However, there was a particular representative who had substantial investments in the Iskandar Project and was only too eager to trumpet his contribution to the region and how the project would benefit the entire Malaysian economy, specifically in two aspects, namely:
1) As the hinterland of Singapore.
2) As the wholesale centre for the distribution of Asia’s exports to the global markets.
It was clear from his very sincere comments that he was totally out of touch with reality and an obvious victim not only of his own corporate spin but that of Badawi regime’s flawed strategies in establishing the Iskandar project soon after the launch of the 9th Malaysia Plan.
During the discussions, I raised the issue of business cycles and pointed out that the last two peaks before the collapse was in 1987 and 1997 and that it was obvious that the next peak would be 2007 / 2008. [1] Hence, Malaysia and corporate leaders should be preparing for a downturn and not as was the case, preparing for a new era of economic prosperity as a result of Wall Street’s financial engineering. Obviously, the policy tools, management strategies and mindsets for an upturn will be different for a downturn.
The particular developer went on and on extolling his grand plans for Iskandar and how with the help of China, the Malaysian economy would be transformed!
One can be forgiven for the lack of foresight, but when a person with the benefit of hindsight, ignores reality and persists in his own spin, he deserves the financial catastrophe that is coming his way!
Since December 2006, I had been warning whosoever that cared to listen of the global financial tsunami. It is common sense and simple logic, that when the US and Europe collapse, all exporting economies would suffer grievously. But so-called experts gleefully boasted that Asia has been de-coupled from the vagaries of the developed economies and would be immune from any financial flu or worse, on account of huge foreign exchange reserves which will provide the necessary protection. Asians have learnt from the 1997 crisis!
Utter rubbish!
What Asian economies did after 1997 was to substitute dependence on hot capital inflows for dependence on global demand, specifically the US, for export led growth! External factors still dominate and determine Asia’s economic survival – “jumping from the frying pan into the fire!”
When the Badawi regime drew the blueprint for Iskandar, their entire strategy was anchored primarily on the financial health of Singapore. This is the fatal flaw, as Singapore’s strength in good times is also the Achilles heel in any downturn.
This was all too obvious since the last quarter of 2008. But any idiot would have noticed that when Singapore’s investment arm, Temasek was injecting huge sums of monies into Wall Street banks in 2007, all of which were insolvent, it was arrogance and misplaced confidence that ruled their minds and their vaunted research capabilities seem to have been put on a back burner.
And what a price Singapore paid for their arrogance – its worst financial crisis since separation from Malaysia in the early sixties!
The same arrogance and misplaced confidence of the Badawi regime, pushed to do the unthinkable by the immaturity and inexperience of the “4th Floor boys” and the various infantile consultancy outfits, have now created an economic nightmare in the Malay heartland of Johor, the bastion of UMNO.
Wall Street has reported that Singapore has admitted that it will experience the “deepest recession in its history.” Growth contracted 16.9% in the last quarter of 2008 and GDP growth in 2009 would decline by 5%. Massive unemployment has already set in. Finance Minister Mr. Tharman Shanmugaratnam even stated that “no one knows how prolonged or deep this recession is going to be. We are plugged into the markets that are largely in the rich countries and when we go through a global crisis like this, we come down very quickly.” The Minister also remarked that there was no Asian domestic demand to provide a cushion for Singapore.
It follows that if there is no cushion for Singapore, there will likewise be no cushion for Malaysia, specifically for the Johoreans who depend so much on Singapore.
Johor and Iskandar are dead meats. This is a given
Malaysia is also much dependent on Japan.
It was reported yesterday that Japan’s GDP was contracting at an annualized 12%. Experts have observed that the speed “of the decline embedded in the latest Asia data is on par with the collapse in the US during the 1930s Depression.”
A microcosm of Japan’s financial woes can be seen in the horrendous performance of Toyota Motors, the flagship of Japanese manufacturers and the world’s largest producer of cars. It has suffered the biggest loss and are shutting down factories and reducing drastically production in Japan. Japan was counting on a continuous growth of 3% in the US for her exports. Exports fell 35% in the 12 months to December 2008. The US consumer market has vaporized completely!
South Korea is in the same leaking boat. In the last quarter of 2008, GDP fell by an average annualized rate of around 15% in the Tiger economies of Hongkong, Singapore, South Korea and Taiwan. South Korea’s GDP in fact fell by 21%!
The collapse in exports has been exacerbated by the lack of credit, specifically trade financing of Asia’s customers i.e. importers. Even exporters are cautious of the letters of credit issued by the tottering banks.
