When tongues wag and tales grow: be aware of politicians gone to the dogs!


With the GE imminent, politicians are already snarling at each other, hoping to score points early.

I love dogs. I’ve always had one, from since I was a child, and now, I have three – two Siberian huskies and a poodle.

Despite their differences – in age and breed – they truly love each other, and it’s a real blessing to have this trio of girls in our family.

But I can’t echo that sentiment for some of our politicians. Politics in Malaysia has gone to the dogs. The concerned players are already in dog fights and the general election hasn’t even been called yet.

It’s still early days, although everyone reckons polling is on the horizon. And we’re all too familiar with the dog-eat-dog nature of politics.

Politicians are already snarling, slobbering and barking at each other. Everyone seems to be calling each other liars and running dogs daily.

Therefore, this has left many of us confused. Who is telling the truth? The incessant snapping doesn’t seem to be seeing an end. There is no light at the end of the tunnel, so to speak.

Well, it was the Penang undersea tunnel that got the ball of nastiness rolling. There’s no resolution in sight, for sure, and if you think we should only cross the bridge when we get there, forget it. It’s under-utilised, at least one of them, anyway.

Well, as the saying goes, every dog has its day, but at some point, it’s going to be dog-gone for any politician who can’t stick to the truth or remember the lies he told. For certain, it will be one hell of a dog day afternoon when that happens.

Meanwhile, opposition leader Tun Dr Mahathir Mohamad has been criss-crossing the country telling his audience that Malaysia will go to the dogs if Datuk Seri Najib Tun Razak remains Prime Minister. Yes, those are his exact words – go to the dogs.

There’s still plenty of fire in his belly, like a dog with a bone on issues, although he called off a few functions last week, presumably because of health reasons.

On Friday night, he was admitted to the National Heart Institute. Guess he must be dog tired. He’s still a crowd puller and has the knack of explaining issues in simple language and in a low, calm voice, as opposed to the thunder and lightning approach favoured by his DAP partners.

His deadpan expressions and trademark sarcasm are enough to draw laughter and keep the crowds entertained. But he has been continuously dogged by the ghosts of his past. The palaces are in an unforgiving mood for what he has done previously, when he was at the helm for 22 years.

It was Dr Mahathir who launched the campaign to amend the Federal Constitution to remove the Sultans’ immunity in the 1990s.

Dr Mahathir has also been asked to return his DK (Darjah Kerabat Yang Amat Dihormati) title, the highest award in the state, which was conferred on him in 2002. The move by the Kelantan palace to revoke the Datukships of two top Parti Amanah Negara leaders from the state has sent ripples through political circles.

Amanah vice-president Husam Musa and his state chief, Wan Abdul Rahim Wan Abdullah, returned their titles to the palace several days ago after being instructed by the State Secretary’s office to do so.

In December, Dr Mahathir returned the two awards he received from the Selangor Sultan, a move believed to be related to the palace’s outrage over his remark on the Bugis, whom he describes as pirates, irking many, including several Sultans.

The chairman of Parti Pribumi Bersatu Malaysia (Pribumi) was the recipient of two medals of honour from then Selangor Sultan in 1978 and 2003. One of them was the Darjah Kebesaran Seri Paduka Mahkota Selangor (SPMS) (First Class).

Dr Mahathir reportedly told a Pakatan Harapan rally that Malaysia was being led by a prime minister who is a descendant of “Bugis pirates”.

That comment triggered outrage from the Johor Palace, Bugis community and associations in Malaysia, and even from some parts of Indonesia.

Selangor Ruler Sultan Sharafuddin Idris Shah was also incensed by Dr Mahathir’s remarks in an interview with The Star.

Last January, the Sultan of Johor said he was “deeply offended and hurt” by the political spin used by certain politicians against mainland Chinese investments in the state, saying if left unchecked, would drive away investors. A visibly upset Sultan Ibrahim Ibni Almarhum Sultan Iskandar singled out the nonagenarian for “putting political interests above Malaysian interests, particularly Johor”.

To put it simply, it appears that Dr Mahathir has run into serious problems with the powerful Rulers, and anyone who understands Malay politics will surely appreciate the relationship between the executive and the Rulers.

The Pakatan Harapan may feel that they should unleash our former PM since he was their top dog to best reach the Malay audience, but plans have run aground somewhat.

Politicians come and go, but Rulers remain, at least for longer than politicians. Rulers determine the laws, in many ways, and it would be foolish for a politician to take on these highly-respected royalty.

It will be hard for Dr Mahathir’s younger party colleagues to communicate with him – he comes from another generation all together. And as the adage goes, it’s hard to teach old dogs new tricks. He’s known to be stubborn and one who will doggedly talk about the issues of his choice.

The odd situation is that it is unlikely that any of the Pakatan Harapan leaders will come out openly to defend him. It’s a classic case of tucking their tails between their legs, with the whining kept private.

It’s truly the Year of The Dog. Let’s hope the GE will be called soon because most Malaysians just want to get it over and done with. We have already let the dogs out, and we hope to bring them home soon!

A happy Chinese New Year to all Malaysians celebrating. Gong Xi Fa Cai.

Wong Chun Wai

Wong Chun Wai

Wong Chun Wai began his career as a journalist in
Penang, and has served The Star for over 27 years in various capacities nd roles. He is now the group’s managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly
without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.
Related posts:

 

Opening up a can of worms from Penang Undersea Tunnel project to Ayer Hitam …

‘In the very first place, does Penang really need an undersea tunnel and three main highways? Are the new infrastructures going to so.. 

PTMP: Losses making fashion company in Penang Undersea Tunnel Project

Filepic: PenangPropertyTalk Did the Penang Govt do a “bait and switch” on the Penang people? That was the question pose.

 

Behind BJ Cove houses at Lintang Bukit Jambul 1 is an IJM Trehaus Project.  Approximate Coordinates : 5°20’38.47″N,100°16’… 

Becoming bald: A view of the clearing work seen at Bukit Relau which was visible from the Penang Bridge in November last year. GEORGE..

