Has Singapore become a magnet for the super Rich !!!

Since last year, Singapore has been facing accusations in the German media and from lobby groups of being a magnet for tax evaders.  Media reports have put the amount of German money moving to Singapore in the double-digit billions. “The perception is that Swiss banks have concluded Switzerland is unlikely to remain a tax haven for much longer, and Singapore is the new place to do business,” said Ronen Palan, a professor at City University London who has conducted numerous studies on offshore finance.  

Swiss banks could see assets from Western European clients fall 28 % to 623 billion Swiss francs, or $668 billion, by 2014 because of the deals to tax undeclared accounts, the Boston Consulting Group said in a report. Singapore and its rival, Hong Kong, look set to benefit.  

Together, the two Asian hubs manage $1 trillion in offshore funds, with about 75 % of that coming from within the region. But Singapore and Hong Kong may overtake Switzerland — now the largest global offshore wealth center, with assets of about $2.1 trillion — in 15 to 20 years, Boston Consulting said. 

Singapore, with tax rates that top out at 20 % and no capital gains tax, is already synonymous with wealth. Safe and clean, the city-state bills itself as a tropical refuge with exclusive residential enclaves, a marina for superyachts, two casinos, fine dining, high-end boutiques and an annual Formula One race that brings in the global jet set.  

Rich residents include Eduardo Saverin, the co-founder of Facebook, who has called Singapore home since 2009. The Brazilian-born Mr. Saverin, who renounced his U.S. citizenship this year, was in the eighth spot on a Singapore rich list published by Forbes magazine, with an estimated net worth of $2.2 billion. The list also included immigrants like the investor Richard Chandler, born in New Zealand, who had $2.9 billion, and the property developer Zhong Sheng Jian from China, with $1.4 billion.  

A 10 % property duty imposed on foreigners, part of efforts to cool the housing market, has done little to dissuade the ultrawealthy — many of them Chinese, Indian, Malaysian and Indonesian — from plowing money into Singapore real estate.  

Australian mining tycoons are also moving in. Gina Rinehart paid 57 million Singapore dollars, or $47 million, for two units at Seven Palms Sentosa Cove, a luxury beachfront condominium, according to Singapore’s Business Times newspaper, while Nathan Tinkler recently moved his family to Singapore.

2009 Financial crisis: AIG

Joseph Cassano, AIG financial products

Cassano has been dubbed "patient zero" of the global economic meltdown. He ran the AIG team that sold credit default swaps in London that led the company into bankruptcy and a massive bailout. Democratic senator John Sarbanes said Cassano "single-handedly brought AIG to its knees".

After the bailout Cassano refused all media interviews and had not spoken about the crisis until he was called before the US congress financial crisis inquiry commission in July 2010. "I think there would have been few, if any, realised losses on the CDS contracts had they not been unwound in the bailout," he said, adding: "my perspective diverges in important ways from the popular wisdom".

Cassano, who used to live in an opulent townhouse behind Harrods, has since moved back to Westport, on Long Island Sound, where he is apparently unemployed, and uncontactable.

2009 Financial Crisis: The American public

It wasn't just the bankers who were greedy. The men and women on the street took out billions of dollars of loans they knew they couldn't afford. American families' wealth has fallen by 38.8% between 2007 and 2010, according to the latest three-yearly data from the Fed. The collapse in house prices, which was caused by Americans' failure to keep up repayments on loans they couldn't afford, caused US families median net worth to decline from $126,400 in 2007 to $77,300 in 2010.

2009 Financial Crisis: Wall St Bankers

Jimmy Cayne, former Bear Sterns boss 

While Bear Sterns was going bust Cayne was playing bridge in Detroit. He's quite an accomplished player and has won several rounds of the North American Bridge Championships. But he was less good at running Bear Sterns, with CNBC naming him one of the "worst CEOs of all time". 

Bear Sterns was sold to JP Morgan for $10 a share, compared with the $133.20 a share it was trading at before the crisis. Cayne, who had a big stake in the company, lost about $1bn. 

Cayne has now disappeared from the corporate public eye, but it is still possible to play him at bridge online.

2009 Financial Crisis: Wall St Bankers

Fred Goodwin, former RBS boss 

Fred "the shred" was stripped of his knighthood last year as public anger over his role in causing the financial crisis reached boiling point. Goodwin, who has been dubbed "the world's worst banker", brought Royal Bank of Scotland to its knees via a series of over-ambitious acquisitions. A string of 20 takeovers transformed RBS into a global leader but Goodwin wasn't satisfied and just before the financial crisis struck he led a $100bn takeover of Dutch bank ABN Amro. 

