Greeting....

Happy Thanksgiving guys!!!

Revelation from the heart....

As the KLCI continue to behaves in oblivion to the world market movements.... I receive an email about this article and thought it is good for people to read and do some reflection just so we plan our future wisely... so here it goes.

*A Malaysian diaspora speaks up....*

I am a female Chinese Malaysian, living in the Washington DC area in the United States . I have read many of the letters that often talk about foreign countries when the writers have no real knowledge of actually living in those countries. Many draw conclusions about what those ountries are like after hearing it from someone else or by reading and hearing about them in the media or after four years in a college town in those countries. I finished STPM with outstanding results from the prestigious St George's Girls School in Penang . Did I get a university place from the Malaysian government? Nothing. With near perfect scores, I had nothing, while my Malay friends were getting offers to go overseas. Even those with 2As got into university. I was so depressed. I was my parents last hope for getting the family out of poverty and at 18, I thought I had failed my parents.

Today, I understand it was the Malaysian Government that had failed me and my family because of its discriminatory policies. Fortunately, I did not give up and immediately did research at the Malaysian American Commission on Education Exchange (MACEE) to find a university in the US that would accept me and provide all the finances. My family and friends thought I was crazy, being the youngest of nine children of a very poor carpenter. Anything that required a fee was out of our reach.

Based on merit and my extracurricular activities of community service in secondary school, I received full tuition scholarship, work study, and grants to cover the four years at a highly competitive US university. Often, I took 21 credits each semester, 15 credits each term while working 20 hours each week and maintaining a 3.5 CGPA. A couple of semesters, I also received division scholarships and worked as a TA (teaching assistant) on top of everything else.

For the work study, I worked as a custodian (yes, cleaning toilets), carpet layer, computer lab assistant, grounds keeping, librarian, painter, tour guide, etc. If you understand the US credit system, you will understand this is a heavy load. Why did I do it? This is because I learnt as a young child from my parents that hard work is an opportunity, to give my best in everything, and to take pride in the work I do. I walked away with a double major and a minor with honours but most of all a great lesson in humility and a great respect for those who are forced to labour in
so-called `blue collar' positions.

Those of you who think you know all about Australia, US, or the West, think again. Unless you have really lived in these countries, i.e. paid a mortgage, paid taxes, taken part in elections, you do not understand the level of commitment and hard work it takes to be successful in these countries, not just for immigrants but for people who have lived here for generations.

These people are where they are today because of hard work. (Of course, I am not saying everyone in the US is hardworking. There is always the lazy lot which lives off of someone else's hard work. Fortunately, they are the minority.) Every single person, anywhere, should have the opportunity to succeed if they want to put in the effort and be accountable for their own actions. In the end, they should be able to reap what they sow.

It is bearable that opportunities are limited depending on how well-off financially one's family is but when higher education opportunities are race-based, like it is in Malaysia ; it is downright cruel for those who see education as the only way out of poverty. If you want to say discrimination is here in the US, yes, of course it is. Can you name a country where it doesn't happen? But let me tell you one thing - if you go looking for it, you will find it. But in Malaysia, you don't have to go look for it because it seeks you out, slaps you in your face every which way you turn, and is sanctioned by law! Here in the US , my children have the same opportunity to go to school and learn just like their black, white, and immigrant friends. At school, they eat the same food, play the same games, are taught the same classes and when they are 18, they will still have the same opportunities.

Why would I want to bring my children back to Malaysia? So they can suffer the state sanctioned discrimination as the non-malays have for over 30 years?

As for being a slave in the foreign country, I am a happy 'slave' earning a good income as an IT project manager. I work five days a week; can talk bad about the president when I want to; argue about politics, race and religion openly; gather with more than 50 friends and family when I want (no permit needed) and I don't worry about the police pulling me over because they say I ran the light when I didn't.

Have we seen the light at the end of the tunnel yet (PKR)? Or is it the head light of an oncoming train ? Lets hope its the former for the sake of all fair minded Malaysians.

The real agenda behind Najib economic stimulus EPF reduction

The government of Malaysia (specifically najib razak the country's deputy prime minister) which recently swap ministry with the prime minister abdullah announced econommic stimulus plan of RM7bil... we know the details of where the RM7 bil were allocated but I'm not going to talk about the details of those. Not because they make sense but I'm interested to bring up the evil plan pertaining to the EPF reduction from 11% down to 8%.

First of all have you ever ask these questions
1) Why the gov wants this reduction to be done?
2) Why made them compulsory?

Well, today I'll tell you why.... the concept is simple but rather subtle for those who never really thought about it.
Here're the reasons...
Malaysians get to deduct RM6k from taxable income for contributing to EPF and purchasing insurance.... now with lesser EPF contribution of 8%, the people of this country who falls into the income group which cannot maximize the RM6k deduction in the taxable income will be taxed more compared to having 11% EPF contribution. Less deductables more taxable income... as simple as that.

On top of that those people who are affected by the above stand to lose more if they happen to be marginally standing in a particular tax bracket.
let say e.g. taxable income of <= 50k will be taxed with 24% the extra will be taxed 27%. Now with the increase in taxable income, someone who happens to have a taxable income of 49,800 may now likely to shoot past RM50k due to the lesser EPF deductables. therefore these people will be taxed with higher tax bracket of 27%... So effectively, what is the impact? people of lower income groups will be having far lesser savings for the old age when they retire and at the same time the government will take a portion of their 3% as tax and hope the people will spend the money away to "boost" the economy. Who stand to gain? the people or the gov (which in this case is Barisan National)? It's obviously the gov! they earn a net income in increase tax Who stand to lose? The lower income group and the poor on the street.. Who's idea? Najib . Now you tell me why would any sane individual would want to vote for such a government?
In times of difficulty like this economic crisis which Obama claims is of historic proportion, the government of Malaysia is stealing from its people (specifically the poor ones)?!?
Instead of helping the people of Malaysia who voted them into power, this ungrateful government is using the economic crisis to cash in...

What an evil plan.... who ever approves this plan is very evil indeed.

My comment: If the Malaysian gov really wants to help the people ride out this difficult time, they should just do a tax rebate.... that would surely boost the economy... consumers are the fundamental driver of the country's economy.... it's a no brainer.

Lessons learned....

Post taken from Michael Yoshikami, President and Chief Investment Strategist of YCMNET Advisors, a wealth management firm...

With the announcement that Citigroup is being rescued by the U.S. Treasury, the FDIC, and the Federal Reserve, a long journey has ended for this fabled financier. Citi has now agreed to government regulation which will forever alter this once proud institution.
In New York where I'm writing this, the mood at Citigroup is one of relief and resignation that their world has forever changed. Who would have thought!

What lessons can we learn across the globe as we watch Citigroup fall under the Federal government’s umbrella? Are the lessons the same in Asia? America? Everywhere?
Indeed they are! They are universal truths we can all profit from. Understand these lessons and it will help you navigate your way through today’s treacherous environment.

Do not underestimate the downside for any investment. Citi hoped real estate markets would not fall. They hoped we would not fall into a recession. They hoped that the consumer would spend forever. Now they are paying the price for unbridled optimism. Examine every investment you make and ask yourself this simple question: What can go wrong and can you live with the pain? If the answer is no, get out.

Leverage can be dangerous. Use at your own risk. Citigroup has many great businesses generating hundreds of millions of dollars of revenue, but like AIG, a few decisions left unchecked by risk controls brought the entire company to its knees. The reason for the dramatic impact -- leverage was involved. Anyone who has ever faced a margin call knows what leverage can feel like when it goes against you. So Be Careful: Leverage can take you down a nightmare path and unwind every other profitable investment in your portfolio.

Face reality and run from denial. Looking at the truth about your current situation is important if one wants to survive these volatile times. Believing your own marketing and chants that "everything will be okay" is a recipe for disaster. Here’s a simple question to ask: If you had cash to invest today, would you buy that same investment? If the answer is no, then it's time to take another look at whether you should be in that position. I'm sure there are a few assets that Citi wished it didn't own. According to news reports about $300 billion worth.

Learn to swallow hard and take action. In a previous column on CNBC.com, I mentioned how important it was to not be like a deer in the headlights. Inaction rarely makes problems go away. Take discomfort in the chops and face reality. Facing the truth now is far better than waiting until you are forced under dire circumstances to see reality.
Citigroup did many things right this weekend. And with this capital injection, they hopefully, will get back on track. I’m rooting for them despite the mistakes they’ve made.

But here’s the difference between Citigroup and you: Your government -- whether it’s China, Australia, a European country or the United States especially Malaysia– will never consider you(and me) too big to fail.... :)
Making Citigroup’s mistakes will cause you more pain than even Citi shareholders. Follow these suggestions and it will provide a good foundation for investment success.
So in the end, maybe the Citigroup debacle has some winners after all. We can learn from their errors and hopefully they will as well. Three cheers for lessons learned. It’s the silver lining in any investment disaster....