 

https://youtu.be/ooyXvqmxbvw GEORGE TOWN: Some 20 houses located on a slope in Hong Seng Estate in Mount Erskine were flooded due


How to measure a politician?

Use technology to learn more about them before casting your vote Cheah taking a wefie with Tanjung Bungah assemblyman Teh Yee Cheu (be…

Wanted: Leaders who listen !

Turning a blind eye: The grumblings over exposed hills are growing louder but little is being done to rectify the situation   G…


 

It’s hard to deny when the effects of climate change are all around us  Andrew Sheng says that from increasingly intense hurricanes t…

Sustainable Development in Penang

Why did MBPP approve the Tanjung Bungah development project? Read more at https://www.malaysiakini.com/letters/399357#qbRd534yu1JfC551….

 

https://youtu.be/kslhytLg-Wc Hills, landslides and floods: What to do?   The mega floods in Penang which followed the landslide…

 

Choong (in white) surveying the deforested hillslope next to Majestic Heights. PENANG MCA has raised concerns about the safety of the r…

 

Wet, wet woes: (Above) Bukit Jambul is flooded once again after an evening downpour. Firemen installing a pump to draw floodwater…

 

Council should not bow to development or political pressure, says city councilor, Khoo ‘Politicians should  be ‘wakil rakyat’ and n…

 

(From left) Dr Kam will deliver a talk on ‘Understanding the Causes of Floods and Seeking Solutions. State assemblymen expressing inter…

 

https://youtu.be/4qaOB1n5tgA GEORGE TOWN: The Penang Island City Council has lodged a police report against the consultant of the aff…

Speaking out: Penang Forum members protesting outside the CAP office in George Town. Don’t just make it about worker safety issues ..

 

https://youtu.be/QB45Q2_mOG0 Suspicious activity: A photo taken from Penang social activist Anil Netto’s blog showing an active s…

Some representatives of the 24 residents associations and management corporations showing messages urging the state to resolve the flood…

 

Our Environment is Our Life – YouTube THE year has barely started, and already we have so many reports of weather and climate-related e…

 

 

Sponge City: Solutions for China’s Thirsty & Flooded cities  China’s ‘sponge city’ projects may be worthwhile examp…

 

Advertisements

Malaysia needs structural reforms says global investor


Middle-income trap, brain drain and high public service spending among Malaysia’s risks

Cheah(pic) thinks the local stock market could go up by between 5% to 10% this year while the ringgit, which has mostly been on an uptrend in recent times, is “still down quite a lot”, against the US dollar.

 

 
Middle-income trap, brain drain and high public service spending among Malaysia’s risks

KUALA LUMPUR: A renowned global investor has called for structural reforms in Malaysia, saying that the country faces “very real” structural issues.

Penang-born Datuk Seri Cheah Cheng Hye (pic) who left Malaysia decades ago counts the middle-income trap, brain drain and high public service spending as current risks to the country.

Based in Hong Kong as the chairman and co-chief investment officer of fund and asset management group Value Partners Group for over two decades now, Cheah who helps manage over US$16bil in funds, however concedes that Malaysia remains a country with huge potential and opportunities.

“I don’t think we should underestimate the importance and attractiveness of Malaysia but what I am saying is that if we don’t want to be stuck forever (being) a so-called middle-income country, we need structural reforms,” he told StarBiz in a recent interview.

“Or maybe… we do want to be stuck because it is a comfortable position and because then, we can make a lot of compromises.”

“ (If that’s the case), we should be frank and say it, don’t pretend that we want to be an advanced country because that requires certain sacrifices.”

“The reality is that we are getting less and less competitive, we ranked number 23 in the latest Global Competitiveness report ,behind France and Australia which are developed countries. (Number 23) is not good enough for a developing country,” said Cheah, who recently made it to the top 40 richest Malaysians list.

Emphasising the issue of brain drain, Cheah, a former financial journalist and equities analyst said Malaysia could perhaps emulate India in this area where the concept of an Indian national overseas card has been introduced.

“I am told there are more than one million Malaysians overseas – (people like) entrepreneurs, these are exactly the type of people we want to stay here but they are not.

“We could introduce a new type of card called the Malaysian national overseas card for Malaysians who have chosen to leave the country and become citizens elsewhere.”

This card will give these Malaysian-born individuals no voting rights but will allow them to come back to work and invest here like everyone else, he said.

Cheah said this could help re-attract talent and there will be no political price to pay, because these people cannot vote here nor transfer this card to their children who would likely be foreigners.

“Some may actually come back, because it is not always greener on the other side… but you must make it easy enough (for them to come back).”

Cheah also pointed out that the amount Malaysia spends on public service is “very high” by any standards.

“Quoting from memory, about 30% of government spending is on civil service salaries and 16.5% of all employment in this country comprise civil servant jobs.

“No matter how you explain it, this is abnormally high ; something that I have learnt from my stay in Hong Kong is, keep the government as small as possible.”

He said although the civil service segment here appears to be bloated, it would be “unrealistic” to fire civil servants.

“Instead, maybe we can consider freezing and redeploying resources.

“Like any corporation, if you have too high a headcount, you freeze hiring and you redeploy people to where they are needed,” Cheah said.

Separately, Cheah, whose investments are mostly China-centric believes that Myanmar could be the next big thing.

“Nowadays, I like Myanmar because it is still cheap.

“It has about 55 million people but its gross domestic product (GDP) is only about US$65bil, Malaysia’s GDP is probably about US$320bil.

“Myanmar has enormous potential, at last they are emerging , gradually reconnecting with the world, they have (a lot of ) raw materials and are in a good position as one of the significant Belt and Road countries, China will go out of its way to invest there.”

Cheah said he would like to set up a Myanmar fund to invest in the country and is in the process of studying this possibility.

Among markets in Asia, Malaysia to Cheah, is “moderately attractive”.

He said consumer sentiment here was finally improving after it took a beating largely due to the implementation of the Goods and Services Tax (GST) back in 2015 plus there are some “interesting corporate restructuring taking place.”

Also, it is General Election year which going by history, tends to send the market higher, he said.

