. I have never read so much and so eager to follow the progress of all those news in my entire life.
2008 will go down the annals of financial market history as the most momentous and tumultuous event of the century. The avalanche of financial news that constantly rocked the financial world each day seems to spare not even the fittest. The financial meltdown of the world financial system was total devastation of some of the biggest firms like Bear Stern, Lehman Brothers, AIG, Freddy Mae and so many. Historians had yet to coin a universally acceptable title. Perhaps if I may try, if I had a hand, call it,
Economic meltdown of the Century
Ultimate financial bubble of the century
2008 financial tsunami
Financial Crash of the century
2008 World Economic Crash
What seems to be a manageable property bubble created by the sub-prime housing loan morph into an uncontrollable financial collapse that affected the entire world. No analysts had predicted the intensity of the contagion of the credit crunch and financial meltdown from US to the rest of the world. By throwing in fiscal and monetary measures and financial interventions, the government tried to avert bankruptcy and steer the country out of recession. Never did so many countries realise their financial impotence. The measures always seem just too late and too little. The avalanche of devastating news that came days after days was so depressing and continues to shatter and acerbate the loss of confidence.
They crumbling stock market caused by the failure of investment banks and insurance companies were unprecedented. The crash of the commodities prices were totally unexpected, when only a few months before, were traded at historical highs. Hedge funds, sovereign wealth funds, pension funds were all hammered. Inadvertently, this affects consumer sentiment that spread the hardship to manufacturing, transport and retail businesses. It also causes wild fluctuation of currencies that either rise or fall to historical highs or lows. The scale and speed of the deterioration has caught every government and institutions by surprise. Now so many big financial institutions were on life support with fate still unknown. I had followed economics news for decades, but what I read this last 6 months total what I read the entire decade.
2008 may pass us but the severe pessimism will definitely carried over to 2009. On the back of every one minds is how long the recession will last. How deep will it be? The recovery will certainly not be V shaped. There were so many predictions out there. The most optimistic predicted recovery in the second half of 2009. While some pessimistic analysts predicted recovery only in 2011 and at a very slow pace.
On the home front, we had Selamat Kastari escape from high security detention centre. It sound impossible in Singapore and yet the year had ended and we don’t even have the slightest clue on his status. On the sporting front, we were thrilled when Singapore bagged an Olympics silver after 50 years.
On the world political front, a first black man was elected as president of America and I do hope he can deliver and bring a new dimension to world peace and order. We see terrorist bombing in Karachi Marriot Hotel and the bombing of Taj Hotel in Bombay. As the images of this grand old dame were aired over TVs, I recalled the number of times I had actually stayed in that old hotel wing with smoke billowing into the air. Other news that dogged the air, were the riots in Tibet, Darfur in Sudan, political brinksmanship in Zimbabwe and not forgetting the usual unsolved Palestinian issues.
On the regional front, the March Malaysian election that saw the BN losing its 2/3 majority for the first time and lost 5 states to opposition. In Thailand, the continuing unrest that pits the old elite against the rural poor back by Thaksin will continue to undermine the stability of Thailand.
On weather, the Tropical Storm Nargis inundated large part of Myanmar. However it is remembered for the sad state of domestic politics that hampered rescue and humanitarian operation. But the most devastating news was the Sichuan earthquake the shatter the souls of millions of Chinese and kill almost 100,000. I had travelled over Mianyang, Beichuan and Wenchuan; close the epicentre of this earthquake, a year ago. I had passed through those cities on my way to Jiuzhaigou for my holiday.
I personally see a very slow recovery maybe toward late 2009, it not 2010. I said this as the entire world has committed so much money to prime start and prevent the economy from further deterioration. But all these measures need time to filter down the real economy. The most difficult part was the total loss of confidence, not only from individual, but from the lenders themselves. But my fear is that the recovery may be short lived. Just like a cancer patient, he recovered from treatment, but may fall into relapse. When that happens, nature had to take its course. Certainly, the world is in an uncharted territory and I tend to be bit edgy on this account.
I can safely predict that the financial world would never be same again. The derivatives created by highly paid investment bankers will haunt the world for a very long time. The risk threshold will be lowered and investors become more sanguine. Greed has blinded both investors as well as investment bankers. The era of fat bonus will be gone for a long time. Future financial instrument will be easy and simple to understand and liquidate. The ideas of ‘growing your money’ or ‘returns’ will be taken with scepticism.
I just hope for a slow but a sustainable recovery. Keep my job and retire with sufficient fund to lead a simple and healthy life.
--------------------------I live to see the world----------------------------------------
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