Market is yet to stabilize

- In the short term the market will continue fluctuating.
- The first batch of subprime write down along with massive write offs have been announced.
- Expect more to come, any bad news will easily trigger sell-offs. The layoffs will put further pressure on consumer spending and can induce higher default rate on credit – reinforcing worries on recession.
- High prices of oil and other commodities spur high inflation.
- But potential upside remains for Indonesia.
- Decisive measures of monetary authorities globally, reasonably strong domestic economy and corporate earning growth will help dampen the negative effects.
- The fact that Indonesian banks have no exposure on subprime mortgage instruments also helps.