Glass Steagall Act

I was still in darkness when Glass Steagall Act 1933 was repealed in 1998 i.e. my life was still upside down. I was just starting my banana farm then. I was broke like hell. I had to walk 5km to the Kuala Pilah town just to mail a job application letter. Many times I had to drink a tap water to avoid thirst because when I was in town I just had enough sen to cover my bus fare home.

In 2002 With God's grace my mother got some money inherited from my late grandfather thus I bought my Perodua Kancil i.e. the cheapest new car in Malaysia then BUT the people of Kuala Pilah reacted as if they wanted to cut my hand. WHY? Is it that wrong for me to have my own car? IDIOT ! Moreover is it that wrong for me to marry a foreigner?

Coming back to Glass Steagall Act. Honestly even if it is NOT repealed I doubt that the current US credit crunch (which is a global crisis now) could be averted. The reason being Americans are used to non monetary instruments (Credit Cards etc) rather than paying cash.

Obviously many items were overlooked when Glass Steagall Act was repealed even though on paper Riegle-Neil IBBEA 1994 and GLBA of 1999 looked promising. Maybe its time for President Obama to look into this matter again.

RM 60 Billion Stimulus Package

The honorable Deputy Prime Minister and Finance Minister Datuk Najib unveiled the second stimulus package last Tuesday. These are my comments i.e.the undergraduate of Edwards University of Saskatchewan Canada.

1)The amount of RM60 Billion to be spread in 2009 and 2010 - SURPRISE as it is 9% of the Gross Domestic Product
2)Estimate government deficit of 7.6% for 2009 - MANAGEABLE for now
3)Forecast GDP of -1% to +1% for 2009 - EXPECTED although I doubt a positive number is attainable.
4)Carry Back Losses - TIMELY i.e.should have been done years ago. Many quarters expect both tax cuts for companies and individuals but obviously the government still need to maintain its revenue.
5)Car Scrapping Scheme for car owners more than 10 years old to buy Proton and Perodua (discount RM5,000) - Good idea. The government has a duty to protect the local car industry no matter how bad the economy is.
6)One year freeze on housing loan to benefit those retrenched or unemployed due to Voluntarily Separation Scheme - WELCOME but what if the borrower still out of job after one year. May contribute to higher NPL.
7)The RM2 Billion Lower Cost Terminal to be built near KLIA - This is indeed a mega project to be completed by 2011. I lauded the project. Rather than building a separate second LCCT just 10 or 20 km from KLIA which needs another runway and land acquisition of poor Felda settlers, its better for Malaysian Airports Holdings Berhad to build the new LCCT nearby KLIA.
8)Possibility of another stimulus package - YES. There is always Post Balance Sheet event.

I wonder where were those smart Malaysians who criticize me badly during my PTD interview. They battered me for coming home to Malaysia without my Bachelor of Commerce,my poor English (am I) and that I could NOT take the burden of learning Finance.

Hei you Malaysians! you have tons of certificates, I ain't got nothing. Brush up for better ideas.

Its The End For GM?

Reading the newest report regarding GM today has made me closer into believing that the biggest automobile manufacturer in the world cannot avoid asking for chapter 11 protection. The argument that buyers won't buy GM cars if they were asking for chapter 11 maybe valid for only a short time.

GM has been there for so long and questions regarding warranties and spare parts should not arise at all. Yes its true buyers will avoid buying cars from an ailing manufacturer but think about GM cars and its reputation since model T.

I still remember driving a Pontiac Sunbird or Chevy Celebrity then. The ride was smooth although the car seat is bigger than myself.

The LAST thing for GM to do is to go for chapter 11. I don't think GM really need that protection for now.

GDP 2008 is 4.6%

I was listening to Karen Carpenter's Yesterday Once More as I was browsing the Central Bank web site. The not good figures for 2008 justified my concern for the Malaysian economy. For 2008 GDP was 4.6% while Q4 2008 GDP was 0.1%

And now I am still listening to Karen carpenter's song wondering what the economy would be like in the next quarters. Obviously global auto industry is suffering and Proton is no exception. Few years back many quarters suggested Proton find a strategic partner mainly American or European car makers BUT Proton discard the idea and went alone except to renew its partnership with Mitsubishi. Should Proton made that partnership with any western auto makers I guess Proton too would have asked money from the government for restructuring.

Maybe now is the right time for us to ponder the sufferings of the refugees in Africa or even the Palestinians. To these people its not how much bonus or profit which concern them but rather how to put food on the table and sleep under some kind of shelter each night.

To all you smart financiers and economists out there, pull your strengths for new ideas. I have some but I am not a graduate from Saskatchewan yet. So I would put those on hold for the time being.

