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 given..lol, 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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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).


https://www.bloomberg.com/news/articles/2019-06-21/goldman-made-241-million-1mdb-compensation-offer-mahathir-says?srnd=premium-asia

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.

Pogba Plays For Liverpool

What's up with the headline? My dua sen on the KT (UBS) mini-series.

Was it a difference in opinion? The answer is no. KT can't seem to understand the difference between current account deficit and fiscal deficit. OK granted, maybe KT failed first-year Econs, we don't know. Maybe he didn't even take Economics, I mean we have law graduates and even engineering graduates entering financial services and investment banking all the time.

For non-finance readers, the above views by KT is like a so-called football expert coming on TV commenting that Pogba played so bad for Liverpool. You as a football fan would CRINGE no end. That's probably how Tony Pua, Ong Kian Meng and most of the financial community felt.

I asked around my older friends in the industry, two who have worked with KT at Jardine (HK) before,  anecdotally their comments ended with "...an absolute xxx#### who never has anything good to say about Malaysia.." (or something to that effect). Not my words but those were the words I heard.

How the hell does UBS allow someone seemingly incompetent to rise so high? Well, it happens in MOST industries and to most people in high positions. Some people are just lucky, some were born to the right parents, some have relatives in high places, some have relatives who could hand them business on a silver platter, some just inherit the earth and all, some just so happened to attend the same school or were classmates to powerful people ....
... some because their gift of the gab is better than their IQ, most get to their positions based on the sales-ability (salesmanship)... whether you are CEO, Senior Manager, I don't care what industry they are in, a lot of selling is involved. You sell the products and services to clients, but more importantly, you have to sell yourself to the decision makers in your firm ...

 In the end, ask people at the most senior positions everywhere... be it Bursa, GLCs, the top 20 listed companies in KLSE ... their one hidden fear ... it is the same for all of us... "I HOPE NOBODY FINDS OUT HOW AVERAGE I AM"

https://www.theedgemarkets.com/article/ubs-remains-positive-malaysias-longterm-prospects?fbclid=IwAR0fNfd9gs7ew1IcrWfjgNuSBi-5q6Y5oN7UuhRkYgHb1xWctFC1WVd9yHE

KUALA LUMPUR (April 24): Swiss banking group UBS remains positive over Malaysia's long-term economic prospects, and has forecast economic growth of between 4.6% and 5% in 2020.

In a statement today, the Singapore branch of UBS said the Malaysian economy should start to see improvement in its exports alongside a stronger currency, since the Chinese economy is turning around.

“We have also recently upgraded our 3, 6 and 12-month forecast on the MYR (versus the USD) to 4.05, from 4.15 previously,” UBS said.

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In its statement, UBS also sought to clarify certain misunderstandings arising from a recent video interview featuring its regional chief investment officer Kelvin Tay, aired on Bloomberg TV on April 12.

“In the context of the interview question on the equity outlook for the region, Kelvin had inadvertently used some wrong terms given the short duration of the “live” interview and would like to clarify the following: He was referring to the Malaysian government’s projected “fiscal deficit” of 3.4%, and not “current account deficit”.

He was also referring to the government’s revenue and not GDP, when he mentioned that cancelling GST would result in a higher dependence on oil prices. He used the term “oil” to loosely refer to sectors that are closely correlated to oil price movements. In context of that discussion, he was referring to the fiscal deficit,” a UBS spokesperson said.

TONY PUA's article:

Current account surplus

Firstly, Tay argued that Malaysia had a current account deficit. This is quite scary as Malaysia has always prided itself as an economy with a current account surplus, with our value of exports well exceeding imports being one of the country’s key strengths. 

Any analyst worth his salt covering Malaysia should definitely know that.

For example, in 2018, Malaysia registered a current account surplus of 2.3 percent of the GDP. Given Malaysia’s very healthy trade surplus so far, the country’s current account balance will remain in surplus for 2019.

Malaysia does, however, have a moderate fiscal deficit which is typical of developing countries. For 2018, the deficit was 3.7 percent of GDP, while it is projected to fall to 3.4 percent this year. The finance minister has also projected the fiscal deficit to further decline to 3 percent for 2020 and less than 2.8 percent for 2021.