Like I always believe, there is always a lesson to learn in everything we do... just don't repeat it.

Where are we now....which stage???

Why did the Fed ease the Fed Funds rate by a whopping 125bps in eight days this past January? It is true that most macro indicators are heading south and suggesting a deep and severe recession that has already started. But the flow of bad macro news in mid-January did not justify, by itself, such a radical inter-meeting emergency Fed action followed by another cut at the formal FOMC meeting.

To understand the Fed actions one has to realize that there is now a rising probability of a “catastrophic” financial and economic outcome, i.e. a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown.

That is the reason the Fed had thrown all caution to the wind – after a year in which it was behind the curve and underplaying the economic and financial risks – and has taken a very aggressive approach to risk management; this is a much more aggressive approach than the Greenspan one in spite of the initial views that the Bernanke Fed would be more cautious than Greenspan in reacting to economic and financial vulnerabilities.

To understand the risks that the financial system is facing today I present the “nightmare” or “catastrophic” scenario that the Fed and financial officials around the world are now worried about. Such a scenario – however extreme – has a rising and significant probability of occurring. Thus, it does not describe a very low probability event but rather an outcome that is quite possible.

Start first with the recession that is now enveloping the US economy. Let us assume – as likely - that this recession – that already started in December 2007 - will be worse than the mild ones – that lasted 8 months – that occurred in 1990-91 and 2001. The recession of 2008 will be more severe for several reasons: first, we have the biggest housing bust in US history with home prices likely to eventually fall 20 to 30%; second, because of a credit bubble that went beyond mortgages and because of reckless financial innovation and securitization the ongoing credit bust will lead to a severe credit crunch; third, US households – whose consumption is over 70% of GDP - have spent well beyond their means for years now piling up a massive amount of debt, both mortgage and otherwise; now that home prices are falling and a severe credit crunch is emerging the retrenchment of private consumption will be serious and protracted. So let us suppose that the recession of 2008 will last at least four quarters and, possibly, up to six quarters. What will be the consequences of it?

Here are the twelve steps or stages of a scenario of systemic financial meltdown associated with this severe economic recession…

First, this is the worst housing recession in US history and there is no sign it will bottom out any time soon. At this point it is clear that US home prices will fall between 20% and 30% from their bubbly peak; that would wipe out between $4 trillion and $6 trillion of household wealth. While the subprime meltdown is likely to cause about 2.2 million foreclosures, a 30% fall in home values would imply that over 10 million households would have negative equity in their homes and would have a big incentive to use “jingle mail” (i.e. default, put the home keys in an envelope and send it to their mortgage bank). Moreover, soon enough a few very large home builders will go bankrupt and join the dozens of other small ones that have already gone bankrupt thus leading to another free fall in home builders’ stock prices that have irrationally rallied in the last few weeks in spite of a worsening housing recession.

Second, losses for the financial system from the subprime disaster are now estimated to be as high as $250 to $300 billion. But the financial losses will not be only in subprime mortgages and the related RMBS and CDOs. They are now spreading to near prime and prime mortgages as the same reckless lending practices in subprime (no down-payment, no verification of income, jobs and assets (i.e. NINJA or LIAR loans), interest rate only, negative amortization, teaser rates, etc.) were occurring across the entire spectrum of mortgages; about 60% of all mortgage origination since 2005 through 2007 had these reckless and toxic features. So this is a generalized mortgage crisis and meltdown, not just a subprime one. And losses among all sorts of mortgages will sharply increase as home prices fall sharply and the economy spins into a serious recession. Goldman Sachs now estimates total mortgage credit losses of about $400 billion; but the eventual figures could be much larger if home prices fall more than 20%. Also, the RMBS and CDO markets for securitization of mortgages – already dead for subprime and frozen for other mortgages - remain in a severe credit crunch, thus reducing further the ability of banks to originate mortgages. The mortgage credit crunch will become even more severe.
Also add to the woes and losses of the financial institutions the meltdown of hundreds of billions of off balance SIVs and conduits; this meltdown and the roll-off of the ABCP market has forced banks to bring back on balance sheet these toxic off balance sheet vehicles adding to the capital and liquidity crunch of the financial institutions and adding to their on balance sheet losses. And because of securitization the securitized toxic waste has been spread from banks to capital markets and their investors in the US and abroad, thus increasing – rather than reducing systemic risk – and making the credit crunch global.

