Pulau Batu Putih milik Singapura

Sumber: Utusan
23/05/2008 6:01pm

THE HAGUE 23 Mei – Mahkamah Keadilan Antarabangsa (ICJ) di sini hari ini memutuskan bahawa Pulau Batu Putih adalah milik Singapura.

Bagaimanapun, dalam penghakiman itu yang dibacakan oleh Hakim Awn Shawkat Al-Khasawneh, ICJ memutuskan Middle Rocks dimiliki oleh Malaysia.

Pulau Batu Putih, yang berukuran lebih kurang separuh daripada keluasan sebuah padang bola sepak, terletak 7.7 batu nautika di luar pantai Tanjung Penyusoh di Johor.

Singapura memanggil pulau kecil itu dengan nama Pedra Branca (perkataan Portugis yang bermaksud Batu Putih).

Pertikaian antara Singapura dan Malaysia mengenai Pulau Batu Putih bermula pada 14 Februari 1980, apabila republik itu membantah tindakan Malaysia menerbitkan sebuah peta pada 1979, yang dengan jelas menunjukkan pulau itu terletak dalam wilayahnya.

Pada Februari 1993, Singapura meluaskan tuntutannya ke atas Middle Rocks dan South Ledge, yang terletak berhampiran pulau itu.

Pada 6 Februari 2003, kedua-dua negara menandatangani satu perjanjian khas bagi merujuk perkara itu kepada ICJ. - Utusan

Monday: 19 Mei 2008: Pengumuman Keluar dari UMNO Oleh Tun Dr. Mahathir Mohamad

Sumber: chedet

Hari ini, Mei 19, 2008 saya mengumumkan keputusan saya untuk keluar daripada UMNO. Isteri saya turut bersama.

Keputusan ini dibuat kerana UMNO yang ada sekarang bukan lagi UMNO yang ditubuh 62 tahun dahulu yang berjuang untuk bangsa Melayu, Agama Islam dan Negara Malaysia (Malaya); UMNO yang menggagalkan Malayan Union, memperjuangkan kemerdekaan Malaya dan Malaysia dan membangunkan Malaysia sehingga menjadi Negara yang termaju di antara Negara membangun di dunia.

UMNO yang ada sekarang hanya wujud untuk menyokong Dato Seri Abdullah Ahmad Badawi, keluarganya dan tindakan serta dasar yang tidak secocok dengan kepentingan bangsa, agama dan negara.

Kepimpinan Dato Seri Abdullah jelas membawa kekalahan dan bencana kepada Barisan Nasional, UMNO, MCA, MIC, Gerakan dan PPP. Kemenangan UMNO di Sabah dan BN di Sarawak bukan kerana kepimpinan Dato Seri Abdullah.

Saya akan jelas satu persatu dasar-dasar dan tindakan Dato Seri Abdullah yang menjadikan Kerajaan pimpinannya dan parti BN dibenci oleh ahli-ahli parti komponen sendiri.

Walaupun sebelum perisytiharan ini saya adalah ahli UMNO tetapi sebenarnya selepas saya letak jawatan sebagai Perdana Menteri saya tidak dilayan sebagai ahli UMNO.

Saya tidak dibenarkan berjumpa ahli UMNO dan ahli UMNO tidak dibenarkan hadir apa-apa perhimpunan di mana saya dijemput sebagai jurucakap atau penyampai ucapan.

Menteri-Menteri yang dahulu berada dalam Kabinet saya tidak dibenarkan atau tidak berani atau tidak mahu jumpa saya lagi.

Jemputan oleh UMNO dan bukan UMNO kepada saya diarah ditarik balik oleh Mneteri Besar dan Polis.

Ramai pemimpin UMNO melepaskan kata-kata kesat kepada saya dan ada yang menyuruh saya keluar daripada UMNO walaupun mereka baru sahaja masuk UMNO. Tidak ada pemimpin UMNO yang pertahankan saya secara terbuka.

Wakil ke Perhimpunan Agong tidak dibenarkan menyuara pendapat mereka. Mulut semua orang ditutup.

Yang didengar hanyalah media arus perdana yang memuji Dato Seri Abdullah sehingga dia percaya dia begitu popular dan akan sapu bersih parti lawan dalam pilihanraya umum ke-12.

