The PM's Frequent Absences, Bank Negara's Commissions

Someone remarked that the PM has not been in KL or Putrajaya over the past 10 days. Off to UAE, back for a day or two then off to China for five days, back for a day then off to Miri for two days for the Gawai Festival. Here is a picture of the PM in Miri. If other people do this it is called AWOL or ponteng kerja.

Cool threads. Smoke a peacepipe kawan. Better feng shui.  A blowpipe is a weapon of war. Bad feng shui lah. The PM is accompanied by Sarawak's Deputy Chief Minister Tan Sri Alfred Jabu. Where is the Chief Minister Adenan Satem? Apa pasal dia tak mahu mari? 11 ADUNs abandoned Adenan Satem in Sarawak. Who engineered the jump? 

There is a theory that the PM's doctor has asked him to avoid stress. BP ada naik. Staying away from the office may help with the BP. But if the country is not managed properly you can get the King Louis XVI syndrome instead. That is more serious than BP rising.

Anyway who is running the country?

Yesterday there was a financial scare of sorts. A bank in Bangsar ran out of cash. This was in Lucky Gardens. The bank branch has operated there for about two decades or more. Bangsar is a wealthy neighborhood with plenty of businessmen depositing and withdrawing money.

Yesterday even RM20,000 cheques could not be cashed. The bank had no money. Finally the bank was able to cash cheques by about 2:30 PM !! I got this info from someone who was there to cash a cheque - slightly more than RM20,000.

This is not good news.

Talk is the rating agencies and the stockbrokers are also getting worried about the gomen's financial ratings.  The gomen has guaranteed 1MDB's borrowings to the tune of berbelas billion Ringgit. Talk is 1MDB does not even have enough revenue to cover their interest payments on all this multi billion Ringgit debt.

Here be some news :

"Lurking beneath Malaysia’s solid investment-grade sovereign rating is a risk posed by a US$14 billion (RM45 billion) investment fund that is not even generating enough cash from operations to cover interest costs.

Regarded as a cross between a sovereign wealth fund and a private investment vehicle, with Prime Minister Najib Abdul Razak chairing its advisory board, 1Malaysia Development Bhd (1MDB) is struggling under the burden of US$11 billion in borrowed money.

The government says it only guarantees around 14% of the debt. The investment community assumes it would provide more if needed, and it is the potential strain on Malaysia’s debt position from these contingent liabilities that raises concern."

Latest news is 1MDB has rolled over some of their debt. Hutang yang tak boleh dibayar boleh dibawa berlayar. 1MDB owes about RM40 billion. Syed Mokhtar's group owes about RM35 billion. Thats already 75 billion eggs  in just two baskets. All eggs from the same chicken farm.

There is also more bad news spreading at the ground level. Bank Negara please wake up. An old friend called yesterday. 'Syed do something lah, say something' he said.  Businesses are really feeling the crunch. Bank Negara is squeezing the credit too tight.

I am ok with squeezing credit cards. There is really no need to issue those credit cards to every 25 year old with half a part time job. That is not good credit risk.

But there is too tight a squeeze on property loans. There are better ways to fight property speculation. Lowering finance margins to a certain extent on second and third homes is fine but do not go overboard. The property maket is suffering. Money is not circulating. Property sales are being seriously affected. 

There are other simpler and much less damaging methods. For example if the property loan is prepaid within five years (because the speculator owner sold the property to make quick profit) then the bank can levy a heavier penalty of say 7% of the total loan amount. (Now it is three years and two percent penalty only - chicken feed for some). That will really chase away the speculators BUT not penalise real home buyers.

Yo Bank Negara tolonglah be lah creative sikit. Jangan pula sebab Bank Negara malas nak memikir, tau tahu memikir you paint everyone with the same brush and then pi minum teh tarik. That is unfair and damaging to the country's economy.

Yes you want to curb the speculators. On the other hand you MUST encourage genuine home buyers and property buyers.  Do not penalise the genuine buyers.

How do you achieve both? 

Make home and property loans easy for genuine buyers. Remove obstacles, reduce red tape, make loans easier, quicker and cheaper. 

At the same time penalise the speculators. Hefty penalties for early sale of properties within five years of loan drawdown date will curb the speculators. 

Genuine buyers will not sell their houses or  shoplots within five years.

The squeeze on property loans is affecting contractors, building suppliers, lighting suppliers and a whole large sector of the economy.

The gomen's really silly 30% RPGT is also damaging the property sector. The property sector drives the "informal economy" as well.  There are millions of people involved as tile layers, small contractors,  lorry transport companies, iron grill contractors, house painters, landscape contractors (who sell grass) in the housing and property sector. They form the "informal economy". They may not pay taxes (because they are lower income lah), they may not have proper account keeping, proper documents etc. But undeniably they are the mainstay of the economy (remember we want to be a high income nation ok).

Now with the sledgehammer treatment ie 30% RPGT and the credit squeeze by Bank Negara - this huge economic sector is suffering badly. How are we going to achieve the high income nation status? 

All this is too much for the PM and his advisors to understand. I heard they dont even read English. Even Bank Negara's english skills are going down, down and down. Nahas kita.

On the one hand the gomen is pouring our taxpayers money into blackholes in the Cayman Islands. On the other hand the gomen is strangling the economy at the street level through credit squeezes, RPGTs and next will be the GST.   We are getting screwed from both sides. 

Bank Negara's Commissions is just a play on words ok. Versus Ommissions.