A 19.7 drop in GDP. Imagine that

And you thought your country had problems… Imagine this: Singapore reported a blistering 19.7% SAAR* GDP drop in the first quarter of this year. That comes after the 16.4% registered drop in Q4 2008. I guess that’s the price you pay if you’re a one-trick pony. Which in this case is Singapore’s dependence on its financial sector. It will take the island state years to recuperate. If they recuperate at all.

(*:SAAR stands for Seasonally Adjusted against Annualized Rate)


The balloons must be emptied first

For approximately 30 years, the world allowed credit to balloon at least ten times beyond the size of the world’s true economy. Gigantic companies financed themselves with credit, even ran their daily operations with money they had loaned. That wasn’t surprising. Taking out loans was rewarded with fiscal deductions, positive interest rates, and a rich variation of other rewards and instruments. And then things went extraordinarily wrong.