“I think there are good arguments why the Malaysian market is good this year but the arguments are not strong enough to result in a very strong market – and there’s also a global environment that’s not as good as last year.”

“I think the US administration is now focusing on globalisation and world trade and it seems to be moving in the direction of conflict with China over trade.

“If there is a China-US trade war, Malaysia will suffer collateral damage because we are a medium-sized player in a global supply chain, so it will be very disruptive,” Cheah said.

Upside for the Malaysian market could also be limited this year, he said, because its current valuation is relatively high at over 16 times price to earnings.

Cheah thinks the local stock market could go up by between 5% to 10% this year while the ringgit, which has mostly been on an uptrend in recent times, is “still down quite a lot”, against the US dollar.

The local unit appreciated by 8.6% against the dollar last year after losing some 4.5%, a year earlier.

At last look, it was traded at 3.9395 against the greenback.

By Yvonne Tan The Staronline
Related Links:

World Bank: Malaysia needs structural reforms – Business News

Related posts:

Huge Civil Service Size, Attractive Emoluments and Benefits are costing Malaysia ! 

Arrest decline in productivity and competitiveness in Malaysia

Corruptions, Conflict of interests, politicians and Malaysian bloated civil service

Structural issues including education are holding Malaysia back

Malaysia no longer stuck in middle-income trap?

Hedge fund management, Value Partners; Malaysian a Hye Achiever in HK, eyes Penang projects

Serious deficits that cannot be financed could lead to bigger global crisis

Restructuring our household debt


NEW Year always come with new resolutions. Finance is an important aspect of most people’s checklists when it comes to planning new goals.

While it is good to set new financial targets, it is also vital to re-look at our debt portfolio to ascertain if it is at a healthy state.

At a national level, our country also has its financial targets matched against its debt portfolio.

According to the latest Risk Developments and Assessment of Financial Stability 2016 Report by Bank Negara, the country’s household debt was at RM1.086 trillion or 88.4% of gross domestic product (GDP) as at end 2016.

Residential housing loan accounted for 50.3% (RM546.3bil) of total household debts, motor vehicles at 14.6%, personal financing at 14.9%, non-residential loan was 7.4%, securities at 5.7%, followed by credit cards at 3.5% and other items at 3.6%.

Evidently, residential housing loan is the highest among all types of household debt. However, a McKinsey Global Institute Report on “Debt and (Not Much) Deleveraging” in 2015 highlighted that in advanced countries, mortgage or housing loan comprises 74% of total household debt on average.

As a country that aspires to be a developed nation, a housing loan ratio of 50.3% to total household debt would be considered low, compared to 74% for the advanced countries. In other words, we are spending too much on items that depreciate in value immediately – such as car loans, credit card loans and personal loans – compared to assets that appreciate in value in the long run, such as houses.

Advanced economies, which are usually consumer nations, have only 26% debts on non-housing loan as compared to ours at 49.7%.

In order to adopt the household debt ratio of advanced economies, our housing loan of RM546.3bil should be at 74% of total household debt. This means that if we were to keep our housing loan of RM546.3bil constant, our total household debt should be reduced from the current RM1.086 trillion to a more manageable RM738bil. This would require other non-housing loans (car loans, credit card loans and personal loans etc) to reduce from 49.7% of total household debt to only 26%. To achieve this ratio, the non-housing loan debt must collapse from the current RM539.7bil to only RM192bil.

Reducing total household debt from the current RM1.086 trillion to a more manageable RM738bil would also have the added benefit of reducing our total household debt-to-GDP ratio from the high 88.4% to only 60%, making us one of the top countries globally for financial health.

Malaysia’s household debt at present ranked as one of the highest in Asia. Based on the same 2015 McKinsey Report, our household debt-to-income ratio was 146% in 2014 (the ratio of other developing countries was about 42%) compared to the average of 110% in advanced economies.

Adjusting the debt ratio by reducing car loans, personal loans and credit card loans will make our nation stay financially healthy.

Car values depreciate at about 10% to 20% per year based on insurance calculations, accounting standards and actual market prices. Assets financed by personal and credit card loans typically depreciate immediately and aggressively.

The easy access to credit cards and personal loan facilities tend to encourage people to spend excessively, especially when there is no maximum credit limit imposed on credit cards for those earning more than RM36,000 per year.

If we maximised the credit limit given without considering our financial ability, we will need a long time to repay due to the high interest rates, which ranged from 15% to 18% per annum.

Based on a report in The Star recently, Malaysia’s youth are seeing a worrying trend with those aged between 25 and 44 forming the biggest group classified as bankrupt.

The top four reasons for bankruptcy were car loans (26.63%), personal loans (25.48%), housing loans (16.87%) and business loans (10.24%).

It is time for the Government to introduce more drastic cooling-off measures for non-housing loans in order to curb debt that is not backed by assets. This will protect the rakyat from further impoverishment that they are voicing and feeling today.

As we kick start the new year, it is good to relook into our debt portfolio. When we are able to identify where we make up most of our debts, and start to reallocate our financial resources more effectively, we will be heading towards a sound and healthier financial status as a nation.

By Alan Tong – Food for thought

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please e-mail feedback@fiabci-asiapacific.com.
Related posts:

Bitcoin: Utter pipedream


No intrinsic value: Unlike enterprises, bitcoin has no business, no intrinsic value, no cash flows and no balance sheet. — AFP

I JUST returned from a meeting of the Asian Shadow Financial Regulatory Committee in Bangkok.

The group comprises Asian academic experts on economics and finance. Their role is to monitor the state of the world economy and the workings of its financial markets in the light of existing and prospective policies; and draw lessons and give advice on vital public policy issues of current interest to regulators and market practitioners to make the world a better place.

The group comprises 23 professors from 14 countries, coming from a diverse group of universities and think-tanks, including the universities of Sydney and Monash, and of Fudan, Hong Kong and Sun-Yat-Sen in China, Universitas Indonesia, universities of Tokyo and Hitotsubashi, Yonsei and Korea universities, Sunway University, Massey University in New Zealand, University of the Philippines, Singapore Management University, National Taiwan University, Chulalongkorn University and NIDA Business School, University of Hawaii and University of California at Davis, University of Vietnam, and Tilburg University in the Netherlands.

