Monday, May 14, 2012

Big banks should be regulated

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2 comments:

yujuan said...

David Van predicted Stock Exchanges should crash by June and advised those playing with equities should liquidate positions before June.
JP Morgan is the starting salvo.
And Michael Synder said,
"The $2b JP's loss is just a preview of the coming collapse of the Derivative market. Today Wall Street is the biggest casino in the entire world.Mainstream news reports are not even using the word Derivatives, just said the $2b loss is simply a bad bet. Perhaps that is easier for the ordinary American people to understand."
And with a seasoned property investor in Singapore, predicting the Singapore property market will start a meaningful correction in Oct this year, we are kiasu and kiasi, better to trim our Equity investment, better safe than to be sorry.
Wonder whether our 2 SWFs have holdings in JP Morgan also, they often say their foreign Banks investments are for the long term, but if they are part of the casino game, then our 2 SWFs are also gamblers too.
And our Banks in Singapore? They lend so much money to foreigners to buy local property, if the world economy turns topsy turvey with the coming big FIs' derivative losses, then all these foreign borrowers would just abandon all the expensive properties here, pack their bags
and fly off, leaving the banks here to carry the over valued babies.

May 14, 2012 11:36 PM
Tan Kin Lian said...

@yuyuan
I do not know if the market will crash in June or not. But I do know that for a long term investor who does not have any leverage (borrowing), a market crash does not matter.
The company will still be trading, so the investor will still collect the dividend and can wait for the market to recover in due course.
If the market crash affect the economy, many companies will report lower profits. So, the dividend may drop, but should still be higher than the rate of interest paid on bank deposits.
Some company may become insolvent, so it is important for the investor to be well diversified into 10 or more shares. If they are not able to achieve this type of diversification, they should invest in the STI exchange traded fund.
For those who are not invested in stocks, a market crash is good time for them to buy the stocks.

May 15, 2012 8:33 AM

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