The intra-regional trade is of no help because it disguises the fact that 60% of the final demand for Asian products still come from advanced economies – USA, Europe and Japan, and they are all bleeding and in intensive care!
The developer whom I had referred to earlier, had pinned his hopes for a rebound in Iskandar and the revival of his shrinking fortune on China’s ability to take up the export slack. He must be wandering in la la land to come to this conclusion. China, the world’s factory has been hard hit, its exports declined for the third consecutive month in January, falling 17.5%. Imports have plunged even further by a whopping 43.1% and bearing in mind that China’s imports are mainly inputs for manufacturing exports, this sharp decline means that China’s manufacturing is in a grid-lock.
So, if Malaysia and Iskandar are looking towards Asia and specifically Singapore for a lifeline, there is none. The Malaysian boat is leaking fast and we don’t even have a paddle. There is not even a focus attempt to plug the leak as the Badawi regime is just too busy retaining power and grabbing power from the Pakatan Rakyat controlled states and now in these critical months, indulging in fruitless campaigning in two silly By-elections in Perak and Kedah!
Malaysia’s exports have collapsed and will collapse further. This is a given.
Asia cannot replace the US / Europe markets.
The monies the Badawi regime has pumped into Iskandar have been wasted and there is no likelihood of any returns in the next ten years.
The Badawi regime had counted on the Arabs and their oil monies. But the stupid Arabs are all in a financial mess. Their dollars were put into the toxic wastes that are now deemed worthless. They were then lured by the fraudsters of Wall Street to invest in insolvent banks. These investments are not even worth ten cents to the dollar! The gleaming skyscrapers and man-made islands sprouting multi-million homes and multi-billion hotels will soon become the largest concrete jungle on planet earth.
The US and Europe are already turning to protectionism as a way to insulate their economies. “Buy America First” is the battle cry and the sooner we come to grips that these export markets are no longer sustainable and accessible for the next few years, the better will we be able to deliver a pragmatic blueprint for survival – one that will take into consideration that the next few years will be very painful.
I am now issuing another grim warning. As the only political / financial analyst who has the guts to do so, I am not confident that the ruling elites will take heed. But I hope that those who are reading this article in my website will put pressure on the Badawi regime.
What is this danger? It is the complete devastation of most if not all European banks. Yes, there can be no rescue of these banks. In an “for eyes-only” document prepared by the European Commission for the Finance Ministers of Europe, it was estimated that European banks must write down $25 trillion on account of gambling in toxic wastes products. This is not a typo, It is not billions. It is $25 trillion. A mind-boggling sum.
In the aforesaid Forum, I warned the delegates that a conservative estimate of total global write down for derivatives debts on the most conservative basis was $50 trillion, approximately 10% of the $565 Trillion derivative trade as at end 2008. The major banks in the US control 90% of this global market. Now, common sense and simple logic tells me that if the EU banks collectively represent the remaining 10% of the global derivative market and has to write off $25 trillion, the US of A is beyond salvage, specifically its banks. The write off in America would easily exceed $50 trillion. The combine write down would dwarf the global GDP of approximately $60 trillion.
If this is too outlandish for you to accept, then do your research – check it out from Google.
The fascist thugs at website “Malaysia Today”, the mouthpiece of Anwar Ibrahim and the Badawi regime, used to attack me for my warnings. They have all scattered but some die-hards remain. If you had listened to these idiots instead of taking my warnings to heart, now is the time to hunt them down and demand that they account for their actions. Demand from the webmaster to reveal their NRIC number and address and then sue their pants off!
If Johor cannot survive this financial turmoil because of Badawi regime’s and Khairy’s foolish schemes, UMNO as a political party will be finished for good. The Malays in Johor (the bastion of Malay nationalism) will be so disillusioned that mass rejection of UMNO as the defender and custodian of Malay rights will erupt into an avalanche! If UMNO cannot save the Malays in Johor, it will be buried in the next general elections.
Since last year, I had warned repeatedly that the first quarter of 2009 would be critical and time is of the essence, but all to no avail. Not one political leader took me seriously. It is only after the 4th February 2009 closed door forum organized by NCCIM that there is a discernable seriousness in acknowledging the need for a more dynamic and hands-on approach in addressing the consequences of the present financial meltdown.
But we may have left it too late. We are still on auto-pilot mode.
If a new pilot takes over at the end of March, he will not be able to stop the bleeding in Johor, and by the end of the third quarter, Johor will be in deep shits.
