PM to proceed with Gunfight, forgotten about fuel prices?

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Sep 22 2008
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You had Saddam Hussein’s “mother of all battles”, Anwar Ibrahim’s “mother of all by-elections” and now you have U.S.’s “mother of all bailouts”. I bet former premier Mahathir is giggling now looking at the financial havocs that prompted Bush administration to seek a whopping US$700 billion to buy up bad loans. It was about 10-years ago when Mahathir was criticized for bailing out Malaysian listed companies after the 1997-1998 Asia Crisis that left these companies licking their wounds. The difference was while the financial institutions in U.S. are in critical situation (Lehman Brothers is bankrupt) due to subprime crisis and the U.S. lawmakers are studying and seeking approval from Congress to help “qualified” financial firms, Mahathir’s approach was to help only certain companies largely seen as his cronies “without” approval from the “Congress”.

Regardless whether the bailouts will chew up $700 billion or $1 trillion, the question is would such huge taxpayer money bring back the consumers and investors confidence to the financial markets as if nothing has happen? It’s not like you have Hiro Nakamura from the “Heroes” TV series who can stop the time, load the $700 billion into the financial institutions and pretends everything is OK. Treasury Secretary Henry Paulson acknowledged that the nation’s outdated regulatory system for financial markets must be overhauled. It’s true that at this moment you should not look at the 400-point up and down swing but rather the credit markets, which are still fragile. Investors are silly not to lock in any profit from the fierce swings (up or down) but nevertheless greed and fear will determine if you’re making money or otherwise.

Bailout Fail to lift stocksU.S. total mortgages amounting to $12,000 billion hence the $700 billion is not a huge amount, so much so the U.S. Treasury and Feds have to burn the midnight oils to identify and qualify the institutions that genuinely need rescue. The fact remains that whether the U.S. government latest action is the ultimate pill to cure the current sickness in the long run remain to be seen. There’re two companies which benefit from the current crisis though. Uncle Sam’s last two major investment banks, Goldman Sachs Group Inc. (NYSE: GS, stock) and Morgan Stanley (NYSE: MS, stock), have been granted their wishes to become full-fledge banks – a status that will allow both to take deposits. Nonetheless, nobody has the crystal ball to tell if the market will reach its bottom after this bailout.

With millions of eyeballs looking at U.S. stock markets for the coming trading days, it’s different problem in Malaysia. Former premier Mahathir was trying to push his old toy again – pegging the ringgit to the dollar. It was shot down by the new Finance Minister Najib today who promised not to re-peg the local currency now or in the future. Obviously Mahathir has not learnt his lesson 10-year ago but for the time being the thrilled deputy PM Najib is not going to scare the handful remaining foreign investors away. Najib has cancelled his Middle East trip in an attempt to focus on the political uncertainties – opposition leader Anwar Ibrahim is supposed to spring into action on Tuesday (tomorrow) after his initial two attempts to meet the PM and a vote of no-confidence were ignored by Abdullah Badawi.

The famous Gunfight at the OK Corral more than 125-years ago in Tombstone, Arizona, is set to repeat again here. The only difference this time – it’s a one-to-one gunfight between Abdullah and Anwar. Cowboy PM Badawi is waiting for Cowboy Anwar to draw his “gun” so that he can draw his pistol tucked into the waistband of his pants – ISA (internal security act). While deputy PM Najib rejoiced after he was crowned the new Finance Minister, he was nevertheless given the post as deputy chairman of Khazanah Nasional Berhad only while the chairmanship still belongs to PM Badawi (after a check from Khazanah website). Whether the portfolio swap (between PM and his deputy) was a temporary carrot to pacify Najib and his gang is up to your interpretation.

Badawi Anwar GunfightAfter bombarded by four warlords to resign not later than 9 Oct at the UMNO’s supreme council meeting, Abdullah Badawi was rumored to have decided to throw in the towel until his son-in-law, Khairy, jumped in and persuade his father-in-law to reconsider and continue to fight for his survival for the position as president of UMNO. It’s only normal for Khairy to prolong Badawi’s tenure because the former’s political survival depends solely on the latter’s position as PM. Furthermore political calculation reveals Najib will most likely refrain from challenging his boss should Badawi decided to defend his position. Interestingly Teresa Kok was released after just a week under the draconian ISA-law prompting the speculation if Najib has anything to do with it. It doesn’t help to inherit an unstable government if it’s fated that the country will have Najib as the next PM.

It’s definitely stupid to win the UMNO president post but to get the boot from the people come the next election. So expect more slogans from Najib on how he’ll be the PM for all Malaysian, provided he wins the race against Anwar Ibrahim. Entertainment asides, people are more interested to know if the government would bring down the fuel prices now that the global oil prices is below the level when the 78 sen a liter (petrol) increase was announced recently. Going by the same logic shouldn’t the government re-adjust the petrol price to at least RM1.92 a liter now? Sadly the PM pretends nothing happens and gave lots of silly excuses not to lower the fuel prices.

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crude price up today. so maybe good excuse not to reduce price. sigh.

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