RBS went on to record the biggest annual loss in UK corporate history and had to be bailed out by the government to the tune of £45.5bn. It is now 82%-owned by the state. 

Goodwin hit the headlines again recently when he was blamed for a crisis at Scotland's biggest architecture firm, RMJM, where he was an adviser. About 80 staff left the firm after a battle over unpaid fees.

2009 Financial crisis:Wall Street Bankers

Wall Street Bankers

Dick Fuld, chief executive Lehman Brothers

"The Gorilla of Wall Street", as Fuld was known, steered Lehman deep into the business of sub-prime mortgages. Lehman took the loans and packaged them up into (soon-to-be toxic) bonds which they sold to investors.

Fuld is said to have raked in almost $500m in pay and bonuses during his tenure as chief executive, but the 66 year old insisted to Capitol Hill that he actually only earned $300m. During the testimony, Fuld was asked if he wondered why Lehman Brothers was the only firm that was allowed to fail. "Until the day they put me in the ground, I will wonder," he said.

A lot of Americans might have been stung by the collapse in property prices in the wake of the crisis. Not Dick, in November 2008 Fuld transferred the ownership of his $100m Florida mansion to his wife. They had bought it four years earlier for $13.5m. 

In 2009 Fuld joined US hedge fund Matrix Advisors. A year later he joined broker Legend Securities, he left the firm earlier last  year.

2009 Financial crisis: politicians

Geir Haarde, prime minister of Iceland 2006-2009 

Haarde is the only politician to have been found guilty by a court of helping to cause the crisis. Last yr an Icelandic court found Haarde guilty of failing to hold emergency cabinet meetings in the run up to the crisis. Haarde fell from power after the country's three biggest banks collapsed, the country's economy went into meltdown, and the government was forced to borrow $10bn (£6.3bn) to prop up its economy. 

During the trial, he said: "None of us realised at the time that there was something fishy within the banking system itself, as now appears to have been the case.

2009 Financial crisis: politicians

George W Bush, former US president 

The meltdown happened on Bush's watch. While Clinton got the ball rolling with sub-prime lending, Bush failed to bring in much tighter regulation, bar the Sarbanes-Oxley Act brought in after the Enron scandal. And he didn't do a lot to stop the boom in lending to "Ninjas" [no income, no job applicants. 

Nouriel Roubini, the economist who earned the nickname Dr Doom for his prediction that the crisis was about to hit, blames Bush. Obama "inherited a mess", Roubini has said. "We're lucky that this Great Recession is not turning into another Great Depression." 

Bush is in self-imposed political exile and has been notable for his absence in Mitt Romney's campaign to become the next Republican president. "He is enjoying his life in Texas. He's not seeking the limelight. And he is really focused on the Bush Center," his spokesman said recently. He has "no plans to endorse, at least not at present," the spokesman added. 

The former president has written a book, Decision Points, about the 14 biggest decisions of his presidential career. The former president was paid $7m for 1.5m copies.

 

2009 Financial crisis: A. Greenspan

In the  2009 crisis economists, central bankers and politician at the heart of the meltdown were identified – their actions had led the world into the worst economic turmoil since the Great Depression. On the sixth  anniversary of the credit crunch, have you wonder what are they doing?

 Central bankers 

Alan Greenspan, chairman US Federal Reserve 1987-2006

A disciple of libertarian icon Ayn Rand, Greenspan became chairman of the Fed just in time to save the global economy from the 1987 stock market crash from becoming a full-blown disaster. He went on preside over the boom years of the 90s and lead the US economy through the aftermath of the September 11 attacks and was widely referred to as an "oracle" and "the maestro". 

But Greenspan's super-low interest rates and consistent opposition to regulation of the multitrillion-dollar derivatives market are now widely blamed for causing the credit crisis. Under Greenspan's tenure the derivatives market went from barely registering to a $500 trillion industry, despite billionaire investor Warren Buffett warning that they were "financial weapons of mass destruction". 

His rock-bottom rates encouraged Americans to load up on debt to buy homes, even when they had no savings, no income and no job prospects. These so-called sub-prime borrowers were the cannon fodder for the biggest boom-bust in US history. The housing collapse brought the global economy to its knees. 

He was given an honorary knighthood in 2002 for his "contribution to global economic stability", but in 2008, at a Congressional hearing investigating the causes of the financial crisis, Greenspan finally admitted he "made a mistake in presuming" that financial firms could regulate themselves. 

"You found that your view of the world, your ideology was not right, it was not working?" Henry Waxman, the committee chairman, said. 

"Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well." 

