Bali Expat Forum - Bali Travel Forum

milan · by **milan** on Fri Oct 10, 2008 9:28 am

Just read on flash news scroll on one American network that Jakarta Stock Exchange ahs been suspended.
Do you already feel the ripple effect from this global economic situation today in Bali?

Roy · by **Roy** on Fri Oct 10, 2008 12:37 pm

They closed it late Wednesday morning when it fell around 10 points. The banks are all fine, business as usual. The IDR closed at 9,625 today, which is just a little weaker to the US dollar than last week.

On the phone yesterday with Bali’s leading tour operator, he said he is not experiencing any increase in cancellations to Bali, but it’s logical to expect some if current trends continue.

SteffandShaz · by **SteffandShaz** on Fri Oct 10, 2008 12:55 pm

Tour operators probably won't feel the crunch for a little while yet. A lot of visitors with plans already in place, and flights paid for, will probably still come for our holidays because too much is lost by cancelling (especially some non-refundable flights). We're planning on enjoying spending some of our hard earned $ in Bali over the next month while we still have some. Although the exchange rate has fallen through the floor so we'll be a bit more careful with our shopping this time. But, if we hadn't already booked we'd probably be staying home and waiting it out to see how we'll fare in all this insanity.

I'm currently watching my superannuation funds siphon away at an alarming rate!! :shock:

I'm starting to worry that I'm going to have and kiss the Semi-Retired life away and go back to full time work again; just to get back to square one somehow :cry:

Cheers,
Shaz

Sanurian · by **Sanurian** on Fri Oct 10, 2008 1:48 pm

...They closed it late Wednesday morning when it fell around 10 points...

It wasn't "10 points". It had drops of 10%+ over several days. Not knowing what to do about it, (I surmise), decided to close the Jakarta stock exchange, "indefinitely". It'll be interesting to see what they come up with when they wake up again.

...I'm currently watching my superannuation funds siphon away at an alarming rate!!...

I know the feeling, Steff. Today, the Aussie dollar here was around Rp 6,500. I think I've "lost" 20-25% in the last day or two. Selfish of me, I know, but I'm hoping the Rupiah does a nose-dive. Got to survive somehow.

As we all know, this global "financial melt-down", or whatever you choose to call it, is going to be with all of us for quite a long time. It's like the shit is hitting the fan, big time.

Big countries like Indonesia and China think their domestic consumer bases are big enough to weather the storm. Hmm. Only time will tell. I hope they're right, for their own sakes.

What to make of it all?

"Blame" it on the stupid American financial institutions crazy enough to lend loads of money to people who had no way of paying it back, (the so-called sub-prime mortgage bullshit). Unbelievable, in the first place. Now everybody has to suffer.

Or is this really the beginning of the end for the USA? Just another "culture" that's past its use-by-date. Is that a fiddler I hear playing somewhere in the background?

:shock:

Roy · by **Roy** on Fri Oct 10, 2008 2:04 pm

That's right Phil, I meant 10%, not 10 points.

Sanurian · by **Sanurian** on Fri Oct 10, 2008 2:12 pm

No problem, Roy

I think many are going to suffer, one way or another, over this.

Me? I don't have a crystal ball. Maybe just an emptier glass.
Something like that.

SteffandShaz · by **SteffandShaz** on Fri Oct 10, 2008 2:14 pm

"Blame" it on the stupid American financial institutions crazy enough to lend loads of money to people who had no way of paying it back, (the so-called sub-prime mortgage bullshit). Unbelievable, in the first place. Now everybody has to suffer.

My sentiments exactly...we've worked and saved hard for our future and in one fell swoop some greedy buggers, half the planet away, have negated a good percentage of it. My super fund has lost 20% with no end of the slide in sight...and who knows how safe the bank savings accounts are?!

Can anyone tell me why the USD is still strong, and the AUD is copping the flogging? I just don't understand that one. I feel for you Sunarian, the exchange rate is not helping your situation at all is it?

When the fiddler stops playing, who (or what) will rise from the ashes :?:

Cheers,
Shaz

chilli · by **chilli** on Fri Oct 10, 2008 2:35 pm

SteffandShaz wrote:
"and who knows how safe the bank savings accounts are?!

get your money out and buy solid gold bullion (coins or bars) and keep them in your possession.

Can anyone tell me why the USD is still strong, and the AUD is copping the flogging?

Shaz

Manipulation,,

The Aussie government is trying to save our economy, aus dollar low, foreign investors buy in.

Sanurian · by **Sanurian** on Fri Oct 10, 2008 2:46 pm

...When the fiddler stops playing, who (or what) will rise from the ashes...

I don't know. Does anybody?

As for "who"? Me, for one, my family and people like you.
As for "what"? Remains to be seen.

It's all "exciting", in its own right, I guess.
Here we all go again in a BIG way....

