Sunday, June 30, 2019

Yesterday - Movie Review

You want the movie to succeed. After all its The Beatles. After all, we have Boyle and Curtis helming it. Well, it seems like talented musicians/performers' biopics are the way to go. It is getting a genre of their own. 

We had Queen, soon to be followed by Rocketman (Elton John), Blinded By The Light (Bruce Springsteen), Janis (Janis Joplin), Judy (Judy Garland) ... see a trend here. 

However, Yesterday was not really about The Beatles, it was asking the question what if The Beatles never existed. A brilliant coffee shop topic.

The movie's premise was simple enough. What if you are the only person who knows about The Beatles and you are an OK battling singer-songwriter. The concept was strong enough. You can cram all the jokes in over what would not exist without The Beatles: Oasis was a, but some other things I am not so sure.

I think the writers had a big problem with how to end the story. It was a bit forced and left many questions unanswered.

The nice twist was that there were two other people on earth who also knew about The Beatles' songs. It could have gone formulaic in a truth vs evil scenario, but it didn't and for very good reasons. The two basically were heartened that The Beatles songs live on somewhat and not just in their minds.

Enjoy the movie, stop your logical brain for a while. Because once you start asking questions:
- how and why did the memory of The Beatles only that got erased?
- if nobody knew about the songs, did they (members of the band) even existed, if they did what were they doing with their lives?
- the assumption that songs which were introduced in the 60s would have the SAME reception if it was released today

The Beatles are what they are now, not just because of the outstanding and timeless songs. The "new energy", the shift in popular culture, their influence on one or two generations of musicians that followed them, their personality and the issues they took up - these are among the many things that make The Beatles what they are. 

The Beatles were somewhat responsible for moving popular culture from Wine, Women & Song to Sex, Drugs & Rock n Roll (for better or for worse). Hence to presume that just hearing their songs for the first in our present culture would yield the same results and aftershocks, would be very presumptuous.

Still, it was a wonderful tribute to The Beatles, just to hear some of the songs being deftly sung in a cinema revealed so much deeper beauty and talent within the songs, in particular: The Long & Winding Road and Yesterday.

If you asked me I'd say, Eleanor Rigby, While My Guitar Gently Weeps, Here There Everywhere and I Will as their strongest compositions.

Anyways, do go see the movie, at least the younger folks will get to appreciate that the older folks actually had much better music in their lives.

If I was the director, I will end the movie with a slowed down version of I Will ... the simplest of songs but therein lies the genius that is The Beatles.

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Friday, June 21, 2019

Why We Need To Whack Goldman Sachs For Every Sen

Unlike my PM Mahathir, I am not anti-Jew. Alll I am interested in is the way they colluded with people in power to screw the rest of the Malaysian public. Let me know if ANY OF THE WORDS I USED ARE NOT TRUE!!!!  I will gladly apologise.

There is a big difference if I can cosy up to Gadaffi .... or I can cosy up to Merkel. There will be a world of difference in terms of the things I can do, the things I can get done, and the things I can say "I got this, don't bother me".

Now, we know the magnitude of the calamity from 1MDB, without Goldman Sachs help, where would we be???!!

My PM Mahathir said, Goldman Offered US$241 Million to Settle 1MDB,.... 

Harrooo, slap me in the face and kill my entire village please... same effect. Why I wrote this article, its the audacity of offering USD241m... its like raping someone and offering 20 sen... go and play in the canteen, don't tell your parents. THE OFFER is mockingly so, it assumes that the Malaysian public and government are idiots.

Goldman, either you were complicit or you weren't. If you weren't... why even offer. You offered means you know you have been very naughty.

But if you were a little bit complicit... ... the figure should be closer to USD3-4bn, and not USD241m.

So, by way of liability... you basically think GS is only liable for USD241m. Hmm... I would love to hear you justify that. I don't know what spreadsheet ypu will be pulling to justify that though. 

“Goldman offered RM1 billion but they made 10% from it,” Mahathir said. When asked by moderator Haslinda Amin, what would be a reasonable sum, Mahathir said that it would have to be at least 10% of the total US$6.9 billion.

If you asked my PM he says around USD700m, Goldman Sach, you better just pay that. Because from all calculations it should be around USD3-4bn if you include fines and punitive charges.

Goldman Sachs, you know very well your share price has tried to DISCOUNT WHAT THE PENALTY SHOULD BE!!!!! Look at the timeline and newsflow, you lost almost USD70 per share based on the 1MDB linkages alone!!!!

USD 70 / USD 250 = 28%... the market has acknowledged you ARE FUCKING GUILTY and whacked USD20BN... dua puloh billion dollar Amerika Syarikat saha...(bloody) ja.

YOU WOULD RATHER SEE 20 BILLION USD BEING WHACKED OFF THAN COMPENSATE MALAYSIA 3-4 BILLION USD .... whackos. If you'd just step up early, admit liability, paid USD4bn, I guarantee you your share price would be higher than its current by 25%. Numbskulls... got brains, but numbskulls nonetheless.

WHY $3-4 Billion??

March 2019 - Goldman Sachs has been fined £34.4m by the UK regulator for misreporting millions of transactions over a decade. The US investment bank was criticised by the Financial Conduct Authority for “serious and prolonged failures” at its London-based international arm after reports for more than 213m transactions between November 2007 and March 2017 were not filed in an accurate and timely manner. The FCA also said Goldman “failed to take reasonable care to organise and control its affairs responsibly and effectively” in relation to those transactions. Goldman’s fine is the largest imposed by the FCA to date over transaction reporting breaches.

Goldman Sachs was fined 34.4m pounds for the above transgression. Do you think it is similar to their role in 1MDB? Cause Goldman Sach seems to think so as the RM214m offered was about similar sum. Please!!!

The bond deals in question, worth $6.5 billion total, took place in 2012 and 2013, and Goldman got $600 million in fees for those deals.  Malaysia's finance minister said he wants Goldman to pay $7.5 billion in reparations. Malaysia's attorney general said the government would seek fines "well in excess" of $2.7 billion from the defendants.

Citi estimates Goldman will receive penalties ranging from US$1.5 billion to US$9 billion, and assumes a base case of US$4 billion to US$5 billion, though business activities are unlikely to be suspended.

Onerous fines and restrictions may depend on perceptions about Goldman's compliance structure. If regulators view this more as an isolated incident and believe Goldman has an effective compliance programme, consistent with Goldman's stated position, then the fine would be on the lower end of the range.

Citi's more bearish scenarios "get to the culture of the firm". News of a potential connection to Lloyd Blankfein, alleging the then-CEO attended meetings with Jho Low, began to surface on Nov 8. This meant that the "act" was more a matter of culture in Goldman and even the top bosses were in the loop - ratifying and supporting these dealings.

Thus the $600m would be a bse case as Goldman should cough back every sen earned from the deal. The scandal caused losses of $4.5bn to Malaysia. Goldman should be fined punitive damages that should send a strong message to the bankers. If it was an isolated instance or where there were a couple of rouge bankers acting on their own, the fines should be smaller, but here we are talking of a despicable culture permeating, working with underhanded untrustworthy government and being complicit with the shennanigans. A punitive fine of 4-6x the sum earned is almost a forgone conclusion. IF NOT, the bankers won't get the message if they only have to cough back the fees earned (if, and when, they get caught).

How Will The Next Correction/Crash/Crisis Look Like For Equity Markets

We can use the mantra that history is the best teacher... but we, rather, we the investors never learn. How long does it take to forget the important lessons of frugality, savings, discipline ... about 10 years it seems.

October 1987    The Dow had the famous one day 20% decline. Naturally, all markets were hit but Malaysia had our own bombs to deal with - the Pan El crisis. For the next few years, graduates were getting between RM400-600 a month for accounting jobs. Not even enough to pay rent. 

