Monday, January 5, 2009
The creDit cRuncH; yR 2008 deja-Vu of The Great Depression
For the past few months, the financial section of the local newspaper is filled with many many negative news. It's in these times that I could see some very BiG, BoLD, and ConTrasTy fonts plastered across the tabloid like nobody's business. Business section suddenly become the main part of the newspaper.
On the next day when the Dow Jones fell 25%, I've seen a very steep drop in the index graph on the paper..so steep that it's like a ravine among the mountains. And everywhere, you could see RED more than GREEN. A look into the stockboard, and you'll know what I mean.
That week, I learned one new term. It's called Credit Crunch. Not the Coco Crunch that you took when you're a kid. Not that one. As far as I know, its the tumbling of the financial giants due to their mortgage based investments gone bad. Which also means that people cannot pay what they borrowed from the banks. Thats how giants like Lehman Brothers got bankrupt and trigger a super chain reaction of 'kABooMs' all over the world's financial markets.
If you happen to see the faces of the traders at the NYSE, you'll notice the contrast were so obvious. From a happy and joyful look a few months earlier in the stock rally to the frightened, weeping, and disappointed look that very week. Frankly speaking, I don't know how much they have lost, but I do know they've lost almost everything.
They say that this is similar to the Great Depression in the 1930s. I don't know what that was, but I guess I had gone through one similar one during my early childhood days, the Asian Financial Crisis of 1997. Back then, I could recall clearly that many businesses were gone and went bankrupt. Stocks are so undervalued, that many are holding a stacks of useless paper. Also heard a lot of unofficial news of stock traders jumping off to suicide, coz they owed so much money, they'll never be able to pay it for generations. It's either they get chased by the banks, or worse still by the AH LONGS that they borrowed money from.
It reminds me of a TVB series called “The Greed of Man” a.k.a. 大时代, starring Lau Ching Wan. The drama is also about the ups and downs of the stock market in Hong Kong, and how much grieves it has brought to people there. And I foresee things are repeating again and again...
And most of all, I still think there is some minority out there who is winning BIG out of this. Those, you call them BIG FISH. The one who lose, the MAJORITY, are the SMALL FISH. For me, this game of stock is always the game of BIG FISH eating the SMALL FISH. And this time around, many SMALL FISHES are in DEEP SHIT. Some are lucky to escape early enough, but majority are just like hopeless SMALL FISHes waiting to become somebody's dish.
Hopefully, this is not gonna last too long. And by the way, this is a good time for BIG FISH thinking alikes to start FISHING!