January 22, 2009

Singapore cut its economic outlook as GDP shrank at a 16.9% annual rate in the fourth quarter, prompting concerns that Asia's slowdown is intensifying. Singapore, a bellwether for Asia's export industry, sharply reduced its economic outlook for 2009, prompting concerns that the region's slowdown is intensifying and putting additional scrutiny on a slew of economic figures expected in coming days.

The city-state said Wednesday it expects its economy to shrink by 2% to 5% this year. The forecast marks a downward revision from just three weeks ago, when officials at Singapore's Ministry of Trade and Industry predicted a worst-case decline of 2% and possible growth of 1%. The ministry blamed increasingly pessimistic signals of weakening global demand for key products such as electronics and chemicals.

Investors filed a proposed class action against Bank of America in New York on Wednesday, accusing the bank and its officers of failing to disclose risks in its January 1 takeover of Merrill Lynch.

The hedge fund industry saw a record $152 billion in investor redemptions in the last three months of 2008, according to data released Wednesday by Hedge Fund Research.

The news is not all bad for the industry. While the bottom 10 percent of all hedge funds declined an average of 62 percent, the top 10 percent of funds gained an average of 40 percent. Investors could eventually reward the winners with more cash and possibly offset the money flowing out of the industry. The total capital invested in the hedge fund industry fell to $1.4 trillion at the end of last year, a decline of $525 billion from its peak of $1.93 trillion, recorded in the summer of 2008, the research firm said.