Friday, November 28, 2008
Why would OPEC need to cut the supply? The real cost of crude oil is in the region of USD30/barrel, but due to several national and technical issues, several countries incurred higher cost that may reached as high as USD50 to USD55/barrel. This are putting a burden to these oil producing countries especially those from the Latin and from African continent.
The last few years several oil producing countries are expanding their drilling and services to keep with growing demand at the time and therefore had to spend large amount of money on new infrastructure.
Therefore OPEC need to safeguard their own investment and to maintain the price of Oil certain level to ensure their survival.
And traders will be happy to see the fluctuation as an opportunity to trade on the current situation; buying at USD50 and sells above USD55.
Thursday, November 27, 2008
Taj Mahal Hotel and Oberoi Hotel was attacked in the early morning, while gunmen looking for US and British passport holders. several public places were also under attack, i.e hospitals and cafe apart from the train station.
One of the hotel was on fire.
What a sad day. It was chaotic. The head of India's anti terrorist police were shot dead.
The Crude Oil price spiked again to above USD55.00.
Wednesday, November 26, 2008
Demand for crude oil had declined a lot and the outlook for the market is gloomy and may remain at current level for quite some time.
Ini isu kecil, tapi ramai Menteri yang kecoh sama, sampaikan heboh kat parlimen, apa tak ada isu yang lebih besar ke? Bukankah ekonomi dunia sedang gawat, patutnya kita tumpukan pada masalah ini yang akan memberi kesan pada seluruh rakyat Malaysia.
Yang melucukan, ada menteri pulak yang kata jangan dipolitikkan isu ini, tapi siapa sebenarnya yang politikkan? Siapa yang bawa isu ini ke Parlimen? Kerajaan pusat sendiri sehingga membawa isu ke Parlimen. Buang masa aja.
Kalau kerajaan Pulau Pinang nak pasang tanda nama apa salahnya, tulisan bahasa Melayu masih di utamakan. Bahasa lain tu hanya sampingan, kalau semua bangsa di Malaysia ni nakkan bahasa mereka biar lantak lah biar penuh tanda jalan tu pun apa ada hal?
Kenapa pula bila DBKL memasang tanda nama jalan yang mempunyai bahasa Arab, tak ada pula Menteri atau ahli Parlimen yang melenting? Sila datang ke Bukit Bintang, anda akan lihat banyak tanda jalan disertakan dalam bahasa Arab. Silalah ke Jalan Isfahan, terpampang "Ain al-Arabia" bahasa Arab. Berapa kerat keturunan Arab rakyat Malaysia, bahkan mereka ni banyak mengaku jadi orang Melayu sebab nak status Bumiputera macam Syed Hamid tu boleh jadi ahli Umno!
Jadi, kenapa bila kerajaan yang tak sehaluan semuanya tak betul tapi yang sekongkol semuanya boleh saja. Bukankah dengan adanya pelbagai tulisan akan mencerminkan negara Malaysia yang berbagai kaum?
Isu ini dah melibatkan Menteri Kesenian, Menteri Pelancungan dan Menteri WP. Kenapa, mereka semua ini tak ada kerja ke? Sekarang ini ada isu lebih besar, iaitu Ekonomi Negara. Inflasi dah melambung, harga barang dah tinggi, tambang bas akan naik walau harga minyak dah turun. Ini hujung tahun, banyak perbelanjaan untuk anak sekolah, dan sebagainya...
Tuesday, November 25, 2008
Come on lah he made the biggest blunder in Malaysian economy now he wants to put a floor on the price of fuel. Let say the price goes down to USD40/barrel, who is going to get the profit? Petronas? Cronies? Malaysian consumer will be paying premium on our fuel. An indirect tax on our fuel consumption! We agreed to forego our subsidy but not on putting a floor.
If the government really want to put a floor there should also be a ceiling on the prices, let say not more than RM3 if the global crude oil goes higher than USD180/barrel.
By reducing the fuel price, the consumers will have more disposable cash to spend, in turn, the spending will help spur the economic growth, especially during economic strife where we need domestic consumption to boost the GDP.
Is that very hard for Shahrir to understand? I think our Malaysian Ministers (including PM & DPM) need to attend Economic 101 again.
Monday, November 24, 2008
Pity that our current Prime Minister has no economic background nor his initiative to consult the professional economists. The DPM had not practised his knowledge in economy for a long-long time, since his last short stint when he was a deputy minister in MOF, he has been too long in Education and Defense Ministry. As a whole the cabinet made the worst decision in the history of Malaysia by endorsing the fuel hike on June 5, 2008.
It is the worst decision which compel the Consumer Price Index (CPI) or Inflation to shoot to the ceiling to 7.7% in June, 8.5% in July and August and 8.2% in September.
All transport costs shoots to the ceiling with 30% extra surcharges for buses and all food items increase higher and higher.
It was also a bad timing, as the region were facing food produce shortages, rice producing Indo-china were hit by flood, eartquake in China etc.