Third, the recession will lead – as it is already doing – to a sharp increase in defaults on other forms of unsecured consumer debt: credit cards, auto loans, student loans. There are dozens of millions of subprime credit cards and subprime auto loans in the US. And again defaults in these consumer debt categories will not be limited to subprime borrowers. So add these losses to the financial losses of banks and of other financial institutions (as also these debts were securitized in ABS products), thus leading to a more severe credit crunch. As the Fed loan officers survey suggest the credit crunch is spreading throughout the mortgage market and from mortgages to consumer credit, and from large banks to smaller banks.

Fourth, while there is serious uncertainty about the losses that monolines will undertake on their insurance of RMBS, CDO and other toxic ABS products, it is now clear that such losses are much higher than the $10-15 billion rescue package that regulators are trying to patch up. Some monolines are actually borderline insolvent and none of them deserves at this point a AAA rating regardless of how much realistic recapitalization is provided. Any business that required an AAA rating to stay in business is a business that does not deserve such a rating in the first place. The monolines should be downgraded as no private rescue package – short of an unlikely public bailout – is realistic or feasible given the deep losses of the monolines on their insurance of toxic ABS products.

Next, the downgrade of the monolines will lead to another $150 billion of writedowns on ABS portfolios for financial institutions that have already massive losses. It will also lead to additional losses on their portfolio of muni bonds. The downgrade of the monolines will also lead to large losses – and potential runs – on the money market funds that invested in some of these toxic products. The money market funds that are backed by banks or that bought liquidity protection from banks against the risk of a fall in the NAV may avoid a run but such a rescue will exacerbate the capital and liquidity problems of their underwriters. The monolines’ downgrade will then also lead to another sharp drop in US equity markets that are already shaken by the risk of a severe recession and large losses in the financial system.

Fifth, the commercial real estate loan market will soon enter into a meltdown similar to the subprime one. Lending practices in commercial real estate were as reckless as those in residential real estate. The housing crisis will lead – with a short lag – to a bust in non-residential construction as no one will want to build offices, stores, shopping malls/centers in ghost towns. The CMBX index is already pricing a massive increase in credit spreads for non-residential mortgages/loans. And new origination of commercial real estate mortgages is already semi-frozen today; the commercial real estate mortgage market is already seizing up today.

Sixth, it is possible that some large regional or even national bank that is very exposed to mortgages, residential and commercial, will go bankrupt. Thus some big banks may join the 200 plus subprime lenders that have gone bankrupt. This, like in the case of Northern Rock, will lead to depositors’ panic and concerns about deposit insurance. The Fed will have to reaffirm the implicit doctrine that some banks are too big to be allowed to fail. But these bank bankruptcies will lead to severe fiscal losses of bank bailout and effective nationalization of the affected institutions. Already Countrywide – an institution that was more likely insolvent than illiquid – has been bailed out with public money via a $55 billion loan from the FHLB system, a semi-public system of funding of mortgage lenders. Banks’ bankruptcies will add to an already severe credit crunch.

Seventh, the banks losses on their portfolio of leveraged loans are already large and growing. The ability of financial institutions to syndicate and securitize their leveraged loans – a good chunk of which were issued to finance very risky and reckless LBOs – is now at serious risk. And hundreds of billions of dollars of leveraged loans are now stuck on the balance sheet of financial institutions at values well below par (currently about 90 cents on the dollar but soon much lower). Add to this that many reckless LBOs (as senseless LBOs with debt to earnings ratio of seven or eight had become the norm during the go-go days of the credit bubble) have now been postponed, restructured or cancelled. And add to this problem the fact that some actual large LBOs will end up into bankruptcy as some of these corporations taken private are effectively bankrupt in a recession and given the repricing of risk; convenant-lite and PIK toggles may only postpone – not avoid – such bankruptcies and make them uglier when they do eventually occur. The leveraged loans mess is already leading to a freezing up of the CLO market and to growing losses for financial institutions.