They examined key issues surrounding the theme: “Cryptocurrencies: Quo Vadis?” focusing on the role and activities of the flavour of the month, bitcoin. At the end of it all, they issued the following statement:

“Cryptocurrencies in general, and bitcoin, in particular, have been receiving considerable press of late, driven mainly by wide swings in value in the cryptocurrency exchanges. There are now in excess of 2,500 products considered to be cryptocurrencies and in the last three weeks alone their combined market value has plummeted from US$830bil to US$545bil as of today, of which US$215bil is attributed to bitcoin and bitcoin cash.

To keep this in perspective, however, Apple Inc has a market value of US$880bil as of today. Market value measures the equity value of a business – or what investors are willing to pay for its future profits. Unlike enterprises, however, bitcoin has no business, no intrinsic value, no cash flows, no profit and loss statement, and no balance sheet. It is a speculative instrument.

Cryptocurrencies, including bitcoin, are not considered currency today because they are not a universal means of payment, nor a stable store of value, nor a reliable unit of account. Buyers purchase on the basis that these cryptocurrencies would rise in value. While market value has been the main focus of the current interest, the more important issues are around the role of cryptocurrencies both as financial assets, and the role they can play in transaction settlements, and their implications, if any, on financial stability.

While there is much interest in cryptocurrencies, especially bitcoin, the volume of transactions remains very small currently. For example, total US dollars (cash) in circulation amount to US$1.6 trillion as of today. M3 (broad money) is valued by the Federal Reserve at US$14 trillion. Total US economy assets in 2016 were valued at US$220 trillion. So why the fascination with cryptocurrencies? Supporters of Bitcoin claim it to be a superior store of value to fiat money issued by central banks because its supply is limited by design and therefore cannot be debased. In addition, the technology behind bitcoin, called the Blockchain, provides anonymity to its players. That is why it is a favourite with money launderers, tax evaders, terrorists, drug smuggler, hackers, and anyone who wants to evade the rule of law. Many people who use cryptocurrencies assert that they pay minimal transaction costs mainly because it avoids the cost of financial intermediation.

Still, there is large potential for capital gains because of the wide volatility of its price movement. This is the main driving force behind the popularity of cryptocurrencies like bitcoin. However, there are high risks involved including extreme volatility and opaque, unregulated exchanges that are prone to cyberattacks.

Authorities and regulators worry about bitcoin because they fear it is a bubble. In the event of a bust, investors in bitcoin – they are many, spread over various continents and countries – will be hurt; and they exert pressure on governments to regulate this business in order to protect investors.

In addition, they worry about the impact – in the event that cryptocurrency trading becomes a significant element in maintaining financial stability – in terms of the impact on the transmission of monetary policy and on its effects on the banking system, and most of all, on systemic risk, if any.

Authorities have responded in different way. In South Korea, new regulations today require banks and exchanges to identify who their customers are, imposing greater transparency in the conduct of the cryptocurrency business. On the other hand, Japanese authorities are more liberal. They only require the registration of companies engaged in this business at this time.

Many other authorities, including those in the US, are adopting a wait-and-see attitude while studying the issues, recognising that there may be a role for them to introduce some regulatory measures in the event that the volume and price volatility of cryptocurrency transactions become more and more significant.

In the meantime, government and tax authorities feel uneasy about the impact on revenue collection. Other regulators are worried about crowdfunding through ICOs (initial coin offers). Authorities in a number of countries, including the US, have introduced measures to regulate the issue of new ICOs to ensure that investors are provided with the necessary information before making such investments.

At the same time, central banks in many countries are looking into the desirability and possibility of issuing their own digital currencies, including to counter privately-issued cryptocurrencies.

Recommendations:

1. Bitcoin came into prominence because of an apparent lack of confidence in fiat currency. It is imperative that governments and central banks continue to give priority to (i) protecting the integrity of their currencies; (ii) designing policies to contain inflation to prevent it from debasing the currency; and (iii) strengthening their mandate to promote financial stability over financial development, if needed (including ensure fintech development does not undermine confidence). Also, in cases where authorities do not have the power to regulate the cryptocurrency business, they should actively seek such authority where appropriate.

2. Monetary authorities should be open to creating digital currencies rather than confining their money supply to notes, coins and deposits. But they should do so in a transparent manner and only after careful consultation and study.

3. It is the role of government to warn their citizens and investors about the high risk involved, and ensure transparency in bitcoin activity, and not to unduly introduce more and more regulations that will stifle innovative initiatives. Blockchain technology, for example, does have other useful applications apart from the issue of its use in the creation of digital currency.

Investor protection

As we see today, bitcoin and the other cryptocurrencies are not currencies. Mostly, they reflect speculative activity. Hence, investing and transacting in them involve high risks. It is imperative that investors realise this and approach investing in cryptocurrencies with great caution and with as much information as is available to help them manage these risks.

Investors must fully understand that cryptocurrency prices need not necessarily always rise, particularly because they have no intrinsic value, they could just as easily fall. So investors beware: Caveat emptor.”

Update

The following developments are noteworthy:

> Columbia’s Prof N. Roubini (Dr Doom) claims bitcoin is not a currency. Few price anything in bitcoin. Not many retailers accept it (even bitcoin conferences don’t accept it as payment). And it’s a poor store of value because its price can fluctuate 20%-30% a day. Worse, he labelled it “the mother of all bubbles” because its claim of a steady-state supply is “fraudulent”.

It has already created thee similar currencies: Bitcoin Cash, Litecoin and Bitcoin Gold. Together with the hundreds of such other currencies invented daily, this creation of money supply is debasing the currency at a much faster pace than any major central banks ever did. Furthermore, bitcoin’s claimed advantage is also its Achilles’s heel – for, even if it actually did have a steady supply of 21 million units, it is not a viable currency because the supply won’t track potential nominal GDP growth; hence, prices will become deflationary – the kind of phenomenon that economist Irving Fisher believed caused the Great Depression.