To appease the angry public, the government had to introduce cash rebates on road taxes and several other incentives were introduce for several category of users. In the first place the move can be avoided if the government had been very prudent and sensible in their decision process.
Now the price of petrol in Malaysia is almost back to where they once were before June because the crude oil price climbed down significantly since then and much lower than it was a year or so ago. The fifth reduction since August.
The main issue all other prices will never come down again. Shahrir had to convince or more probably made a pact with the giant Hypermarkets to reduce their prices. Good for consumers but on the other hand this move will kill the smaller retailers or "kedai runcit".
The recent price reduction for rice were mainly due to the restoration of supply not due to the government effort.
A couple of weeks ago they announced to cut employees contribution to EPF, the effort is not really to help employees during economic strain but mainly to ensure domestic consumption level remain high and by end of the year, the government will report a good GDP/economic statistic. This is another short term measure. The loser - by the time the employee reached their retirement age the savings will not be sufficient.
Another stupid move was to introduce 10% toll discount between 12midnight till 7 am for passenger cars, it seems the government is encouraging the public to drive during the wee hours. Ironically these are the most dangerous time for passenger cars; heavy vehcles and time to sleep.
Just like any other countries our government had to introduce RM7bil stimulus package to spur the economy. Where will the money come from and how the government is to channel them?
Why don't the government be more cool, prudent and sensible like Bank Negara with their monetary policy especially overnight policy rate?
Thursday, November 20, 2008
All this while, midnight driving is a privilege for Heavy vehicles; lorries/trucks, tankers, container haulers, express buses and also for "midnight racers", mat rempits and drunks. By offering discounts during these hours, the government is now encouraging the public to make their long distant journey in the wee hours and the possibility of endangering users life. Even in broad daylight a lot of accidents involving heavy vehicles with passenger cars, what more in a sleepy mood and darkness of the night.
Toll operators are an unscrupulous lot, they know that the number of passenger cars plying their highways are the lowest during this hour, now they are encouraging drivers to travel at the hour to optimize the usage. It is very dangerous as it midnight is habitually considered a time for rest and sleep for the majority of the public.
If the toll operators are really sincere they should offer discount during peak seasons i.e beginning 3 days before and ending 3 days after any festivities (Hari Raya, CNY, Divali, Xmas etc.)
One thing for sure this is not a way to help during the economic downturn!
Wednesday, November 19, 2008
Check out today's Star newspapers or StarOnline "Government Not Paying Petrol Subsidies". At last the government finally revealed that our fuel price no longer subsidized since the global crude oil price drop below USD65/barrel. So for all that period, in actual fact we have already been paying a premium and most probably still are. Shahrir did also mentioned that the price may be cut to RM1.92 or much lower soon, therefore indicating that all this while the subsidy is either minimal or non-existent.
Quoted from The Star;
“Even with petrol retailing at RM2 per litre, we are not paying any subsidy. We have actually arrived at a time when the price can return to RM1.92,” he said.
Then what happen to the discount of 30sen, most probably also non-existent. The Government all along had given a wrong picture on the subsidy when Shahrir said;
“Earlier announcements of how much the subsidies cost us, even as recent as 2005 or 2006, always included how much we had foregone in terms of taxes.
“We have stopped doing this, however, and just focused on how much subsidy we are paying,” Shahrir said, adding that the Government was now enjoying some revenue due to the difference in the ex-refinery price and the price oil companies sold petrol to station operators." (the Star 19/11/2008)
As an oil producing country we should be enjoying much lower fuel price, like Brunei and the oil rich middle Eastern countries.
Tuesday, November 18, 2008
Pak Lah yesterday lashed out at traders refusing to cut down prices of goods despite the reduction in fuel price. But the real culprit is not the traders, but Pak Lah himself! and together with Shahrir and probably the rest of the cabinet. They had made the decision to hike the fuel price by more than 40%, without proper economic forecasting or projection, misjudged the economic situation, without taking into consideration of the impact from such historically huge hike.
Such a huge hike prompted traders to increase their goods and once prices are fixed it will never look back. Fullstop.
Anyway, still not satisfied with RM2.00/litre still hoping for RM1.90/litre soon.
Monday, November 17, 2008
Shahrir had promised to lower the price but nothing materialized. The petrol price should by now retail at below RM1.90 per litre.
Several pump station had already pasted "pump rosak" (broken pump) on their regular petrol unit in anticipation of an increase in the retail price. Several station operators decided to defer replenishing their stocks ahead of any government move to cut any losses. Some had to resorted to these tactics until their stocks all dried up.
How low will the crude oil price go? Unsure, but consensus says that the chances for the prices to go higher is generally very minimal.
First, it was about my current job status, the possibility of being transferred into another entity really spoiled my working mood last week. The uncertainties about my terms of services, bla, bla, bla... going around and nobody can give a definite answer...
Then, it was about my mentor, my sifu's misfortune after serving a couple of days at his new work place, office politic overpowered and he is also facing uncertainties...
