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Back in 1997 major financial slump rocked number of countries in Asia, an event that became known as “Asian currency crisis”. Effected countries included Taiwan, Thailand South Korea and others. One of the memorable comments of the time came from one of leading Thai politicians. He blamed this whole mess on speculators, with George Soros being the main culprit. The remarks went so far as to public statement of “not being able to guarantee his safety if he visited Thailand”. Quite ominous.

The fallout in South Korea was brutal. The US Dollar has about doubled in value against the Won, with USD-KRW moving from just above 800 in early 1997, to 1600 by the year’s end. Local stock market suffered similar fate, as did all areas of economy. Perhaps most telling was an enormous spike in unemployment, as the jobless rate soared to almost double digits, with about 9 million people out of work.

This author observed the aftermath first hand, during one of his business trips to South Korea at that time. Collapse of once high flying conglomerate Daewoo under burden of debt. The sight of many construction projects suspended or stopped all over Seoul and Pusan. Daily failure of scores of small business. It was good time to visit South Korea, due to low prices, but very difficult period for residents.

The country has rebounded nicely since then and became one of Asia’s most dynamic economies. KRW strengthen considerably reaching level 900 against USD in 2007. The stock market has recorded double digit gains in four of the last five years, gaining 32% in last year alone. Korean companies like Samsung Electronics Co, and Hyundai Motors Co, have established themselves as some of the world’s leading corporations.

Things have changed in 2008. Challenges like high oil prices, inflation, external debt and account deficit have shaken investors confidence. While many countries have seen outflow of funds into the dollar, this process became especially painful in South Korea. The Won has become the Asia’s worst performing currency, loosing 20% to date. Stock market was no better, falling 25%, with farther sell off of equities expected.

These developments created widely spread comparisons to situation from 1997 and were quick to be picked by the press. International Monetary Fund disagrees with this assessment and expressed confidence by saying that South Korea is a mature and resilient economy with country’s fundamentals much stronger than a decade ago. Korean financial authorities, however, felt obligated to act by intervention on Wons behalf in the open market. This seemed to stop the bleeding for now.

What can be expected next? In all reality, 1997 type sell off is extremely unlikely. As South Korean economy is cooling down together with the rest of the world, Seoul might not be able to stop bleeding of the stock market but there is one thing they can do- keep intervening on behalf of its currency. Unlike before, there are huge foreign reserves, about 250 billion dollars worth of, and they can be used to support Won.

Very likely scenario, as of this writing, is continued fall of Korean equities, in tune with broader stock declines. The Won should also keep dropping, but in much more measured and steady pace. Central Bank has not mentioned what the comfortable level for USD-KRW is, but as we noticed over last few years, major trends are very powerful and can go through any “line in the sand’ drawn by anybody.

Current rate is around 1150. Even with expected interventions, Won can easily weaken to 1300 and maybe 1400, but far short of the previous low of 1600. Also, one shouldn’t look for a fast move, but rather steady depreciation, lasting a year or two. This is not a situation for active traders, but for those who prefer longer term positions current development might present good opportunity for farther selling of KRW.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com

One of the most unexpected experiences for many commercial borrowers is the discovery of extensive business financing problems. Unfortunately many inexperienced lending advisors are unfamiliar with some of the most problematic commercial loan situations which are likely to occur. Some of the difficulties will be more isolated, but business owners will find that working capital loan, commercial real estate loan and business opportunity investment financing each have specific and serious problem areas to anticipate.

Commercial Loan Advisory Reports -

We have published separate commercial loan advisory reports which provide a comprehensive discussion of the major problems likely to be encountered in typical business financing and commercial real estate loan circumstances. For example, one report focuses on common business opportunity investment financing difficulties. In another report, we discussed the obstacles usually experienced with SBA loan refinancing.

The Black Ice Analogy: Unseen Business Financing Problems -

The focus in this article is to highlight several of the more obscure commercial loan problems. A commercial borrower should consider such obscure business financing problems to be extremely important. When ice is virtually invisible on a road surface, this is usually referred to as black ice. Drivers who have experienced this hazardous condition are likely to realize that invisible business finance problems are equally dangerous for the financial health of a business.

Online Business Finance Applications -

The first relatively unknown business financing problem involves the increasing use of internet technology by commercial lenders. Commercial borrowers will be asked to submit online applications by numerous commercial loan websites. This is not a prudent way for a business owner to proceed with their commercial financing.

It is important that business owners understand that it is not in their best interest to submit an online business financing application. For a more detailed understanding of why an online commercial loan application is inadvisable and how to proceed in a search for viable financing, borrowers should review the report entitled How and Why to Avoid the Online Business Loan Application Trap.

Recall Provisions for a Commercial Mortgage -

The next obscure but nevertheless serious business financing problem to anticipate involves the use of loan recall terms by a lender. Commercial loan recall covenants mean that the lender can force the borrower to repay early by calling the loan before it would normally expire. Many traditional commercial lenders routinely place recall clauses in their commercial mortgage conditions, but this potential concern is not applicable to all borrowers since some financing agreements will not allow a loan recall possibility.

The circumstances which can cause a recall will vary but can commonly include periodic lender review of financial statements, tax returns and credit history. If prescribed levels of income, credit scores or other benchmarks are not present, then the lender will typically notify the commercial borrower that they must pay off the loan within a 30-90 day period.

With a commercial loan recall, borrowers will need to refinance quickly. Prudent borrowers will exclude lenders that require recall agreements when evaluating business financing options. For commercial borrowers who have recall provisions in their current business loan agreement, it will be equally wise to consider refinancing their commercial mortgage before a recall occurs so that refinancing is accomplished according to the preferred timetable of the business owner.

Balloon Payments and Short-term Business Loans -

Another often overlooked commercial financing problem is the increasing emphasis on short-term financing by many commercial lenders. How long is a long-term commercial loan? Most business financing experts will advise a minimum loan period varying from 10 years to 30 years depending on the specific circumstances of the borrower. Unfortunately many business lenders often consider three years as the maximum period before a balloon payment will be due for a commercial mortgage.

A business borrower must either refinance or pay the loan balance if they are faced with a balloon payment term that is about to expire. This kind of loan is a short-term commercial loan instead of long-term and should be avoided whenever feasible. Longer-term business financing will often be the critical difference that facilitates a successful business investment because new financing will not be required for many years and business loan payments will usually be reduced.

Inexperienced Commercial Real Estate Loan Lenders and Advisors -

The final example of a problem that is not obvious to most commercial borrowers involves a shortage of business loan experts providing candid advice to business owners. Business financing and business investing has become increasingly specialized in recent years. There have been some recent real estate and business investment developments that have made this process even more complicated. The current turmoil in residential real estate investment property has resulted in an increasing number of residential lenders and advisors attempting to become active in commercial loan activities.

This is an almost impossible transition for most residential lenders and advisors. There are over 25 critical differences between residential and commercial property investing. As a result, these new and inexperienced commercial financing advisors frequently provide woefully inadequate advice and potentially disastrous business financing for their clients.

How to Avoid These and Other Commercial Financing Problems -

What can commercial borrowers do to avoid a similar fate? To acquire a thorough understanding of these and other business finance complications, prudent borrowers will review other resources. The Commercial Real Estate Investment Property Loan and Business Finance Guide is one example of business financing resources that will provide strategies and solutions for many problematic commercial loan circumstances.

S.A. Bush is a business finance and commercial real estate investment property loan expert. For details about commercial mortgage - business opportunity loan strategies, please visit AEX Commercial Financing Group - Commercial Loan and SBA Loan Solutions.