Asia Monday Off To Grim Start
Discussion From

Hysteria in Asia?
(SeattleSun) Oct 27, 02:20

From a buddy working for Barclays in Singapore.

The stock market doesn't exactly show this but there is hysteria level among people with money, merchants, proprietors - local money that is - to move them back into USD or gold, moving out of HSBC or Standard Chartered banks all over Australia, moving from PHP/THB/ IDR/KRW out into USD socked under mattress or in home vaults. Armageddon was the October selloffs. This? I don't have a name for it yet.


.....just off the phone again, and there are people waiting on the phone watching CNBC, ANY govt intervention off they go calling the bank to buy USD on the dip. This is crazy bad. I remember 98 was bad, but this is gonna end up something else altogether. Whoever had their money in carry trade or asia decoupling or some form commodity exposure if not dead yet will be very very dead. I have had one confirmed suicide due to liquidation of 40MM account trading JPY on Friday in singapore. This is not going to be isolated at all.


.....are they going into digital FRNs or actually looking for printed bills.....


From what I heard they'd put it in the banks so long as they feel "comfortable" - i.e. bank owner is connected politically like Paulson here etc. But will definitely pull the minute there's a word mortgage or UK on it. Citibank hasn't been rushed yet and I wonder how this split personality works because if anything it's so much worse......


Philippines Market Closed (Emergency)
As of MON OCT 27, 2008 12:10:00 PM

Time there is now:
Mon 12:35:29 PM PHT

If they don't/can't reopen, then yes -12.27% down is the close.


From Poland -
I confirm massive run to safety and dollars purchasing across Eastern Europe. People in Poland created long lines in front of foreing exchange offices on Friday. It was a massive move. Hundreds of thousands of people purchased USD at any cost. It was shown on sattelite TV. Banks run out of currency!


The Fed has backstopped the entire planet out of their credit markets AND out of their local currency.

Look for runs in Belarus, Romania, Poland, Hungary, & t Bhealtics.

Every day I think 'Well, this is as bad as it can get', and everyday it gets a bit worse...


What's the deal with HSBC? It is an extremely conservative bank, and probably has the deepest penetration of rich Asian clients among all banks.

I can understand Singaporeans' USD fetish, SGD was soft pegged to USD for many years, so flight to safety to their local currency is the same as flight to safety to USD, and of course given its size, USD is obviously safer to flee to.

I also have a friend there telling me that suddenly Chinatown jewelery ships are swamped with customers and the local gold shops have been out of physical since last week.

----------------------------------------------------- also needs to understand Singapore from another perspective, it is a tiny country completely dependent on trade for food, and trade surplus in particular to sustain itself. So Singaporeans typically overreact to any crisis, including the SARS and Asian Financial Crisis.

Not to downplay the severity of what we facing, but these tiny countries with no secured food supply face a very different crisis outcome from a country that is the bread basket of the world......


I just talked to my contacts in Beijing and they are telling me that people are forming long lines to buy Chinese Government bonds. I asked where they thought the people were getting the money and most said from stock market and savings accounts. I asked why not just pull it from the market and put it into savings accounts, and the answer was that the interest on the gov't bonds is tax-free. I asked if this could lead to a run on the banks, their answer - no. This is the part that I am not sure about. If people are buying bonds with their liquid money, doesn't this take money from the banks? I know that the bonds are purchase through the banks, but doesn't the money leave the bank?


I have never seen anything like this in my life. I have been in the markets since the recession of 1973. I began working under an 80 year old broker who survived the GD.

Take my word for it, what is happening right now has NOTHING TO DO WITH ANY STOCK METRIC! The markets and share value are being driven by one thing and one thing only - BACKSTOPPING!

For example, if you have a position with a MF/Broker and that MF/ Broker is not backstopped, you move out of that position and to the bank that is backstopped. This has nothing at all to do with investment metrics. This has brought countries like Australia to their knees; so that they had to stop MF withdrawals. This is what is driving markets at the moment. This trend will not stop until country default risk is gone which is still a long way off.

I have never seen anything like the global currency movement last week. I have been trying to draw an analogy for my not-so- financially-aware friends and colleagues here. I occurred to me what that could be.

Do you remember the Asian Tsunami in Thailand? Well, what happens just before you get hammered is that the water goes way out, the bay dries up and then you've had it. That is exactly what it happening now in the currency markets; the smaller currencies are being drawn down until they dry up worthless, and then the world is going to be hit by an ALMIGHTY DOLLAR AND YEN TSUNAMI!

Everybody is starting to run for high ground, but they can't find any.


Had dinner tonight with some Thai people whose family started the first Thai restaurants in Los Angeles some 30 years ago. Both male members of the family are in Bangkok, and travelled there to repatriate assets.


Well that is how Monday the 27th of October is starting in Asia.