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'Sun Worldwide' – Senate Rejects $15bn Bailout For Autos.
"Sun Worldwide" – Stocks plunge as the rescue plans fail to pass the US Senate.
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January 2, 2009 (FPRC) -- Asian-based asset management firm, Sun Worldwide, believe that US unemployment could skyrocket after the bailout of the Big Three US automakers was rejected by the Senate.
Sources close to Sun Worldwide suggest that the news could see stock markets around the world deteriorate into the new year, dashing hopes of a so-called “Santa rally”.
Sun Worldwide pointed to the US Dollar’s dismal showing against the Japanese Yen and other currencies and commodities as evidence of investors’ bleak expectations for the US economy. The only glimmer of hope for GM, Chrysler and Ford lies in some form of legislation to allow them to access funds from the $700bn TARP (Troubled Asset Relief Program) which was set up to rescue the US financial system from collapse.
One of the unnamed Sun Worldwide sources said that the main problem seems to lie in the speed at which unionized autoworkers should see a reduction in wages to bring them into line with their counterparts at foreign-owned carmakers in the US such as Toyota.
"Sun Worldwide" on the next danger for the beleaguered financial sector.
Sun Worldwide are thought to be calling mounting defaults on corporate bonds the next great threat to the banking system.
A source close to Sun Worldwide cited recent news from UK banking giant HBOS that corporate delinquencies had contributed more than £3.3bn of total provisions of £5bn for bad loans. The Asian-based wealth manager is thought to expect the outlook to worsen in the quarters going forward as the economic environment continues to deteriorate.
Sun Worldwide reportedly advised clients that the credit card and unsecured lending markets would likely join mortgages and corporate debt as further burdens on the banking sector. They also reportedly repeated their advice to avoid premature investment in the stocks of banks until the 4th quarter of 2009.
The Sun Worldwide source suggested that although government efforts to stabilize financials were having an impact, further consolidation among banks could not be ruled out over the coming months.
Send an email to Brad Cullen of Online News
0800 321 3084
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