After he quit the Fed, in 2006, Greenspan joined Pimco, the world's largest bond investor, as a special consultant. Pimco's co-founder Bill Gross said Greenspan had helped make the firm "billions of dollars'' in his role as a consultant. Gross said Greenspan's "brilliance" was a "big money saver for us''. "He's made and saved billions of dollars for Pimco already,'' Gross said in 2008.He has also advised Deutsche Bank and hedge fund billionaire John Paulson. 

Greenspan has also found time to criticise current Fed chairman Ben Bernanke's programme of quantitative easing. "I've stayed away from commenting on Fed policy," he said on US TV earlier this month. "I will say this, however, that the data do show that the expansion of assets has had very little impact on the economy, for an important reason, that we've created a major increase in the asset side of the Fed balance sheet and a very large trillion and a half increase in excess reserves."

The Great Depression, 1929

The Great Depression was the longest and most severe depression in global economic history, lasting for virtually the entire period between 1929 and the outbreak of World War II. As a stark contrast to the roaring '20s, a period of prosperity and ostentatious wealth, the Depression created massive and virtually instantaneous poverty.  

The beginning of this period was marked by the Wall Street Crash, which remains the single most devastating crash in U.S. stock market history. On October 29, 1929, $10 billion (around $95 billion today) turned to dust. For some, it took entire lifetimes just to break even from the losses made at this point. 

In the years leading up to Black Tuesday, the Dow was turning countless men into millionaires. The market became a hobby for many ignorant investors, who readily poured all their money into the stocks of companies (many of which were fraudulent) that they didn’t understand. 

When the government raised interest rates, panic ensued. Investors were desperate to liquidate their stocks, but the money simply wasn’t there. Unfortunately, banks also invested in stocks, and the panic led to a run on those banks that reduced many to insolvency and failure. The country was thrust into the Great Depression, and much of the world followed.

The Great Recession, 2008

In 2008, the shock collapse of the Lehman Brothers Bank, which held assets worth $600 billion, became the symbolic start of the most dramatic financial crisis since the Great Depression. The causes have been attributed variously to the likes of a deregulated financial sector, poor public monetary policies and an international economy that was ultimately based upon a house of sand, with unsustainable levels of debt in both public and private sectors. 

Wherever the responsibility really lies, the effects are undeniable. Between the credit crunch, the stock market collapse and the ensuing recession, growth in recent years has been stunted, unemployment has remained high and governments have struggled to retain control over their own finances. It was estimated by one financier that by March 2009, up to 45% of global wealth had been destroyed. It could take years to reclaim it. 

Japan’s "Lost Decade," 1990-2000

The collapse of the Japanese asset bubble in 1991 led to a prolonged period of low growth, which has since been extended to incorporate the decade since the year 2000. The original lost decade was caused by an unsustainable level of speculation, large amounts of credit and low interest rates (sound familiar?). When the government stepped in to control this, credit became much harder to obtain, and capital investment dropped significantly. It led to a virtual halt in economic expansion during the 1990s, hence the lost decade. 

Japan was fortunate in avoiding a depression, but the effects of 1991 are still being felt, even today. It is a situation that some commentators feel could be repeated in Western economies in the near future if care is not taken.

The Japanese asset price bubble (1986-1990)

Japan’s domestic policies after World War II urged people to save money. People deposited more of their savings into banks, which made it easier for companies to take out loans and lines of credit. 

By using their lines of credit Japanese companies invested in capital resources, which made them capable of making more goods than international competitors.  Japan had provided high quality products on reasonable prices and its products high demands in world lead it to become a major economic power in world. 

The yen was appreciated and investors made good money off financial markets. Majority of people used easy credit to make property and homes making a speculative real estate bubble. Because of that the real estate prices gone skyward as 1 square foot rate of property in Tokyo was selling at $139,000. Stocks prices were having no limits in rising up, because of reinvestment the economy expanded more. In December 1989 the Nikkei reached all time high of 38,957.44. But in early 1990s Japan’s bubble started to sink. But that haven’t happened in flash of time that happened slowly, stock and real estate values decreased heading to Japan’s “lost decade”. People pulled out their investments and started investing out of Japan because of that Japanese companies lost some advantages of their competitiveness internationally. Low consumption rates coupled with lower output and employment meant steady deflation.

Though the government lower the interest rates to practically nothing that haven’t encourage Japanese people to put money in the banks. The government subsidized banks and businesses at extreme end of failure, supporting up the zombie organizations with little visible benefit to the economy. Finally in 2003 the Nikkei started to climb again. 

Lesson

Surely bubbles look wonderful while growing but when they sink, as they have to sink they pulls back the economy more than a decade.

