Wake Up Call – Mathias Chang


In an excellent recent article by Mathias Chang entitled “Flip-Flopping Fairy Tales – Malaysia Will Not Have 3.9% Growth In 2009 – Accepting Reality Is Not Pessimism, Giving False Hopes Is Not Optimism” , he challenges the nation’s leadership’s position of ostrich economics.

Surely, his grave warnings may sound like doomsday prophecy and may be brushed aside as wild speculation.  Surely, the Badawi Administration can come out and say quite the opposite that all will be well and Zeti says we will not be in a recession next year.  Yes, people in the right places can come out saying almost anything about the well-being of our economy.

But guess what?  Only we the Rakyat will know and has known for a while now that tough times have arrived and tougher times ahead.  It’s not about talking ourselves into a recession but to face the realities and do the right things.

Here are some of Mathias Chang‘s predictions (read here):

  1. by H1 of 2009, the KLCI will drop below 700; it is 866.14 today (28 Nov 2008)
  2. By 2nd Half of next year, the automobile industry will go into a tailspin and suffer massive losses.

  3. By 2nd Half of next year, credit card debts will soar, credit limits will be drastically reduced (worse than 1997/1998) and interest rates on outstanding will increase sharply. It is already happening!

  4. By 2nd Half of next year, shipping rates will drop drastically and this is also happening. Our ports and shipping companies will suffer.

  5. By 2nd Half of next year, our housing market bubble will burst notwithstanding all the stimulus and pump-priming. Arab investors will not be coming. Dubai and Abu Dhabi is already in a financial / property gridlock! Why would they come here when they have to save their own asses?

  6. By 2nd Half of next year, our exporters will be in tears, when Letters of Credit (L/Cs) will not be honoured and inventory stacks up at ports and in factory premises. Chinese exporters are already stipulating what LCs from which global banks will only be accepted.

  7. By 2nd Half of next year, FELDA settlers will also be in tears. Having spent their windfall early this year (because of Badawi regime’s false optimism), their savings will be down and they will bleed.

  8. By the 3rd Quarter of next year, corporate NPLs will shoot up! Relaxing mark-to-market rules will not help.

  9. Malaysia will have a huge immigration problem when these hardworking people are thrown out of work and have to compete with the swelling ranks of Malaysian unemployed.

  10. In the meantime capital outflows will continue.

  11. Let’s see whether the statement that Malaysia has more than enough reserves (since according to Bank Negara, we need only have US$30 to US$40 billion reserves) will provide sufficient confidence to foreign investors to continue to invest in Malaysia.

In the end, we the Rakyat will be the judge who to believe.  Alas by then, when the reality sets in, when we realize that we’ve been duped to believe everything is well when all is not, when we discover that we have been doing it all wrong on hindsight, we will be a frustrated and angry nation with little to hold on to.

Fossil fuel and palm oil prices have come down in record time and have surprisingly stayed down.  It is the time when people are trying to boost their prices.  This has never happened before when prices were low those days.

The US financial crisis and effects are rippling around the world.  We are a world that is surprisingly well woven together even when we least realize it.  Malaysia is feeling the shocks but our leaders are still trying to paint a rosy picture.  A bipartisan mega effort must be sought but our Speaker refused Anwar‘s challenge to debate it.  Nobody in the BN Government dares to engage the Opposition to work together for the greater good.

Oil price today is USD 53.82 (click here to check latest oil price.  Oil price when our Government increased pump prices by 41% in June was around USD 125.  In a matter of 5 months, everything changed and our lives are never the same.  Inflation soared and remains high and our cost of living went through the roof.  Yet our Government says we are OK.

One now wonders when will anyone in Malaysia step up to drive us all in the right direction!

Free Hit Counter

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: