In the Era of Value Destruction ($120 billion evaporated)

The first half of this year is over after today, many corporations have began to conduct the deep review on thier business performance for the first half now. Although the final report cards still in the cooking, but the business sentiments are less favourable that appears in the news all over the world and in the region, as well as in Singapore.

The leading indicators for economic in Singapore such as the purchasing index was dipped below 50 and declining over the last 3 months and stock market has dropped by more than 15 % from the peak of STI 3500 at beginning this year. The growth of property market has reduced from at the peak of 30% last year down to around 5% to 8% this year.

Why? it was started with the sub-prime mortgage crisis in US last year. It is a bigger problem than many people thought, with this happening it is leading to lower interest rate by US Fed reserve every quarter, weaker US Dollar, higher and higher crude oil price and soft commodities such as rice, soybean and etc. It does produce the highest record for fuel price and rice price at this moment and probably in the forseeable future.

What does it mean to you and me?

As a consumer, you move from point A to point B more often than before in this complex city life, such as travel to work and visit your clients, and make social visit to families and friends, that requires petrol ............ Power your home with high tech stuff for example, power utility for Lighting, TV, Computer and laptop, mobile phone, digital and video camera, MP 3 & 4, audio players and etc. All these requires fuel oil ......... The fuel oil price increased also trigger higher transportation cost for business and ordinary people. it leads to;

>>>> higher inflation, it is a value destruction processing environment that hurt many people, especially the lower income group, however the higher income group may lost more in absolute terms. The higher income group will see their personal wealth shrink due to lower price of property and equity. The lower income group will face the difficulty in making ends meet in the uncertian future.

Let's us change our perspective to help many to reverse this high era of value destruction to value re-creation.

Please let me know if you have any comments.