My advice to UMNO and Barisan Nasional is simple and the rakyat will thank you for this courageous and pragmatic initiative – give Pakatan Rakyat a walk over in the two By-elections as the outcome in any event will have no strategic significance to UMNO’s survival as a political party.
But if UMNO is distracted by the By-elections and waste precious time in resolving the growing financial crisis, it will lose the support of the Malay heartland and the bastion of Malay nationalism.
UMNO, you have been forewarned. Ignore this advice and UMNO will lose everything at stake! Barisan Nasional will not survive beyond 2010!
Follow my advice, and UMNO and the Barisan Nasional will be able to wipe out Pakatan Rakyat by the second quarter of 2010.
This is strategic thinking at the highest level.
I am playing the chess game. Why are you still playing marbles?
Badawi has asked his members of Parliament to come out with ideas as to how we can resolve this crisis. This is an open admission that he is devoid of any ideas and that Khairy and his much touted advisers are all intellectual bankrupts. The MPs have no idea whatsoever. They are all groping in the dark.
We in Malaysia have a major structural problem with regard to the Bumiputra economy. Stimulus packages no matter how massive cannot resolve inherent structural issues in the economy. I have the answers but until and unless Barisan Nasional is willing to listen and make changes, my lips are sealed.
This may sound arrogant to many. But I was the only one in the entire freaking country that got it right since December 2006. The entire nation was auto-pilot. The 9th Malaysia Plan got it wrong, the Mid-Term Review got it wrong, the 2008 budget got it wrong, the 2009 budget got it wrong and now the mini budget will also not get it right!
Time is running out. The rakyat has to decide as to who got it right and what needs to be done. I rest my case here.
Notes
1. I postulated that in Malaysia, our business cycles have a 10-year cycle. Obviously other markets’ business cycle will differ from Malaysia and therefore analysts must of necessity focus on their respective markets. The point I was making was that whatever the business cycle, there will always be ups and downs and therefore we should prepare accordingly at the critical junctures of the business cycle.
Johor, The Bastion of UMNO Plunging Into Economic Free Fall By 3rd Quarter 2009 - The Iskandar Project - Johor UMNO’s Millstone - By Matthias Chang (17/2/09, Updated at 8:45 am 18th February 2009)
On the 4th of February 2009, I participated in a closed door forum on the global financial crisis organised by the National Chamber of Commerce and Industry of Malaysia (NCCIM). One of the Forum’s objectives was “Mapping A Blueprint For Survival” and representatives from the cross-section of our economy offered invaluable insights and comments on the challenges faced by the respective industries.However, there was a particular representative who had substantial investments in the Iskandar Project and was only too eager to trumpet his contribution to the region and how the project would benefit the entire Malaysian economy, specifically in two aspects, namely:
1) As the hinterland of Singapore.
2) As the wholesale centre for the distribution of Asia’s exports to the global markets.
It was clear from his very sincere comments that he was totally out of touch with reality and an obvious victim not only of his own corporate spin but that of Badawi regime’s flawed strategies in establishing the Iskandar project soon after the launch of the 9th Malaysia Plan.
During the discussions, I raised the issue of business cycles and pointed out that the last two peaks before the collapse was in 1987 and 1997 and that it was obvious that the next peak would be 2007 / 2008. [1] Hence, Malaysia and corporate leaders should be preparing for a downturn and not as was the case, preparing for a new era of economic prosperity as a result of Wall Street’s financial engineering. Obviously, the policy tools, management strategies and mindsets for an upturn will be different for a downturn.
The particular developer went on and on extolling his grand plans for Iskandar and how with the help of China, the Malaysian economy would be transformed!
One can be forgiven for the lack of foresight, but when a person with the benefit of hindsight, ignores reality and persists in his own spin, he deserves the financial catastrophe that is coming his way!
Since December 2006, I had been warning whosoever that cared to listen of the global financial tsunami. It is common sense and simple logic, that when the US and Europe collapse, all exporting economies would suffer grievously. But so-called experts gleefully boasted that Asia has been de-coupled from the vagaries of the developed economies and would be immune from any financial flu or worse, on account of huge foreign exchange reserves which will provide the necessary protection. Asians have learnt from the 1997 crisis!
Utter rubbish!
What Asian economies did after 1997 was to substitute dependence on hot capital inflows for dependence on global demand, specifically the US, for export led growth! External factors still dominate and determine Asia’s economic survival – “jumping from the frying pan into the fire!”
When the Badawi regime drew the blueprint for Iskandar, their entire strategy was anchored primarily on the financial health of Singapore. This is the fatal flaw, as Singapore’s strength in good times is also the Achilles heel in any downturn.
