A decade ago, the 2008 financial crisis wreaked havoc on global markets as well as the world. The financial crisis has sunk some banks and paralyzed markets, resulting in staggering losses for many people out there. It is also considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.
How did it all happen?
After 10 years, the causes and repercussions remain tricky to comprehend. What exactly set it into motion involves a whole series of complex questions with a number of interlocking answers.
Here is a quick infographic attempting to detail what caused the 2008 Financial Crisis:
It all began with the use of securitization. Securitization simply means the pooling of debt and then issuing assets based upon that debt.
Noble Group, founded in 1986 by Richard Elman, is known for being one of the world’s biggest commodity traders but now its very survival is in question. The company is incorporated in Bermuda and is listed in Singapore Exchange. We have seen its market value wiped out from US$6 billion in Feb 2015 crises.
This is a classic tale of smoke and mirrors, hubris and denial. Some events like Enron mark a generation. By no coincidence Enron’s business model was comparable to that of Noble, except that Noble has not yet filed for bankruptcy.
Noble had a great story to tell, just like Enron. Here is a quick glance on the key events that led the downfall of Noble Group:
Everybody knows that the Turkish Lira has been going south toward a crisis, but Donald Trump, President of United States made a statement through Twitter after a speech was made by Erdogan, the Turkish President which lead the Turkish Lira plunge further.
“There are various campaigns being carried out. Don’t heed them,” Erdogan said Thursday “Don’t forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now,” Erdogan told supporters.
As you can see, Trump’s tweet has rubbed salt into the wound – heated up the crisis even further and caused the Turkish Lira to accelerate its decline. The Turkish Lira has then crashed as much as 20% within a few days.
It is no surprise how one statement on Twitter from world leaders can have such a huge impact on the financial markets today.
Why 25% instead of 10%? That’s twice of the initial tariff level!
On July 10 2018, Trump seeked to impose 10% on thousands of Chinese imports. While the tariffs would not be imposed until after a period of public comment, the proposed level was then raised to 25% by Trump – this could escalate the trade dispute between the world’s two biggest economies.
Economically speaking, we know that by raising its tariff to a higher level simply serves as a motivation to motivate domestic producers to increase production of their output. This results in higher consumer prices, higher producer revenues and profits, and higher government revenues which make tariffs a way to make transaction from consumers to government treasuries effectively.
However, having tariffs begets strong consequences: 1) Cost of production for American companies increases 2) China will retaliate in response.
There are some opinions on the real motive behind imposing tariffs on China – it is more than just attempting to save its own country. …
We have a new eBook, The Guide To Singapore Stocks 2018 Edition, written by popular bloggers: TUBInvesting (@TUBInvesting), Simple Investor (@Simpleinvestorsg) and featuring special commentary by Lau Shi Ern (@LauShiErn).
Organised by industry and sector and consisting of 700+ pages, this guide allows you to quickly understand how each SGX-listed company has been performing and what it does.
In this edition, we are pleased to have Shi Ern on board as a collaborator, who worked as an investment analyst previously.
Over the past few months, Shi Ern has taken time to answer questions from many fellow investors, doing it out of good will and sharing his thoughts with the community. Having experienced investing as a fund analyst, we believe his view will be useful as a unique perspective to our readers.
Magnus Bocker, who led the SGX after the global financial crisis, has died of cancer at the age of 55. Here’s how SGX faired under him.
Prior to Mr Bocker’s role as SGX CEO from 2009 to 2015, he was the President of the Nasdaq Stock Market, and before that, he was the creator of OMX, the Nordic exchange. Mr Bocker held over three decades of experience in the financial industry and was often regarded as a driving force for change.
Here’s a recap of Magnus Bocker’s journey and some of the significant events during his tenure with SGX:
This Interview Series where we will be interviewing some very important people and asking them questions that you, as a retail investor, want answered. The aim of this series is not only to give retail investors a voice and help you become better at investing, but also to bridge the knowledge gaps between financial institutions.
How do people make money investing in stocks? One way is to buy a stock at a low price, and sell it at a higher the price. This is also known as capital gains yield. Another way is to receive the dividends while holding the stock. This is known as dividend yield. …