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Showing posts from March, 2010

This Irish Joke Is not So Funny

Ireland's finance minister is shocked to discover that Irish banks actually need $43bn in new capital. As mentioned in my talk, the Greece situation is just one of many, its now the turn of the PIIGS - Portugal, Ireland, Italy, Greece and Spain. No matter how you look at it, Italy and Spain are really too big to fail - if things start turning bad there, help will be swift, so those two countries are not a big issue. Now its Ireland's turn. $43bn is very big to Ireland. Ireland’s banks need $43 billion in new capital after “appalling” lending decisions left the country’s financial system on the brink of collapse.

“Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin yesterday. “Irish banking made appalling lending decisions that will cost the taxpayer dearly for years to come.”

The Irish government, which has already nationalised one bank, Anglo Irish, is now widely expected to end up as the majority owner of every big bank in t…

The New Economic Model

ON 30TH MARCH 2010, AT 8.15 AM


1. Thank you for that very kind introduction. I want to say how delighted I am to be here with you today. Business leaders and investors are crucial to the health of Malaysia's economy - and our society. I want to thank you for the work you do, the contribution you make, and your involvement in the important discussions being held here over the coming days.

2. The theme of Invest Malaysia 2010, 'Powering Global Excellence', is a fitting one given the forward looking nature of Bursa Malaysia and the aspirations we share for our nation and our businesses. It is also precisely what I want to talk about with you today. In a new year, in a new context, in a world emerging from recession, we are focused on:

- How to ensure a sustainable and ro…

Geithner Could Label China As A Currency Manipulator Come April

The Greek debacle has been dying down a bit after attempts by bigger EU nations to placate the markets. While the Greece situation is still dicey, it is still in ICU but showing signs of life and recovery. Now we have a new looming "bear factor" coming to play with a fixed deadline, mid-April.

There have been furious behind the scenes negotiations that have basically gone nowhere. Now the discussions, opinions and grouses are being publicly aired - obviously after the secretive discussions went nowhere, the US BSDs will have to air their attempts to the democratic Senate, telling them that they have tried. Just weeks before he makes a decision whether to label China a "currency manipulator," which could trigger tougher action against Beijing, Geithner said last week that Beijing should allow its yuan currency, which is virtually pegged to the US dollar, to appreciate in a reflection of market expectations."We can't force them to make that change. But it is…


Being from Ipoh, I have been to Indulgence a lot, both the old place since 1996 I think. The first few years were splendid, maybe the menu was not as extensive. The owner chef Julie Song works with passion, and never shies away from meshing different ingredients to heighten the senses. It literally was like dining at a close friend's home. Somehow, the menu got a bit adventurous and for a few years it was always a hit and miss with some of the dishes. I have been reading plenty of food bloggers on Indulgence, most were not positive. You's have to wonder at the power of the food bloggers, if they were, Indulgence would have closed shop years ago!
Too many will always say how expensive it was in the end - just because its in Ipoh does not mean everything will be cheap people, that is such a stupid line of thought. We all know that there are great hawker food in Ipoh, Indulgence is gourmet food. I think its time to set things right. Indulgence is defined both as the act of gratif…

The State Of Play - March / April

Those who were at the talk would have been aware that I still see imminent dangers of downside for all markets, in particular 2Q 2010. I do think that the second half of the year would be a lot better. Hence even though the S&P 500 and local bourse have been trending up, I would still recommend 50% in cash. We should still be quick to reduce if things start looking shaky again. Watch the VIX indicator - if it starts climbing above 20, be careful.

The other thing is the usual "sell in May" adage, which I must say do rings true in most cases. If you remember I stated that that would not be the case in 2009 and was largely proven correct. 2009 was unusual because I thought that the recovery was underway and that too much funds was still sidelined. This year, I think we would do well to stick to the rule of thumb: Sell In May & Go Away.

Why the negativity - I don't like the uptrend, its a bit hollow in terms of volume and pervading theme. Macro wise there are a lot mor…

Beijing Clamps Down On MDICs

This made the earlier article on "China's Bubble Doomsdaysayers" look intelligent. At least Beijing is on the right path, clamp down on the state owned enterprises dabbling in real estate.

Friday, March 19, 2010

Beijing has banned 78 state-owned enterprises from dealing in the property market in a determined move to curb home prices.The directive from the State-owned Assets Supervision and Administration Commission yesterday said only 16 state-owned companies whose primary business is real estate will be allowed to participate in the sector.Analysts say the move will have a negative impact on the stock market and create correction pressure on mainland developers across the board."The recent steps and comments from Beijing and state-run media show the central government is not happy with the SOEs' recent high-profile participation in land auctions, which have drawn heavy criticism," Quam Securities sales director Andrew Wong Wai- hong said."The recent bid…

Astro @ 4.20 ... 4.22 ... 4.23

Sometimes the price traded reveals a lot if you just think a bit harder about it. Generally, when a company do a G.O., it will trade close to but slightly lower than the G.O. price. That is usually the case as many shareholders or traders do not want to wait till the actual "last day" to wait for submission and then wait some more for monies to be paid back to their accounts.

Then there are the more volatile G.O., usually in deeper and more developed markets, where a G.O. signals a tussle for control. Maybe one or two other parties are also interested to wrest control and ownership, and in those cases the price would immediately spike up much higher than the G.O. - technically speaking the same person/entity declaring the G.O. cannot go into the market to buy at higher prices than the G.O. as then the same person/entity would have to raise the G.O. to the highest price purchased after declaring the G.O.

So, what's happening to Astro? Are some substantial shareholder buying…

"China's Bubble" Warning By Doomsayers

You gotta love it how more and more people just seem to join the chorus once somebody with some credibility says something interesting. China is in the midst of "the greatest bubble in history," said James Rickards, former general counsel of hedge fund Long- Term Capital Management LP. Who is Rickards??? Why is he saying things at all? He's just the counsel at what was the biggest collapse in the 90s.... aahhh. The Chinese central bank’s balance sheet resembles that of a hedge fund buying dollars and short-selling the yuan, said Rickards, now the senior managing director for market intelligence at McLean, Virginia-based consulting firm Omnis Inc. Rickards joins hedge fund manager Jim Chanos, Marc Faber and professor Kenneth Rogoff in warning of an overheating and potential crash in China's economy following a rally in stock and property prices. Now even the World Bank has chimed in to say the same thing.

Are we heading down the road as opined by those above. Beijing…