Hasilnya ialah kekalahan yang teruk bagi Barisan Nasional. Malangnya mesej yang hendak disampaikan oleh pengundi dan penyokong BN tidak dapat difahami oleh Dato Seri Abdullah.

Dia masih berkata dia menang. Ini sukar diterima oleh orang Kedah, orang Pulau Pinang, orang Perak, Selangor dan Wilayah Persekutuan.

Oleh kerana Dato Seri Abdullah buta mata dan pekak telinga dan tidak faham mesej ahli BN, oleh kerana ahli UMNO pun turut bersama, oleh kerana proses demokrasi tidak berjalan, oleh kerana UMNO yang ada sekarang bukan lagi UMNO yang ditubuhkan 62 tahun dahulu, saya berpendapat penyertaan saya sebagai ahli UMNO tidak bermakna dan tidak berguna lagi.

Justeru itu saya ingin umumkan bahawa saya sudah keluar daripada UMNO.

Saya ingin tegaskan bahawa saya bebas dan tidak menyokong mana-mana parti lawan.

Saya akan pohon untuk masuk UMNO apabila Dato Seri Abdullah Ahmad Badawi sudah berhenti daripada menjadi Presiden UMNO, Pengerusi BN dan Perdana Menteri Malaysia.

Dr Mahathir bin Mohamad (bekas ahli UMNO No 1)
Dr Siti Hasmah binti Mohd Ali (bekas ahli UMNO No 2)

Posted by Dr. Mahathir Mohamad at 10:11 PM

19 Mei 2008 - Tun Dr Mahathir Umum Keluar Umno Berkuatkuasa Serta Merta

Sumber: Kuda Kepang

ALOR STAR, 19 Mei (Bernama) -- Bekas Perdana Menteri Tun Dr Mahathir Mohamad hari ini mengumumkan keluar dari Umno berkuatkuasa serta merta.

Dr Mahathir yang juga adalah anggota Umno seumur hidup berkata beliau bertindak demikian kerana hilang keyakinan terhadap kepimpinan Umno sekarang yang gagal membela nasib orang Melayu di negara ini.

"Saya umum saya keluar parti hari ini," katanya di hadapan kira-kira 1,000 hadirin yang kebanyakannya anggota Umno Kedah pada majlis bertajuk "Nasib Kedudukan Bangsa Melayu" di sebuah hotel di sini Isnin.

Bekas Presiden Umno itu juga berkata beliau hanya akan kembali menjadi anggota Umno selepas Perdana Menteri Datuk Seri Abdullah Ahmad Badawi yang juga Presiden Umno meletak jawatan atau tidak lagi menjadi pemimpin utama negara.

"Saya akan menulis surat kepada Umno bagi memaklumkan mereka (mengenai keluar dari Umno)," katanya.

Bercakap kepada pemberita selepas majlis anjuran Dewan Perhimpunan Melayu kedah itu, Dr Mahathir dengan wajah kecewa berkata beliau terpaksa mengambil tindakan keluar Umno yang dianggotai sejak 1946 kerana berpendapat parti itu tidak lagi dapat berperanan sebagai sebuah parti politik sebenar untuk membela nasib Melayu, sepertimana hasrat sejarah penubuhannya.

Sambil menyatakan rasa tidak puas hatinya, Dr Mahathir mendakwa Umno kini hanyalah dijadikan parti untuk mengiktiraf Abdullah sebagai Presiden Umno dan mengutamakan kepentingan keluarganya (Abdullah) sehingga membelakangkan negara.

"Saya boleh senaraikan perkara-perkara yang dia (Abdullah) lakukan sehingga merugikan negara kita.

"Umno yang wujud hari ini tidak lagi berpegang kepada hasrat parti yang ditubuhkan 62 tahun lepas. Sebab itu saya tidak teragak-agak untuk keluar dari Umno," katanya.

Dalam sejarah Dr Mahathir dalam Umno, beliau pernah dipecat daripada Umno pada 1969 kerana melanggar disiplin parti apabila mengkritik kepimpinan Umno ketika itu, tetapi diterima kembali ke dalam parti pada 1972.

Dr Mahathir turut mengajak anggota Umno yang sependapat dengannya berhubung dengan kepimpinan untuk mengikuti jejaknya dengan bertindak keluar dari parti itu tetapi bukan untuk menyertai parti lain.

"Saya yakin cara ini berkesan. Saya tidak akan menyuruh orang membuat sesuatu yang saya sendiri tidak berani melakukannya," tambahnya.

