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The Worst is Not Over Yet but We Can Survive, only if …



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Apr 15 2009
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Wall Street was behaving as if the worst was over which saw investors snapping stocks in anticipation of a reverse to the bearish market. Everybody was trying to prove that they managed to buy at the lowest. It sure feels good if your prediction was right. After all how many can beat Warren Buffett in the game of “I bought at the lowest”, never mind that the Oracle couldn’t do so himself? But a surprisingly weak retail sales report punctured investors’ optimism about the economy causing Dow Jones to lose almost 140-points. Financial stocks took the beating after Goldman Sachs Group Inc. announced strong profits but said it would raise $5 billion (huh?) to repay government bailout money.

The unexpected 1.1 slump in retail sales (the biggest fall in three months) in March was far worse than the increase of 0.3 percent that analysts polled by Thomson Reuters. So, if you think the worst is over think again because we’re not out of the woods yet. With Americans still losing jobs by the thousands, a major fear is that people will cut back even further on their spending and that could plunge the powerful economy into a sharper tailspin. Yahoo Inc. is gearing up for its third round of mass layoffs in 14 months. Intel Corp.’s strong first-quarter earnings result ($647 million) that easily beats Thomson Reuters estimate of 3 cents per share plus its proclamation that slumping personal computer sales have “bottomed out” failed to excite investors. Reason – Intel wouldn’t give detailed revenue forecast because it’s still “too hard” to accurately predict results in this environment.

US Worst Not Over YetIn the current sketchy environment countries that rely solely on exports especially to countries such as U.S. and Europe would find little space to breathe. I’ve mentioned before that despite the global economic crisis the hidden blessing in disguise was the opportunity for these countries to relook at their own economic framework to determine if it could sustain on its own should another crisis hits. This is also the best time to test if leader of a country could mobilize its economy experts to architect a new solution to drive the country out from the storm. It’s time to relook at the old economic model of relying on labor-intensive industries and perhaps move up the value-chain *yawn*. Of course countries such as Thailand and Malaysia which are having internal political problems may justify that their own political survival are at stake so the economy issue can go fly kite.

It’s ironic that some leaders couldn’t calm down and look at a bigger picture. Instead of poking fun at certain ethnic *there we go again* for being “ungrateful” despite taken the “instant noodle” but never vote them in the recent by-election, he may want to relook at the education system that is continuous producing graduates that are unemployable. Quality human resource is the greatest asset if there’s political will to move the country up the value-chain especially in the research & development. At this moment we’re still wondering and guessing if the new PM Najib is ready and capable of commanding the ship, which has been circling in the sea for the last 5 years, to the next and subsequent destinations. It seems he’s busy taking the commands from his mentor Mahathir on how to revive the old plans or projects such as the “Crook-Bridge” abandoned by Badawi.

Najib PattayaThere’s nothing wrong to be sentimental and vengeful in reviving the controversial S-shape crook-bridge because such project would generate employment but the perception that the project costs would multiply many times to satisfy the cronies is simply worrying. Ability to create domestic demand to spur the economy is one thing but to be wasteful on crook projects and other white elephant projects is another thing. People are still hoping that PM Najib could get over with his disappointment over the Pattaya incident *grin* and be a leader who could drive the country to a higher level, not into the sea of disastrous. Sure, Mahathir is still needed as long as he’s not senile but only for useful advises (to the country and people) and not individual ambition such as the resurrection of a dictator via “Presidential Councils”. Najib has only himself to be blamed if he can’t control and govern the country. And maybe he needs to tell his deputy to not make fun of himself by blaming the press for “twisting” the facts. People have awaken and not stupid anymore, not with the internet and blogs pushing information faster than the traditional government-controlled media.

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Comments

Dear Mr Stocktube
I wish we might, I wish we fight
If only if, F1 PM dont flight
and let the senile and the cha(cha)-rity auntie control the flight

Dear Stocktube,

You have a very well written overview of the present "Sorrowful" state of Affairs in this great nation….

Quote: "…we’re still wondering and guessing if the new PM Najib is ready and capable of commanding the ship, which has been circling in the sea for the last 5 years, to the next and subsequent destinations." unquote.

We can all forget about suggesting the next move like the "Consolidation Programme", Economic, Financial, etc Policies, Education, etc….

Party promotions based on “patronisation, money politics, etc” without “Meritocracy and Proven Track Records” leads to “Leaders” that UMNO is inheriting – “Elite, Ketuanan UMNO BEGGARS”….

Remember….One must always be MAGNANIMOUS in VICTORY….

TWO WRONGS DO NOT MAKE ONE RIGHT….

Hello, apa macam mahu jadi “Pemimpin” cawangan dan negara kalau ta’mau dengar, tengok & belajar….

Asik2 mau pukul semua Anak Bangsa Malaysia, Melayu, Cina, India & SENDIRI PUNYA PARTY MEMBER pun mau cari Gaduh (MB Admad Said!)!!!!

