Hantu Laut
Anwar Ibrahim yesterday put the blame on Prime Minister Abdullah Ahmad Badawi for the delay in the oppositions attempt to form the government and insisted that he had the numbers to take over the government on 16 September 2008 but failed because Badawi refused to step down and hand over the government to him.He now set December 8 as his next game of blind man's buff.
Which idiot is going to give him the government on the platter? Which idiot is going to buy his story when they knew fully well he his bluffing? Not only he tried to bluff Abdullah and the BN, he also bluffed members of his coalition and his supporters by saying he can't reveal the names of those BN MPs that have agreed to join him because the Prime Minister would use dirty tactics to stop them and the sad thing is his followers believed him.DAP and PAS swallowed the crap hook,line and sinker.
The problem with Anwar is he has become victim of his own bluff.If you have enough MPs to form the government the right thing to do is to assemble all of them and march to Puterajaya and demand the resignation of the Prime Minister and than go to Parliament and exercise your constitutional rights.Pass a vote of no confidence against the PM if he refused to resign.In fact he can do it today when Parliament reconvened.That's what astute and honest politician should do instead of making a fool of oneself by making all kinds of false claims.
It's the same kind of rubbish he came up with by accusing the BN of rigging the elections.How would he explains the unprecedented and unbelievable results obtained by the oppositions in the March General Elections if the BN rigged the elections.The oppositions captured 5 states and got 82 MPs and denied the BN of two-thirds majority.The BN was wiped out in the Federal Territory of Kuala Lumpur.Sad to say he gave his followers blinkers to wear so they couldn't see the sides of the track.
He said there will be fireworks today in Parliament on debate of the budget.Malaysians are looking forward to him taking a pragmatic and sensible approach on debate of the budget and not just screaming his head off just to make senseless noise to keep his supporters besotted to him with his endless rhetoric.
Anwar Ibrahim has come to a stage where he believes in his own lies.He epitomises a demagogic preacher.His followers believed him without a shadow of a doubt.These are the early signs and one of the most essential ingredient in the making of a dictator, blind and unquestionable loyalty. This is not to say that he definitely would end up being a dictator if he comes to power but the people are giving him the opportunity to be one.
PAS and DAP are watching him closely as to where he is leading them to.His repeated failure to make good his promise in taking over the government would soon weaken the solidarity of this loose coalition and lost of confidence in him.
They say revenge is sweet, that probably sits at the top of his priority list more than anything else.
Give it another year, if no government,the coalition will break up.
Monday, October 13, 2008
Saturday, October 11, 2008
Where Crude Oil Heading For?
Hantu Laut
Have we reached 'peak oil'? Would the world's industrial output come to a grinding halt when we ran out of fossil fuel.
Peak oil is not about absolute depletion of crude oil and the world running out of it.It is a theory of whether oil extraction have reached its peak and in terminal decline as featured in the 'Hubbart Curve'.
Below is Hubbart's theoretical chart
Click to read:
Have we reached 'peak oil'? Would the world's industrial output come to a grinding halt when we ran out of fossil fuel.
Peak oil is not about absolute depletion of crude oil and the world running out of it.It is a theory of whether oil extraction have reached its peak and in terminal decline as featured in the 'Hubbart Curve'.
Below is Hubbart's theoretical chart
Click to read:
From the said chart he theorised that oil extraction would decline to zero by the year 2200.
Will it happen? I would think so, maybe, not on the exact Hubbart's time frame, but the day would come when mother earth would run out of fossil fuel. I am also optimistic that by then humans would have found abundance of alternative sources of energy through technological advancement and new inventions capable of mass production of energy producing substances.
The recent high oil prices we saw this year was not the consequence of the law of supply and demand but has an added element of human greed in the form of speculation of oil futures.Again greedy speculators took advantage of this forward and futures contracts and took it to the casinos.