Overnight Policy Rates and SRR

I caution the decision by the Bank Negara Malaysia to reduce the OPR further down by 5o basis points to 2% as at 24th February 2009. The move by the Malaysian Central Bank could be a hint that a negative is expected for the 4th quarter 2008 GDP figure which is to be announced Friday 27 February 2009. Thus the ceiling rates is now 2.25% and floor rates 1.75% respectively.

Reducing the SRR by 1% to 1% commencing 1st March 2009 is seen now as a needed or just a gimmick. The problem is banks are NOT giving out loans to the needy. Banks have the money to create more money, its only the ordinary Malaysians who are broke.

Datuk Najib as the Finance Minister must take a bold action now. Are we gonna keep reducing OPR into the negatives or are we gonna continue spending public money as sinking funds? More measures must be tackle in the 2nd stimulus package which is to be announced on March 10th 2009. I am certain as an economics graduate Datuk Najib can look beyond fiscal and monetary aspects.

As a human I don't want to take the bus again or lose my home!

Strategy Conflicts

I wonder how many billion per USD more that President Obama is willing to ask Congress to pass. From what I see now the US economy is not getting anywhere at all. Why would GM asked the Swedish government to bail out its subsidiary company SAAB? And why the Swedish government was reluctant to do so?

All governments must remember spending such a big sum of tax payers' money would be a pain in the ass if the expenses were treated as sinking funds. Using public money to renovate and refurbish the CEO's room, entertaining clients at Vegas or even using public money for bedroom leisure to me is unacceptable.

For every stimulus package announced the government tells its people to save during recession and yet the irony of it the government also asked the people to continue spending. I think the advice would be much wiser if it is done according to the spending power of the population.

For Malaysians whose household income more than RM7,000 per month there should be NO discouragement to them if they still want to go for a holiday at a five star resort because they can afford it. But for a clerk whose take home pay is RM1,000 then this is the group which must be advised to save and spend wisely.

Those with large credit card debts must be made to surrender their cards the moment it's overdue rather than made the accounts accumulated with heavy interests. Many people are living on credit cards now. There will be a time when their credit cards are not acceptable anymore and their unemployment benefits could barely put foods on their tables.

I am eager to know the 4th Quarter Malaysian GDP figure which will be announced at the end of the month..........

The Global Auto Industry Is At Stake

My heart sank as news of one car manufacturer after another was asking help from their respective governments for financial support. In recent week French Renault and PSA Peugeot Citroen was given € 3 Billion loan so that its employees could keep their jobs.

Closing a business is the last thing in the mind of every management team. During this hard time I truly agreed with President Obama's remarks on bonuses paid to Wall Street CEO's then using public funds. To those who were forced to leave their jobs and yet seeing their former bosses still receiving bonuses, zipping wines or even buying a new private jet is certainly a pain in the ass.

If Henry Ford is still alive he would regret inventing Model T. Even Enzo Ferrari won't mind just riding a bicycle instead of his fast machine.

Malaysian Made Car PROTON (Perusahaan Otomobil Nasional Berhad)was incorporated on 7th May 1983. I was only 16 years old then but as the first Proton Saga rolled out in 1985, there I was proudly seeing a Malaysian Made Car driven by Malaysians. Although it was just a remake of Mitsubishi that particular first model itself provide the symbol and spirit of Malaysians.I assume I would be much prouder if I go to Britain and seeing a British i.e.my former lords driving a Proton.

There has been real signs of negatives in the Malaysian Economy lately but I doubt that PROTON would need a government support in the very near future because in 1998 Proton too has suffered badly but we survived. I am certain the Malaysian Government would provide something to keep the heart of Malaysian Economy moving in its second stimulus package to be announced soon.

I wonder if the crude oil prices would remain as low as it is now for a long time. But my instinct says crude oil price would remain low until at least end of 2009.Now that people worldwide are driving more cautiously the demand for oil is declining too. Admit it, we only drive our cars now only if we have to rather than just driving around seeing chicks.

Happy Valentine's Day....................

Thank God Its Valentine's Day

Dear God,

I thank you for giving me this life and celebrate this Valentine with my love although we are far far away apart. Our love will always be nurtured no matter what the obstacles.

Happy Valentine's Day

Dear Valentine,

This year would be the 19th year that we could not celebrate Valentine's Day together. No matter what had happened both you and I know that we still love each other.

My Valentine,
It's so hard to endure this feeling of lost without you beside me BUT your voice is still in my ears. Your smile, laughter, anger are fresh in my mind. The kisses and love would last forever.

I Wish you My Valentine A Happy Valentine's Day. I will always love you though we are thousands of kilometers away. We are physically apart BUT not our hearts.

Love,