Who's who in the credit crisis
Dr Money finds out which banks had the biggest bailouts in the current economic downturn
I DON'T play golf very often.
By Larry Haverkamp (Doc Money)
mail@AskDrMoney.com
08 April 2008
I DON'T play golf very often.
Why? The non-golfers in Indonesia explain it well: 'Too many holes, too many balls, too many sticks.'
Translation: Chasing a little white ball over a few kilometres is very time-consuming.
The last time I played golf was also the most fun. It was in the Philippines where they have a disrespectful version of the game called 'hit and run'.
You hit the ball and then run to hit it again. No one keeps score and kicking the ball is permitted. So is picking it up and throwing it.
The goal is to finish in the shortest time. I completed 18 holes in just under 30 minutes. It was good enough for third place in our group of four.
DOC MONEY'S HOBBY
Golf is out. But Mrs Money tells me, 'Every hubby needs a hobby'. So, for the past six months, I have pursued a fun new hobby: Tracking the credit crisis.
We all know that bad US home loans have caused havoc in financial markets. Losses are $320 billion thus far and could triple before it's over.
For a while, it looked like there might be a run on the banks and they could fall like dominoes. Depositors would lose their savings and the world would plunge into a great depression.
Whew! That didn't happen. The US and European central banks made the right moves and saved the day, at least for now.
Still, many proud banks have been humbled. They were forced to sell shares at bargain prices to replace the money lost.
Singapore is at the centre of the storm. By my count, we have made four big investments amounting to $33b. Another $2b or so is expected to be invested in UBS.
Will these investments do well in the years ahead? Probably. For one thing, the troubled banks have strong earnings from their daily business.
For another, banks may have played it too safe by writing off so many bad loans. In the next few years, we could see some big write-backs.
In the turmoil, one huge irony seems to have gone unnoticed: The 10 banks listed in the table are all big-time wealth managers.
They continue to attract rich clients with the line, 'We are smart bankers who can make winning investments for you'.
Oh yeah? So far, no one has asked the embarrassing question: 'If you are so good, how did you manage to lose all that money?'
Who's who in the credit crisis
TNP Illustration: HUP
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