In 1972 the price of crude oil was around US$3.00 a barrel.During the Yom Kippur War or the Arab Oil Embargo in 1973/74 the price of oil quadrupled to US$12.00, not because of shortages but because of Arab's anger at America and the West for having sided with Israel.The Arabs put a brake on productions that increased the price.This year we saw the highest price of over US$150 per barrel fuelled by rising demands and needless to say price highly aggravated by speculations.
Prices have begun to fall over recent weeks as speculators moved out of the market in anticipation of the financial market collapse.The crude oil market is now finding its own price level.
Below is a chart showing the prices of crude between 1947 to May 2008:
Click to enlarge
With increasingly high unemployment in the developed economies, industrial outputs are going to plummet to a low level and consumption of energy would likewise follow.
As more people lose their jobs, businesses going into bankruptcies and reduction in global industrial outputs the demand for oil would show a sharp decline.Consumption would continue to decline as long as the global economy continue to shrink which is expected to continue well into 2009.With reduced global demand prices are expected to fall below US$50 a barrel before the year end.
If the global recession become hard-headed and carry on without any sign of recovery than prices may even drop below US$30 per barrel by the first-half of 2009.
It may sound like good news but it is not.In fact it is a scary scenario, it means the global economy is in the doldrums and there would be widespread hardship among the populace of the world.
Those who have cash are kings and can go bargain hunting.
QUIZ
Test Your Knowledge of the Economic Crisis
Friday, October 10, 2008
Derivatives:Hantu Was Right
Hantu Laut
On 2nd October I wrote about the state of the American economy and the likely causes of the financial meltdown in America under my posting "American Get Screwed".
One of the reasons leading to the financial crisis was the use of financial derivatives. These are very complex financial instruments that not many investors understand the workings and risk involved.They are supposed to reduce risk but in the wrong hand,greed and overexposure could be disastrous.
There are wide range of derivative contracts traded on the financial markets based on different kind of assets and indexes.You can even have derivatives on the weather.How all these different instruments work you may have to visit the investment gurus on Wall Street(where it was invented) to explain to you.
Below is a paragraph of what I wrote on 2nd October:
"Much of the troubles started from highly innovative and risky financial derivatives, over-extended credit,over-speculation of trading in stocks and bad financial management.Some of the top CEOs in America are undeservedly overpaid with some having pay packages running into hundreds of million.Their over-indulgence in highly speculative financial derivatives were the cause of the meltdown"
Many of you would still remember Baring Bank and its rogue trader Nick Leeson who speculated in derivatives trading that brought the centuries- old bank to its demise.That's what derivatives can do to banks,corporations or anyone who are greedy,careless or have no understanding of the mechanics of these complex instruments.Former Federal Reserve Chairman Alan Greenspan was a great believer and supporter of these beastly business tools.
Lehman Brothers and Merrill Lynch were creators of credit derivatives.These derivatives are the sweethearts of investment banks and brokerage houses by selling them and making huge upfront fees and premium payments.Another victim,AIG jumped on the bandwagon and went overboard in derivatives involving the sub-prime market.
Below is an article on the subject that appeared in the New York Times yesterday, 8th Oct:
On 2nd October I wrote about the state of the American economy and the likely causes of the financial meltdown in America under my posting "American Get Screwed".
One of the reasons leading to the financial crisis was the use of financial derivatives. These are very complex financial instruments that not many investors understand the workings and risk involved.They are supposed to reduce risk but in the wrong hand,greed and overexposure could be disastrous.
There are wide range of derivative contracts traded on the financial markets based on different kind of assets and indexes.You can even have derivatives on the weather.How all these different instruments work you may have to visit the investment gurus on Wall Street(where it was invented) to explain to you.
