Fall of US Financial System

First the 5th largest investment bank, Bear Sterns falls, with a bailout by JP Morgan, supported by Fed $29 billion. Then Fannie and Freddie, bailed out by Fed in full, then Lehman, the world 4th largest investment bank, whose bleak future is looking at bankruptcy, as Fed has decided that they cannot afford to continue the bailout and disrupt the self-correcting market and with its intent to tell the market that "you have to solve your own problem!".

Then came Merill Lynch, the 3rd largest investment bank, who knows that they cannot wait for a public fund, and already in talks with BOA for a buyout before they follow the trail of Lehman. In fact, it has already been confirmed:

By Binyamin Appelbaum

Washington Post Staff Writer Sunday, September 14, 2008; 9:59 PM

Bank of America has struck a $44 billion deal to buy Merrill Lynch, according to two people familiar with the negotiations, a merger that will unite the nation's largest consumer bank with one of its most celebrated investment banking firms.

Who knows what will happen to the other banks? However I am pretty confident that JP Morgan and Goldman Sachs will survive, and emerge stronger than before, Thus, it will be 2 great choice for investment if you were to invest in US banks.

With the above episode, no banks in the world will be spared from losses as they deal with one another. European banks will be the next to be greatly affected, followed by Asian banks. For instance, China banks are holding a significant amount of stakes in Fannie and Freddie, and it is only a matter of time when they have to divulge their losses. Also, there has been talks that Singapore DBS bank has strong dealings with Lehman. What will happen if Lehman goes into bankruptcy, which is more or less confirmed.

The banks' stock is going to tumble hard soon, but this also means that we will finally be reaching the bottom of the market. However, do note that this financial crisis will only end when US housing prices stop falling. Once it has stabilized, it is time to start going into the market to make a killing.

I will putting up the US mortgage rate monitor in my blog soon...so Stay Tune!

Kin Mun Clinic Toa Payoh

This is a relatively popular skin clinic located at Blk 66 Toa Payoh Lor 4 #01-319, which is usually packed. Call 62566353 for appointment. You do not have to wait if you know which products you are buying.

I have used 3 of its products:

• Skin Renewal Cream
• Washing Gel
• Toner

Skin Renewal Cream - Effectively helps to reduce spots on your face after using it once per night for 2-4 weeks. It works like AHA and will cause peeling. I have used it and it really works!

Washing Gel and Toner - Used both together for oily skin. It helps to control oil production on your face and is pretty effective as well.

No more oily skin and spots!

Kose Sekkisei White Powder Wash Helps Oily Skin

I was having problem with oily skin since puberty, and had been unable to find a washing cream that can help to alleviate the problem. Recently, I was introduced to a relatively new product by Kose - Sekkisei White Powder Wash.

You can instantly feel your face rid of all the oil after using it, and after using it for a month plus, you can feel that the oil on your face is well-controlled.

Though it may be subjective, but it's no harm trying it!

Available at all major departmental stores at around $30+ per bottle.

Mei Xin Mooncake - Simply the best!

In view of the upcoming Mooncake festival, I would like to take this opportunity to share with you the best mooncake that you should get - Mei Xin Mooncake from Hong Kong (HK). I have personally taste it in Hong Kong, the snowskin mooncake is simply the best I have ever tried, soft, tasty with lots of diffent variety and flavours!

Unfortunately, it does not have a branch in Singapore, but fortunately, you can buy it now at a booth in Takashimaya Mooncake exhibition at basement 2, as well as at Raffles City Shopping Centre booth. Grab it now!

For more information, visit http://www.mei-xin.com/index.html

POSB Everyday Credit Card

On top of my previous post on 3 best credit cards, POSB Everyday credit card is definitely worth taking a look, reason being it gives a unique rebate on our everyday usage - Utilities and StarHub!

Paying your Utilities and StarHub bills (SCV, Mobile and Broadband) using POSB Everyday Credit Card entitles you to a 1% rebate each. It is better than nothing!

Besides that, the card gives 5% rebate at Carrefour (also the best), and 3% at Watson. Besides this, you can use this POSB Credit Card to pay for your Stock Purchase as mentioned in my previous post to get extended contra period and rebates on stock transaction fees!

The rebates come in the form of instant cash stored in your card that you can use it for purchase, and this card comes with a 5 year waiver of card fees.

What are you waiting for? Make the best of your credit cards now!

Stock Market Cycle

The above graph provides a rough guide of the relationship between economic cycle, stock market cycle and the stock sector. Though it may not be 100% correct and reflective of what should happen to each stock sector during bull and bear market (e.g our tech sector has been in the doldrums for a long period and has not really enjoyed the bull market from 04-07), it does give you a good gauge of the sector you should focus on.

I believe we are not at the trough yet, as history always points out, there should always be a sell-off in banking stocks before we reach the trough. Our local banks (DBS, OCBC, UOB) has dropped in price, but has pretty much held up its price. There should be a furious sell-off coming up soon before we reach the trough. My guess is US is in a early-middle recession period, and the rest of the world is trailing US and should be in the early recession period. There should be at least few more months to go before US housing prices bottom out, and at least a year to go before US banks clean up their mortgage and sub-prime problems.

The graph points out that we should go for utilities, healthcare and non-cyclical consumer stocks, and I would add dividend stock to that list, and that is pretty much in line with my stock investing strategy for now. However, do note that there are always few bright sparks in each industry irregardless of the market, and do keep a look-out for them.