10:01 am - Market Report by Bill Wermine

Dear Traders,

Just returned from Singapore for a business/pleasure trip via Air Asia. Singapore is in a major slowdown because of exposure to the banking and finance industry. Thousands of workers are jobless- there are major department store sales on Orchard Road where we stayed in the Holiday Villa Park View. I bought some high quality Berkshire shirts- I am not sure if this is Warren Buffet's shirt company ? - for a 70 % discount.

Even so customer traffic is light and sales ladies are so agressive to pull you into their shops and get angry if you dont buy. Even traffic at the Singapore zoo was light- only a 3 minute wait to buy a ticket. There were more animals than tourists. The animals however were impressive- including 2 white tigers, pygmy hippos, a polar bear and a herd of mongooses.

The facility was well managed, very clean and very helpful zoo keepers. One explained to me there are only 5000 wild tigers left in the whole planet while in 1900 there were over 200,000. Many of the animals in the zoo are endangered and becoming more endangered due to human greed, pollution and global warming.

I think our world financial system has become disfunctional due to human greed, corruption, mismanagement much as the animal kingdom has been plundered. The zoo had a picture of the last Australian Tazmanian Tiger who became extinct in 1931.
when he died in the Brisbane zoo.

It looks like some major banks, insurance and auto companies such as GM may soon become extinct for the same reasons that so many animal species became extinct.

I met with Tim Peach of Man Investments to get answers to those of you who have concerns.

Bottom line: Your capital guarantee is safe as your money is protected by the AUD government bank deposit scheme. The AUD banks just as Malaysian banks are not involved in credit derivatives, sub prime mortages and the pyramid scheme products that have collapsed the financial house of cards in Europe and the US.

He also explained in detail that Man should perform well in 2009 if everything else goes down the drain.

I had the pleasure to meet with Mr Lim who is the chairman of Phillip Capital. who explained in a simple way how this financial disaster happened and what to expect in the months ahead. He said there will be trading opportunities. He also said if we buy any shares they must have strong cash flow be the strongest of the strong with long term track records- There willbe sharp rallies within the context of the world bear market.

In our next Traders club will share his insights.

Although almost everything in Singapore is on sale there is one thing that is not: I tried to buy some gold maple leafs, Kruger rands and the gold shops are refusing to sell. They say the gold coins in the display case are only for display and not for sale !

Hold on to your gold, it will be very volatile and we may see more upside in weeks ahead.


Have a good week ahead
Bill