Bekas Perdana Menteri turut melahirkan rasa kecewa kerana anggota-anggota Umno masih disekat oleh kepimpinan parti daripada berjumpanya.

"Sampai nak adakan perjumpaan, ahli-ahli Umno dan ketua bahagian tidak dibenar berjumpa saya. Ini apa?," katanya.

Beliau berkata tindakan kepimpinan Umno itu hanya menyebabkan timbul lebih banyak rasa tidak puas hati dan akhirnya melambangkan Umno sebagai tidak demokratik.

Ketika diajukan soalan oleh pemberita mengenai tindakannya itu akan membuat orang lain mengikuti jejaknya, Dr Mahathir berkata: "Saya tidak peduli kerana saya pun disekat daripada berjumpa dengan ahli-ahli Umno."

Beliau juga yakin bahawa tindakannya meninggalkan Umno tidak akan memberi kesan kepada politik orang Melayu.

"Saya pernah dibuang dari Umno, (dan) politik Melayu tidak hilang. Kalau orang Melayu hendak betulkan, bukan kerana (tindakan) saya keluar. Kalau mereka berani hendak pelihara parti dan perjuangan parti mereka harus berani bertindak," katanya.

Dr Mahathir juga sekali lagi menegaskan bahawa Abdullah perlu melepaskan jawatan sebagai Perdana Menteri bagi memastikan survival Umno dan jika perlu anggota Umno boleh membuat undi tidak percaya dalam usaha memaksa Abdullah meletak jawatan.

Ditanya adakah tindakan terbarunya itu (keluar Umno) bertujuan untuk memberi tekanan kepada Abdullah, Dr Mahathir berkata: "Saya tidak tahu mengenai tekanan kerana orang ini tidak faham apa-apa".

Ditanya adakah tindakannya keluar daripada Umno mempunyai kaitan dengan arahan terbaru Kabinet supaya Peguam Negara memulakan siasatan serta merta berhubung segala tuduhan terhadap individu yang dinamakan dalam laporan Suruhanjaya Siasatan Diraja mengenai klip video peguam Datuk V.K Lingam, Dr Mahathir menafikannya.

"Ini soal mahkamah... dia boleh tuduh dan kalau saya salah masuk jail. Kalau tak salah janganlah tangkap saya juga," katanya sambil ketawa.

Individu yang dinamakan dalam laporan itu terdiri daripada Lingam; bekas Timbalan Menteri di Jabatan Perdana Menteri Datuk Seri Tengku Adnan Tengku Mansor; tokoh korporat Tan Sri Vincent Tan; dua bekas Ketua Hakim Negara iaitu Tun Ahmad Fairuz Sheikh Abdul Halim dan Tun Mohd Eusoff Chin serta Dr Mahathir.

Pada akhir majlis itu, Dr Mahathir turut melahirkan kekecewaannya terhadap pemimpin Umno sekarang kerana bukan sahaja tidak mempertahankannya sebaliknya turut mengkritiknya.

"Kalau dulu orang kata kononnya saya berkhidmat kepada negara, cium tangan naik asap tapi bila saya kritik Datuk Seri Abdullah pasai tak buat jambatan orang maki saya. Tiada siapa dalam Umno mempertahankan saya," katanya kesal.

Pada majlis itu, Dr Mahathir dalam ucapannya selama sejam turut menjawab beberapa persoalan yang ditimbulkan oleh hadirin antaranya berhubung pengganti Abdullah dan langkah memulihkan kuasa politik Umno.

Dr Mahathir juga mengulangi gesaannya supaya sistem kuota kelayakan untuk bertanding jawatan penting pada perhimpunan agung Umno Disember ini dimansuhkan melalui persidangan mesyuarat khas parti.