Of course, we need to decipher as all correction or crisis was brought on by an incident or event. It is usually not the sole incident or event's fault. A major correction can only be triggered by an incident or event when the market's way overvalued. If the markets aren't overvalued, the event or incident would have a muted impact.

Such as the failed leveraged buyout of United Airlines in October 1989. Or the July 1990 invasion of Kuwait by Iraq. These generally do not count as major corrections.

October 1997    Asian financial crisis, brought on by easy money from foreign funds, and the proverbial mess when funds exited. Asia was so over-geared. It also impacted the developed markets during this massive correction.

March 2000    Dotcom bubble. Noticed how well we change the industry - from dotcom to internet to internet of things. 

Almost all bubbles are necessary (even the tulips bubble). Bubbles are when funds go searching for the best returns over the most exciting new prospects, new invention, great innovation ... hence we need these funds surge to support and fund the startups or companies to search for the proverbial 'gold' in the new fangled industry.

This makes it easy to magnify the various business plans and R&D into the industry's nascent nooks and crannies. It is important for innovation and progress, and sadly we also have to contend with the massively high failure rate.

September 2001   Man-made catastrophe which dragged the world into a mini economic crisis. But cannot be categorized as a naturally evolving market correction due to market forces.

October 2007   Subprime financial crisis. Quite unfair, when the developed nations went crazy on debt binge on property, and when the party's over, the smaller nations also got whacked.

April 2010     The EU crisis stemming from the Greek tragedy.

August 2015   The shortlived by big correction brought on by the commodities crash.

We can actually block out the 2010 and 2015 incidents as non-major corrections. It is 2019 and it has been more than 12 years since the last major snafu. We are riding on borrowed time. So how will the next major correction look like? Where is it coming from?

China's Corporate Debt??     The year 2018 witnessed an unprecedented wave of corporate bond defaults in China, as the world’s second biggest economy lost steam amid a trade war with the United States. The expectation that the economy will slow further, combined with the government’s continued efforts to rein in debt and risky lending, suggest the number of defaults is likely to increase further in 2019. China companies defaulted on 39.2bn yuan ($5.8bn) in domestic bond in just the first 4 months, that was TRIPLED the pace for last year.

China’s property sector, which lies at the centre of the construction and development boom, had accumulated debts, including bank loans, trust loans and bonds, of 15.6 trillion yuan ($2.27 trillion) as of June 2018, more than double the 7.6 trillion yuan three and half years ago.

Defaults for Chinese corporate bonds — issued in both U.S. dollars and the Chinese yuan — soared last year, according to numbers from two banks.

Yuan-denominated debt rose to an “unprecedented” 119.6 billion yuan ($17.8 billion) — four times more than 2017, according to a February report by DBS. Nomura’s estimates were even higher, putting the size of defaults in onshore bonds — or yuan-denominated bonds — at 159.6 billion yuan ($23.8 billion) last year. That number is roughly four times more than its 2017 estimate.

However, I don't think the fuse will be lit by Chinese companies because NOT ENOUGH foreign funds hold their bonds. As it will be largely a domestic situation, it is likely to be "managed" by Beijing.

US High Yield Debt??     Companies are carrying a $9 trillion debt load, posing a potential threat should rates continue to rise and the economy weakens. Most Wall Street bond experts think the issue is contained for the next 12 to 18 months, though one says the market’s “angst” is “not misplaced.”  A principal worry is over companies teetering between investment grade and junk that could cause market trouble should their standing deteriorate.

The rate of defaults for US companies on high yield bonds are not high for the moment. Things are still chugging along, markets at an all-time high there. Need to give it another 6-12 month. Hence the next big spike down is likely to be by this group but at least 6-12 months down the road.

Countries Stock market's Capitalisation As A % Of GDP

 Why is the figure important ... if you can strip out foreign listings and non related listings (inclusive of SPACs) and maybe some REITs th...