To say that it's been a difficult decade for New York City, and the nation at large, would be an understatement. In New York, more than 100,000 lay-offs in the financial community stemming from the bursting of the leveraging bubble and closure of key financial institutions has led to the city's worst recession in more than two decades.

However, the financial and economic crisis that has slowed New York's economy, surprisingly, has not resulted the loss of one city title -- that of financial capital of the world. 29% of respondents to a survey listed the city as the leading global financial center, with the city that never sleeps topping both Singapore, 17%, and London, 16%, according to a Bloomberg Global Poll. The poll of 1,452 Bloomberg subscribers was conducted October 23-27.

Staff cuts are coming for Singapore Airlines (OTC: SINGF) with calendar Q2 "almost certain" to be a money-loser. This won't be a first for the carrier, but it's definitely rare. Since going public in 1985, SINGF has only had one quarterly loss until now. It took the SARS epidemic to put this company into the red for three months, back in 2003. According to four of the five analysts polled, there was little the company could do to avert the situation.

In a respectable move, the staff cuts are following that of the executive team, which has had 10% to 20% sliced from its salaries. An operating loss of $50 million or more for Q2 will cause staff paychecks to fall by at least 2.5%. SINGF is on the hook to cut 25% of the "monthly variable component" (MVC) that's included in staff salaries if the airline's loss pierces the $50 million threshold. MVC disappears in its entirety if the loss passes the $200 million mark. Currently, MVC accounts for only 10% of employees' total compensation.

Employees have already been chipping in to reduce the airline's costs. Pilots, for example, have sacrificed 65% of a day's pay every month, and employees in general are working shorter weeks.

But, this hasn't been enough.

Short-term interest rates continue their downward trek.

The effort by major central banks to increase the supply of dollars globally to free-up credit continued to move rates in the right direction Thursday -- down -- as private banks were encouraged by the U.S. Federal Reserve's interest rate cut and $120 billion in new swap lines with emerging market central banks.

The London rate for three-month loans in dollars declined for the 14th consecutive day, dropping another 23 basis points to 3.19%. Rates also fell in Asia: the three-month rate for Hong Kong, the HIBOR, dropped 15 basis points to 3.39%.

Meanwhile, the London interbank overnight rate, or LIBOR, plunged another 41 basis points to 0.73% - - its lowest level since January 2001.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

A year ago, few in the currency market would have predicted this stunning reversal in the flow of capital.

Despite being the nation that's likely to bear the largest economic and fiscal costs -- including a huge increase in its budget deficit and national debt -- from the global financial crisis, institutional investors are turning to the U.S. dollar in a flight-to-safety that economists say shows few signs of ending soon.

Investors flee to the dollar

That's right: you read correctly -- investors are turning to the dollar as a safe haven. Despite a decade of budget and trade deficits that drove the dollar to records lows. Despite an uncertain (at best) immediate economic outlook (the U.S. will be oh-so-fortunate to experience only a mild recession). Despite disagreement in the nation over the best way to pay for the many rescues / interventions needed to end the crisis. Despite the uncertainties presented by the upcoming U.S. Presidential / Congressional election. Despite its inadequate infrastructure and underdeveloped industrial base.

Despite all of the above, institutional investors abroad want: dollars. Money is flowing out of emerging markets and into the dollar -- so much that the major central banks may very well have to intervene repeatedly to support emerging market currencies to prevent further global financial system destabilization. Institutional investors are also flocking to Japan's yen, due to that country's relatively lower exposure to toxic assets.

Carlton Delfeld reveals his latest global ETF picks and warns of leveraged funds.

Q. Carlton, in your last newsletter, you commented on the low valuations of several global markets, including Ireland, Singapore, UK, and Sweden, among others. Have you since added any ETFs from these regions to your portfolios?

A. Yes, I have added iShares MSCI South Africa Index (NYSEArca: EZA), iShares MSCI Singapore Index (NYSEArca: EWS), and the iShares MSCI United Kingdom (NYSEArca: EWU). South Africa is in part a currency and commodity play. The United Kingdom is very much predicated on global financial recovery, and Singapore will likely be a core holding.

Q. Each of these regions seems to have its own stress points right now. Do you think that South Africa is particularly vulnerable to a global slowdown? Hasn't Singapore been hit hard by the bear market in China? And isn't the UK just moving into a housing decline that may rival that of the US?

A. South Africa, China and the UK are all trading at attractive valuations. They all have challenges. The South Africa Rand has been a strong currency and will come back with higher gold prices, the UK is already moving through the housing issue and its financial-oriented market has already been hammered. Lastly, Singapore is a very high-quality China play.

This post is part of a series on some of the most memorable companies that have disappeared.