-- BERNAMA

http://www.bernama.com/bernama/v3/bm/news.php?id=333937

Lirik Lagu Warisan

Dah lama tak posting, dunia saham sudah kelam.
Politik Melayu juga sudah kelam lepas PRU12.
Teringat lagu ini:

Anak kecil main api
Terbakar hatinya yang sepi
Airmata darah bercampur keringat
Bumi dipijak milik orang

Nenek moyang kaya raya
Tergadai seluruh harta benda
Akibat sengketa sesamalah kita
Cita lenyap di arus zaman

Indahnya bumi kita ini
Warisan berkurun lamanya
Hasil mengalir ke tangan yang lain
Pribumi merintih sendiri

Masa depan sungguh kelam
Kan lenyap peristiwa semalam
Tertutuplah hati terkunci mati
Maruah peribadi dah hilang

Kini kita cuma tinggal kuasa
Yang akan menentukan bangsa
Bersatulah hati bersama berbakti
Pulih kembali harga diri

Kita sudah tiada masa
Majulah dengan maha perkasa
Janganlah terlalai teruskan usaha
Melayu kan gagah di Nusantara (3x)

http://praskt.wordpress.com/2008/03/24/warisan/

What Happened? KLCI Travels South!

Source: Malaysia Today, Thursday, 06 March 2008
By Little Bird

When the PM Badawi announced the dissolution of Parliament on the 13th of February he also mentioned that among other things the KLSE was robust with the Composite Index (KLCI) at over 1400 points. This would be the first time that any Prime Minister would refer the Stock Market as a barometer to call for the elections.

But the KLCI has been going south since then. Here is some info about the KLCI from Feb 13 till today.

On Feb 12th 2008, one day before the dissolution of Parliament, the KLCI stood at 1,417.52 points.

On the day of the announcement of the dissolution of Parliament on Feb 13, the KLCI went up to 1,423.

Then, on Feb 21, the KLCI fell below 1,400 points to 1,394. By March 4th 2008, the KLCI retreated further south to 1,324. March 5th saw the KLCI dip below 1,300 to hit a five-month low of 1,285. The KLCI has dropped over 9% since the announcement of the dissolution of Parliament by Badawi.

Despite the KLCI hitting over 1,400 points many people were asking ‘Eh whose share went up ah?’ Because many shares just did not go up in price that much or not at all. Some folks said that money was being pumped in to push up the Index Stocks. There are 100 Index stocks. If these stocks move up or down, the KLCI will follow suit. Even among these Index stocks there are only about 20 heavyweight ones that really matter (Maybank, Telekoms etc). The Gomen fund managers can easily push up the KLCI by pumping money into these 20 counters.

And the smart foreign fund managers have tagged along for the ride. But along with the weak sentiment in bourses overseas, the market is also wary of the outcome of the General Election on the 8 th of March 2008. The foreign boys are withdrawing some of their money. Hence the KLCI is going down south.

The everyday man on the street is not going to get burnt. The Gomen fund managers may get their fingers toasted. That’s our money too.

But both Badawi and Nor Yakob are not talking about the KLCI anymore.

Parlimen Bubar Hari Ini

Sumber: Utusan online
13/02/2008 2:41pm

PUTRAJAYA 13 Feb. - Parlimen dibubarkan hari ini bagi membolehkan pilihan raya umum ke-12 diadakan.

Serentak dengan itu semua Dewan Undangan Negeri (DUN) kecuali Sarawak, turut dibubarkan.

Pengumuman pembubaran Parlimen itu dibuat Perdana Menteri, Datuk Seri Abdullah Ahmad Badawi pada sidang akhbar di sini hari ini.

Ia dibuat selepas Perdana Menteri menghadap Yang di-Pertuan Agong di Istana Negara pagi ini bagi mendapatkan perkenan Seri Paduka.

Berikut adalah transkrip penuh kenyataan akhbar Perdana Menteri pada sidang akhbar khas di Pejabat Perdana Menteri, Putrajaya pada pukul 12.35 tengah hari ini:

``Saya ingin mengumumkan mengenai pembubaran parlimen pada hari ini setelah mengadap Yang di-Pertuan Agong pada pagi ini.

``Yang di-Pertuan Agong berkenan untuk membubarkan parlimen berkuat kuasa hari ini bagi membolehkan pilihan raya umum ke-12 dijalankan.

``Yang di-Pertuan Agong menandatangani perisytiharan pembubaran parlimen.

``Dengan itu, kerajaan-kerajaan negeri turut dinasihatkan membubar Dewan Undangan Negeri berkuat kuasa pada hari yang sama.

``Suruhanjaya Pilihan Raya juga sudah dimaklumkan mengenai perkara ini.”

