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Showing posts from December, 2011

2012

Let's kick off with the last posting for 2011. Looking at the trading for the last two weeks, I am seeing a potentially massive run up in the second liners from Tuesday onwards till the last few days prior to Chinese New Year. Why do I say so? The build up activity has been too obvious. Its like investors were all saying to themselves, "OK, let the GLCs and local funds do their silly window dressing to perk up their returns for the year". Nobody is touching the GLCs or index linked stocks for now as the market is too staid and volume not active enough to bring forth any kind of run in the first liners.

So, second liners it is. Some people frown when I pick trading stocks. Some people frown more when they consider those stocks as con jobs. Some people say, what the hell am I doing recommending those stocks?

I am not sure when I was granted a halo with the right to talk about "pristine stocks" only. Stocks are stocks, there is a time for everything. My picks are us…

Best Cartoon Ever

The Debt Crisis In 2012

Japan has long been mired by an aging population, sluggish growth and deflation since an asset bubble popped in the early 1990s.  The country already has the highest debt-to-GDP ratio in the world--about 220% according to the OECD -- and a debt load projected at a record 1 quadrillion yen this fiscal year.

Based on a plan approved by the Cabinet in Tokyo on 23 Dec, the country is now looking to sell 44.2 trillion yen ($566 billion) of new bonds to fund 90.3 trillion yen ($1.16 trillion) of spending in fiscal year 2012 starting 1 April.  That will raise Japan budget’s dependence on debt to an unprecedented 49%.

According to Bloomberg, the government projects new bond issuance will surpass tax revenue for a fourth year. Receipts from levies have shrunk about a third this yearafter peaking at 60.1 trillion yen in 1990.  Non-tax revenues including surplus from foreign exchange reserves also halved to 3.7 trillion yen. Social-security expenses, now at 250% of the level two decades ago, wil…

Christmas Time

What do we celebrate ... most of us will see it as a great time to party, not that there's anything wrong with that. I would sincerely like to share with you three music videos that somehow brings forth the spirit of  true Christmas to me.


The first is the Matthew West song about the little boy Dax Locke, One Last Christmas, the kid's last Christmas because he was dying of leukaemia. Its not so much what he is, but what he caused the people around him to do. Its the spirit of loving, giving and being true to oneself. Its about bringing out the best in us. Dax's father started decorating his house with Christmas decorations in September as he wanted his son to at least experience Christmas time ... soon, everyone chipped in as well. Thankfully, the real life story has been made into a movie as well, The Heart of Christmas.







The second music video is my favourite instrumental piece, which I have featured before, this time played by Chihiro, just the piano. Somehow at a time lik…

The ECB Lending - Folly or Fantabulous

When the tap finally opens, banks (whether they needed the money or not), stretched out their palms. Much like the experience during the subprime rot when the Fed lent out money at zero rates. As one can see, the yield on government bonds in Italy and Spain did not fall, but actually moved higher. So banks are hoarding again to prettify their balance sheet and maybe capital adequacy ratio, or just having a standby line while they can still access funds because if the Euro crisis gets any deeper, the whole money market could shrivel up.



The good thing is that at least money is moving, the risk of a major bank run has been thwarted somewhat. So, anyone who says that the ECB lending is not a positive thing is looking at much too high expectations. This is precisely the stopgap fear removal. The persistent fear is that dwelling deeper into how to revitalise troubled EU government's finances would eventually lead to extreme pessimism, which will result in people and funds fearing the mo…

The Song Remains The Same (NOT)

The internet has changed the playing field of many industries, in the way we produce, network and reach our audience. The internet is a great equaliser, it brings prices down, it makes almost everything cheaper. We get to cut out a lot of the middlemen in transactions.



However, there is one industry that stands out for being most maligned by it, causing the entire business model to shift dramatically. Its like talking pictures being invented and accepted by the masses, have a heart and see how those whose livelihood was connected to silent pictures - what a mind blowing change for them. Then we have the invention and acceptance of television, which totally displaces much of the "influence and attraction" of the radio.


However, even those two scenarios added up cannot be compared to the tumultuous upheaval of the music industry by the internet. Now music is almost a commodity. You'd be hard pressed to find anyone paying anything for music. $1.00 seems to be the norm set by …

How MF Global Collapsed by over Hypothecat​ing and Who is Next?

Sam CK,  my good friend and classmate in secondary school back at St. Michael's Institution, is a prolific finance writer. I think he wrote a goodie on hypothecating. A worthwhile read. Does this apply in Malaysia? Maybe we should have a lot more transparency as I do think this happens a lot in "local stockbroking firms".  When you as clients pledge your shares for margin facility, do you know if the broker uses your shares for something else? If we are not transparent, we will only ask question when the whole thing blows up in our face. Are there parameters, are these parameters being regulated rigorously? Is this an unregulated issue? How does it differ from broker to broker? Is the information available to SC on a regular basis? Can we know as well? Or is this totally forbidden (think not).
By:Sam_Chee_KongDec 13, 2011 - 06:24 AM Another month another new implosion. Europe really seems to be stuck in a financial black hole, unable to free itself out of it. Before we ev…