February 13th, 2008

- When Japan had its real estate bubble in the 90s; banks ended up with $9--bn in bad debt, 20% of GDP, in US right now $200-300bn or 2%

- real GDP fell from 3-4% rate to 1%

- Japanese banks were unwilling to reapitalize themselves, instead chose to 'implode balances sheets and wait'

- Philly Fed forecasters see US Q1 GDP at 0.7% vs. 2.2% earlier forecast

- BoK kept rates unchanged for 6th straight month at 5%; had last raised rates in July and August to fight consumer inflation

- bonds were bid on speculation rates may be cut from 6yr high but Governor Lee said "need to time to assess fallout"

- Indonesia and Malaysia kept rates unchanged over last week

- Korean inflation up 3.9% in Jan, fastest in 3 years; target band is 2.5 - 3.5%

- First day of trading in CNY after long holiday; spot taken to high of 7.2220 in afternoon but front end very discounted

- HKD swaps eased off on back of soft t/n rates of 1.5%

- SGD tried 1.4150 again but failed as rumors of subprime losses in JPY pushed the pair higher to 1.4188

- Thailand

- Commerce minister wants to call meeting to work with manufacturers on reducing consumer prices

- no decision out of meeting b/w FM and BoT on capital controls

- FM proposing laws that will restrict freedom of PM to dip into annual govt budget; would be very good for fiscal responsibility

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