Malaysia is a diversified economy

Tay also claimed oil revenue made up 30 percent of Malaysia’s GDP.

This is completely incorrect. Malaysia is well-recognised by rating agencies and the investment community as having a fairly diversified economy with mining (including the oil and gas sector), manufacturing and services making up 7.9 percent, 23.0 percent and 55.5 percent of the 2018 GDP respectively.

Perhaps Tay was trying to highlight that oil and gas revenue is expected to contribute approximately 30.9 percent of 2019 government revenue. 

Even so, the UBS fund manager failed to highlight that the underlying contribution of oil and gas revenue as a percentage of government revenue is projected to be only 22.0 percent, after fully discounting the one-off special dividend from Petronas.

As announced by the finance minister in his budget speech, a one-off special dividend of RM30 billion is offered by Petronas with the specific intent of contributing to RM37 billion of GST and income tax refunds which were hidden and undisclosed by the previous regime.

In fact, oil and gas revenue as a percentage of the government’s total revenue has been declining over the years, with the peak being 44 percent in 2008.

Fiscal deficit target is intact, with pro-growth policy in place

As a direct result of Tay’s misguided understanding of Malaysia’s economy above, he went on to conclude that weak Brent crude oil prices – currently hovering at $71 per barrel – would negatively affect Malaysia’s growth since the Government was projecting Brent to average US$70 per barrel this year.

Tay failed to acknowledge the fact that every US$1 decline in crude prices will only affect approximately RM300 million of government revenue, and hence even with a US$10 decline, the overall revenue impact will only be RM3 billion.

Any such negative impact on government revenue as a result of weaker oil prices would be compensated by the new revenue measures which were announced by the finance minister in his budget speech, but has not been included in the government's official budget figures. The new measures are expected to raise an additional RM4 billion to RM5 billion of revenue for the government.

Government enjoys comfortable majority

Finally, Tay claimed a political paralysis in the country. This is untrue. On the contrary, most will certainly agree that Malaysia was paralysed by the 1MDB crisis before the change of government in May 2018.

However, with the change in power, Malaysia has now received a fresh renewal impetus, with the government pushing hard for greater transparency, improved governance, reduced corruption and increased competition. 

These reforms are difficult, will create short term headwinds and will take some time to demonstrate results. Nonetheless, the persistence of the new administration to carry out the reforms will certainly strengthen the country’s fundamentals to create continued economic growth when the global economy recovers its steam.

The new government commands a comfortable majority in the Parliament, controlling 63 percent of the seats in the Lower House. The fact the Malaysian government has successfully renegotiated the cost of multiple large high-profile infrastructure projects down proves there is no paralysis and indeed, the government is pressing on with various institutional reforms it promised to the Malaysian electorates.

Facts please

Bloomberg is a global media giant with humongous traction and audience. Tay’s ‘sensational’ interview with Bloomberg has been viralled widely on the social media to cast very negative aspersions of Malaysia. 

I would further like to state that we welcome fact-based criticisms and constructive commentaries. Malaysia, like any other country, isn’t perfect and is doing its best to recover from the damage caused by the previous kleptocratic administration.

Bloomberg, with the power it wields, certainly has a duty to fact-check information presented by their guests, especially when the mistakes were so elementary. If the information is outright false and damaging, they should be corrected.

A Simple New Rule That Guarantees China's Economic Power Trajectory For The Next 40-50 Years

Like it or not, we all have to contend with the USA owing to its sheer size and voracity as demand for exports, plus their lead in technology and education, and their reputation as a financial center (capital disbursement).

The above image classifies each of the states in the US by comparing their state GDP that is similar to another country's GDP. Hence whenever there is a downturn or rise in business confidence, it is akin to 50 countries moving at once in the same direction. That is why we have to follow what's happening in the US, and why Trump is so dangerous.

Look at the image carefully, one day very soon, China's map will resemble the above image. Sooner than you think.

China has surged up the charts for economic power by mobilising its rural class to middle or working class. It was the greatest economic miracle to do that on a capitalistic playbook on a socialised platform. A watered down kind of communism.

China has done very well in moving the rural class to working and/or middle class. That energised a substantive group of working consumers, fueling demand for all things. Education has always been big in China, and the last 15 years have seen many students venturing to study at solid colleges, and many have returned armed with stronger international networking and inroads into technology and international finance.