Eighth, once a severe recession is underway a massive wave of corporate defaults will take place. In a typical year US corporate default rates are about 3.8% (average for 1971-2007); in 2006 and 2007 this figure was a puny 0.6%. And in a typical US recession such default rates surge above 10%. Also during such distressed periods the RGD – or recovery given default – rates are much lower, thus adding to the total losses from a default. Default rates were very low in the last two years because of a slosh of liquidity, easy credit conditions and very low spreads (with junk bond yields being only 260bps above Treasuries until mid June 2007). But now the repricing of risk has been massive: junk bond spreads close to 700bps, iTraxx and CDX indices pricing massive corporate default rates and the junk bond yield issuance market is now semi-frozen. While on average the US and European corporations are in better shape – in terms of profitability and debt burden – than in 2001 there is a large fat tail of corporations with very low profitability and that have piled up a mass of junk bond debt that will soon come to refinancing at much higher spreads. Corporate default rates will surge during the 2008 recession and peak well above 10% based on recent studies. And once defaults are higher and credit spreads higher massive losses will occur among the credit default swaps (CDS) that provided protection against corporate defaults. Estimates of the losses on a notional value of $50 trillion CDS against a bond base of $5 trillion are varied (from $20 billion to $250 billion with a number closer to the latter figure more likely). Losses on CDS do not represent only a transfer of wealth from those who sold protection to those who bought it. If losses are large some of the counterparties who sold protection – possibly large institutions such as monolines, some hedge funds or a large broker dealer – may go bankrupt leading to even greater systemic risk as those who bought protection may face counterparties who cannot pay.

Ninth, the “shadow banking system” (as defined by the PIMCO folks) or more precisely the “shadow financial system” (as it is composed by non-bank financial institutions) will soon get into serious trouble. This shadow financial system is composed of financial institutions that – like banks – borrow short and in liquid forms and lend or invest long in more illiquid assets. This system includes: SIVs, conduits, money market funds, monolines, investment banks, hedge funds and other non-bank financial institutions. All these institutions are subject to market risk, credit risk (given their risky investments) and especially liquidity/rollover risk as their short term liquid liabilities can be rolled off easily while their assets are more long term and illiquid. Unlike banks these non-bank financial institutions don’t have direct or indirect access to the central bank’s lender of last resort support as they are not depository institutions. Thus, in the case of financial distress and/or illiquidity they may go bankrupt because of both insolvency and/or lack of liquidity and inability to roll over or refinance their short term liabilities. Deepening problems in the economy and in the financial markets and poor risk managements will lead some of these institutions to go belly up: a few large hedge funds, a few money market funds, the entire SIV system and, possibly, one or two large and systemically important broker dealers. Dealing with the distress of this shadow financial system will be very problematic as this system – stressed by credit and liquidity problems - cannot be directly rescued by the central banks in the way that banks can.

Tenth, stock markets in the US and abroad will start pricing a severe US recession – rather than a mild recession – and a sharp global economic slowdown. The fall in stock markets – after the late January 2008 rally fizzles out – will resume as investors will soon realize that the economic downturn is more severe, that the monolines will not be rescued, that financial losses will mount, and that earnings will sharply drop in a recession not just among financial firms but also non financial ones. A few long equity hedge funds will go belly up in 2008 after the massive losses of many hedge funds in August, November and, again, January 2008. Large margin calls will be triggered for long equity investors and another round of massive equity shorting will take place. Long covering and margin calls will lead to a cascading fall in equity markets in the US and a transmission to global equity markets. US and global equity markets will enter into a persistent bear market as in a typical US recession the S&P500 falls by about 28%.

Eleventh, the worsening credit crunch that is affecting most credit markets and credit derivative markets will lead to a dry-up of liquidity in a variety of financial markets, including otherwise very liquid derivatives markets. Another round of credit crunch in interbank markets will ensue triggered by counterparty risk, lack of trust, liquidity premia and credit risk. A variety of interbank rates – TED spreads, BOR-OIS spreads, BOT – Tbill spreads, interbank-policy rate spreads, swap spreads, VIX and other gauges of investors’ risk aversion – will massively widen again. Even the easing of the liquidity crunch after massive central banks’ actions in December and January will reverse as credit concerns keep interbank spread wide in spite of further injections of liquidity by central banks.

Twelfth, a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction. In illiquid market actual market prices are now even lower than the lower fundamental value that they now have given the credit problems in the economy. Market prices include a large illiquidity discount on top of the discount due to the credit and fundamental problems of the underlying assets that are backing the distressed financial assets. Capital losses will lead to margin calls and further reduction of risk taking by a variety of financial institutions that are now forced to mark to market their positions. Such a forced fire sale of assets in illiquid markets will lead to further losses that will further contract credit and trigger further margin calls and disintermediation of credit. The triggering event for the next round of this cascade is the downgrade of the monolines and the ensuing sharp drop in equity markets; both will trigger margin calls and further credit disintermediation.
Based on estimates by Goldman Sachs $200 billion of losses in the financial system lead to a contraction of credit of $2 trillion given that institutions hold about $10 of assets per dollar of capital. The recapitalization of banks sovereign wealth funds – about $80 billion so far – will be unable to stop this credit disintermediation – (the move from off balance sheet to on balance sheet and moves of assets and liabilities from the shadow banking system to the formal banking system) and the ensuing contraction in credit as the mounting losses will dominate by a large margin any bank recapitalization from SWFs. A contagious and cascading spiral of credit disintermediation, credit contraction, sharp fall in asset prices and sharp widening in credit spreads will then be transmitted to most parts of the financial system. This massive credit crunch will make the economic contraction more severe and lead to further financial losses. Total losses in the financial system will add up to more than $1 trillion and the economic recession will become deeper, more protracted and severe.

A near global economic recession will ensue as the financial and credit losses and the credit crunch spread around the world. Panic, fire sales, cascading fall in asset prices will exacerbate the financial and real economic distress as a number of large and systemically important financial institutions go bankrupt. A 1987 style stock market crash could occur leading to further panic and severe financial and economic distress. Monetary and fiscal easing will not be able to prevent a systemic financial meltdown as credit and insolvency problems trump illiquidity problems. The lack of trust in counterparties – driven by the opacity and lack of transparency in financial markets, and uncertainty about the size of the losses and who is holding the toxic waste securities – will add to the impotence of monetary policy and lead to massive hoarding of liquidity that will exacerbates the liquidity and credit crunch.
In this meltdown scenario US and global financial markets will experience their most severe crisis in the last quarter of a century.

In short, one should be prepared for the worst, a systemic financial crisis.

courtesy of Dr. Doom....

KLCI stock market direction?

Well, many things have been said and many assurance were given including the RM7bil "stimulus" plan.... so questions many investors are asking,. is this the bottom of KLCI?
So let's do a recap here...

Internally,
1) Mal gov is using EPF money to fund the valuecap bail out.... why not use the national reserve?
- if we have such huge reserves, why not take some to benefit the people, afterall these are the people's money?
2) EPF contribution reduced from 11% to 8%... hoping the people will use the 3% to spur the economy... what bloody strategy is that??!? more importantly, does it help?
3) No fund was allocated to improve the people's cost of living and purchasing power, (eg. tax rebate, BLR reduction, etc...) --> fuck that RM500mil for police station and army camps maintenance... is there a war? or should I say does the police work so damn hard that our crime rate have reduced? then why the fuck does the gov think the RM500mil (people's hard earn money) should be spent this way? have we found out the person who supplied C4 bomb in the mongolian murder? if the police can't even solve such an outright simple and straight forward case, what makes us think by spending that money, it will improve the services of these incompetent and useless pricks? -> what maintenance will cause RM500mil?? RM1mil for an aircon pipe? RM50k for painting a police station? ACA in this country is a fucking puppet.... that's why.
4) RM1.2 bil for low cost housing? kid me not... is the gov not aware of the state of the consumer confidence and financial conditions? why not invest in building better public transport to lower the cost of living and ease traffic congestion? then the people will have more allowances to cope with the rising cost of living... that's simple economic moron!! -> to the Malaysian leader who approve the "stimulus" plan... get an education!

now let's go external...
4) Sentiments on Oct jobs report in US are extremely negative.... out tonight.... expected to top the number of payroll cuts.... >300k people to be jobless.
5) other data such as home sales and inventories for wholesale will be revealed..
6) GM and Ford will lead the market to south tonight. Both are expected to report huge losses and cut jobs to preserve cash while its management are pinning for Fed's help to inject funds into the company...
7) if GM and Chrysler were to merge (which I think highly possible due to the bleak outlook for auto industry) more heads will roll...with at least close to 33,000 jobs to be cut.
8) GM needs USD14bil at least to keep the business running...GM burned through a little more than $5 billion in the first half of this year, ending the second quarter with $19.4 billion. On the other hand, Ford spent the same amount, but had more cash on hand, ending the second quarter with $30.1 billion while Chrysler ended the second quarter with $11.7 billion.
--->errosion of consumer confidence and inability to borrow from banks are the key problems...
8) Warren Buffet's Berkshire Hathaway is expected to report a relatively significant drop in earnings tonight.
9) Mr. Obama is not going to take over the office until Jan '09... so don't expect much of his promises to materialize anytime soon in the future...

its a no brainer that the stock market will continue to head south... but the key message is we have not yet reach the bottom....