The dot-com bubble (1995 – 2000)

A new type business came out into view in the mid-1990s, The .com, a company based on the Web or servicing the internet, its people and its technology. In beginning when dot com stock values shot skyward venture capitalists  started all together to finance Internet startup 

As there was no certain business plan of dot com that can stop many VCs from investing in it. While investors and startup executives thought that the .com would gain the attention of people they will get back the reward for their investments. 

Speculators crawled in making a market full of wildly overvalued startups, spending so much on gigantic publicity campaigns followed. dot com burned through their VC money with hope that it will come back soon. Day trading became relatively common way to make fast money. 

Though the government hasn’t paid attention to .com startups or speculation, its policies and timing mightily contributed to a loss of confidence. Between 1999-2000 interest rates were raise six times to prevail the economy and in meantime a flurry of government investigations stalled corrupt business practices. 

For example as the NASDAQ began its slide, Microsoft was declared a monopoly. Main telecommunication companies like MCI Worldcom was fall in heavy debt and management scandals. Regulators put the financial industry under fire for misleading investors during the .com boom and famous Enron was collapsed when the investigators found out an accounting scandal. 

In 2002 the Sarbanes-Oxely Act was passed out having unyielding transparency and accountability standards for public companies. 

Lesson 

The market always welcomes new technology but on long run it become harsh giving you a hard blow of losing assets.

 

East Asian Financial Crisis, 1997

The so-called “Asian economic miracle” turned disastrous in July 1997 when investors did what they do so well: lost confidence, particularly in currencies. High-yield rates made Asian markets appealing, but when the U.S. tried to stem its own recession by lowering interest rates, it made itself more attractive and, as a consequence, the Asian markets looked too risky.  

A domino effect followed, beginning in Thailand and spreading through the Philippines, Hong Kong, Indonesia, Malaysia, and beyond, triggering an unprecedented global crisis. Asian markets that had enjoyed some rare prosperity were slammed: Thailand dipped 75%, Hong Kong’s HSI went down 23% and Singapore dropped 60%.

 

Not a single global market went untouched.

Financial crisis of the past

If we look into history of different countries we will find that different countries faced the financial crises at different times. As the world is facing now financial crisis now also, the question comes in mind that who are those who run this finance horse, what are the reasons which leads to financial crises? Or is there is someone who is holding all the strings and keep them pulling? So many questions come in mind when mind starts thinking about it.crisis-recession-global-financial. Well I had searched about this and compiled these ten nasty crises. Check out these ten dramatic crises 

Asian Financial Crisis (1997 – 1999)

South East Asia was a hot international investment destination during 1997-1999. The high short-term interest rates of ASEAN countries given foreign investors favorable rates that made the fluent capital flow of in the region. 

In the early 1990sthe growth rates were so high as 12% of GDP, and assets prices were increased also, leading analysts refers it as a remarkable thing as “Asian Tigers” and “Asian Economic Miracle”. 

In meantime Thailand, South Korea and Indonesia were having huge deficits for that these countries borrowed quite a bit of money externally keeping their own interest rates fixed which at end lead them to damage in foreign markets. 

In early 1990s foreign investors turned out from Asia as higher U.S, interest rates made dollar value high, this affected South East Asia’s exports as their currencies were pegged with the U.S. dollar, so in result they lost their exports competitiveness. By the beginning of 1996 South East Asian exports were slowed down, at least it was fueled by China’s increased competitiveness in the export market. 

What were the causes of that crisis? Some say that it was because of the policies leading to large amounts of credit pushing up asset prices which collapsed then which lead to a massive debt defaults (kind of like the sub prime crisis). 

The foreign investors got the infectious fear so they pulled out their investments. To hold the region attractive for foreign investors ASEAN governments pulled up their interest rates and bought up excess domestic money using foreign reserves. Which lead the government’s central banks run short of foreign reserves and on other hand capital was still flying out from the region. 

Thailand’s government floated the bath in 1997 to engage the Asian Financial Crisis. Regional currencies depreciated making liabilities in terms of foreign currency more expensive in domestic terms. It melted down the whole economic sectors and people felt into poverty. Stock markets crashed down and currencies devalued. That led to the political destabilization with so many executive resignations and increase in extremist groups. 

The International Monetary Fund made bailout packages stating removal of faults in exchange for debt defaults. In these reforms government expenses were cut down, allowing banks to fail, raising interest rates and becoming more transparent. 

So far the results of the IMF’s actions are doubtful for reaction against powerful international NGOs that continues today. According to some analysts Asian crisis had also contributed to the recent United States housing bubble. 

Lesson 

In crisis if rich people interfere offering their money in exchange for an agenda that not for sure always their agenda will work or will be having any useful results. Financial meltdowns can happen with blink of an eye.