USD Drop Against SGD

As of 20 Sep 2007, 1 USD is equal to 1.5007 SGD. USD dropped even further after the recent interest rate cut.

Stocks: Percentage Gain Required to Recover Loss

A good reference

Loss of  % Gain Required to Recover Loss
5%       5.2%
10%      11.1%
25%      33.3%
50%      100%
75%      300%
100%     Game Over

Federal Reserve Statement

THE following is the full text of the statement issued on Tuesday by the Federal Open Market Committee (FOMC) in announcing a half-point cut in the base federal funds rate, to 4.75 per cent:

'The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 43/4 per cent.

'Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

'Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.
'Developments in financial markets since the Committee's last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

'Voting for the FOMC monetary policy action were: Ben S Bernanke, chairman; Timothy F Geithner, vice-chairman; Charles Evans; Thomas M Hoenig; Donald L Kohn; Randall S Kroszner; Frederic S Mishkin; William Poole; Eric Rosengren and Kevin M Warsh.

'In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 51/4 per cent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Cleveland, St Louis, Minneapolis, Kansas City and San Francisco.' - AFP

http://www.businesstimes.com.sg/sub/storyprintfriendly/0,4582,249500,00.html?

Keylogging worm discovered on Skype

Chris Boyd (aka Paperghost), from the FaceTime Security Labs (FSL), have identified a variant of the Bubbles worm on Skype. The team at FSL found what they're calling "Bubbles for Kids" that is designed to steal any and all sensitive information from the victim's computer through the most devious method of all - keylogging! It looks like it not only attempts to steal all your info on your machine, but once it has done that, it spreads out to all your Skype contacts.

The team have written up their findings on the Spyware blog.
http://blog.spywareguide.com/2007/09/bubblesfor_kids.html

Federal Reserve Cut Interest Rates By 50 Basis Points

As expected, the Federal Reserve moved aggressively to head off the risk of a sharp slowdown in the US economy on Tuesday 18 Sep 2007, cutting interest rates by 50 basis points to 4.75 per cent. This resulted in global stock markets to soar.

However, I believe the turmoil is yet to be over.

10 Easy Arithmetic Tricks

10 tricks to do mathematical calculations without using a calculator.

http://listverse.com/science/10-easy-arithmetic-tricks/

USB 3.0 To Be Released Soon

It will be a boost from 480-Mbits/s in USB 2.0 to 4.8 Gbits/s in USB 3.0 while dramatically lower power consumption.

http://www.pcmag.com/article2/0,1759,2184767,00.asp

US Federal to Announce Decision In Few Hours Time

The Federal Open Market Committee will announce its decision at about 2:15 p.m. (Washington Time) in Washington today, 18 Sep 2007.

Google Presentations Is OUT

After so long, Google Presentations is finally launched. However, its functionalities as of now is limited. One key feature is its embedded chatroom.

Google Presentations Finally Launched
http://googlesystem.blogspot.com/2007/09/google-presentations-finally-launched.html

Example of Published Presentations
http://docs.google.com/Present?docid=ajg2d6cw8q8n_120cfj9cm&fs=true
http://docs.google.com/Present?docid=df7b563g_6cb55qv&fs=true

Yahoo to acquire business software maker Zimbra

Yahoo Inc (YHOO.O) said on Monday it will pay $350 million in a cash and stock deal to acquire Zimbra, makers of "open source" e-mail and collaboration software that is an alternative to Microsoft Outlook.

http://news.yahoo.com/s/nm/20070917/tc_nm/yahoo_zimbra_dc

Microsoft Lose EU Antitrust Case

The gist of the whole matter is Microsoft Windows bundle with Windows Media Player is seen as a monopoly move by giant Microsoft which has caused minor players unhappiness. Microsoft is being ordered to pay approximately S$1 billion fine for this EU Antitrust case. On top of that, Microsoft is being accused of not releasing its code to others and making difficult for other software to interface with Microsoft's.

Personally, I feel the decision is unfair since the final decision is the customers'.

http://www.pcmag.com/article2/0,1759,2184210,00.asp
http://www.pcmag.com/article2/0,1759,2183936,00.asp
http://www.pcmag.com/article2/0,1759,2184214,00.asp
http://www.pcmag.com/article2/0,1759,2184207,00.asp

Getting Busy At Work

I am getting busier at work these days. So tiring :(

What is the yen carry trade

Simply put, the carry trade involves selling a currency with a relatively low interest rate, like the yen, and using the funds to buy another currency that yields a higher interest rate, such as the New Zealand dollar.