Below is a paragraph of what I wrote on 2nd October:
"Much of the troubles started from highly innovative and risky financial derivatives, over-extended credit,over-speculation of trading in stocks and bad financial management.Some of the top CEOs in America are undeservedly overpaid with some having pay packages running into hundreds of million.Their over-indulgence in highly speculative financial derivatives were the cause of the meltdown"
Many of you would still remember Baring Bank and its rogue trader Nick Leeson who speculated in derivatives trading that brought the centuries- old bank to its demise.That's what derivatives can do to banks,corporations or anyone who are greedy,careless or have no understanding of the mechanics of these complex instruments.Former Federal Reserve Chairman Alan Greenspan was a great believer and supporter of these beastly business tools.
Lehman Brothers and Merrill Lynch were creators of credit derivatives.These derivatives are the sweethearts of investment banks and brokerage houses by selling them and making huge upfront fees and premium payments.Another victim,AIG jumped on the bandwagon and went overboard in derivatives involving the sub-prime market.
Below is an article on the subject that appeared in the New York Times yesterday, 8th Oct:
“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004
George Soros, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.”
And Warren E. Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
One prominent financial figure, however, has long thought otherwise. And his views held the greatest sway in debates about the regulation and use of derivatives — exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, the former Federal Reserve Chairman Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street. “What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so,” Mr. Greenspan told the Senate Banking Committee in 2003. “We think it would be a mistake” to more deeply regulate the contracts, he added. Read more....
The Asian markets are going to take a big tumble today because of what happened on Wall Street yesterday.The Dow was down 7.3% in yesterday's trading.
The whole world is in financial turmoil.Malaysia is still in a slumber.More concerned with politics than state of the economy.The KLSE is the only exchange that is not in sync with the other markets.Are we fundamentally strong or are we living in a state of denial.Watch the market next week.
Next post:'Where Crude Oil Heading For'
Thursday, October 9, 2008
Bad News And Good News:The World In Turmoil
Hantu Laut
The Asian stock markets tumbled yesterday .The Japanese Nikkei went down 9.38% ,Hong Kong's Han Seng down 8.17% and the biggest fall was Jakarta with over 10%.
Surprisingly, while all other Asian markets went down quite substantially the KLSE went down only 2.71%.Is our fundamentals really that strong and investors confidence unshaken in spite of all the bad news on the global financial markets? Is the government trying to prop up the market to avert panic selling? If that is the case how long can the government continue to do so and where are the funds coming from? Let's hope it is not our money or worse still the EPF money.
In spite of interest rate cuts in most major markets the world's stocks markets continue to tumble.The Dow was down 2% yesterday.The Dow has now fallen 35% from its highest level a year ago.The US rescue package will take some time to make an impact on the market.The Moscow stocks market went down 14% and suspended its trading.
Iceland says the government is bankrupt.It got US$5.4 billion loan from Russia and blamed hedge funds for its financial woes.Sounds familiar.
So Mahathir wasn't wrong back in 1997 when he blamed the hedge funds especially George Soros for the Asian financial crisis.There is one thing we must all know, the capitalist world is greedy,competitive,cruel and sad to say, have no space for social conscience.What happened in America and the resulting crisis is because of freedom and laissez-faire gone amok.De-regulation of the financial system and businesses because the Westerners think they are more responsible,therefore, need not be regulated.
I must say again Mahathir was ahead of his time when he said" the Jews used proxies to fight their wars".Take a look at the 2 presidential candidates' campaign in America, how both of them clamoring to suck up to Isreal by refering to it as their main and strong ally in the Middle East.
There is 50/50 percent chance George Bush will bomb Iran before he leaves office in January 09, especially if Obama won the presidential election, leaving him to pick up the pieces.
Due to high volatility and high risk of the markets investors are expected to dump more stocks and move to safer low-yield government bonds and probably gold.
Among the waves of bad news coming from every corners of the world at least there are two good news for Malaysians, the prices of crude oil have tumbled to below US$90 a barrel and Prime Minister Abdullah Ahmad Badawi has confirmed not contesting the Presidency of UMNO in March 09 meaning he is giving up his premiership.
Now, suddenly the politicians are full of praises and accolades for the Prime Minister on his act of courage and responsibility ??
As usual the oppositions never had anything good to say concerning him of the good news or bad, especially those coming from the Indian community, who probably are still sore with him for locking up the Hindraf's activists.Here's what Perak DAP Vice-Chairman M.Kulasegaran said "what surprises me is why he is waiting till March to quit". Give him a break! Haven't you guys given him enough bashing already.
Most Malaysians are only interested in two things, politics and price of petrol.Others, including the world financial crisis, which can make their lives even more miserable can take a back seat.Oh! One more thing Malaysians also love English and European football, the bad news is, you may soon not be able to watch your favourite teams if they fall victims to the global financial meltdown.The hottest team and favourite with many Malaysians, Manchester United owed the bank a whopping RM4.6 billion.
Let's watch the KLSE today whether it will behave abnormally from other markets. If it does than you know for sure who is throwing good money to chase bad money.
The Asian stock markets tumbled yesterday .The Japanese Nikkei went down 9.38% ,Hong Kong's Han Seng down 8.17% and the biggest fall was Jakarta with over 10%.
Surprisingly, while all other Asian markets went down quite substantially the KLSE went down only 2.71%.Is our fundamentals really that strong and investors confidence unshaken in spite of all the bad news on the global financial markets? Is the government trying to prop up the market to avert panic selling? If that is the case how long can the government continue to do so and where are the funds coming from? Let's hope it is not our money or worse still the EPF money.
In spite of interest rate cuts in most major markets the world's stocks markets continue to tumble.The Dow was down 2% yesterday.The Dow has now fallen 35% from its highest level a year ago.The US rescue package will take some time to make an impact on the market.The Moscow stocks market went down 14% and suspended its trading.
Iceland says the government is bankrupt.It got US$5.4 billion loan from Russia and blamed hedge funds for its financial woes.Sounds familiar.
So Mahathir wasn't wrong back in 1997 when he blamed the hedge funds especially George Soros for the Asian financial crisis.There is one thing we must all know, the capitalist world is greedy,competitive,cruel and sad to say, have no space for social conscience.What happened in America and the resulting crisis is because of freedom and laissez-faire gone amok.De-regulation of the financial system and businesses because the Westerners think they are more responsible,therefore, need not be regulated.
I must say again Mahathir was ahead of his time when he said" the Jews used proxies to fight their wars".Take a look at the 2 presidential candidates' campaign in America, how both of them clamoring to suck up to Isreal by refering to it as their main and strong ally in the Middle East.
There is 50/50 percent chance George Bush will bomb Iran before he leaves office in January 09, especially if Obama won the presidential election, leaving him to pick up the pieces.
Due to high volatility and high risk of the markets investors are expected to dump more stocks and move to safer low-yield government bonds and probably gold.
Among the waves of bad news coming from every corners of the world at least there are two good news for Malaysians, the prices of crude oil have tumbled to below US$90 a barrel and Prime Minister Abdullah Ahmad Badawi has confirmed not contesting the Presidency of UMNO in March 09 meaning he is giving up his premiership.
Now, suddenly the politicians are full of praises and accolades for the Prime Minister on his act of courage and responsibility ??
As usual the oppositions never had anything good to say concerning him of the good news or bad, especially those coming from the Indian community, who probably are still sore with him for locking up the Hindraf's activists.Here's what Perak DAP Vice-Chairman M.Kulasegaran said "what surprises me is why he is waiting till March to quit". Give him a break! Haven't you guys given him enough bashing already.
Most Malaysians are only interested in two things, politics and price of petrol.Others, including the world financial crisis, which can make their lives even more miserable can take a back seat.Oh! One more thing Malaysians also love English and European football, the bad news is, you may soon not be able to watch your favourite teams if they fall victims to the global financial meltdown.The hottest team and favourite with many Malaysians, Manchester United owed the bank a whopping RM4.6 billion.
Let's watch the KLSE today whether it will behave abnormally from other markets. If it does than you know for sure who is throwing good money to chase bad money.
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