This was all too obvious since the last quarter of 2008. But any idiot would have noticed that when Singapore’s investment arm, Temasek was injecting huge sums of monies into Wall Street banks in 2007, all of which were insolvent, it was arrogance and misplaced confidence that ruled their minds and their vaunted research capabilities seem to have been put on a back burner.
And what a price Singapore paid for their arrogance – its worst financial crisis since separation from Malaysia in the early sixties!
The same arrogance and misplaced confidence of the Badawi regime, pushed to do the unthinkable by the immaturity and inexperience of the “4th Floor boys” and the various infantile consultancy outfits, have now created an economic nightmare in the Malay heartland of Johor, the bastion of UMNO.
Wall Street has reported that Singapore has admitted that it will experience the “deepest recession in its history.” Growth contracted 16.9% in the last quarter of 2008 and GDP growth in 2009 would decline by 5%. Massive unemployment has already set in. Finance Minister Mr. Tharman Shanmugaratnam even stated that “no one knows how prolonged or deep this recession is going to be. We are plugged into the markets that are largely in the rich countries and when we go through a global crisis like this, we come down very quickly.” The Minister also remarked that there was no Asian domestic demand to provide a cushion for Singapore.
It follows that if there is no cushion for Singapore, there will likewise be no cushion for Malaysia, specifically for the Johoreans who depend so much on Singapore.
Johor and Iskandar are dead meats. This is a given
Malaysia is also much dependent on Japan.
It was reported yesterday that Japan’s GDP was contracting at an annualized 12%. Experts have observed that the speed “of the decline embedded in the latest Asia data is on par with the collapse in the US during the 1930s Depression.”
A microcosm of Japan’s financial woes can be seen in the horrendous performance of Toyota Motors, the flagship of Japanese manufacturers and the world’s largest producer of cars. It has suffered the biggest loss and are shutting down factories and reducing drastically production in Japan. Japan was counting on a continuous growth of 3% in the US for her exports. Exports fell 35% in the 12 months to December 2008. The US consumer market has vaporized completely!
South Korea is in the same leaking boat. In the last quarter of 2008, GDP fell by an average annualized rate of around 15% in the Tiger economies of Hongkong, Singapore, South Korea and Taiwan. South Korea’s GDP in fact fell by 21%!
The collapse in exports has been exacerbated by the lack of credit, specifically trade financing of Asia’s customers i.e. importers. Even exporters are cautious of the letters of credit issued by the tottering banks.
The intra-regional trade is of no help because it disguises the fact that 60% of the final demand for Asian products still come from advanced economies – USA, Europe and Japan, and they are all bleeding and in intensive care!
The developer whom I had referred to earlier, had pinned his hopes for a rebound in Iskandar and the revival of his shrinking fortune on China’s ability to take up the export slack. He must be wandering in la la land to come to this conclusion. China, the world’s factory has been hard hit, its exports declined for the third consecutive month in January, falling 17.5%. Imports have plunged even further by a whopping 43.1% and bearing in mind that China’s imports are mainly inputs for manufacturing exports, this sharp decline means that China’s manufacturing is in a grid-lock.
So, if Malaysia and Iskandar are looking towards Asia and specifically Singapore for a lifeline, there is none. The Malaysian boat is leaking fast and we don’t even have a paddle. There is not even a focus attempt to plug the leak as the Badawi regime is just too busy retaining power and grabbing power from the Pakatan Rakyat controlled states and now in these critical months, indulging in fruitless campaigning in two silly By-elections in Perak and Kedah!
Malaysia’s exports have collapsed and will collapse further. This is a given.
Asia cannot replace the US / Europe markets.
The monies the Badawi regime has pumped into Iskandar have been wasted and there is no likelihood of any returns in the next ten years.
The Badawi regime had counted on the Arabs and their oil monies. But the stupid Arabs are all in a financial mess. Their dollars were put into the toxic wastes that are now deemed worthless. They were then lured by the fraudsters of Wall Street to invest in insolvent banks. These investments are not even worth ten cents to the dollar! The gleaming skyscrapers and man-made islands sprouting multi-million homes and multi-billion hotels will soon become the largest concrete jungle on planet earth.
The US and Europe are already turning to protectionism as a way to insulate their economies. “Buy America First” is the battle cry and the sooner we come to grips that these export markets are no longer sustainable and accessible for the next few years, the better will we be able to deliver a pragmatic blueprint for survival – one that will take into consideration that the next few years will be very painful.