Indeed, the head of the European Central Bank had since declared to the European Parliament that cryptocurrencies are unregulated and “very risky assets. Their price is entirely speculative”. That’s not what we want or need. It’s a pity the FOMO (fear of missing out) of many retail investors will end them in a wild goose ride!

> Over its nine-year history, bitcoin has had five-peak-to-trough falls of more than 70% each. The recent decline offers a dose of reality to new investors – bitcoin dropped to a low US$7,850 on Feb 2 for the first time since November 2017 – crashing 60% from the high of nearly US$20,000 in mid-December. Sentiment has shifted dramatically this year.

On Feb 5, it fell another 4% to US$7,524. Also, the fledging market has taken a number of blows: Facebook has since banned advertisements on it (for being misleading); US Securities and Exchange Commission has accused some latest ICOs as “outright scams”; US and UK largest banks have put up “road-blocks” to financing bitcoins; and the recent Japanese hack theft of 523 million crypto-XEM (worth US$500mil) brought back memories of Mt Gox, which collapsed after a similar hack in 2014.

> Arbitrage traders (buying where it’s cheap and reselling where it is dear) have been active – taking advantage of price differentials in multiple places and different times. They call it “capturing the arb”. Hedge funds, high frequency traders and even amateur enthusiasts are giving it a shot. Price divergences can be due to glitches or network traffic jams. In South Korea, exchanges quote abnormally wide prices reflecting high investors’ demand for bitcoin in the face of strict capital controls – giving rise to a “Kimchi premium” (of as high as 50% above US price; now down to 5% as price disparities are swiftly traded away).

> Concern over cryptocurrency activity is spreading beyond China, Japan, South Korea and India. This prompted the governor of the Bank of England, who also chairs the Global Financial Stability Board, to voice his unease over the anonymity embedded in blockchain technology underlying their use, especially for illicit activity (including money laundering). He disclosed that it would be on the agenda at the next G20 meeting. Tax authorities have also expressed concern over the under-reporting of capital gains tax.

> Bitcoin futures trading on Chicago’s CME and CBoE exchanges have been slow to catch fire – at the pace of a “slow walk”.

What then, are we to do

Reality check: Bitcoin is proving that cryptocurrencies can erase wealth as fast as they create it. In January 2018 alone, it wiped off US$45bil from its US$200bil in market value generated in all of 2017 – the biggest one-month loss in US dollar terms in its short history. Since then, more value is being lost. For most economists and finance experts, they don’t represent an investable asset – there are liquidity issues, safety issues, exchange issues; most of all, they have no intrinsic value.

Can’t realistically put a fix on their fair value. They are for speculators who are prepared to lose everything. Of course, its something else for those who use them for illicit activity (home to criminals and terrorists), including money laundering. Anonymity means you are potentially closing a chain, while at somewhere along it had some illicit activity that cannot see the light of day.

Fair enough, these concern regulators. But we shouldn’t lose sight of the huge range of opportunities presented by the underlying technology – a view shared by many in relation to raising the efficiency of payment systems. Regulators are right to want to regulate crypto but also, continue to encourage innovation on blockchain. As I see it, so far in 2018, bitcoin has been a total dud. The list of factors driving its decline is growing, especially rising regulatory clampdown occurring around the world.

So, the cryptocurrency market has fallen on tougher times. For sure, Bitcoin has been highly profitable for many investors. Indeed, there continues to be strong interest among millennials.

Bottom line: the year so far has been terrible for bitcoin. But the fundamental positive story for crypto appears to remain intact. Protecting consumers should make it harder for charlatans to sell digital dust. There is a point where it goes from “buying on the dip” to “catching a falling knife”. Only time will tell. So, beware!

NB: Following global regulatory crackdown, bitcoin’s price has on Feb 6 fallen to a low of US$5,947, wiping out over US$200bil so far this year. Bitcoin’s market cap is now US$109bil, about one-third of the total crypto market (that’s down from 85% this time last year). The Bank for International Settlements (banker to central banks) has now condemned bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster” (refers to huge amounts of electricity used to create it) and warns it can even become a “threat to financial stability”.

By Lin See-yan – what are we to do?

Former banker Tan Sri Lin See-Yan is the author of The Global Economy in Turbulent Times (Wiley, 2015) and Turbulence in Trying Times (Pearson, 2017). Feedback is most welcome.

Related posts

 

https://youtu.be/E_kCCgsldjU According to Wikipedia, a blockchain , [1] [2] [3] originally block chain , [4] [5] is a continuously gr…

 

Global economic order under threat 

 Recalling Bank Negara’s massive forex losses in 1990s

 

Related News:

 

Make environment our 2018 priority


Our Environment is Our Life – YouTube

THE year has barely started, and already we have so many reports of weather and climate-related events.

Heavy wind, snow storms and below-freezing temperatures paralysed cities in the United States’ East Coast. New York’s John F. Kennedy International Airport was in chaos with hundreds of flights suspended.

Yet, just weeks previously, big fires linked to a heat wave were sweeping through parts of California on the West Coast, burning 112.000ha of forest and threatening lives and homes.

Colder weather in one place and hotter temperatures in another are signs of global climate change, which can also cause heavier rainfall and drought in different regions.

While it is difficult to pin down any particular incident as a direct result of climate change, it is recognised scientifically that climate change generally exacerbates extreme weather events and may cause some of them.

We can expect the weather, and more broadly the environment, to figure prominently this year.

The alarm bells sounded long ago on the environmental crisis. But it is not easy to achieve a continuous high level of concern among political leaders.

After a calamity and public outrage, there are pledges to correct the situation. However, the interest fades after a while, and not much action is taken, until the next disaster happens.

In Malaysia, people are now looking at the sky constantly to anticipate whether it is going to rain.

Heavy rainfall has been causing floods in Kelantan, Terengganu, Pahang, Johor, Negri Sembilan, Kedah, Selangor, Sabah and Sarawak.