Asian Markets Extend Losses Amid Worries That US Is Headed for Recession

Source: Yuri Kageyama, AP Business Writer
Monday January 21, 10:34 pm ET
Asian Markets Extend Losses Amid Worries That US Is Headed for Recession

TOKYO (AP) -- Global stock markets extended their shakeout into a second day Tuesday, plunging amid worries that a possible U.S. recession will cause a worldwide economic slowdown. The dramatic declines were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.

Japan's Nikkei 225 index, the benchmark for Asia's biggest bourse, skidded 4.4 percent in morning trading to 12,738.31 points, after dropping 3.9 percent Monday. Hong Kong's Hang Seng index was down 5.2 percent after plunging 5.5 percent the day before.

"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.

U.S. markets were closed Monday for a holiday commemorating civil rights leader Martin Luther King Jr. But Wall Street future prices were down sharply, portending a plunge when trading begins at 9:30 a.m. Eastern time.

Dow Jones industrial average futures were down 436 points, or 3.6 percent, at 11,670, while Standard & Poor's 500 futures were down 57.1 points, or 4.3 percent, at 1,268.

Markets have been plunging amid pessimism about the ability of the U.S. government to prevent a recession. The Federal Reserve has indicated it will lower interest rates further, and President Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.

The U.S. economy has been battered by a slump in the housing market and a credit crisis that has led to billions of dollars of losses among major U.S. banks.

In Europe Monday, investors also dumped stocks, sending the Britain's benchmark FTSE-100 down 5.5 percent and France's CAC-40 Index sliding 6.8 percent. Germany's blue-chip DAX 30 plunged 7.2 percent to 6,790.19.

Takeuchi said investors feel that the selloff is spreading worldwide, setting off fears of a global downturn. Risks of economic contraction have been growing in Japan as both exports and consumer spending are weakening, he said.

Kirby Daley, strategist at Newedge Group, said the Nikkei could shed another 10 percent to 15 percent to the 11,000 level in the next few months. Japanese companies depend on exports and capital investments to keep up profits, and both are endangered if there is a U.S. slowdown, he said.

"The argument that valuations are cheap for Japanese stocks is flawed," Daley said. "The basis for those earnings valuations doesn't consider ongoing problems in the U.S. economy, which are likely to get worse."

Even usually upbeat Japanese Economy Minister Hiroko Ota acknowledged that downsides risks are growing, given the volatile markets and surging oil prices.

"The economy keeps recovering as recent production data show, but downside risks are growing these days," Ota told reporters.

USA: The Economy in Crisis

Source: Fortune
Monday January 21, 7:58 am ET
By Shawn Tully, editor at large


The wobbly economy is overtaking Iraq as the issue weighing most heavily on the minds of America's voters. And Washington has noticed. The White House and Congress are almost certain to enact some kind of stimulus package. But like all such temporary, feel-good measures, it will generate a quick blip in growth that will quickly evaporate. In reality only one player has the power to do anything swift and decisive: the Federal Reserve. And its chairman, Ben Bernanke, has already made his intentions abundantly clear. Unfortunately, the cure he's prescribing may be worse than the disease.

Just how low will the economy go? There are conflicting signals. It's clear that the economy is losing steam. The plummeting value of America's houses is chilling consumer spending, layoffs are mounting, and banks and other creditors burned by the subprime crisis are far more reluctant to lend to everyone from small-business owners to private equity firms. But GDP increased by 4.9% in the third quarter, and economists estimate that GDP was still growing in the fourth quarter. Exports are strong, thanks to the weak dollar. The Fed did a brilliant job last summer by flooding the banks with money to prevent a full-scale credit crunch. Credit is far more expensive today, but it's also becoming more plentiful, as demonstrated by the falling rates on everything from LIBOR - the rate at which international banks lend to each other - to junk bonds. So while a recession is a real possibility, it's not inevitable - even the Fed is not forecasting one this year. And if we do get one, it may be brief and shallow, like the one we had in 2001 - with economic growth falling by perhaps half a percentage point for a couple of quarters, and unemployment rising from its current 5% to 5.5% or 6%.

By cutting rates early and often, Bernanke is acting as though a recession - even a mild one - would be a calamity that must be avoided at all costs. He has already reduced the Fed funds rate (which banks pay when they borrow from each other) by one point, to 4.25%, and promises to "take substantive additional action as needed to support growth," a pledge that Wall Street interprets as meaning at least another half-point cut at the Fed's meeting on Jan. 29, if not sooner.