Naturally China has recorded huge amounts of surpluses and their not so secret strategy has been to recycle the surpluses into buying of "intelligent global assets" that have important patents or just to get a strong foothold into certain industries which are not familiar to Beijing. That's basically the unvoiced spat in the current trade war between the two countries.

What China could not develop fast enough, they would buy. So what's the problem?

Look at the demographics of China. Thanks to its one-child policy, by 2040 24% of the population in China will be 65 or older. You would then have to contend with a different set of problems (like Japan) where your labour base is not wide enough to support the retirees. Your stronghold as a consumption middle class will have new issues to tackle with a dwindling population curve.

China's population will be peaking at 1.45bn by 2030. An aging workforce can erode gains in productivity. The current birthrate of 1.7 needed to rise to 2.1 to maintain a steady population, thus ensuring its status as an economic power.

Already certain industries have shown that you need to have China as a market or you shouldn't exist at all - take the movie industry. Soon, in various guises, more and more industries will face the same equation. Be in China, market to China or die.

The think tanks in Beijing are obviously ahead of the curve on this problem. In 2016 Beijing abolished its one-child policy to "two is better". That had a knee jerk reaction as birthrates rose for two years after that but the overriding demands of the modern world saw marriages being further delayed and fewer couples wanting to have more kids as demands on their time and resources are high. 

Beijing is proactive here, it will probably remove the "two is better" policy altogether... go and have as many as you want, so as to pull the bell curve back up. There will still be a need for more incentives to ensure a birthrate of 2.1 but at least Beijing recognises this early and is willing to ditch the socialistic playbook for a LKY-styled pragmatic push forward.

Why The Population
- Create a sustainable workforce to support the retirees
- Replenish the middle class as the domestic economy is a priority to shield from economic crises overseas
- A consumer base that is enhanced (like the USA now) makes everybody kowtow to you for better trade ties, and indirect how your influence infiltrate the world of politics
- Better management of surpluses will allow for "control" and "dominance" over selected trade blocs, countries, shipping routes, access to certain prized assets/resources
- YOU NEED ECONOMIC POWER TO GO WITH MILITARY POWER FOR REAL GLOBAL LEADERSHIP

That is why China has basically ensured its status as an economic power stays on a strong uptrend trajectory by taking care of the population growth.

Quietly Steadfastly .. Change Is A' Coming

Pelham Blue's Letter To Sc (Parody)

Have to admit, this person is certainly funnier than me, so, here's the link, it is hilarious:

http://www.pelhamblueassetmanagement.com/2019/03/complaint-by-concerned-shareholder.html

Dear Securities Commission of Malaysia,

I am writing to register my complaint about the conduct of some investment banks and their analysts, whose recent downgrade of my favorite stock has caused the price to drop considerably.

I am of course writing about TalkCock Industries (TCO), an investment education company that had gone through tough times but whose financials have been recovering. The stock fell to RM1 recently, after gaining 250% since January to RM1.80. 

I have repeatedly told readers of my blog that TCO is worth at least RM4. How did I come up with this? Simple - my 'platinum rule' is when the company records three consecutive quarters of profit recovery. Never mind that the sector is cyclical, vulnerable to broader market factors, and that the company has yet to prove that talking cock is an inherently sustainable business model. These are not as important, OK?

My logic is very simple. TCO reported earnings per share of 12 sen in its latest quarter. Multiply by four quarters, assuming it will report at least this much EPS, and you will get annual EPS of 48 sen. From this observation, and assuming a conservative PE ratio, the stock is undoubtedly worth RM4 at least. This observation is worth the content of at least ten research reports. 

My followers and blog readers evidently shared my unbridled enthusiasm. This explained the recent 250% rally - I did not tell them to buy the shares, of course! Not even once, twice, or four times. 

I now find myself in the awkward situation of explaining to them why they have lost money and I sort of didn't, since I was smart enough to buy into TCO very early. This is clearly unacceptable, so I have a list of demands. 

I urge the SC to reprimand the analysts whose stock analysis skills are undoubtedly subpar. Please don't give me acronyms like CFA and SWOT analysis - my platinum rule trumps them all. I am of course very happy when the research reports support my stock position. When they reverse course, not so much. 

One of the analysts had the nerve to downgrade his target price for TCO, saying that 'the last quarterly performance is unlikely to be repeated'. Another analyst - presumably very young and has no clue about trading shares - dared to say in his report that 'investors would be wise to take some profits'. What is going on here!

This stock price movement after the UNREASONABLE downgrades are a TRAVESTY.

These downgrades, and the concerted efforts by certain parties, have caused me considerable grief as I have lost vast sums of money. I am at a struggle to explain why; I have always used my margin account and utilised the leverage responsibly.

I challenge these investment banks to prove that they do not hold any TCO shares. Additionally, they each have to write a written confession that there is no conspiracy to destroy Malaysia's fledgling talking cock industry. 

After that, I urge them to reimburse me for the sums I have lost due to these unforeseen downgrades. My followers are unhappy that my target price are nowhere near being met. I expected better out of them as there were no complaints when TCO did nothing but go up, every day. 

Investment banks' research reports are such dangerous things. Analysts can be so irresponsible sometimes. To these people, I am willing to forgive them for their lack of experience and market nuance. I am also willing to help them make better investment decisions and analysis, simply by following what I say and write about. 

A properly well-informed analyst would easily share my views; TCO is worth at least RM4 and not one sen less. With an expected GDP growth of 4.9% this year, and higher subscription rates for classes where investment gurus do nothing but talk cock, I am certain the business will pick up. 

The SC has a responsibility to protect shareholders' interests. Especially when I tell people to buy and now they're angry at me for being stuck at high prices.

These people will hold everybody accountable when they lose money trading shares : the SC, TCO's management, Tun Mahathir, Najib, and even myself. I am not saying I am the same but somebody, anybody has to be held responsible when I lose money. Enough is enough.



Sincerely,

Concerned Shareholder

**this post is purely a work of fiction. 

Do Good, Be Good .... Why

Look at the poster ... its what I call CRAP!!!

Why write this? Well, if other people feel so freely to share their convictions, I think I also need to share my convictions.

Problems I have with organised self-delusional groups: 
a) there is something inherently wrong or misdeeds you or your forefathers have done, so shut up and make the best of it;
b) all these units of charm offensive promises you something in return.

Original Sin/Previous Lives - Imagine you have a 5 year old kid going to kindergarten for the first day. He sat down, the teacher comes over and gave him one tight slap. He cries why ... the teacher said "oh, its something your forefathers did or you did in your previous life". What kind of logic? Well, in every organised charm offensive, there has to be something that you can never question, something you are "guilty of" and there is nothing you can argue or question its logic. It is only by getting you to be "you might not know it but you have already done something wrong" mode that they can proceed to show how they can "bail" you out.

The Uncertain and Unknown Afterlife - Most are just buying insurance or just doing things because they have been culturally inclined to. Just in case there is really a purgatory or heaven or hell, or really another life. We need to hedge our bets against the unknown. IF there is a "plan", you are here... then just live your life HERE and NOW well. Any kind of afterlife plan that looks like a health insurance place is bollocks: oh well, you didn't tick these boxes. Live your current life well and with joy, whatever happens (or nothing happens) after, will sort themselves out.

In Christianity its because God so loved you, and now that you have been saved, you should be like Christ, be good, be nice.

In Buddhism, we are all just passing through, its cycles, we need to improve the present life so that our future life cycles higher on the road to nirvana. Karma is a bitch too, what you put in you plow... maybe not this life but eventually.

Every single organised charm offensive is selfish in nature. You do something in order to get something in return. You do charity, social work, bring kind, even being a better person generally ... because of something you are getting.

Better life cycles to nirvana, isn't that just selfish as well... it is me me me, better for me. 

My problem with the above two postulations is why can't we be good for GOODNESS SAKE!!!??? Why do we need this carrot being dangled in front of us, what are we, PETS!!???

I am not an atheist, and I do believe there is a God (power/force) and its all very nice the love thing but let's leave it at that. Do not extrapolate that into my character. I am still me. 

If I do good its because good is really good, it brings out the best in humans. It is the right thing to do, AND YOU DO NOT NEED TO HAVE SOMETHING IN RETURN - you don't need presents,  good luck, eternal life, good karma ... those are some other shit.