:arrow:

SteffandShaz · by **SteffandShaz** on Fri Oct 10, 2008 3:13 pm

Thank you Chilli, I hadn't thought of it that way...makes sense, but I hope it works!

Yes Phil, we will be left standing, wondering if anyone got the rego number of the Mack truck that hit us...but we'll dust ourselves off and say what now? Then get on with LIFE. How that life will pay for itself will come out in the wash with us I suppose.

Goodnight all,
Cheers,
Shaz

gtrken · by **gtrken** on Fri Oct 10, 2008 5:40 pm

Yep, i can't believe how the Aussie economy , which is supposed to be strong cops a hammering while the US greenblack ( yes that was deliberate) gets stronger..

Fortunately I have some small cash invested in both US and Indonesian rupiah thanks to some previous very small investments in Bali

But the headspin from working out where to shift it too is driving me slightly insane.

Cheers
Ken

BaliLife · by **BaliLife** on Fri Oct 10, 2008 7:02 pm

Can anyone tell me why the USD is still strong, and the AUD is copping the flogging?

hi.. 3 main reasons for this:

1. it's almost entirely related the repeated unwinding of the yen carry trade. as risk appetite decreases (as it has rapidly done over the last few weeks), global investors who had sold the yen (an ultra low yielding currency) to buy aud (a relatively high yielding currency - higher a few months back) start to unwind these positions - i.e. they sell their aud forcing down the value of the aud and either pump it back into yen (hence the rise in the value or the yen) or buy US treasury bills - considered a safe haven.. the aud is particularly vulnerable to this..

2. also in the mast 3 months, investors have seen the interest rate differentials between the US and australia drop somewhat.. i.e. before the RBA started cutting the difference in yield between usd and aud was greater than what it is today...

3. weaker and speculation of further declining commodity prices - as prices on commodities that australia produce decrease or as the volume of commodities exported decreases, there's less demand for aud, because to buy commodities from australia, even though the prices are pegged to the usd, you still need to pay in aud equivalent, which means selling whatever your base currency is in order to buy the aud. high demand drives up the price of the aud and speculators jump on board expecting further rises.. lower demand mean fundamental softening of the aud and again, speculators jump on board and exacerbate the swing..

ct

BaliLife · by **BaliLife** on Sat Oct 11, 2008 1:30 am

BaliLife wrote:
Can anyone tell me why the USD is still strong, and the AUD is copping the flogging?

hi.. 3 main reasons for this:

1. it's almost entirely related to the repeated (continual i should say) unwinding of the yen carry trade. as risk appetite decreases (as it has rapidly done over the last few weeks), global investors who had sold the yen (an ultra low yielding currency) to buy aud (a relatively high yielding currency - higher a few months back) start to unwind these positions - i.e. they sell their aud forcing down the value of the aud and either pump it back into yen (hence the rise in the value or the yen) or buy US treasury bills - considered a safe haven.. the aud is particularly vulnerable to this..

2. also in the last 3 months, investors have seen the interest rate differentials between the US and australia narrow somewhat.. i.e. before the RBA started cutting, the difference in yield between other major currencies and the aud was greater than what it is today, and that resulted in other "carry trade" positions being established, and again now, unwound..

3. weaker commodity prices and speculation of further weakness - as prices on commodities that australia produce decrease or as the volume of commodities exported decreases, there's less demand for aud, because to buy commodities from australia, even though the prices are pegged to the usd, you still need to pay in the aud equivalent, which means selling whatever your base currency is in order to buy the aud. high demand drives up the price of the aud and speculators jump on board expecting further rises.. lower demand results in a fundamental softening of the aud and again, speculators jump on board and exacerbate the swing..

ct

geez, my grammar is worsening significantly..

ct

chilli · by **chilli** on Sat Oct 11, 2008 1:47 am

Thankyou Balilife, you taught me something new.

Ken, maybe the Euro is the currency you/I /we should, "or should have "invested in.
day before yesterday the exchange rate was 1 euro: $2.08 AUD.

Imagine going to europe on a vacation now, !

:shock:

Jimbo · by **Jimbo** on Sat Oct 11, 2008 9:29 am

Sorry for all who are caught up in this web. I wake up in the morning seeing some of the worlds biggest financial intitutions going down the pan and wondering if mine will be next and I lose everything.

Starting to spread money around between different banks but nothing I can do about a small pension I have or the eroding pound sterling.

I hope against hope that it will not delay my retirement. I was with a finacial advisor yesterday and will see two more next week to try and get a clearer picture of the best way to go. Fortunately I had no exposue other than a small pension to stocks and share but I will still lose around 10%

BaliLife · by **BaliLife** on Sat Oct 11, 2008 10:37 am

jimbo, i thought the BOE essentially came out and said that they guarantee all deposits? i'm not at retirement, but i don't know if i'd be losing sleep over the prospect of banks failing in the uk and losing my deposit..

ct

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