In Penang, severe state-wide flash floods seem to be occurring every few months, with localised flooding in several areas in between. The mud brought down from eroded hill-slopes into overflowing rivers and then into houses, makes floods an even worse nightmare for those affected.

For some unlucky ones, hardly have their houses and furniture been cleaned than they are under one metre of water again through a new flood.

Heavier rain and more floods is the new normal in Malaysia. There has been an increase in rainfall for most parts of the country in 2000-2009 compared to 1970-1999, with the major increase in 2005-2009, according to a 2012 paper by Yap Kok Seng, then the head of the Malaysian Meteorological Depart­ment (MMD), and his colleagues.

The global temperature increase has led to changes in weather including major wind patterns, amount and intensity of precipitation, and increased frequency of severe storms and weather extremes, according to the paper, Malaysia Climate Change Scenarios.

In Malaysia since the 1980s, there had been increasing number of days of extreme rainfall events, extreme wind events and annual thunderstorm days, added the paper.

Unfortunately the situation will worsen. A study published on Jan 10, whose authors are affiliated with Germany’s Potsdam Institute for Climate Impact Research, predicted that millions more people will be affected by river flooding as global warming increases severe rainfall in the next 20 years.

In Asia, the most affected region, people at risk from floods will rise to 156 million from the present 70 million in the next 20 years.

Global warming increases the risk of flooding because rain during an extreme downpour “increases exponentially” as temperatures rise, the institute’s Anders Levermann told Reuters.

“We have to adapt to global warming. Doing nothing will be dangerous,” he said.

Countries will have to act urgently and make major investments in flood protection to boost their flood defences, according to the report.

This advice surely applies to Malaysia as one of the countries already being affected by heavier rainfall and extensive river flooding.

Flood mitigation measures must be increased, including de-silting, widening and deepening rivers, improving urban drainage, strengthening river banks, redirecting water flows, constructing tidal gates, and pumping excess water into ponds.

Even more important is flood prevention. A main cause of the floods is deforestation, leading to the loss of the forests’ valuable roles in soil and water retention and climate regulation.

It is really short-sighted and irrational to damage and destroy forests, especially forest reserves and water catchment areas.

Exposed soils are swept by rain into rivers, clogging up streams and drains with mud and causing floods downstream in the towns and villages, while also depriving us of much-needed water supply.

There is a great deal of public concern over recent developments that threaten forests and hill lands in the country.

These include the de-gazetting of the Ulu Muda water catchment area in Kedah; the de-gazetting of hill lands in Penang that previously were protected under the Land Conservation Act and which are now being “developed” with the aid of higher permitted density ratio; the conversion of 4,515ha forest reserve to cultivate oil palm plantations in Terengganu (being opposed by WWF-Malaysia); and protests over the imminent loss of a forested park in Taman Rimba Kiara in Kuala Lumpur to make way for housing.

Federal, state and local governments should give priority to environmental rehabilitation of damaged forests and hills, prevent damage to the coastal ecosystem including mangroves, and take comprehensive flood prevention and mitigation measures.

They should stop approving environmentally harmful projects in ecologically sensitive areas.

They must make major financial allocations to protect and rehabilitate the environment, and implement finance measures to prevent and manage the floods.

As so many scientists are warning, and as more and more local communities and citizen groups are demanding, the time to act on the environment is now. Let us hope that in 2018 these calls will be heeded.

Global trends by Martin Khor

Martin Khor is executive director of the South Centre. The views expressed here are entirely his own.

Related posts:

Behind BJ Cove houses at Lintang Bukit Jambul 1 is an IJM Trehaus Project.  Approximate Coordinates : 5°20’38.47″N,100°16’…

https://youtu.be/ooyXvqmxbvw GEORGE TOWN: Some 20 houses located on a slope in Hong Seng Estate in Mount Erskine were flooded due

Wet, wet woes: (Above) Bukit Jambul is flooded once again after an evening downpour. Firemen installing a pump to draw floodwater…
Council should not bow to development or political pressure, says city councilor, Khoo ‘Politicians should be ‘wakil rakyat’ and n…
Seeking solutions: Penang Forum member and soil expert Dr Kam Suan Pheng giving her views during the dialogue session themed ‘Penang Fl…
(From left) Dr Kam will deliver a talk on ‘Understanding the Causes of Floods and Seeking Solutions. State assemblymen expressing inter…
https://youtu.be/4qaOB1n5tgA GEORGE TOWN: The Penang Island City Council has lodged a police report against the consultant of the aff…

Speaking out: Penang Forum members protesting outside the CAP office in George Town. Don’t just make it about worker safety issues ..

https://youtu.be/QB45Q2_mOG0 Suspicious activity: A photo taken from Penang social activist Anil Netto’s blog showing an active s..

 

Some representatives of the 24 residents associations and management corporations showing messages urging the state to resolve the flood…
Wanted: Leaders who listen !
Turning a blind eye: The grumblings over exposed hills are growing louder but little is being done to rectify the situation   G…

 

It’s hard to deny when the effects of climate change are all around us  Andrew Sheng says that from increasingly intense hurricanes t…
Why did MBPP approve the Tanjung Bungah development project? Read more at https://www.malaysiakini.com/letters/399357#qbRd534yu1JfC551….
https://youtu.be/kslhytLg-Wc Hills, landslides and floods: What to do?   The mega floods in Penang which followed the landslide…

Becoming bald: A view of the clearing work seen at Bukit Relau which was visible from the Penang Bridge in November last year. GEORGE..

Choong (in white) surveying the deforested hillslope next to Majestic Heights. PENANG MCA has raised concerns about the safety of the r…

The American dream turned nightmare, President Trump’s first year …


A homeless man sleeps under an American flag blanket on a park bench in New York City in this file picture. As of June 2013, there was an all-time record of 50,900 homeless people, including 12,100 homeless families with 21,300 homeless children in New York – Photos AFP
A young homeless woman panhandles on the streets of Manhattan in New York City. According to a new report released by the US Department of Housing and Urban Development New York City’s homeless population expanded by about 4% in 2017.