We have a mind, a sense of morality ... you may ask where do these come from ... even if they are God given, just say thank you ... but you do not need to do good because of that. You as a good parent, you take care of your kids because it is the right thing to do, because of the love you have in your heart for the kid... and most will not even want anything in return, most will not want the kid to worship them, most will not need the kid to repay them... and so it is. Do good because the other side is evil/grey.

Yes, I do feel good when I do good, so is that something for something, who cares... don't do it for presents or promises or to change your luck because those will only reveal how shallow your character is, and in the end, your goodness is tainted and watered down. 

Will you still do good if there were NO CARROTS!!?? If you answer yes, thats the best answer and the only answer you need to hear. Good hearts can't be bought. You can nurture it but don't bribe me.

WE ARE NOT PETS... don't dangle carrots/bones in front of us!!!

A Most Important Blueprint

The local bourse went into a groggy sleep today. That was a surprise considering our PM's speech at Invest Malaysia 2019. The bulk of the recommendations and initiatives were SPOT ON to reinvigorate Malaysia domestic economy, export competitiveness and capital markets. I couldn't have scripted a better blueprint, I think. Seriously, I think the markets should be up 20-30 points today, headed to 1850 by end April.

PM Tun Mahathir’s speech at Invest Malaysia 2019:

*Friendly ties with Singapore and China – growth partner. Key trading and investment partner. 

*GLC not to crowd out private sector – become a catalytic role in driving growth. (This is important but to actually see it, in reality, is another thing, a good initiative if carried out effectively).

*Fix and strengthen government – Cabinet committee set up for anti-corruption. (Just give MACC more teeth and more protection and/or reward for whistleblowers).

*No political appointees in GLCs. (Major... implement well).

*Change in the constitution – Prime Minister term to limit to 2 terms. (Do it while you have 2/3 majority cause somebody else could very well overturn this some years down the road).

*Parliament to appoint MACC Chief. 

*Budget transparency – mid-year Budget review to be done. (Budget is one thing, the government should place utmost importance on the Auditor General's annual report and punish all perpetrators and their heads. What's the point in Budget clarity and integrity in the numbers if "crimes/leakages" are not punished at the end of the day?).

*Ministry of Finance to provide guidelines on appointing Head of GLCs. 

*Prime Minister’s to review salary and remuneration of government agencies and GLCs. (Too narrow, and too much discretion here. Better to have a committee of 5 from respected disciplines. Successful business people who are in tune with the labour market for top executives on a domestic and regional basis).

*Look East Policy – Learn Japan culture in hard work. 

*Shared prosperity in income levels – Income gap widening and needs to narrow with higher worker salaries with growth in profits. (Local salaries won't grow much unless we fix the foreign workers numbers and minimum salary. Limit the number of foreign workers in certain industries over time. Increase minimum salary of foreign workers over time - e.g. RM1,300 by January 2020; RM1,500 by January 2022; RM1,700 by January 2024... thus allow business owners to plan accordingly).

*Fiscal Responsibilities Act – Government balance sheet to reduce debt and guarantees, greater risk control on government guarantees. (Need actual RATIOs, % of GDP, % of foreign reserves, etc... so that there is actual accountability and structure).

*Reduce GLCs stake of the government – monetization must not be at fire-sale prices. No disruption to capital markets. Some GLCs to be listed. 

*Fiscal Consolidation Committee headed by Prime Minister is on track to achieve targets. 

*Reduce tax leakages. 

*Holistic and simplified tax incentives for future investments. 

*Corporate tax to be reduced to 17% for SMEs. (Standing ovation!!! This will be major in boosting entrepreneurship - just remember to repeal bankruptcy laws to a 4-5 year non-perpetuity system. 17% brings us in line with even HK, and when you put in the indirect subsidies in electricity, gas, fuel... that will put Malaysia miles ahead. Thailand is not even in the race thanks to their silly foreign ownership laws).

*No new tax this year – only sugar tax to be implemented. 

*Rationalising government expenditure to be more effective – streamlining programmes for poor headed by Deputy Prime Minister. 

*NEAC given mandate to identify pain points and proposing measures to improve growth prospects. 

*Education improvements – Make National Schools Great Again. No exams for Standard 1-3. Single vocational schools. A special task force reviewing entire education policies to complete next month. 