Many on Wall Street back Bernanke. "I'll defend the Fed," says Bear Stearns chief economist David Malpass. "Part of the slowdown is the result of banks' tightening credit, and you help that by lowering the Fed funds rate." Mickey Levy of Bank of America agrees: "You need to lower rates to offset the drag on housing."

But Bernanke is setting the stage for an even bigger recession down the road. Just as the ultra-low rates of the early 2000s created many of the problems we're experiencing today, pumping money into the system would probably stoke inflation, forcing the Fed to hike rates sharply in the near future. "It's better to take a small recession and kill inflation immediately instead of facing high inflation and a really big recession later," says Carnegie Mellon economist Allan Meltzer.

Meltzer, who is finishing the second volume of his history of the Federal Reserve, warns that Bernanke is risking a disastrous replay of the 1970s, when high oil prices fueled double-digit inflation. Every time the Fed started to tighten and unemployment jumped, chairmen G. William Miller and Arthur Burns lost their nerve. They lowered rates to boost job growth, and inflation inevitably revived, causing a vicious price spiral. The Fed let the disease rage for so long that it took draconian action by chairman Paul Volcker in the early 1980s to finally defeat inflation. The price was a deep recession, with unemployment hitting 11% in 1982. "The mentality is the same as in the 1970s," says Meltzer. "'As soon as we get rid of the risk of recession, we'll do something about inflation.' But that comes too late."

Indeed, while the economy is sending mixed messages about growth, the signs of increasing inflation are flashing bright red. For 2007 the consumer price index rose 4.1%, the biggest annual increase in 17 years. Gold, historically a reliable harbinger of inflation, set an all-time high of more than $900 an ounce. The dollar is languishing at a record low against the euro and a weighted basket of international currencies. "Flooding the market with liquidity is a disaster for the purchasing power of the dollar," says David Gitlitz, chief economist for Trend Macrolytics.

The Fed's supporters tend to downplay those dangers. They contend that the inflation surge is being driven largely by energy costs. Since oil isn't likely to rise from its near-$100 level, inflation is likely to tail off in 2008. "That argument is wrong," says Brian Wesbury, chief economist with First Trust Portfolios, an asset-management firm. "As people spend less to drive to the golf course, they will spend the extra money on golf clubs or other products. The Fed wants to reflate the economy, so the money that went into higher oil prices will drive up the prices of other goods."

Fed supporters also point out that the yield on ten-year Treasury bonds stands at just 3.8%, a figure that implies that investors expect inflation to be around 2% in future years. So if inflation is really expected to rage, why aren't interest rates far higher? The explanation is twofold. First, government bonds are hardly a foolproof forecaster. For example, five years ago Treasury yields were predicting 2% inflation over the next five years, and the actual figure was 3%, or 50% higher. Second, investors are so skittish about most stocks and corporate bonds that they're paying a huge premium for safe investments, chiefly U.S. Treasuries. "It's all about a flight to safety," says Meltzer. Stand by for a major rise in yields as the reality of looming inflation sinks in.

So what is the right course for the Fed? Bernanke should hold the Fed funds rate exactly where it is now, at 4.25%. Standing pat might well push the economy into a recession. But the Fed's newfound vigilance on inflation would boost the dollar, effectively lowering the prices of oil and other imports. America would suffer a short downturn and restore price stability, paving the way to a strong recovery in 2010 or 2011.

Sadly, the Fed has already chosen sides. It's likely to lower rates every time growth slows or joblessness rises. As a result, it will never tame inflation until it becomes a clawing, bellowing threat. Then we'll have to suffer a real recession, the kind we suffered in the aftermath of a time we should study and shouldn't forget - the 1970s.

Timing the Chinese Bubble, Part III

Source: Boon

Notes:

* The US consumers make up about 30% of world GNP.
* The Chinese consumers are about 10% of the US's.
* Therefore, a 1% drop in the US will need to be compensated by a 10% rise in China. Is that possible? Well, probably.
* But if the US drops by 3%, the Chinese will need a 30% of increase to balance out. That will be tough.
* Not to forget about this 'vacuum' effect. When the music is playing and the government keeps spending, everybody makes easy money.
* The biggest spending programmes in China right now are: the Olympics and the Three Gorges Dam. When are they going to be completed? Well, within 2008.
* Just not too long ago, you heard people saying that China is a bubble. You heard from the media and economists that the growth and the stock market are not sustainable.
* These days people seem to have stopped associating the word bubble with China.
Not only that. There are now theories that China could decouple from the US.
* If it looks like a bubble, walks like a bubble, and quacks like a bubble, it's a bubble!
* The most dangerous phase is when nearly everybody buys into the thinking that it can only go up!