Pemimpin Ketuanan Muslim Hadhari UMNO dari atas sampai bawah semua GOBLOK!

Everyone of them UMNO Leaders are “Squeezing” each other by the “Orbs/Jugulars”.

First, Incoming PM had underestimated his Deputy's promised support….now that he must take care of his "Own Business Agenda" FIRST (IPP, Sri Wani, Eden, etc???)

Next he had allowed his Deputy to bring back Mahathir the Anionted Adviser into UMNO….for his own DPM's campaign…

Next the Trengganu "Debacle" which could develop into another Constitutional Crisis like Perak….

Then it will spread to Kedah, Perlis, etc….

After what Agong had done for Incoming PM & DPM last week….

The “Anointed Adviser” have now got them both in his “Trap” going AGAINST the UMNO AGM convention….

To appoint one son as Dy Minister of MITI & soon another Businessman son to be appointed as a “Senator” in due course (Semua APs bisa Di-ator!)….

He now has to complete his “Dream Team” with “Idris Jusoh” & his 40 thieves to continue the Oil Royalty plunder Kau, Kau Pt 2!

Already he has revisited & wants to make the Crooked Causeway relevant ….well beyond our nation's NEEDS & AFFORDABILITY….

Followed soon with the "Slotting In" of our Famous former FM Daim to complete Adviser's "Twin Tag Team"

All together with his 2 sons he is now the “Taiko” to continue from where he left the last time….

Fat Mama’s 1st reprimand to Najib….

Bodoh….remove MB Mohd Nizar but forgot to remove Speaker Sivakumar!

Now 2nd reprimand….

Goblok….Listen to Mahyuddin to invite Mahathir to rejoin UMNO!

Now….even Mama cannot help you, Stupido!

Constitutionally speaking Pak Lah is still the "Incumbent PM, Party President & his Cabinet" elected by the rayaat on 8th March 2008, is "Relevant" until 2013….

He, DSAI & PR could have the last Laugh when the "Shit hits the Ceiling Fan!"

Every new day will be another “New Revelation” to reveal another “Truth” in its Self Destruct motion towards its “Demise”.

There will definitely be “Fireworks”, so let us sit back & watch the Greatest show in Bolehland….

“Devine Intervention” works “Wonders”….

You go figure out….

Cheers.

Dear Stocktube
Does it appear that many of us may have actually missed the boat to accumulate a tidy sum for our retirement or for our children’s education going by how fast the bourse has risen?

Yes, I anticipated a rally but more towards end of 2Q

While there still few good undervalued stocks to look at, from a broader perspective are things more or less over for those who missed this rally?

With economic uncertaintites still prevailing, and stocks having had a massive rally, they would be pretty expensive vis-a-vis business environment.

I have a considerable pile of cash that can be infused into the market, but I am suddenly in a straitjacket, unable to decide

What do you think? Can you do a write up for the general benefit of many others whom I feel are in the same boat as I am?

Sincerely
S. Radhakrishnan

hello anonymous,

first of all you need to determine the following, if you can:

1) do you think the current rally is because the worst is indeed over? or it’s an artificial rally due to political reason?

2) what do you think of public bank earnings result? what does that mean?

3) are you a long-term investor, short-term investor or a trader who wish to scalp for fast money and run?

there’re more but i think for the time being the above are sufficient for you to ponder upon …

cheers …

happy trading / investing …

Dear Stocktube & Anonymous,

Presently I feel the markets have not bottomed out sufficiently to park our "Hard Earned Retirement" eggs….

I had planned years before my retirement in 2002, to leave all my CPF savings in Singapore for almost 3 decades when I came back to K.L with my employment until my retirement (With my EPF here!).

I have converted my RM into Euro, AUD & Singapore Foreign Currency FDs at the Local SCB Bank.

For long term I am not concerned on the FD rates, rather the Capital value appreciation which is 2 pronged….

Interest higher than RM FDs & Currency Appreciation vs RM which could suffer a sudden depreciation!

Our neighbour Singapore & the World G20 Leaders are Intelligently Brainstorming, Strategising & Synergising their positions on the GLOBAL FINANCIAL "CHESS Board"….

Synergising & Harnessing their Best Brains & Best Practices SOLUTION Models….

To LEAD Singapore & the G20 nations & its people SAFELY out of this Financial Tsunami.

This Bolehland has a “Long” way to go with their “Blatant Denials” & “Childish Charades” even at this eleventh hour, to be able to catch up!

With the Global Financial Meltdown, NO Country or Government can understand & appreciate the "Actual Impact" to the "Nation" & its "People" until they get hit "Hard" like "Iceland."….

And Malaysia could JOIN the many, many more to come!

The toxic time bomb is ticking and it is only a matter of time before it explodes.

I would like to take this opportunity to suggest to the good people of Malaysia….

Ignore the political theatrics of both sides, focus on the financial crisis and save your family from unemployment, foreclosure and or bankruptcy if you are deep in debt.

There is no time to waste. After March 2009, the economy will turn messy.

Cheers.

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