I am now issuing another grim warning. As the only political / financial analyst who has the guts to do so, I am not confident that the ruling elites will take heed. But I hope that those who are reading this article in my website will put pressure on the Badawi regime.
What is this danger? It is the complete devastation of most if not all European banks. Yes, there can be no rescue of these banks. In an “for eyes-only” document prepared by the European Commission for the Finance Ministers of Europe, it was estimated that European banks must write down $25 trillion on account of gambling in toxic wastes products. This is not a typo, It is not billions. It is $25 trillion. A mind-boggling sum.
In the aforesaid Forum, I warned the delegates that a conservative estimate of total global write down for derivatives debts on the most conservative basis was $50 trillion, approximately 10% of the $565 Trillion derivative trade as at end 2008. The major banks in the US control 90% of this global market. Now, common sense and simple logic tells me that if the EU banks collectively represent the remaining 10% of the global derivative market and has to write off $25 trillion, the US of A is beyond salvage, specifically its banks. The write off in America would easily exceed $50 trillion. The combine write down would dwarf the global GDP of approximately $60 trillion.
If this is too outlandish for you to accept, then do your research – check it out from Google.
The fascist thugs at website “Malaysia Today”, the mouthpiece of Anwar Ibrahim and the Badawi regime, used to attack me for my warnings. They have all scattered but some die-hards remain. If you had listened to these idiots instead of taking my warnings to heart, now is the time to hunt them down and demand that they account for their actions. Demand from the webmaster to reveal their NRIC number and address and then sue their pants off!
If Johor cannot survive this financial turmoil because of Badawi regime’s and Khairy’s foolish schemes, UMNO as a political party will be finished for good. The Malays in Johor (the bastion of Malay nationalism) will be so disillusioned that mass rejection of UMNO as the defender and custodian of Malay rights will erupt into an avalanche! If UMNO cannot save the Malays in Johor, it will be buried in the next general elections.
Since last year, I had warned repeatedly that the first quarter of 2009 would be critical and time is of the essence, but all to no avail. Not one political leader took me seriously. It is only after the 4th February 2009 closed door forum organized by NCCIM that there is a discernable seriousness in acknowledging the need for a more dynamic and hands-on approach in addressing the consequences of the present financial meltdown.
But we may have left it too late. We are still on auto-pilot mode.
If a new pilot takes over at the end of March, he will not be able to stop the bleeding in Johor, and by the end of the third quarter, Johor will be in deep shits.
My advice to UMNO and Barisan Nasional is simple and the rakyat will thank you for this courageous and pragmatic initiative – give Pakatan Rakyat a walk over in the two By-elections as the outcome in any event will have no strategic significance to UMNO’s survival as a political party.
But if UMNO is distracted by the By-elections and waste precious time in resolving the growing financial crisis, it will lose the support of the Malay heartland and the bastion of Malay nationalism.
UMNO, you have been forewarned. Ignore this advice and UMNO will lose everything at stake! Barisan Nasional will not survive beyond 2010!
Follow my advice, and UMNO and the Barisan Nasional will be able to wipe out Pakatan Rakyat by the second quarter of 2010.
This is strategic thinking at the highest level.
I am playing the chess game. Why are you still playing marbles?
Badawi has asked his members of Parliament to come out with ideas as to how we can resolve this crisis. This is an open admission that he is devoid of any ideas and that Khairy and his much touted advisers are all intellectual bankrupts. The MPs have no idea whatsoever. They are all groping in the dark.
We in Malaysia have a major structural problem with regard to the Bumiputra economy. Stimulus packages no matter how massive cannot resolve inherent structural issues in the economy. I have the answers but until and unless Barisan Nasional is willing to listen and make changes, my lips are sealed.
This may sound arrogant to many. But I was the only one in the entire freaking country that got it right since December 2006. The entire nation was auto-pilot. The 9th Malaysia Plan got it wrong, the Mid-Term Review got it wrong, the 2008 budget got it wrong, the 2009 budget got it wrong and now the mini budget will also not get it right!
Time is running out. The rakyat has to decide as to who got it right and what needs to be done. I rest my case here.
Notes
1. I postulated that in Malaysia, our business cycles have a 10-year cycle. Obviously other markets’ business cycle will differ from Malaysia and therefore analysts must of necessity focus on their respective markets. The point I was making was that whatever the business cycle, there will always be ups and downs and therefore we should prepare accordingly at the critical junctures of the business cycle.
Di pos oleh Arbain Muhayat pada 08 March 2009