Remember: the herds never got it right; they are to be slaughtered!

Timing the Chinese Bubble, Part II

Source: Boon

The Hang Seng went down by more than 5% today -- a plunge of nearly 1,400 points. Is a big miss for me. My feed for the HSI is not yet ready and there's still some homework for me to do before I could provide any meaningful strategy. However, it does seem that the best point of entry, as far as I am concerned, for shorting the HSI is already gone.

Timing the Chinese Bubble, Part I

Source: Boon

Few days ago I posted the above note, saying that I didn't think the Dow and the S&P 500 had hit their bottoms. As what I had anticipated, both indices continued drifting lower following my posting, which preceded the disappointing US jobs report -- that I had also predicted back in September 2007. The Dow has now retraced more than 1000 points.

Now, I would like to take this opportunity to say that I am currently speculating the possibility of a collapsing Chinese stock market. Let me stress that this is still a speculation, as far as I am concerned. There is some homework I need to do before I could elaborate on my thinking further.

to be continued...

Americans pay for housing boom's excess

Source: By MADLEN READ and JOE BEL BRUNO, AP Business Writers
Wed Jan 16, 4:37 PM ET

NEW YORK - The bill for America's excessive borrowing during the housing boom has arrived, and more people are having trouble paying it.

JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation's biggest banks, on Wednesday joined a growing chorus warning that the subprime mortgage mess is just the start of a sweeping lending crisis. And some fear that consumers falling behind on all kinds of loan payments could tip the economy's scale toward recession.

Strapped consumers are having a tough time making payments on credit cards, home-equity loans, and even for their cars. This has caused three of the top five U.S. commercial banks that have already reported damaging fourth-quarter results to set aside some $12.5 billion to cover future loan losses — and that number will likely grow as the year wears on.

Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it — a recession, slowdown or even the makings of a depression — it's clear banks are under mounting pressure to be more cautious about lending.

"If consumption growth stagnates, the odds of a recession are incredibly high," said Andrew Bernard, director of the Center for International Business at the Tuck School of Business at Dartmouth. "All the pieces of household financial health are starting to be shakier, especially at the low end."

He and others are paying close attention to what top U.S. banks say about their customers' payment habits. Many view this as an early indicator about where the overall economy is headed, but there are other signs that are troublesome.

The stock market has had its worst start to the year in three decades, with investors rattled by signs from the Labor Department that unemployment is on the rise and retail sales are on the decline. Further, the Commerce Department reported Wednesday that higher costs for energy and food in 2007 pushed inflation for the year up by the largest amount in 17 years.

There was no sign of a turnaround in the last few months of the year. The Federal Reserve reported that the economy grew at a slower pace in late November and December as credit problems intensified and consumers tightened their spending.

To some, it appears that the Fed came to its rate-cutting decision in August a bit too late. Others point to the falling dollar and surging oil prices, factors that usually prevent the central bank from easing its monetary policy.

While debate persists about the Fed's timing and the extent of the slowdown, bank executives — who have scrambled to prepare for another tumble in home prices and higher unemployment in 2008, feel academic definitions are beside the point.

"We're not predicting a recession — it's not our job — but we're prepared," JPMorgan Chase CEO Jamie Dimon told analysts after the nation's third-largest bank wrote down $1.3 billion and said profit dropped 34 percent.

His financial institution didn't do all that bad. Rival Citigroup Inc. fared the worst during the fourth quarter, losing $9.83 billion after writing down the value of its portfolio of mortgage and mortgage-backed products by $18.1 billion.

Wells Fargo, a more traditional bank that avoided last year's trading woes, saw its profit fall 38 percent due to troubles with home equity loan and mortgage defaults.

JPMorgan is girding for home prices to decline further in 2008 by 5 percent to 10 percent; Citigroup's estimate of 7 percent falls within that range, too.

"The banks are the infrastructure for everything, the heartbeat of the market," said Chris Johnson, president of Johnson Research Group. "They need to be fixed before the market, and economy, can move forward with confidence. They need to get all their dirty laundry out there."