*Regain status as Asian Tiger.

Malaysia's Surprising FDI

Foreign Direct investments, to me, is the singular most important macro indicator for the mid-long term outlook for the economy. Following the stupendous May election result, many were optimistic over the reforms and plugging of leakages to the system. However as the months dragged on, nothing seems to be moving. All we saw was a prolonged process of getting the culprits to their destinies. 

Some GLC heads and other high ranking officers were removed, but nothing concrete was moving the real economy. The stock market went into a slow death mode. Projects were canceled
 and still,  more inertia seems to be bugging most ministries.

Even the most apologetic among the supporters were murmuring. Things seemed to be finally moving just before CNY this year. The following bit of news will surely spark a lot of things. A 48% jump to RM80.5bn in FDI for 2018, largely came about in the second half of 2018 - which speaks volumes about the confidence foreign long term investors have in the new government. 

The figure is all important and would be an indicator of bright things to come. Long term FDI takes some time to trickle down to the real economy. 

Expect fireworks... the nice kind.

 Malaysia recorded a 48% increase in approved foreign direct investment (FDI) across all sectors amounting to RM80.5 billion in 2018, the finance minister said.

Approved FDI in the first half of the year was only RM26.5 billion but this grew significantly higher at RM54 billion in the second half, Lim Guan Eng said.

Lim said the FDI growth was augmented by a 3.2% year-on-year expansion in the Industrial Production Index (IPI) in January this year, higher than the market consensus of 2.3% compiled by Bloomberg.

A Way Out For MAS

How many times, how much longer should we keep bailing MAS? How much have we spent... RM26bn!!! If you take from year 2000, that is more than RM1bn a year to keep this thing afloat.

We see a figure like RM26bn and it does not make much impact because we have no frame of reference. What is RM26bn? 

Let's say the 1MDB, which was a financial crime and CBT, cost us Malaysians RM5bn. Then MAS would have meant going through about 5x 1MDB disaster. To be fair, MAS is a business and while the comparison is not entirely apples vs apples, there is still some painful truth in comparing it to 1MDB.

a) There is no shame in not having a national airline but there is a lot of shame and fiscal irresponsibility when we keep losing more than RM1bn a year for the past 20 years.

b) It doesn't take a rocket scientist to see that MAS is almost unfixable owing to the: i) the union and their contracts (back in 2015 20,000 employees were terminated and 14,000 rehired, were the terms too generous our is it the culture which still infects the company?); ii) the legacy of bloated supply contracts and the greedy gatekeepers and their leakages; iii) the overcrowding for short haul flights; iv) having depleted so many international routes, MAS is having difficulty branding itself properly other than a codeshare specialist.

Since we are going to lose more than RM1bn a year, just sit down with the unions and supply chain contractors - declare bankruptcy and negoatiate to tear up all contracts at a steep discount or haircut resolution. While I am all for good unions and employee rights, somewhere along the way the MAS union has gone past what is good for the company - be honest.

Value all existing planes and landing rights, come up with a figure. Sell to AirAsiaX for shares, but golden share remains with current AirAsiaX management for 10 years.

Inject into AirAsiaX as that would be more palatable for Tony and his team. At least the better margins at AirAsia stays intact. All domestic routes to be integrated and managed by AirAsia. We cut out the duplicity and may even be able to fly more secondary support routes (such as twice a week Ipoh-Bangkok, Ipoh-KK,etc..).

As for ex-MAS employees, after getting their severance, those who are interested will need to re-apply to AirAsiaX to be integrated as AirAsia employees. This part will be critical because you don't want an us-them situation camp fight if you were to absorb all staff automatically from MAS. Pick and choose those who will conform.

By selling to AirAsiaX, MOF will keep a healthy stake to hopefully plow back some profits to compensate for the losses to the people. Secondly, it would not be 'nice" to sell MAS to a foreign party, only to see them turnaround the thing. 

20 years and multiple CEOs have shown and proven that MAS is not fixable because we "allowed" it to be unmanageable, hence the best professional will also not be able to do much - its like asking a chess Grandmaster to play for your country but he/she can only move your rook two spots and your bishops once every 10 moves, etc... it is ridiculous.

Bite the bullet and move on already. Forget about the votes of the employees and relatives, that's not the way to manage a country properly.