Third, received a letter from Income Tax (LHDN), that i owed them a cumulative sum of RM6,800 for tax between 2002 to 2007. Oh my god! Be patient be sober and luckily i kept all my documents intact, check all the figures and found out that all parties had erred, myself including. The major fault was my employer, for not reporting the annual bonus payments according to the rules, I argued with them that it was wrong to penalise me for the errors made by my employer, and told them to reverse the late payment charges. They should educate or penalise my employer instead.
Since i also made the error of not paying the difference on the amended assessment after declaring the bonus payment, i had to pay almost RM5,000 to LHDN, of which i had to forked out RM2,500 in cash and the rest by 6 months salary deduction. Ouch! thats a lot of money. Well, I had to defer my dream of owning Nikon D90/D300 in the near term. The biggest setback.
Last week also found out through the internet that I got a speeding fine in August of which i cannot recall as it happened 3 months ago and i did not even receive letters or official correspondence. Why me?
Monday, November 10, 2008
As a country rich with our own natural resources we are less dependent on other countries but i have to stress not totally independent, we still rely heavily on foreign trade, especially with the US and the Asean countries. Based on the current statistics our major export is to USA, Singapore and Japan. All these countries are suffering economic recession. The latest statistics also shows that the our export is declining while import increased.
The weakening of the economy had pressured the price of commodities lower; crude oil back to the level more than 18 months ago, palm oil is now going lower than RM1,400/ton after enjoying as high as RM4,400/ton, and rubber is back to its previous level. All the above were the major contributor to our export statistic.
The main export item, electronic and electrical goods had been suffering a low demand for quite a while. The main importer of Malaysian E&E, the US are facing economic recession and demand for such goods will not improve although the festive season is just around the corner.
Malaysian monetary policymaker had been very brave by not increasing the interest rates when the inflation rates soared to record high despite other countries adjusting their rates higher. By now those countries had to re-adjust their rates when the economy come tumbling down.
Malaysia will be affected indirectly by the slowdown in global economy; the weakening export, shrinking in commodity prices, slower foreign investment, weakening stock-market sentiment and economic slowdown in neighboring countries.
Right now Malaysia had to depend largely on domestic consumption. To encourage more domestic spending at the expense of reducing rakyat's savings!
Friday, November 7, 2008
But it is actually a very diabolical and irresponsible act, a short-term measure to ensure the economic records growth. By reducing the deduction, more cash will be available in the hands of the people and more spending power. In other word, the government is prompting the peoples to spend more. By spending more, it would stimulate demand in the domestic market and therefore incite consumer spending. GDP figure will improve.
In the long-term the people/EPF member will suffer especially the lower income group, where at the end of their service age, would found out that their retirement savings is barely enough to sustain a couple of years only.
Before implementing the policy, employers should brief in detail of the pro and contra of their options, reduce or maintain the deduction. This is the time for the employee to increase their saving instead of spending. The government should be more prudent and do an indepth study before implementing any policy, this is the second biggest boo-boo the government made, the first was in June this year, hiking the fuel price by more than 40%.
All working Malaysian and EPF contributor/members must alert and be well inform of the implication of such a move. Inflation is forever increasing and goods are getting more expensive, by 5 to 10 years the savings in EPF may not be sufficient and by then we will see a lot more old folks working like we see now as security guards, kitchen helper etc., etc. instead of enjoying their retirement benefit.
The new Finance Minister cum Prime Minister-in-waiting should be more farsighted, sensible and practical in your decision.
The US Presidential election had ended and the joy in celebration for the new President-elect in the stock exchange also ended, as the market come back into reality. Will Obama be able to make changes as promised? Will his view of the economy be distinct from his past predecessors?
Yesterday's plunge in the stock exchange all over the world compelled the crude oil price to USD60/barrel. Are we seeing the price to remain at this level?
The main issue now is that the demand for oil has reduced so much as the major import countries are more concern in rehabilitating their dwindling economic trend.
Could the coming winter create demand for the black gold? Very difficult to gauge. Most probabilities major user countries like US and China may have already piled up their inventories when the market was pushing to record high in reaction to stock-up before the price goes above USD200/barrel.
In Malaysia are we seeing the retail fuel price revert to pre-June 2008 hike? It should be lower than RM1.92/litre, last year the crude oil price was hovering around this level or probably lower.
Monday, November 3, 2008
When the government hike the petrol by 40%, they never consider the implication on inflation, costs of other consumer goods, cost of transportation, basically nobody is thinking about the general public welfare. But, the petrol operators made huge sum of profit when the fuel prices were increased drastically. By increasing the petrol from RM1.92/litre to RM2.70 per litre, the petrol station operator made a profit of at least 78sen.
Let say, as at 12 midnight on the eve of the price hike, a petrol station had a stock of 10,000 litres bought at RM1.80/litre or RM18,000. By midnight, they sell the petrol at RM2.70/litre, minus operation cost, they made RM26,000 from selling the stock. A gain of RM8,000 was made. Therefore these people had made a lot of money from the price hike, but when the government cut the price, the priority is on the petrol operators' welfare.