Skip to main content


Showing posts from August, 2008

Food Treasures & Nuggets

Its Budget Day, so nothing much to talk about until after the reveal. So, I think I will do something fun. There are certain dishes/food items in selected restaurants which in itself is enough reason to visit them frequently. Here are the food nuggets, feel free to add to them:

1) Truffle Oil Pasta with Seared Foie Gras, at Chalet Suisse in Ampang. Hope its still below RM50, still the best single dish under RM50 in KL to me.

2) Oxtail Pasta served with Chilli Padi tapenade, at Cava@Bangsar, Jalan Bangkung. The meat comes off the bone and the chilli padi tapenade (for want of a better word) is exhilarating.

3) Almond Tong-Sui Powder Mix, at Restaurant Ipoh Old Town, Lucky Garden. This is not the Old Town chain, its a stand alone restaurant. The almond powder is done in Ipoh, no preservatives. Just add hot water, it taste like the freshest made almond tong-sui. Comfort food.

4) Grilled NZ lamb cutlets, at Max Kitchen, Tengkat Tong Shin. Slathered with freshly made but warm mint sauce. Its a…

Dengue Rears Its Ugly Head Again

Aug 27 (Bernama) - Four deaths due to dengue fever were reported one each in Selangor, Kuala Lumpur, Melaka and Johor in the Aug 17-23 period, the director of the Disease Control Division of the Health Ministry, Datuk Dr Hasan Abdul Rahman, said in a statement here Wednesday. He said in the same period 1,003 cases of dengue fever were reported representing a drop of 36 cases from the previous week. "Although there is a drop in cases it is still about 10 per cent higher than the same period last year when there were 910 cases and 31 per cent higher than the targeted figure of 765 cases," he said in a statement Wednesday. Dr Hasan said seven states and the federal territories of Putrajaya and Labuan had recorded increases in dengue cases. The seven states are Perak, Selangor, Negeri Sembilan, Melaka, Johor, Terengganu and Kelantan. He said the states and the federal territories had 74 per cent or 743 cases of the total cases reported and to date a total of 29,942 cases of den…

Dubious Money Transfers By Merrill Lynch Taiwan For Chen 's Family

Finance Asia: The news that Merrill Lynch may have been involved in possible money laundering by members of the family of Taiwan’s former president, Chen Shuibian, has raised questions about the bank’s internal risk controls. Merrill Lynch has declined to comment on any aspect of this article, apart from to say that “as is our standard policy, we are cooperating with the authorities”.

The facts of the case, as they have been reported by opposition party legislator Hung Hsiuchu and the press in Taiwan, can be summed up thus: former president Chen Shuibian's daughter-in-law Huang Jui-Ching reportedly opened two Merrill Lynch bank accounts in Switzerland (at Merrill Lynch Bank Suisse AG) in February 2007, and remitted millions of dollars from an anonymous Credit Suisse Singapore account in February and March that year into two separate accounts at Merrill Lynch in Switzerland. First there were transfers of US$21 million and US$140,000 respectively.

A Cayman Islands account was set up t…

China mulls 370b stimulus package

by KathyWang/The Standard

Monday, August 25, 2008China's leaders are carefully considering an economic stimulus package of about 370 billion yuan (HK$420.7 billion), including a 220 billion yuan new expenditure and 150 billion yuan of tax cut plan, that may ease the government's monetary policy by the end of the year, China Business News reported. "Although the details are yet to be sorted out, there is such a plan, and it has been approved by a central finance planning team," state-run Xinhua News Agency said in a report yesterday. The expenditure part will include the spending of 45 billion yuan on social welfare, 46 billion yuan on agriculture, 38 billion on education, 35 billion yuan on construction, and 28 billion yuan on import of energy and commodity products.The package will also propose tax cuts of 150 billion yuan in total, including measures to raise the threshold of personal income tax, export tax rebate, and preferential tax packages for small and medium…

Joanna Wang - Ingenue

Time to talk about music. Made a new discovery when I came across this Joanna Wang. Joanna Wang (王若琳) is a Taiwanese singer/songwriter, daughter of famous Taiwanese music producer Ji-ping "Bing" Wang (王治平). Her debut album,Start From Here, was released in January 2008 as a double-disc set, one in English and the other in Chinese. She is 19 now and was brought up in the U.S.A. She moved back to Taipei when she was 15. She performs regularly in the Taipe Riverside Cafe. Fans have likened her voice to Sarah Vaughn, Norah Jones, Diane Schuur and Teena Marie.

I love her voice, smoky, earthy, and she is a composer as well, contributing 3 songs on the album. However she has been giving interviews saying the debut album was a "product" and not a true reflection of her vision for her music. I think there were some heavy handed production decisions, especially in doing the covers of True and New York State Of Mind - she is much better than that.

Joanna: " I don't rea…

The China Price

Datuk said

...When a ship sailing in a stormy sea with an invisible front side the captain need to apply his common sense that guilded by his previous experiences as well as taking into consideration of the on the spot factors for moving forward to the planned destination.

Thus, the experience (history) and common sense (objectivity of view point) are two helpful gurus for guilding us to sail through the current economy sea.

In my opinion, there were 2 aspects of inter-dependent spending in china, namely consumer spending and infra and capital investments. A strong consumer spending derived from the strong confidence which in turn influence the capital/infra spending and vice versa.

China as we known is a typical export orientated economy. This is to say that the growth factor in CHina for many years has been driven by its "factory of the world" due to it cheapest cost relative to other countries.

However, the comodities boon for the past 3 years had changed this scenario. The ex…

Emerging Markets Funds Flow & China Post-Olympics Blues

Fund Redemptions - If you remember the rankings of year to date performances of various markets, the emerging markets have been hit pretty hard. Now we know that last week saw fund redemptions from emerging market equity funds totaling US$1.9bn, which was the biggest outflow in 5 weeks. That on top of the 5 weeks of continued outflow of funds. In total the total fund redemptions was almost US$20bn on emerging markets funds.

The situation was reversed for US equity funds where US$13.3bn flowed in over the past 10 weeks. To me, the outflow from emerging was collateral damage from the massive unwinding and deleveraging by speculators, hedge funds and commodity funds. It was not fundamentally driven. As they unwound, the emerging markets were being sold down to cash up for overal anticipated redemptions. The reversal now seen in commodity would establish some platform for emerging markets to find their feet again.

China Post-Olympics' Blues - The generally accepted fact is that China …

Oil Shorts Covered, Go Long Gold & Oil

When did I become a commodities trader? Unlike most commodity traders, I do not trade the volatility or very short term trades. I tend to look at sentiment and momentum and compare that with the "noise" in the market place, all the time assessing the underlying fundamentals.

The first short position on oil was at US$139, the double up position was taken at US$119.90. The shorts were covered at US$112.90. I initially was waiting for US$110 to be broken.

My reasons for covering:

a) The open interest on oil futures was only about 43% when oil was at US$130, now its closer to 70% and mostly on the short side. The hedge funds and index speculators were not only unwinding and deleveraging, but taking the short side as well in most commodities. The fact was much clearer in gold price movements over the last 2 weeks.

b) Despite the cumulative shorts, the momentum does not seem strong at all to push to test the US$110. If things don't look likely, it will move the other way.

c) The US…

USD Strength Is Temporary

Don't make the mistake of thinking USD strength is responsible for the collapse in commodity prices. The dollar DID NOT cause the collapse. To think like that would bring about the wrong investing strategy going forward.

There is very little to support a bullish dollar going forward. The connection is reversed, its not a dollar led sell down. Its the deleveraging by index funds and cut-loss by speculators in almost all commodity asset class which has brought about the cashing up. The dollar has been inversely correlated to commodity prices for the past 3 years. Its only natural for the inverse correlation to hold as well.

To many index speculators, to go long on commodities is one trade. If you wanted to enhance returns, you can also short the USD, its a double whammy. Plenty of hedge funds have taken on this strategy, and what we are seeing is the reversal of that. Hence the strength in USD is pretty fake.

Amidst a slowing US economy, the biggest determinant for USD strength would h…

Commodity Correction Or A Bubble Bursting?

Are we seeing the collapse of the commodity cycle or as some may like to refer to it as the commodity bubble? CRB Index of 19 commodities fell 10% since June 30. This was the biggest monthly decline since 10.5% drop in March 1980, when US was in recession. Natural gas plunged 32% to lead July's biggest losers. Corn dropped 20% and nickel sank 16%.

Tight supply/demand fundamentals support bull case for commodities, but speculation may amplify price trends to overshoot or undershoot fundamentals.

Wasn't commodity supposed to be a safe haven to fight against inflation? We still see most countries grappling with inflation brought on by the huge upswing in the commodity prices over the last 4-5 years, in particular kicking in strongly over the last 24 months.

High inflation may eventually slow economic growth and demand. Expectations of monetary tightening and stronger dollar may be crunching the commodity bubble. Though many tend to cast aside the role played by speculators in ca…

Double Down Short On Oil Activated

Well, as expected, price of oil broke US$120 thus my proposed double down short would be activated at US$119.90. Should sit pretty all the way down to US$105-110.At the time of writing this, the price has reached US$119.30.

26 July 2008 - If I shorted at US139, I'd be pretty happy to ride along as I am waiting for US120 to be broken, which to me, will be a very huge sell signal to most chartists. At US119.90 I would be doubling up my short position. Why don't I double up now at US123 you might ask. Well, things are still fluid, it could hang around the present levels for another few weeks, which to me would be base building - if it does that, and does not break US120 by mid-August, then I should take profit on my short position as I would interpret that as the bulls still having the upper hand.

Hence I am looking forward eagerly to US120 being broken because it will fall pretty quickly to US105-110, the level which I think there will be better long term support.

26 July 2008

Default & Foreclosure Rates For US Homes

Despite the bailouts for Fannie & Freddie and the housing package in the US, defaults and foreclosures are rising rapidly, and not even flattening out. Mortgages in the sub prime category: 8.4% for all sub prime mortgages taken out in 2005 are now in default or foreclosure; for sub prime mortgages taken out in 2007, the default/ foreclosure rate now stands at 16.6% as at June, a pretty sharp hike from May's 15.8%.

The trouble is these high default rates are not just in sub prime but is flowing into other mortgages as well. One rung above sub prime is what they call Alternative-A category. The default/ foreclosure rate here has jumped 300% in April from a year ago to hit 12% (which isn't that far from the sub prime default/ foreclosure rate).

Even some of the prime loans are being hit as well. The default/ foreclosure rate has doubled in April to 2.7% from a year ago.

Even with the bailout packages, housing prices are not likely to do a V-shape reversal but rather a prolon…

Let Business Cycles Cycle

The headline must have sounded like bad English. Business cycles and commodity cycles are there for very good reasons. Cycles are basically expansion and contraction periods. However, the contraction periods are usually much shorter than periods of expansion, or else we would all be in deep trouble if it was 50-50 all the time.

Riding out of troughs is essential for business longevity and income preservation. The last two contraction periods was relatively mild in the US, lasting just 8 months. The first one began in mid 1990 and the second in 2Q 2001. The expansion phases for the last 2 cycles were very much prolonged. From 2Q 1991 till 1Q 2001 was 92 months. From end-2001 till 1Q2008 was about 84 months. These two were among the top business expansion phases in history. It was only surpassed by the prolonged business expansion upcycle from 1961 till 1969. Most of the rest of the expansion periods were less than 50 months.

The best explanation may be central bankers and financial autho…

Brewery Companies & Sin Taxes - The Debate

Its that time of the year as the brewery and cigarette companies (BCCs) make their public relations rounds to spread the news against any sin taxes in the upcoming budget.There were no sin taxes last year. Following the windfall taxes being imposed on CPO companies and IPPs, it’s only natural for BCCs to make their case known before the upcoming Budget is finalised. Recently, in The Star’s business section, breweries in Malaysia cautioned that another round of excise duty hike could result in more smuggling and increased competition from wine, spirits and hard liquor. The article also highlighted that excise duty rates in Malaysia is already the highest in Asia and second highest in the world, after Norway (and I thought we were only tops in car prices).The DefenceThe sector contributes some RM1.24bil in excise duties, corporate taxes and personal income taxes.It provides direct employment to over 1,000 full-time employees and more than 60,000 people through indirect employment where …

Something For The Weekend

I have posted this about a year ago, but its still great to watch. My Hokkien is hopeless but I understand enough to know what its all about. Laugh your heads off if you can understand Mandarin and a bit of Hokkien. Click on the link below:

p/s photo: Elanne Kong