Budget Travel

Malaysians are having a bonanza time in the travel arena. Near free air tickets to international destinations are offered by Air Asia, Firefly and lately even MAS. What does all this mean to our economy?

It all depends on whether we are attracting more foreign tourists than the number of Malaysians going overseas. If the prevalence of budget travel has resulted in more Malaysians jumping on the bandwagon, then the local economy would probably suffer a bit. Local tourist destinations would probably have fewer visitors. Also, Malaysians doing their shopping overseas while on holiday would be buying less at home.

If the budget carriers have attracted more foreign travellers to the country, then the economy should be better off. The tourism revenue would be increased. This would improves our country's balance of payment. But, my gut feeling is that this is not the case.

Poor MCA

It is a pity that the MCA has not had a strong leader for the last 30 years. All the leaders had not been strong characters and a few of them were embroiled in personal business problems. What this means is that the Chinese community was not well represented. They were at the losing end of a power sharing alliance.

The latest one is no exception and to my mind the worst. From day one, he has decided to relegate his deputy. He has decided to divide and rule. He thinks that his faction alone will be able to run the show. And he has the cheek to tell the community that he is not sidelining his deputy. Who is he trying to fool. His action smacks of arrogance.

The deputy president of MCA may not be the most holy of all man. But, he is legitimately elected. He has the support of most of the grassroots in MCA. This point should be considered. He is also a capable leader. His talents should be tapped for the betterment of the community.

It is said that unity is strength and division is the recipe for disaster. So the new MCA president better get smart and learn to live with his deputy. Only by working together can the MCA be strong and be well prepared to represent the community.

Look at Obama. He has appoint his opponent in the primaries, Hilary Clinton, as his secretary of state. He has also appointed a republican senator as a member of his cabinet. The MCA president should take a lesson from him.

Fundamentally wrong investing?

For a retired person, it is always recommended that you invest conservatively. Take little risks and aim for a steady income. By this, it means that you invest in some low beta stocks while has a high dividend yield. Try to preserve capital.

For a GLC, its investing principles should be the same as that of a retired person. Take no risks. However, this GLC seems to be doing the opposite. It is selling off its safe assets like power plants and buying much riskier assets like investment banks - worst still USA ones. Billions of dollars are at play.

Will it pay off? Probably only time will tell. But, as of this moment, I think it is sitting on a huge paper loss. Big brains are supposed to be running the company. I wonder how those guys are feeling now.

Currency exchange

The current financial crisis is causing havoc in the currency exchange market. The exchange rate for the currencies have fluctuated wildly. For example, the US dollar, which has been on a slide for most of the first half of this year, suddenly turned around. Similarly, the Japanese Yen has strengthened. As a consequence, many other currencies, including the Ringgit, have declined in value.

Mostly, the currency movement is caused by the shifting of funds by investors. The unwinding of the carry-trades by the Japanese is causing the Yen to rise and vis-a-vis the Aussie dollar to decline. Similarly, the repatriation of funds by US institutional investors is causing the US dollar to be on a tear.

The Ringgit had its best day against the US dollar in late April when it was trading at about 3.13. It is now at 3.54, a lose of 13%. The Ringgit has also gone to below 10 Baht. All this is good news for the expoters. However, for the average citizen, the price of imported goods has gone up. And with it .... inflation.

Warren Buffett

Warren Buffett sure drives a hard bargain. He exacts fantastic terms from the sellers when they are down and desperate. He puts his money where his mouth is by following his investment philosophy of being greedy when others are fearful. This makes him and Berkshire Hathaway shareholders a very happy lot. But what about the shareholders of the acquired companies? Or the CEOs of those com. Wouldn’t they feel being taken advantage of? Couldn't he showed them some compassion?

WB is the richest man in the world. He has already committed to giving most of his wealth to charity. So why does he still try so damn hard to make more money? Is there still a point for him to prove? Maybe he should use more of his heart than brain in his wheeling and dealing.

I think this is the best time for him to do some National Service. Resign as CEO of BH. Volunteer to be in a position that can help solve the credit crunch. Use his own money to help if need be. This way, he will leave a much better legacy.

US Election

It looks like Barack Obama is set to win the Nov. 4th election. How interesting, a person from the minority group becomes the president. America is really a land of hope and dreams.

That race is not a big consideration in the choice of president is a big plus for meritocracy. It shows that integration in US is more thorough. Race is not the top consideration in their daily life. This is also perceptible from the reality shows. Generally, they don't practise racial discrimination. The whites treat the blacks as equals even though the latter are subtly more cunning and devious.

Compare them to us, we are far far behind. Everything is done based on racial consideration. From the government policies to the local authorities, every action is carried out with a racial overtone. Worst still, because of majority control, racial discrimiantion is prevalent in policy implementation.

Even politic is played based on race. You have political parties based on race and fighting for the rights of their particular race. Verbal contests on each race's rights are often aired. The people's feelings are aroused. They become racial and think along racial lines. And this perpetuates .....

chicken market

They say when the US sneezes, the rest of the world catches the cold. But why does it have to be so?

The credit and financial crisis is a Caucasian problem. They are the ones having a credit crunch. Our banking and financial system is sound. The confidence of the people in the economy is intact. But, why is our market performing worst than theirs? For example, the DJIA was up some 400 points on Thursday, but our market was down about 14 points yesterday. For the week just ended, the Dow was slightly up, but our market suffered a severe beating in the week.

During the week, Public Bank announced improved results. However, its share price still experienced a sell off.