Usually, investors borrow in a low-interest-rate currency, convert the funds into a high-interest-rate currency and lend out the resulting amount at its relatively higher interest rate, reaping a profit from the difference in interest rates.

To paint a clearer picture of how the yen carry trade works, take the example of a trader who borrows yen from a Japanese bank, converts it into US dollars and buys a bond for the equivalent sum. Assuming the US bond pays 4.5 per cent and Japan's interest rate is zero, the trader makes a profit of 4.5 per cent as long as the exchange rates of both countries do not change.

The huge risk of the carry trade is the uncertainty of exchange rates. In the example above, if the yen was to appreciate in value relative to the US dollar or vice versa, the trader would stand to lose his money.

http://www.businesstimes.com.sg/sub/campus/story/0,4574,249041,00.html

How to Extract Pictures from Powerpoint

This simple hack is very useful.

http://labnol.blogspot.com/2007/09/extract-pictures-from-powerpoint-photo.html

How To Stay With MSN 7.5

Microsoft has just step up in forcing all Messenger users to upgrade to the new Windows Live Messenger. However, this has brought displeasure to some.

However, there's a temporary workaround to revert back to MSN 7.5. Please note that this workaround method works now does not mean it is going to work forever. Who knows when Microsoft will lock the use of earlier messenger versions by changing the encryption and protocol.

This is how the workaround works.

1. Open Windows Explorer and go to C:\Program Files\MSN Messenger
2. Right click msnmsgr.exe and select Properties
3. Make sure Compatibility tab is selected
4. Check the Compatibility mode option and select Windows 2000 from dropdown list
5. Click Apply or OK button
6. Run MSN Messenger 7.5 and it will automatically repair it.

Google is 10 Years Old

10 years ago on 15 Sep, Larry Page and Sergey Brin registered domain google.com to start Google internet search engine.

http://news.yahoo.com/s/afp/20070914/tc_afp/uscompanygoogleinternet

A loss

Sold one of my shares yesterday for profit taking but then today the share actually jumped 6%! That's a hundred dollars gain and a miss for me.

It's just too bad.

There's No Free Lunch

Nothing in this world is free. In one way or the other, there's definitely a cost incurred. Think carefully - if it's 100% free, then where on earth are we to find incentive for those who promote the so-called "free" product?

NO to the Microsoft Office format as an ISO standard (Online Petition)

I would say those who signed this petition are either an Open Source follower or just being anti-Microsoft.

BTW, below is a link for those who wish to sign a petition against Microsoft's Office OpenXML becoming an ISO standard. Anyway, I remember reading an article few days back saying even Microsoft themselves know they are losing this battle since they are not able to garner enough votes.

Online Petition (I am neutral so I did not sign)
http://www.noooxml.org/petition

A quick guide to sub-prime issues

In case you are still not sure what sub-prime means, read below. Please note that it is extracted from The Business Times (Published 10 Sep 2007).

CHARMIAN KOK explains how individual loan defaults in a faraway land can have a domino effect all over the world - including here

PAUSE for a moment to consider these facts: HSBC, the world's third-largest bank, announced that 50 per cent of its earnings in 2006 were wiped out by sub-prime losses from its US subsidiary. Since the beginning of that year, over 50 US mortgage companies have put themselves up for sale, closed or been declared bankrupt. In July this year, Bear Stearns closed two of its ailing hedge funds, while in June, BNP Paribas announced the suspension of three of its funds due to exposure to US mortgages.

With news like this making waves in financial markets lately, it is hardly surprising to see the proliferation of doomsday headlines like 'Market falls parallel previous collapses', and 'Anxiety attack knocks markets down'. No longer confined to the US real estate or financial markets, the topic of America's sub-prime mortgage market has taken centre-stage, as fears of a spillover spread to financial markets in Europe and Asia - even Singapore.

How did it all begin?

