The State Of The Nation - Before Deepavali

I received this from someone. My comments in blue.

The PM now gives written answers on our economy. After failing to show his face at the 'Nothing To Hide' fiasco he dares not call a Press Conference anymore, where the Press may badger him with questions about so many things. 

The PM and his Cabinet use flowery words to describe our economy and that we are on track to achieve high income nation status, that our fundamentals are good, our reserves are strong, we are not in crisis etc. They are in a state of denial.

The fact is our reserves have gone down from 140 billion to 97 billion - a huge drop of 43 billion but we are told it is alright. Nobody has explained why the reserves have gone down so much. Foreign investors have left the country. We keep being told that our reserves are strong. 

The banks are complaining that they are no longer getting enough deposits from their customers and they have to increase their deposit rates to attract customers but people people have lost faith in the government and fear that the bank will lend the money to the government who they believe is facing financial problems. To increase our reserves the central bank has allowed US$ deposits.

We are told that we are on target to become a high income nation but we are not told that to achieve the target we need an average 6% growth every year. This year and the next our growth will be below 5%. So how are we going to achieve our target of a high income nation?

People are very unhappy with government policies. The GST has caused inflation and a lot of small businesses have to close down creating unemployment among the people. Among the worst hit industries are the oil and gas sector, banking and retail.

There have been a lot of retrenchments. Among the retrenched those who have cars have even become UBER drivers. Surely the PM and his Cabinet know that Petronas has slowed down their investment in the oil industry. StanChart Bank and Maersk have announced retrenchments.  RHB, CIMB and Hong Leong Bank among others, have announced retrenchment of staff.

For the past few years the economy was based on consumption and household debt has exceeded 85%. There is no more room to borrow for this purpose. 

Also, national debt has reached an all time high as there was too much borrowing during Najib's time.  Without this borrowing we could not have achieved growth of 4.5%.

1MDB and the so called donation of RM2.6 billion has put the country to shame. There is no business model where a company with a paid up capital of RM1 million can borrow RM42 billion 

The PM has asked for six months to put the company in order but that six months has been extended many times. Now the promise is that by December this problem will be resolved. 

The PM said that this was a fast track IPO. Obviously he didnt know what an IPO means. And now he gives the excuse that the failure to have the IPO does drag the company down and make it unable to pay its debt.   Obviously the PM is building a case and finding excuses for the 1MDB fiasco. The truth is 1MDB was formed to siphon money.

At the World Islamic Economic Forum the PM wanted a mega Islamic bank to be established. What he did not tell the world was that there was already a consortium that had agreed to establish the mega Islamic bank and the site was at the very same Razak Financial Center. The center was to be known as the Islamic financial center and the land was alienated to Harta Tanah Bumiputra but was taken away by the PM and given to 1MDB.   1MDB refused to work with the consortium because it was not interested in genuine business. 

We know that a parcel of land has been sold to Tabung Haji which paid in full to 1MDB but no title has been transferred because the land has not been subdivided. Tabung Haji is receiving funds from the poor Muslims who save to go to Mecca.  Before this,  money from EPF and the pension funds were also being used.

1MDB has reulted in the DPM, a Minister and an AG to be retired plus a few more casualties. This is a serious political crisis and this uncertainty is causing a crisis of confidence.

My comments :  The banks are not getting enough deposits from their customers. This does not mean there is not enough liquidity in the system. It simply means people are putting their money elsewhere. So the banks will have to raise their deposit rates to attract deposits.  Ultimately they will also raise their interest rates (to cover the higher deposit rates). My concern is that there is not enough new economic activity in the country to use up all that money. We will have plenty of Ringgits floating around chasing too few economically viable projects. This will lead to more inflation.  Also the value of the Ringgit will fall again.
 

I am surprised about the banks now taking US$ deposits.  This will cause more Malaysians to convert their Ringgit to US$ and place it in US$ deposiits. The Ringgit will fall even more.  

The high income nation crap was just something a mamak advisor thought up while sitting on the throne in the morning. Its nothing more than that. Just a sound byte. They were never serious about it then and they are certainly not serious about it now. Then they just raised the salaries of staffs working in the GLCs to stratospheric levels to show the kampong level 3.85 IQs that it can be done.

Even with 6% growth we could not have achieved the high income nation status. Now with growth going under 4.5% that target is even more remote. The analysts say our GDP growth will be below 3.5%. 

The oil and gas sector, banking and real estate are not the only ones that are suffering. Naza is also laying off workers at its plants in Kedah.  The banks are retrenching by the thousands. The JPA has also announced that they will not be hiring new staffs. MAS has laid off thousands of staff. The whole country is laying off workers. This is bad.

The same mamak moron advised the gomen to create easy credit through a loose credit card policy. Recall those young credit card salespeople handing out pre approved credit cards at shopping malls ? As long as you had RM1,500 monthly income you could get two, three or four credit cards.

Thousands have gone into debt and now we have tens of thousands of young people below 30 years of age who suffer personal bankruptcy. All because of a stupid idea to increase consumer based consumption - using easy credit. 

Well, well so Tabung Haji bought land with no subdivided title? So how do you transact on an undivided title?  Is Tabung Haji's name registered on the Master Title? 

How was the wording of that Tabung Haji BOD resolution to buy a portion of someone else's Master Title?

When the title is eventually subdivided who pays for the new land survey (to issue the new title)?  What is the shape of the portion of land bought by Tabung Haji? Will it be shaped like a crescent moon? Longish shaped? Rectangular? Squarish? All this will affect your land use and ultimate GDV.  

Darkness is really falling upon us - sadly just as Deepavali is around the corner.