Granted a recession in the US will induce a slowdown or even a recession in our country. But our diversified economy should be able to weather the storm better. We should be able to survive the economic reverse.

My opinion is that our market is affected by the movement of hugh foreign funds. They cause the volatility in our market. When they start buying, the market outruns its fundamentals. Conversely, when they sell, the market drops into the abyss. The reason being that their size is big in comparison to our market. Big storm uproots the trees.

The only remedy is that our institutions should play a more active role in the market. They should counter the activities of the foreign funds. This will result in a less volatile market.

Crude prices

Crude oil price is at a near record price of close to US$140.00 per barrel. This is causing hardship to a lot of people all over the world. Blame it on speculators, tight supply and demand situations or OPEC cartel manipulations. What to do now.

The only way to bring oil price down is to reduce usage - conserve energy. This must be a world-wide concerted effort. Governments must make effort to cut down on the consumption of oil. Legislation can be introduced to limit usage of motor vehicles, eg. no car Sundays. Limit airline flights. Cut production of non essential goods. Go on 4 day work weeks and etc. The situation is bad and it calls for drastic measures.

The other way to reduce dependence on fossil fuel is to develop alternative or renewable energy. Bio-fuel is good provided it does not take over land meant for the cultivation of food. Go big scale on solar, wind and wave energy. Better still, go nuclear. New nuclear power plants that are safe and non-polluting should be built to supply the energy needs of big cities.

Everybody has to cooperate to fight the rising price of oil.

Where is the logic?

The salary of the Prime Minister of Singapore is 5 times that of the President of USA. It is 44% more than the combined salaries of the head of state of USA, UK, France and Germany. More glaringly, it is 25 times that of the President of Russia.

The GDP of Singapore is only about 1% of that of USA. Population wise, it is about 2% of that of USA. In terms of land area, Singapore could not be more than 1% of USA (never bother to check).

So, how do you figure out the proportions?

Don't need opposition MPs?

The main function of the parliament is legislative i.e. the making of laws. Opposition MPs are needed to provide a robust argument to any proposed legislation. Ideally, the opposition should form at least 1/3 of the house so that it is not so easy for the ruling party to pass any new legislation.

Question time is just an accompanying function of the House. Opposition MPs are more free to raise questions, especially those on the policies of the government. Furthermore, what is said in Parliament carries more weight as it is the privilege of only the elected few. Ruling party MPs are not allowed to question government policies.

In Singapore, the number of opposition MPs is very small. The government there has resorted to apoint nominated MPs so as to have a more lively debate in the House.

Airlines good business?

MAS made a profit of RM242 million in the quarter ended December 2007. Not to be outdone, Air Asia reported a profit of RM246 million in the same period. One up is SIA which made S$610 million. That must make you think that airlines is a good business.

All of this happened in a period of stiff competition where some airlines were literally giving away free tickets. This is also the period where crude oil hit new highs. High demand has also pushed up the salary of pilots and other staff.

So, it makes you wonder why MAS was losing hundred of millions of dollars a year before mid 2006. MAS was virtually a monopoly in the domestic market then. Fuel prices were much cheaper then. So the problem must lie with the management. Were they utterly imcompetent or were they working for their own interest. You think about that.

Is Suharto good or bad?

The man has died. But his legacy is controversial. During his rise to power in 1966, there was a massacre of communist and ethnic Chinese. Then, there is the ample corruption and nepotism during his rule. Yet, there is a clarion call for him to be pardoned and made a hero in his home land. LKY has said that he is no given enough recognition. To be fair, he did bring stability and progress to his country during his 33 years rule.

So, can his good deeds obliterate his sins. It is said that you are remembered for your mistakes but your good deeds are all not recognised. This is certainly not true here. Rather, it is the short memory of the human being that is at play. Or is it his stature that the people are unable to regard him any ill.

This phenomenon is also prevalent in society at large. Fledgling business people used unscrupulous means to make money. After they have got rich, they become philantropic. It is as though they are seeking atonement for their past deeds. Very often, they are able to change their image for the better.

Taiwan people not Chinese?

For years now, the present Taiwanese government has been trying to dissociate itself from anything Chinese or China related. From history to language to official monuments, they try to obliterate any linkages or connections to the Chinese mainland. It is as though they really hate the Chinese.

But the reality is different. Taiwanese are investing heavily in China. They are reaping in the profits. Many of them stay in China to oversee their businesses. I don't think they hate China that much.

So, if you are born yellow, that means you are yellow. Painting yourself black or bleaching will not change that fact. In fact, it is not so so bad being a Chinaman. One quarter of the world's population is Chinese. Number means power. This will eventually prevail.

Election gimmicks

"Come the general election, there is an unusual degree of tolerance and flexibility in matters of race, language and religion as politicians try to woo the people. Why can't it be like this every day?" Wrote WCW in The Star.

Yes, election is near and the UMNO politicians have become especially nice. Suddenly, people are granted leases to the land they have been cultivating on for years. Chinese and Tamil schools are given funds to renovate their premises. The existence of the Chinese schools is reassured. Chinese schools with low student populations are allowed to relocate to urban area where the demand is greater. The politicians come down from their high pedestal, dressed down and greet & exchange niceties with every voter.

Once the election is over, as happened before, they would become arrogant and self-serving. At their annual party assembly, their would become racists and extremists. Don't expect free lunches then.

So, it is left for the voters to decide. Do we want hypocritical politicians who used small baits to hookwink voters. Think and act correctly. The decision is important for the future of the country.