1. Last friday was another history of depression in world economics. Semua market collapsed. Ini semua angkaara Wall Street yang mengamalkan konsep maximising profit. US dahulunye begitu angkuh dengan konsep kapitalism, akhirnya admitted their financial strenght is gone draining. Aku cuba memahami kenapa financial sector mereka boleh collapsed. I have read books and articles about their economics. Since 2001, another depression year, The Fed practising by lowering rate was the best solution to give more liquidity in market. Thus, cost of financing/borrowing maintain at manageable rate. This will reflect a very high confidence to the mortgage company to give more and more loans to housing buyer. The housing sector was booming, and financing company introducing irresistable loan packaging to market. The best part, people who earned USD84K per annum can buy propery worth of USD1.0M. The killing part was,no fixed income/zero credit rating can buy property. That was booming time. The bubble keep expanding since 2001. Finally, 2008 the bubble burst...
2. The second part, aku cuba memahami, why there is such problematic in liqudity. Now i realised, please see http://jp.youtube.com/watch?v=4dpJL6ANnV0
3. Paling aku pelik ialah RM vs USD. As of now (2.09pm 13 Oct 2008) 1USD = RM3.5105, padahal USD is getting weaker (two months ago was RM3.4). Please understand supply and demand. US Dollar's supply is more than demand, the rate supposedly and econmically lower, but it is the other way around. Then, compared to RM vs EUR. As of now is RM4.75 vs 1 EUR (one month ago was RM5.1). Yes, Europe also in deep depression. People dumb their holding in EUR, thus lowering the demand. But, this concept not applied in USD..still mencuba memahami ..
4. I will continue with this story on a later part.
Monday, October 13, 2008
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