Banks and card companies like American Express Co. — which warned last week that it would add $440 million to loan loss provisions — said in the regions where home prices are declining, card default rates are rising faster. The same goes for auto loans, subprime mortgages and home equity loans in these areas, which include Florida, Michigan and California.

A big reason for the rise in credit card default rates is that they are returning to more usual levels following a change in bankruptcy law that sent rates lower for a time. But the fact that more losses are being seen in the weaker parts of the country shows the increase is economically driven as well.

Analysts believe this means one thing: Consumers will be the ones paying for years of lax lending standards by U.S. financial institutions. Many will become more restrictive about who gets credit in a bid to stem future losses — and that could curb consumer spending, which accounts for more than two-thirds of the economy.

"We've pushed the envelope," Johnson said. "Along with the joy of a market that goes as high as ours is the agony of when it starts to correct itself."

The Croesus Chronicles - Recession Ahead?

Source: From Robert Lenzner, 12.27.07, 6:00 AM ET

No-one knows for a certainty that 2008 will be a year of recession. Gurus are all over the map with their crystal balls, some wishfully calling for a "growth recession," while others see a very rotten time ahead indeed.

But better pay close attention--because a great deal is riding on the recession odds. There's the value of your portfolio, the cost of money, your job, the price of oil, inflation and very likely the identity of the next inhabitant of the White House. The worse the recession, I would say, the better the chances of the Democratic candidate.

According to the Economic Cycle Research Institute, seven out of 10 citizens now believe we are or will soon be in a recession. That could be a powerful sentiment slowing the economy. Certainly the credit crisis reflects that we have been in a serious slowdown for some time now. The leading home price index is at a six-year low, financial services are at a 13-year low, while non-financial services are at a 56-month low, according to figures kept by ECRI.

In Pictures: Signs We've Entered A Recession
Sounds pretty bad, doesn't it?

Be on your own personal recession watch. Carefully follow the major drivers of the economy.

Most crucial are the job figures. which are holding up, but have softened to under 100,000 new jobs last month. Any two months in a row of negative job growth--meaning there were job losses--is usually the key indicator that a recession is around the corner, asserts Lakshman Achuthan, of the ECRI, a private organization that keeps the most intensive watch over all statistical indicators of the economy.

Second, the industrial manufacturing figures, which are holding up due to exports based on the weakening dollar, are the next best barometer of the U.S. economy. Still, manufacturing is well below the June high, suggesting that this sector is "subdued," according to the ECRI December report.

Third, housing is down and expected to fall lower. Merrill Lynch (nyse: MER - news - people ) economist David A. Rosenberg says in a report that the roof caving in on housing starts with a 43% plunge in new single-family homes.

Consumer expectations are falling as confidence lags due to the inability to borrow vast amounts of money on rising home values. Interest rates, of course, are headed lower, due to the credit crunch, and may also be a sign of the recession coming. The same Merrill report suggests that chain store sales are looking very soft in the critical December holiday period, which many stores count on for a good part of their yearly turnover.

Corporate earnings are holding up for now, but are expected to slow significantly, perhaps by 16%--which represents the median decline in corporate earnings during recessions over the past 50 years, according to Morgan Stanley (nyse: MS - news - people ). "Earnings are now 62% above trend. If history repeats--and I see no reason why it shouldn't --there is a huge earnings shock coming," says Abhijit Chakrabortti, Morgan Stanley U.S. strategist. That's far more bearish than projections by Goldman Sachs (nyse: GS - news - people ) or T. Rowe Price, the mutual fund company.

Investor expectations, neither bullish nor bearish, are flat, indicating that investors can't make up their mind about the recession because they can't see it. Don't wait for the National Bureau of Economic Recession (their Business Cycle Dating Committee is the body that officially calls a recession) to tell you that we're in one, because they ordinarily wait until economic activity has fallen for six months. By then, it's too late--the stock market will have sagged.

Even the Economic Cycle Research Institute believes, based on today's figures--which are a mix of positive and negative--that a recession isn't inevitable. Yet its Weekly Leading Index has fallen to its lowest point since November 2002, suggesting, admits Achuthan, that "U.S. Economic growth prospects continue to worsen."

We are in the sixth year of an expansion, which is longer than the average post-World War II growth cycle. When an expansion gets this long in the tooth, it's time to look out below.

In Pictures: Signs We've Entered A Recession