F1 hype

Witnessed my first F1 race yesterday and had an amazing time. It definitely helped that I was seated at the corporate box where they really know how to spoil you silly. First, you're greeted with a cold wet towel, then offered a class of the official champagne. There's a whole long bar worth of really really good food! You're then constantly asked if you'd like more wine, beer, coffee etc. And of course, the most important part, the box's air conditioned! 

Well, I guess for $3k they better treat you like a royalty!

Hhaha I've not even talked about the race yet. 

You start feeling the excitement and vibes the moment you enter the gates. The whole place was like a carnival, there were baskers, alot of food tents, people just enjoying the sun on the grass....

the random group of rowdy ferrari fans waving their patriotic flags. 

The qualifying race itself only started at 10pm (we were there since 4pm!). All I can say about my virgin F1 experience is I truly understand the meaning of 'catch no ball', in this case it's "catch no car'. The cars just zip by so quickly, leaving only a trail of VERY VERY loud screeches! The sound is no joke man! At first I tried to be hero, declining the offer of ear plugs but humbly went in search of one the moment I heard the first car go by. 

The only disappointment was, there were no accidents! I was really hoping to see one especially since we were seated right between 2 very sharp bends. 

Ok la I've to confess, i enjoyed the "spoiling me with booze n food" part more than the race itself hahaha. 

Will post some pics here soon but don't expect any photos of the cars cos they were too damn fast! 

Flabbergasted

Wow, I'm really flabbergasted by the huge public outcry over the DBS high note. It's simply unimaginable how many people lost their hard earned savings to these products that were purportedly sold as "low risk" investments. 

In sad contrast, MAS took a super long time to respond and when they eventually did respond, all they could say is "not my problem, go take it up with your bank". WTF??? 

But thank goodness for the internet, affected investors were able to come together through blogs and hopefully take a collective action in order to be heard more effectively.

This is impact of just one investment bank (lehman) going down, there are numerous notes tied to others like Goldman, UBS, Merril, Morgan Stanley, all of whom are in serious trouble now. I think we should all collectively pray that the US bail out plan works man otherwise the amount of wealth literally down the drain is too scary to imagine. 

Check out the links:

http://tankinlian.blogspot.com/2008/09/sad-experience-of-minibond-investor.html

http://www.straitstimes.com/Breaking+News/Money/Story/STIStory_281540.html

http://comment.straitstimes.com/showthread.php?t=13637

http://www.lioninvestor.com/what-will-happen-to-my-lehman-minibond/

crystal ball strike 2

Following my post yesterday, this just came out in the news:

"New York - Morgan stanley became the next great wall street name in peril on Thursday with reports it was in talks to be bought by US Wachovia Corporation.....

With flames of the financial crisis outrunning renewed central bank intervention...media reports meanwhile said Morgan Stanley was looking for help"

and so the saga continues....

Credit Crisis Crystal Ball: What does it say?

I chanced upon a bloomberg article written in 2007 which sheds alot of light into the Lehman brother debacle and possibly predict "who's next?"

Since as early as sept last year, the bond market already signaled the impeding end for Lehman brothers when bond yields show that Lehman is considered riskier than Columbian bonds. Columbia, based on their credit rating, has essentially has a junk bond status. And yet, lehman bonds were trading at an even bigger credit spread discount against columbia.

As far as I can recall, Lehman has always been a very aggressive and highly leveraged investment bank that did not have a superb credit rating history. Therefore, it comes as no surprise Lehman would be hardest hit and first to fall as a result of the credit crisis.

Ok so now we know "Lehman's kah-put", the multi billion dollar question is "who's next?"

Let's look into the crystal ball called the bond market again:

Hmm, I see a name appearing.....it says Goldman Sachs and.....possibly Morgan Stanley

Goldman last year issued a $2.5b senior debt and the bond market basically considered Goldman's bond no better than near-junk yield despite their AA-rating.

To make matters worse, firms in the limelight now like Lehman, Goldman, Merrill and Morgan Stanley are facing this year almost US$133b of bonds maturing. Merrill had the highest debt due this year at $42b (and as we all know they're in the shits now), next in line is Morgan Stanley at $34b. So could they be next? 

Or perhaps it's Goldman? 

I think now it's not a question of who's in the brink of bankruptcy. It's more a question of who will the Feds chose to bail out. The US have been the world's largest debtor since the beginning of time. Therefore, the Feds will have limited capital to sustain enough life support machines for these financial institutions in ICU now. 

While everyone grapples with this financial tsunami, i think the consensus is that, it's far from over. The cancer has so far only affected Wall Street, it has not even hit the main street yet.