Before the US real estate bubble burst, sub-prime lending was a rapidly growing segment of the mortgage market. It worked by banks extending credit to borrowers who, for a number of reasons, would otherwise be unable to qualify for credit. According to the US Department of Treasury guidelines issued in 2001, 'sub-prime borrowers typically have weakened credit histories that include payment delinquencies, and possibly more severe problems such as charge-offs, judgments and bankruptcies'.

Most US sub-prime mortgages have an attractive initial fixed-rate mortgage payment for a few years, followed by a higher adjustable rate for the remaining life of the mortgage. The sub-prime mortgage industry began to proliferate earlier this century and estimates say that about 21 per cent of all mortgage originations from 2004 to 2006 were sub-prime - a sharp increase from 9 per cent in 1996-2004. At its height in 2005, sub-prime mortgages were worth US$805 billion.

Although not all sub-prime loans are necessarily high-risk, many of them were made to homebuyers with poor credit or little income. As the US housing market boomed, thousands of lenders greedily sought greater profits by aggressively touting loans to individuals with poorer credit ratings and making greater exceptions to guidelines. In certain cases, individuals were not even required to produce any proof of their income.

These sub-prime loans were bought mainly by big banks which bundled the debt and sold them to Wall Street firms. To sell these ticking time bombs, Wall Street packaged these risky loans with supposedly safer loans to create instruments known as collateralised debt obligations (CDOs) - making them more attractive to risk-averse investors. In 2006, an estimated US$100 billion of sub-prime debt went into US$375 billion worth of CDOs.

In pursuit of higher yields, investors stretching from Europe to Asia invested in these instruments for their potentially higher returns, as compared to bonds with the same ratings.

What went wrong?

Trouble started brewing when the US economy began showing signs of slowing down. Interest rates crept up, house prices tumbled and sub-prime mortgage defaults began climbing at an alarming rate, reaching 12.6 per cent at one point.

As default rates soared, creating losses on the underlying mortgages of CDOs, investors began to question the reliability of the models and ratings which valued these CDOs; indeed, credit rating agencies like Moody's have come under fire for misjudging default rates in sub-prime mortgages. With the uncertainty surrounding the current analysis and valuation of credit risk, many investors have decided to pull back on investments in CDOs and hedge funds with stakes in such securities.

Explained Jeremy Goh, an associate professor of finance at the Singapore Management University (SMU): 'When investors heard all these negative things about default rates in the news, they started withdrawing their money from hedge funds and parked them in safer money market instruments like treasury bills.'

The result was a triggered chain of reactions which affected markets worldwide. Hedge funds were forced to unload their assets in order to raise cash.
The scattered ownership of CDOs has in turn created widespread loss of confidence in financial markets. Besides affecting all holders of sub-prime-related assets, the greater and more serious implication of the sub-prime crisis is a squeeze on liquidity. Due to the uncertainty over other financial institutions' exposure to sub-prime losses, they became unwilling to lend to each other.

A tsunami or ripple effect?

However, central banks around the world have responded by injecting liquidity into the markets to ease fears of a liquidity crunch. The US Federal Reserve has also cut its discount rate (which it charges for emergency lending to banks) from 6.25 per cent to 5.75 per cent.

Asian equity funds have also been hit hard, and among those affected the most are funds from Singapore and Malaysia. Data from Morningstar Asia showed that funds from both countries sank an average of 10 per cent. Asian stock markets has also been tumultuous, spreading fears that a slowdown in the US economy will extend to the rest of the world.

Although the sub-prime crisis in the US may be a cause for concern, investors here should not be overly worried as Asian fundamentals remain strong. Many industry watchers agree that Asia's economies are no longer as reliant on the US as in the past. As intra-regional trade grows, Asian giants like China and India have become increasingly important trade partners for other Asian countries instead of the US.

Fundamentals of Singapore's economy remain firm as well, analysts agree. With the introduction of Formula One and the integrated resorts in the coming years, demand and consumption is likely to continue to propel Singapore's growth.

Prof Goh concurs: 'I think the jittery stock market in Singapore is only temporary, and I believe that highly-rated CDOs are still safe. Even if the US economy is heading for a recession, it will be a mild one, so the problem could be due to panic selling in the markets or hedge funds unloading some illiquid assets.

' As a result, it triggers fear in the lending market. Lenders are more reluctant to lend, which might have some effect on the economy - but nothing major, in my opinion.'

Extracted from The Business Times (Published 10 Sep 2007)