Monetary Policy,New GDP Forecast, CPI & SRR

I am stunned by the news that Microsoft would terminate only 5,000 jobs. I sincerely think the figure would be bigger. Moreover with Apple's Steve Jobs taking 6 months off to me is a signal of how bad the economy is (not just his health problem)

Bank Negara Malaysia reduced the Overnight Policy Rates 75 basis points to 2.5% thus the ceiling rate is now 2.75% and floor rate 2.25%. Commencing 1st February 2009 the Statutory Reserve Requirement for banks would be reduced further to 2%. However one figure which gave me a sigh of relief is the CPI for December 2008 - It has gone down to 4.4%

I could not but review my GDP forecast for Malaysia in 2009 to less than 1%. Considering the declining demand in computers I predict many computer chip factories in Malaysia would soon retrench their workers. When I was recuperating at the HTAN ward I met some factory workers who have been asked by their employers to come to work for 3 days instead of five.

The second stimulus package to be announced by Datuk Seri Najib Minister of Finance must look deeply into this matter. To me Najib is a more open figure considering he was a British graduate. The only way to overcome an economic crisis which started from the west is to think like the westerners but never ever forget the eastern and Islamic values.

Emphasize must be given to domestic economy now. Tourism is a good foreign income. I thank the people of Thailand for their recent demonstration and closure of Thailand two airports because foreign tourists have instead travel to Malaysia.Proton and Perodua must never ever be neglected because the National Car is the heart of the Malaysian Economy.

Gong Xi Fa Cai

Happy Chinese New Year to my Chinese readers. I am not sure what animal 2009 relates to according to the Chinese Calendar BUT I hope the Chinese fortune tellers could provide some happy news on the economy.

I Have Lost A Great Buddy

In 1998 my auntie died suddenly of heart attack.She was only 35 years old. In 2005 my grandmother died at the age of 76.

Since his heart valve operation in 2002,my late father always reminded me about Prophet Mohd (peace be upon him) hadis i.e.that human lifespan would be between 60 years and 70 years. Even Prophet Mohd died at the age of 63. I thought I have prepared BUT in reality it sucks although my father died at the age of 71.( My father's mother is still alive but she is senile at 90 I think)

I have lost not only a great father but also a friend who would argue with me on world affairs from credit crunch to the Palestinian conflict. I am sad and shock especially remembering him having his stroke inside my Perodua Kancil that evening of 30th December 2008.

May God Bless His Soul.

My Father DIED on 30th December 2008

Allah The Almighty the One and only God, my beloved father DIED at Kuala Pilah Hospital on December 30th 2008 for pneumonia and heart failure at 2210 hours.

Just the day before, our family were in Kuantan Pahang to celebrate my father's 71st birthday and my parent's 43rd wedding anniversary at Swiss Garden Resort Kuantan. I noticed a lot of differences with my father lately BUT I thought it was nothing to matter.

On 27th December 2008, the Ruler of Negeri Sembilan Tuanku Jaafar also passed away.We were on the way to Kuantan when the Ruler's death was announced BUT I noticed my father was looking and staring at me. I just smile.

I have prepared myself for this situation since September 2002 when my father did his heart valve replacement surgery at IJN BUT I am just an ordinary human being. However I am glad that my father died peacefully WITHOUT any debts to burden his next of kin i.e. me. Should he die in September 2002 I would still need to settle his mortgage (housing loan) BUT my father's housing loan was settled in July 2005.

Now that I am the head of the family many things have to be done. First thing is to go to the Malaysian Public Services Department to renew my father's pension so that it would be paid to my mother instead.In so doing I suffered a minor chest pain on December 31st 2008 and was warded at Kuala Pilah Hospital until January 5th 2009.Now I have to take some pills for hypertension and undergo Stress, Echo and Hulter tests in March 2009.

Please give me sometime so I could refresh my mind regarding the global economic situation.

Al Fatehah

Canadian Subsidiaries Automaker Bailout

The 4 Billion Canadian Dollar loan granted by the Canadian Government and Ontario Provincial Government to General Motors Canada and Chrysler Canada is a clear set back to the U.S. Canada Free Trade agreement 1989. As a student in 1989, I clearly supported the move by the then Mr Mulroney's Tory Government for a freer trade between U.S. and Canada.

Now that the U.S. is in a bad shape, Canadians too have to suffer the consequence of failing auto industry. Though I have never been to Windsor which is the Canadian city of Detroit, I could imagine Windsor as a ghost town in January 2009 IF the Harper Government plays Adam Smith's Free Market idea.To restructure a big organization like GM in 3 months will be an excruciating job BUT I know with decades of experience GM, Chrysler and Ford either in Canada or the U.S. could rejuvenate the auto industry again.Furthermore with a zero to 0.25% Fed interest rate, North Americans may now be allowed to turn their purchases toward Big 3 compact models (even if they receive unemployment insurance).I welcome the willingness of Canadian Auto Workers to cooperate with the government and the automakers to prevent more lay offs.

I still remember reading a blog which says she is losing her home BUT she cannot afford to lose her car too! BECAUSE for homeless North Americans now their vehicles are their beds.

MERRY CHRISTMAS

With the 6.7% unemployment rate in The United States, I foresee a gloomy Christmas. Nonetheless this is the first time since 1990 that I am able to wish viewers the spirit of Christmas.

The subject is Jesus ( in Malay it is ISA ). While Christians believe Jesus as the son of God, Muslims believe Jesus is one of the 25 prophets i.e.the last is Muhammad S.A.W. When I was in Canada NEVER EVER I attended any service at any church whether in Saskatoon or Outlook. I believe that ALLAH is my God and Muhammad is my prophet.

BUT

I will always remember the 1989 Christmas present given to me by a Caucasian lady. She may now married with kids but that 1989 Christmas present would always remain inside me. She knows who she is!!! (looks like Drew Berrymore in Never Been Kissed)

Merry Christmas.

Gasoline Prices in Malaysia

AS of today December 16th 2008, price of gas in Malaysia is reduced again by 10 sen. Now
Ron 97 is RM 1.80 per litre
Ron 92 is RM 1.70 per litre
Diesel is RM 1.70 per litre

Thank You again Pak Lah!

GAS Prices & Gross Domestic Product GDP

On December 3rd 2008 the Pak Lah Government reduced the gas prices by 10 sen more. Now
Ron 97 is RM$1.90 per litre
Ron 92 is RM1.80 per litre
Diesel is RM1.80 per litre


Malaysian economy grew remarkably well during the three quarters of 2008. For the
1st Quarter 2008 GDP is 7.1%
2nd Quarter 2008 GDP is 6.7%
3rd Quarter 2008 GDP is 4.7%
Thus, Malaysian economy only need to grow by 1.5% to achieve the target 5% growth for the whole 2008. For 2009 I envisage Malaysia GDP could achieve at least 2.5% growth.

MALAYSIAN MONETARY POLICY AS AT 24th NOVEMBER 2008

I welcome the move by Malaysian Central Bank i.e. Bank Negara Malaysia to reduce interest rates. Bank Negara Malaysia decided to reduce the Overnight Policy Rate by 25 basis points to 3.25% from the current 3.5% - Hence the ceiling rate now is 3.5% and floor rate is 3% respectively.Even at this current rate I still envisage a downward trend in interest rates.

Effective 1st December 2008, the Statutory Reserve Requirement (SRR) for banks will be reduced from 4% to 3.5% - Obviously Malaysian Banks would have more cash thus would be able to provide more opportunities for businesses and the Malaysian public.