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The collapse of the financial system on Wall Street is now finally reviewed. It’s going to affect everyone and every industry so much so that, no one can accurately said how the world will be in the next 2 years time, from economic sense. It’s like Iraq after the desert storm operation.

The financial market in the US was effectively driven by greed to make more money with the little they have. It is like take mortgaging your home and taking leverage with you house for everything you want, such as a dream holiday, a new car you cannot afford, a renovation, a new kitchen or just additional cash you need for Christmas.

Now even the banks do not trust each other and have stop lending to each other for fear that such borrowing may not be sound. Everyone is trying to plug the leak.

It is time the market p­layer­s take a long vacation and come back after the dust has settled. You cannot see anything clearly at this moment in time.

The commodity price will collapse to some extent, as the construction industries try to find their equilibrium. In some market, we are only seeing the beginning of the cycle for this slow down.

• Car Industries – will slow down and shift to budget models with fuel efficiency engine, no fancy flight here.

• Construction – will definitely slow down drastically.

• Building Materials – Will be greatly reduced.

• Primary industries – will slow down to some degree due to slower demand for goods.

• Food industries – will maintain and slow down marginally

• Transport – Including aviation will slow down with focus on budget mode.

• General Industries – will experience slow down depending on the industries.

• Utilities – Will have some slow down but at least this will help on the balance of payment due to importation of fuel and at the same time, fuel cost has recently turned south which should translate to higher margin.

• Banking & Finance – local market do not see great default to come from this crisis as most of the banks and local financial house was largely restricted for taking up foreign investment up until end 2006. Even then, the amount of products in the market was not popular.

• Property – this is going to be the tough one. Demand will slow down, with only interest from Middle East and some Asian countries; it would be interesting to know if this can be sustained. My view is, it will not and new launches will be affected most and there is rear concern on some of the project which are on the borderline.

• Media – There will be significant slowdown in the advertising budget as always when there is a slowdown in the market.


There is no sure winner out there. Credit crunsh will have far more deeper effect on the economy than you can immagine. Even company with sound business model and steady income may find it difficult to grow and even meet daily needs.

"The darkest hour is the beginning of dawn."
No one has the ability to pin point the bottom. While waiting for it, many are sure to miss it. Leaders of the world are now concerned that the world will go into a deep recession. They are trying hard to avert this. Everyone is overly pessimistic at the moment. This is a good sign that the bottom is around the corner.

The average Americans have over spent so much that they are now unable to service their loans. If the banks cannot collect back what they have lent out, they are in trouble, hence the credit crunch. This means a severe shortage of money in the banks.

Most people need a loan from the bank to buy a car or a house. If they cannot get the loan, they have to forgo what they want. Thus demand for properties will dwindle. Developers will then downsize their developments or postpone them. This means jobs have to be cut. This will further aggravate the situation. Imagine the situation where a person who needs a job to pay his installments, food and utility bills is now without a job. Worst still, if he has no savings and cannot borrow from any source. This is disastrous; it is a catastrophe!

Once the vicious circle starts, deflation will set in. Demands will drop and supplies will be curtailed. Lets pray that this scenario does not happen.

It is anybody's guess as to when the present downtrend will reverse. A good strategy is to monitor your candlesticks and follow the guiding lights accordingly.

Cheers!