I credit Nick Leeson for creating jobs for lots of my friends. Back in 1995, when he single-handedly brought down Barings Bank with currency trading run amok, I had never heard the term "risk management." But I soon started hearing right and left of friends getting highly paid jobs at financial firms in the "risk management" department.

Apparently, after Mr. Leeson lost $1.4 billion dollars in unauthorized trading rendering Barings insolvent, financial institutions around the world decided to put in more rigorous systems of checks and balances that would keep such things from happening. Hence, newly expanded risk management departments.

Founded in 1762, Barings Bank was the oldest merchant bank in London, financed the Napoleonic Wars, and was the Queen of England's own bank.

The disk drive business isn't exciting. But, it does generate nice cash flows.

So, over the weekend, KKR announced that it is buying Unisteel, which is a disk drive component developer in Singapore. There were other bidders at the table, such as the Carlyle Group, TPG, and Bain Capital.

The price tag: $578 million.

Unisteel is listed on the Singapore exchange. Because of low trading volume, there are many bargains to pick from -- which should be attractive to private equity players.

Also, from a strategic standpoint, the Unisteel deal is another sign of the consolidation in the global disk drive market. Essentially, scale is incredibly important.

Interestingly enough, KKR purchased MMI Holdings -- another disk drive operator -- about a year ago. So, by combining MMI and Unisteel, there should be some juicy cost savings.

Moreover, keep in mind that KKR will continue to focus on Asia. After all, the firm recently raised a $4 billion fund that is focused on the region.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

After recommending yesterday that our leaders should stimulate the economy by investing in infrastructure rather than mad money stimulus, and after discussing this with some business associates, I have a few more thoughts I'd like to share.

We have been hearing that 70% of our economy has been supported by the American consumer. Congress and the President have agreed on -- or colluded, depending on who you speak with -- a bi-partisan economic stimulus package. When, and if, the check arrives in the mail, there might be short-term glee among the populous. But if it is used just to stimulate more consumption, then it will only serve to postpone the pain by some time -- perhaps a month or two.

If I get anything back, I will be using it to reduce debt or invest in equity and nothing else. I hope my fellow citizens are able to understand that reducing debt or investing in equity has some value, while consuming, that is, rushing out to buy a flat-screen television or a new PlayStation, is a complete waste of a one-time opportunity.

The Treasury and some members of Congress are concerned that sovereign funds from the Middle East and Asia may use their investments in US banks and corporations to push their global political goals. Treasury Undersecretary for International Affairs David McCormick said the government-controlled funds may raise "legitimate national security concerns," and may distort markets if not managed properly, according to MarketWatch.

If the large funds walk away from investing in the US, especially when banks and brokerages may need more money to weather the credit crisis, finding large pools of capital may be difficult.

But, one sovereign fund, Singapore state investor Temasek, appears to be willing to agree to make official its intention to put money into US companies for only "financial" reasons. According to Reuters, "A Temasek Holdings executive told a U.S. House of Representatives subcommittee that it supports the aim of U.S. lawmakers to maintain the right balance between national security and investment flows."

The Associated Press reports that Merrill Lynch & Co. (NYSE: MER) is in talks to accept a $5 billion investment from Singapore's Temasek Holdings. This is the latest in a string of investments from Asian and Middle Eastern government funds -- called Sovereign Wealth Funds (SWFs) -- which oversee between $2 trillion and $15 trillion.

Of the countries that are buying up big chunks of our financial system, Singapore is among the least threatening. I have visited there several times and find it a beautiful country. However, it has some puritanical social policies -- such as prohibiting people from chewing gum -- a ban it relaxed in 2002. I doubt its investment in Merrill will lead Singapore to impose its gum chewing ban on the U.S..

Merrill is soon to announce additional write-downs of assets thanks to the ratings downgrade of bond insurer ACA Financial Guarantee Holdings. One estimate suggested Merrill would write down $3 billion because ACA's lack of capital transfers the cost of bad Collateralized Debt Obligation (CDO) investments from ACA to Merrill.

But who knows? There's no reason to think we've reached the bottom -- of either the asset write-downs or the SWF buy-up of our banking system.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Merrill Lynch securities.

Bloomberg ran an interesting article this morning. The article contained an interview with Jens Nordvig, a senior currency strategist in New York at Goldman Sachs (NYSE: GS). Nordvig said the top currency trade for 2008 will be to sell the U.S. dollar against a basket of Asian currencies, including the currencies of Malaysia, Singapore and Taiwan.

In the article, Nordvig cites two reasons why this trade should work next year:

1. Asian central banks should allow faster currency appreciation to offset inflation in their home countries
2. It is becoming costlier for the central banks to enter foreign exchange market

The Malaysian, Singaporean and Taiwanese currencies will each gain about 5% to 10% against the dollar in the next year, according to Nordvig.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.