American culture and a new tax Bill are exacerbating chronic poverty by helping to widen the wealth gap.

SITTING among a jumble of his few possessions on a San Francisco sidewalk, 41-year-old “Kaels” Raybon has begun to accept the bad choices he made.

He was a drug user, and did jail time. By the time he was let out, his wife and four children – two boys and two girls – had left him. Other family members had died and he had nowhere to live. He has now spent over 15 years on the street.

America may be the land of equal opportunity – but like many other countries, there is a thin line between a life on the street and a roof over one’s head. Poverty creates its own loop; a prison record, for instance, makes it difficult to find employment.

Raybon’s voice trembles as he speaks of his children.

“Emotionally, I’m a wreck most of the time,” he admits. “I see kids and dads, and I want that too. But it’s just not in my cards.”

The children came to visit him one day, he says. He was torn. “I wanted them to stay, but at the same time I didn’t, because I have nothing to offer them.”

Raybon is among those who make up the most visible indicator of America’s worsening poverty and inequality – over half a million urban homeless. They are a stark contrast in arguably the world’s richest, most powerful and most technologically innovative country.

But homelessness is only the visible tip of the poverty iceberg. Large areas outside big cities are mired in chronic poverty. The definition of poverty varies, but a commonly used measure from 2015 is an annual income of US$12,000 (RM47,500) or less.

Forty-one million Americans live in poverty – 12.7% of the country’s population. Some 46% of those live in “deep poverty” – on an annual income below US$6,000 (RM23,700).

Among them are 1.5 million households, including 2.8 million children, who live in extreme poverty or on less than US$2 (RM8) per person per day.

“These are people who cannot find work … who do not qualify for any other (welfare) programmes or who may live in remote areas. They are disconnected from both the safety net and the job market,” Dr Premilla Nadasen, author and professor at Barnard College in New York City, wrote in the Washington Post newspaper on Dec 21.

Poverty is in the news again on the heels of a scathing 15-page statement released late last year by Dr Philip Alston, a tall, lean, 67-year-old New York University law professor from Melbourne, Australia, who is the United Nations’ Special Rapporteur on Extreme Poverty and Human Rights. A special rapporteur functions like an investigator and reports back to the UN.

Dr Alston is not known for beating about the bush. After a 15-day swing across six American states and cities, he is warning that worse is in store for America’s poor, at the wrong end of an increasingly widening wealth gap, and in an environment and official culture in which if you are down and out, it is probably your own fault.

The recent passage of the Republican Party’s tax Bill will make their lives worse, says Dr Alston. The Treasury Department has explicitly listed welfare reform as an important source of revenue in part to make up for the deficit that the tax cut is likely to trigger.

More important, however, is the culture.

“In a poor country, there are two starting points – that there are social rights, and citizens have a right to healthcare, a right to education, a right to food,” Dr Alston says at an interview in his booklined office at New York University.

“Second, the only thing standing in our way is resources; we just don’t have the money.”

“In the US, it’s the exact opposite,” he says. “There’s no such thing as social rights. If people are living in abysmal conditions, it’s their fault because we have equality of opportunity.

“Secondly, it’s not a resource problem. We just found US$1.5trillion (RM6trillion) to give to the super rich. The money would have been there to eliminate poverty if there had been any political will. But there isn’t.”

The US$1.5trillion refers to the Republicans’ tax Bill, passed just before Christmas that will bring the middle class some relief but inevitably, analysts say, end up benefiting the wealthy disproportionately.

America’s wealth gap has been steadily widening. On average in 1981, the top 1% of adult Americans earned 27 times more than the bottom 50%. Today, they earn 81 times more.

Meanwhile, since the 1970s, the safety net has been considerably diminished, Dr Nadasen wrote in the Post recently. “Labour regulations protecting workers have been rolled back, and funding for education and public programmes has declined. The poor have been the hardest hit.”

She added: “The shredding of the safety net led to a rise in poverty. The United States has the highest child poverty rates – 25% in the world.

In the course of his tour, Dr Alston saw houses in rural areas of Alabama surrounded by pools of sewage. “The state health department had no idea how many households exist in these conditions, nor did they have any plan to find out, or devise a plan to do something about it,” he says in his statement.

He could not help noticing that most of the area’s residents were black. But while racial divisions are not far below the surface, it would be misleading to assume that poverty is generally worse in the Native American and African American minorities. It cuts across all ethnicities. There are eight million more poor white people than black people.

Like Rudy Damian, 53, who as a teenager ended up homeless in San Francisco after taking drugs and alcohol and being involved in crime – a common pattern contributing to broken families and financial ruin.

He has several missing teeth – dental care is not covered by most health insurance and the poor, at best, can go only to hospital emergency rooms where invariably a tooth is simply extracted.

Damian says he is sober now, and even works part-time as a security guard, but still can’t afford to rent a home. He calls his sister and his 94-year-old mother sometimes, but they avoid talking about his life. “They are disappointed by my lifestyle,” he says. “I was just a loner. I was the youngest when my father died, I decided to leave (home), and that isolation has lasted throughout my life.”

Fragmentation of families and the weakening of community support contribute to the isolation of homeless people in particular. But there is more.

“Caricatured narratives” drive the debate on poverty and homelessness in America, according to Dr Alston. The rich are seen as “industrious, entrepreneurial, patriotic, and the drivers of economic success”. The poor are “wasters, losers and scammers”.

“As long as you have the mindset that we’re all on our own, it becomes possible that when my own brother falls off the cliff, I’m able to say, ‘Well, he had the same opportunities as me. He’s failed, he has to cope with it,’ instead of saying, ‘I can’t let that happen. I’ve got to do something.’”

In Los Angeles, he found that the objective for the local authorities was to raise the standard of Skid Row, an area less than a square kilometre but containing many hundred homeless, to that of a Syrian refugee camp.

“One of the richest countries in the world, and we’re aiming to meet the standards of a Syrian refugee camp for a large population in one of our richest cities,” he says. “It is sort of stunning.”

