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Showing posts from January, 2009

Why Citibank Might Not Be Around ... Soon

Why pick on Citibank? Didn't they agree to break up the company already? Well, one can argue that the biggest toxic assets reside in Citigroup, Lehman Brothers and Merrill Lynch. We all know Lehman was hung out to dry. Merrill's woes are now part of Bank of America's problems. BoA may or may not be able to digest Merrill's positions. Both Citi and BoA have been given tons of money by the US government. Will it be sufficient? In the past 12 months, taxpayers, sovereign wealth funds and private investors have sunk $1 trillion into failing U.S. and British financial institutions, while central banks have slashed their cost of funds to nothing and their collateral standards even lower.
It looks likely that the hole is simply too big to fill even by governments. Bank losses from the write-offs of bad loans and busted derivatives tally up to $1.5 trillion so far. In addition, $5 trillion to $10 trillion worth of off-balance-sheet businesses such as structured investment vehic…

Critics Of The Stimulus Plan

Its often been said that you cannot please everyone. Having watched CNBC, I can finally confirm that they have too many Republicans on the show as anchors. I am not saying that Obama's stimulus plan is perfect, far from it, but it is never going to please the majority because there are not just two sides to the stimulus plan. There are many sides you can take. If you put the top 10 economists into a room to debate the plan, I would bet that there would be 11 views.

I also think I have to put a strong protective layer on my TV screen as I am very very close to throwing things at my TV everytime Gasparino or Kudlow speak.

We have to appreciate that beneath our views and opinions on the stimulus plan are our very unique assumptions of what will work and where our inherent priorities and biases lie. Safe to say that most people who like to say things on business channels will have a view, and believe that their understanding of economics are the appropriate school of thought.

It is easy …

Wen Jiabao Can Criticise But Putin Should Shut Up!!!

At the current Davos summit, many leaders have whacked the US for its role in bringing the global economy to its knees. Wen Jiabao of China can criticise, but OMG Putin should shut his face. For my life, I cannot understand why Russia was invited into the G8 and not China????? Why does he have the gall to even criticise the US? Its like Thailand advising Malaysia on how to play better politics, or rather, like Malaysia advising Thailand on how to play better politics!

Why Russia should shut up:

a) Despite the huge run up in oil price and hence Russia's reserves, the country did not improve its infrastructure. It allowed Russian gang leaders (or some may call them oligarchs) to lead many big companies, and when things do not go their way, these ballbusters would use the courts, extortion, kidnapping and murders to get their way. Foreign investors who have been in Russia can attest to that.

b) While opening arms to welcome foreign funds, Russia also openly go about nationalising indus…

Is Asia Doing Enough Stimulus?

Well, the US can afford the stimulus because it can print as much Treasuries that it wants as long as there are demand for it. Other countries don't have it so good. Other countries have to watch our balance sheet, our reserves, our foreign debt levels, etc... Its unfair, and the global economic paradigm will shift, albeit slowly, to require more accountability from the US, but until then, we have to play by the slanted rules. Asia have come up with its own economic stimulus, with Japan and China hogging the limelight, and both should have no problem financing the stimulus. What about other Asian countries?

So far, Asian countries are introducing over $600 bn in fiscal stimulus to raise govt spending on infrastructure and public services, cut taxes, offer subsidies and ease credit for households and firms incl. exporters and SMEs in order to cushion domestic demand, promote investment and curtail job losses amid export slowdown and global recession. Stimulus by most countries have …

Gold Investing In 2009

Been rolling over my sole gold futures position as a bet and a hedge. So far, it allows me to sleep well at night. You may choose to trade stocks now or stay on the sidelines, both have solid arguments for doing so. Do consider that as the yen rate is still below 93, it would be wise to only have 1/3 or less of your cash in shares.
The gold position acts as a good bet and good hedge for me. Its a hedge if inflationary pressures come into play, owing to vast sums of liquidity being injected by the many central banks. Its a bet that the risk aversion may favour holding only real assets, if you come to extreme pessimism, all assets classes will be shunned, including stocks, bonds, even Treasuries, thus leaving gold as the sole carrier of value.
The case for gold is this: The US government (and many other governments actually) is pumping trillions of dollars into bailouts and stimulus plans, a purposefully inflationary policy aimed at reversing current deflationary pressures. If inflation r…

More Jokes On Economists

Grow your own dope -- plant an economist.
Economic forecasters assume everything, except responsibility.A friend of mine was taking a class by Milton Friedman at the U of Chicago, and after a late night studying fell asleep in class. This sent Friedman into a little tizzy and he came over and pounded on the table, demanding an answer to a question he had just posed to the class, my friend, shaken but now awake said " I'm sorry Professor, I missed the question but the answer is increase the money supply."We love it on the floor of the CBOT. What does it take to be a good economist? An unshakeable grasp of the obvious! Achieving free trade is like getting to heaven. Everyone one wants to get there, but not too soon. President Truman once said he wants an economic adviser who is one handed. Why? Because normally the economists giving him economic advice state "On one hand and on the other..." On the first day God created the sun - so the Devil countered and created…

Obama's Ride

Its certainly not easy being President of America. The car is a beauty though. Click on image to enlarge.

CNY Entertainment

If you guys are still surfing the net on CNY, you must be real desperate. For you, I have compiled some very special entertainment nuggets. These are very treasured performances by some of my favourite artistes. Trust me when I say these clips are very hard to find.

I have saved the best for last, .... Enjoy!

The very hard to find clip where Sam Hui performed with the original group Beyond with Wong Ka Kui.

The very versatile Leslie Cheung where he performed the best known Canto opera with Wong Ming Chuen. Leslie's command of Canto operatic nuances was very admirable, complemented with the proper way to hold the text and hand movements. Sent all Canto opera fans into delirium. Followed by a rare duet by Leslie and Roman Tam.

During Sam Hui's retirement party, one of the treasured moments where Leslie Cheung sang with Sam Hui.

A rare live …

Chinese New Year 2009

To all who celebrate CNY, may you have a healthy and prosperous 2009. May the new year be more meaningful and fruitful to you and your loved ones.

p/s drive safely...

Making Fun Of Economists

"Economics is the only field in which two people can share a Nobel Prize for saying opposing things." Specifically, Myrdal and Hayek shared one.
Man walking along a road in the countryside comes across a shepherd and a huge flock of sheep. Tells the shepherd, "I will bet you $100 against one of your sheep that I can tell you the exact number in this flock." The shepherd thinks it over; it's a big flock so he takes the bet. "973," says the man. The shepherd is astonished, because that is exactly right. Says "OK, I'm a man of my word, take an animal." Man picks one up and begins to walk away."Wait," cries the shepherd, "Let me have a chance to get even. Double or nothing that I can guess your exact occupation." Man says sure. "You are an economist for a government think tank," says the shepherd. "Amazing!" responds the man, "You are exactly right! But tell me, how did you deduce that?""…

Pounding The Pound

The fall in value of the British pound is a problem for mainland Europe and will be added to regular talks on exchange rate issues when G7 finance ministers meet in February. In the past year, sterling has lost around 30 percent versus the dollar, 20 percent versus the euro and more than 40 percent versus the yen. Late Wednesday, the pound bounced back to $1.3977 after slipping to a 23-year low of $1.3618. The British pound has fallen to a 7-year low against the US dollar and a record low against the Japanese Yen.
Bank of England Gov. Mervyn King on Tuesday night signaled that the central bank was set to seriously consider buying up a range of assets in coming weeks in an effort to jumpstart stalled lending to businesses and households. He also outlined potential "quantitative easing" measures that could be used to boost the money supply, or effectively print money, in the face of a steep contraction that threatens to take inflation below the central bank's 2% inflation …

Depressing Economics

Edward Chancellor is the author of Devil Take the Hindmost and a senior member of GMO’s asset allocation team.

Governments around the world are resorting to extreme measures to stave off deflation and depression. Fiscal and monetary stimulus on a grand scale is prescribed by Keynesian and monetarist economists alike. But there’s a danger that such moves could hinder the cleansing process of the bust. Although the contraction may be mitigated, the result of depression economics tends to be weak economies overburdened with government debt. (There are now clearly two sides in the field, one is Keynesians who believe fiscal and monetary stimulus will be necessary and appropriate to revive the economy. The other side are the conservatives who believe that markets must be allowed to correct on its own accord, that bad companies must be allowed to fail. By intervening, it is usually borne by the government/taxpayers and reward shareholders and excessive risk takers. If we allowed Citi, Bank …