Sources: The Straits Times/Asia News Network, by Nirmal Ghosh who is The Straits Times ’US Bureau Chief.

Related:

Trump’s First Year 

 

President Donald Trump has had a hostile relationship with the media, frequently attacking it and other pillars of the US system including the Department of Justice and the courts.A year on, Trump’s US still deeply divided

 

 Trump, the master media manipulator

 

US lawmakers in bid to end shutdown stalemate

 

Mass crowds rally for anti-Trump Women’s Marches across US | AFP …

China raps US for ‘Cold War mentality’ in defence strategy – ASEAN …

Beijing: China has denounced the United States government for what it calls its “Cold War and zero-sum mentality” in its latest national defence strategy, which named China and Russia as “revisionist powers” that “seek to create a world consistent with their authoritarian models”.

Related post:

Greener pastures: Wang at his company’s headquarters in Shanghai. The successful Silicon Valley alumni was lured back to China by the pro…

 

STRATA Property insights – Serious on strata



Important issues and frequently asked questions

STRATA-type property is and has been all the rage. It is also expected to be “the living model” if not already.

Whether in cosmopolitan cities or suburban fringes, and as space becomes “in want” and prices hike, we feature our final article on strata-related property highlighting pertinent questions frequently asked to which Chris Tan (CT) gives input on.

Q: What should one look out for in the S&P before deciding on buying a particular strata-titled residential property?

CT: Buying a strata title property is not just buying a property but buying into a community living regulated by law. As a buyer, you are not only responsible for your very own unit but also the common property within the development too.

There is an ongoing obligation to pay the monthly service charges and sinking fund until the day you sell the same to another owner.

Besides the S&P Agreement, you are normally expected to sign the Deed of Mutual Covenants too, that regulates the relationship of the many owners within the same development with house rules vis-a-vis the prescribed by-laws under the Strata Management Act. In addition to the compliance with these rules, you are also expected to participate in the management of the common property at the Annual General Meeting as well as the Extraordinary General Meeting.

In the completion of the S&P Agreement, do ensure that the seller has no more outstanding charges and sinking funds owing the management and that the deposits paid are to be adjusted accordingly.

Q: Can you please explain further on ‘share units’ of strata-titled property? How does this affect a residential strata-titled property owner or what is the relation between the owner and the share units?

CT: Share unit has always been there in strata living as it will be stated in the strata title upon its issuance. It is now capturing the limelight, given that it is now the basis to be contributed into the maintenance charges and not the usual rate psf of the size of your main parcel.

There are different ‘weightages’ for the main parcel, the accessory parcel and the type of usage to make up the various elements of the share unit.

Suffice to say that two units of apartments of the exact same size might have different share unit allocation, if one has more accessory parcels than the other, or one is of commercial usage while the other is residential.

Q: What are some current and common issues faced by owners of strata-titled residential property and how would these be best settled?

CT: Issue 1: Contribution to service charges and sinking funds from the owners have always been done on the total size (in sf.) of the main parcel. Under the new regime since June 2015, it should now be based on per share unit instead.

Share unit is a concept that takes into account the size and the usage (of different allocated weight) of both the main parcel as well as the accessory parcel. It’s stated clearly in the strata title when it is issued. It is also the basis of voting by poll if so requested in any General Meeting. Share unit is therefore now the basis of both contribution and control as opposed to just control in the past.

In theory, it should be a fair method for all. The issues are:

(i) Some strata owners find themselves paying more than before while some strata owners now pay less; and

(ii) The Share unit allocation under the previous legal regime was a result of consultation and discretion and not as transparently guided under the new law. It is a difficult process and to adjust again, particularly when the strata titles have been issued, will be tedious.

Issue No. 2: In Phased Development there is now a requirement to file the Schedule of Parcels (SOP) stating clearly the total share units to be offered under the entire development before one can proceed to sell. It therefore includes the later phases of a development that will only be developed in the future.

The issue is that this SOP can only be adjusted if we can get 100% of the owners to agree or it is a direction from the authority.

There will be no flexibility accorded to the developer who might want to change the SOP for the feasibility or sustainability of the development, taking into account the new circumstances of the future, in the best interest of the entire development.

Another related issue would be on the contribution of the allocated share units by the developer for yet to be developed phase in the maintenance of the common property already built and delivered.

Q: Any other ‘surprises’ or areas of concern that many strata-titled residential property owners are unaware of until after purchase of such residents?

CT: Don’t be surprised if the property does not come with an allotted car park, although it is a norm to expect a car park to come with the unit. It is not always the case.

Q: Like many busy owners of a strata-titled property who do not have the time to sit in at resident’s meetings with the management body – many have simply ‘gone with the flow’ of things as ‘questions/disputes’ require time for discussion.

What would you recommend for busy individuals who have ‘no time’ to attend such meetings but can only look at the annual/bi-annual strata/building management statements/financial reports? What should one keep an eye out for in these financial statements?

Why is it important to attend these meetings; what would owners be losing out on by not attending and being an ‘active owner’?

CT: It is a regulated community living and participation is expected of every owner.

Although many have chosen to be passive, you need to participate or run the risk of letting major decisions lay in the hands of the active few.

You should keep an eye to ensure that the charges collected are well spent, that collection should always be monitored and the performance of the appointed property manager.

Also, understand your rights and obligations as a strata owner is important, and ensure that you and your neighbors are equally aware of the same too.

Q: As a tenant, and not the owner of the ‘parcel’ – are they bound to all the By-laws?

CT: The by-laws, additional by-laws and amendment of such additional by-laws made by the Management Body shall not only bind the owners but also the tenants, chargess, lessees and occupiers.

Q: Any other important issues that you would like to highlight to readers of theSun?

CT: Moving forward, strata living will be the preferred way of community living. Take a keen interest to learn and understand this living model in order to get the most out of it.

There are many more frequently asked questions, especially on management bodies, by-laws and leakage and defects. Answers to these can be found in Chris Tan’s Owner’s Manual & Guidebook.

Follow our property column next Friday for more insights on the market in the local scene.

Source: Thesundaily

%d bloggers like this: