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Wakaf Pembangunan Pusat Tahfiz Al-Amin

2014-02-14T11:17:00.002+08:00

“Dan setiap umat mempunyai kiblat yang dia menghadap kepadanya..Maka berlumba-lumbalah kamu dalam amal kebaikan(kebajikan), dimana saja kamu berada, pasti Allah akan mengumpulkan kamu semuanya, sungguh Allah maha kuasa akan segala sesuatu..” (al-Baqarah : 148)

“Wahai orang-orang yang beriman, rukuk serta sujudlah (mengerjakan solat) dan beribadatlah kepada Tuhan kamu (dengan mentauhidkan-Nya) serta kerjakanlah amal kebajikan, supaya kamu berjaya di dunia dan di akhirat..” (al-Hajj : 77)

“Hendaklah kamu tolong-menolong dalam membuat kebajikan dan ketaqwaan” (al-Maidah : 2)

“Maka barangsiapa mengerjakan kebaikan(kebajikan) sebesar zarah, nescaya dia akan melihat balasannya..” (al-Zalzalah : 7)

Mari kita tambah Saham Akhirat untuk kehidupan yang abadi disana.............

*Akaun baru CIMB Islamic : 8601664721

*Mohon sebaran dan infak dari seluruh rakyat Malaysia~

Assalamualaikum wm,
Untuk maklumanMuslimin dan Muslimat serta sahabat-sahabat sekalian, Pusat Tahfiz Al Amin mula beroperasi sejak tahun 2010 diatas bangunan yang diwakafkan sementara oleh Cikgu Mustafa beralamat di:
No 69,
Lot 210, Sungai Seluang,
09600 Lunas,
Kedah Darul Aman.

Sehingga kini Pusat Tahfiz Al Amin terus berkembang pesat dan jumlah pelajarnya terus meningkat. Pusat Tahfiz Al Amin beroperasi sepenuhnya diatas sumbangan infak, zakat, derma , wakaf dan seumpamanya oleh tuan-tuan, puan-puan , muslimin muslimat dan sahabat-sahabat sekalian.

Terkini, dalam merealisasikan kewujudan bangunan sendiri diatas tanah milik Pusat Tahfiz Al Amin(tanah diwakafkan oleh satu keluarga yang budiman) , kerja-kerja membina komplek bangunan Pusat Tahfiz Al Amin Fasa Pertama sedang giat dilaksanakan sekarang hasil dana wakaf muslimin muslimat dan sahabat-sahabat sekalian selama ini.

Oleh yang demikian, pihak Pengurusan dan Penyelenggaraan Pusat Tahfiz Al Amin amatlah mengharapkan sumbangan yang berterusan daripada muslimin muslimat dan sahabat-sahabat sekalian serta menggembeling usaha menghebahkan kepada kaum keluarga, rakan taulan, kenalan dan semua yang dapat dicapai bagi mengumpul dana pembinaan Fasa Pertama ini yang berharga RM500,000.00 sahaja dan dijangka siap dalam masa 6 bulan dari sekarang (Jun 2014).

Wakaf cuma RM25 untuk satu bahagian bangunan.
Sumbangan wakaf, infak, zakat, derma dan seumpamanya bolehlah disalurkan ke akaun "Pusat Tahfiz Al Amin" :

Bank Islam: 02057010031773
CIMB ISLAMIC 8601664721
BSN: 02136-41-00004852-9
May Bank: 5571 6620 0836
Diatas nama : PUSAT TAHFIZ AL AMIN

dan maklumkan wakaf tersebut melalui sms, inbox, email kepada:

Pengerusi/Mudir (Ust Ismail Bin Saad) 019-4586172,
https://www.facebook.com/ismail.saad.754

N/Pengerusi ( Md Daud Abdul Rahman) 013-4305756 ,
https://www.facebook.com/mddaud.abdulrahman?fref=ts

Bendahari ( Sham Affin) 0124798937.
https://www.facebook.com/shamsonariffin.abdulrahman?fref=ts

Email: pusattahfizalamin@gmail.com

ATAU PUN paling mudah, masukkan sahaja wang infak tuan/puan, sdr/sdri kedalam akaun bank diatas dengan niat 'INFAK' untuk Pusat Tahfiz Al Amin , selesai, jazakumullahu khairan kathira. Yang memerlukan RESIT pelepasan cukai pendapatan, sila berikan alamat penuh,terima kasih

‘PUSAT TAHFIZ AL AMIN ADALAH MILIK KITA SEMUA’

Like kami di :https://www.facebook.com/pages/Pusat-Tahfiz-Al-Amin/337948846257745

EPF to raise members’ basic savings level

2013-10-16T12:51:00.003+08:00

KUALA LUMPUR: The Employees Provident Fund (EPF) will revise upwards the basic savings quantum of its members to RM196,800 by the age of 55 effective January 1 2014, to ensure enough savings to finance their retirement needs.

The new quantum will be equivalent to RM820 a month for 20 years from age 55 to 75.

The current basic savings amount, which was set in 2008, is RM120,000 at the age of 55.

“The new rates are benchmarked against the minimum pension for public sector employees which are currently at RM820 a month.

So, the monthly retirement income does not fall below the poverty level,” EPF deputy chief executive officer (operations) Datuk Ibrahim Taib told a media briefing here yesterday.

Investors Panic Selling of Gold GLD ETF

2013-04-13T09:37:00.001+08:00

Gold has faced stiff headwinds lately as investors abandon alternative investments to chase record-high stock markets. Probably the most significant has been the major selling hammering the flagship GLD gold ETF. It has suffered such intense differential selling pressure that its custodians have been forced to dump enormous quantities of physical gold. What are the implications of this flood of new supply?
The amount of gold bullion GLD has hemorrhaged recently is amazing. To put it into perspective, earlier this week the rumor that embattled Cyprus may be forced to sell its official gold reserves made news. The Cypriot government owns 13.9 metric tons of gold. But on a single trading day alone in February’s gold capitulation, GLD had to sell 20.8 tonnes! The supply recently added by GLD dwarfs everything else.

Why is GLD dumping gold so aggressively? While silly conspiracy theories abound as always in the gold world, the reality is far less provocative. GLD’s mission is simply to track the price of gold. The World Gold Council (which is funded by leading gold miners) created this gold investment vehicle in November 2004 to offer stock investors an easy, cheap, and efficient way to obtain gold exposure in their portfolios.
The gold miners created a direct conduit for the vast pools of stock-market capital to chase gold. The only way for GLD to fulfill its mission of tracking gold is for this ETF to shunt excess GLD-share demand and supply into underlying physical gold bullion itself. This capital sloshing into and out of gold via GLD has naturally had a massive impact on global gold prices. And lately gold has suffered a major GLD exodus.

During times like 2009 when gold grows popular among investors, GLD shares are bought up far faster than gold itself is rallying. This excess, or differential, GLD demand would quickly force this ETF to decouple from the metal to the upside if not equalized into physical gold. So GLD’s custodians sop it up by issuing new GLD shares to meet demand. They then use the proceeds to buy more gold bullion.
But when gold is falling out of favor like now, capital flows reverse. GLD shares are dumped at a quicker pace than gold’s own selloff. This differential selling pressure creates an excess supply of GLD shares. This ETF would decouple from gold to the downside if this wasn’t equalized into the metal. So GLD is forced to buy up this excess supply. It raises the cash to do this by selling some of its gold bullion.

And this is what we’ve experienced lately, heavy differential selling pressure. As the levitating stock markets rise ever higher, investors have sold gold to buy general stocks. Because of its incredible liquidity, GLD has been the epicenter of this anti-alternative-investment rotation. It’s rather illogical when you think about it, selling gold low to buy stocks high. Investors are supposed to buy low and sell high!

But sadly greed and fear always overwhelm reason at market extremes. Foolish investors rush to sell low after long corrections, just before new uplegs are born. And later they eagerly flood into markets after long uplegs, buying high just before major corrections. Selling low and buying high leads to financial ruin, which is why such a small fraction of investors ever achieve significant success in the financial markets.

Gold is universally despised right now because it is low, the ideal time to buy. General stocks are adored if not worshipped because they are high, the prudent time to sell. Every day on CNBC, a long parade of analysts effectively proclaim gold is doomed to sink to zero while stocks will joyously rally forever more. The intense selling pressure GLD has faced in recent months simply reflects these emotional extremes.
As a contrarian I’ve grown rich fighting the crowd, being brave when others are afraid and afraid when others are brave as Warren Buffett once eloquently put it. That’s the only way to buy low and sell high. So I’ve watched GLD’s holdings lately with great interest. Thankfully this flagship gold ETF is very transparent, publishing its holdings daily. How does GLD’s holdings plunge stack up relative to precedent?

This first chart over the past year or so highlights the extreme differential selling pressure GLD has faced in recent months. Its holdings are shown in blue and tied to the right axis, superimposed over the gold price in red. There has been no bigger headwind facing gold lately than the deluge of physical-gold-bullion supply GLD has been forced to dump into the global gold markets. It has proven overwhelming.

Remember Cyprus’s 13.9t of official gold reserves? The recent “correction” in GLD’s holdings has forced it to dump a staggering 169.8t of gold bullion simply to keep GLD shares’ price tracking gold! We are talking about 5.5m ounces of gold here, from this single American ETF! There are only two gold-mining companies in the entire world (Barrick and Newmont) that produce that much gold in a whole year!

Yet the mass exodus from GLD by stock investors forced it to add 169.8t of gold supply in just over 4 months. It’s hard to believe given how despised gold is today, but back on December 7th GLD’s holdings hit an all-time record high of 1353.4t. They remained stable and held near this record for several weeks, until two simultaneous events hit in early January that started cracking gold’s bullish sentiment.

First the flagship S&P 500 stock index soared 2.5% on January’s opening trading day on news of the fiscal-cliff tax deal. The biggest tax hike in US history had been narrowly averted at the very last minute. And then the very next day, the minutes from the recent FOMC meeting were misinterpreted to imply the Fed was already preparing to shut off its brand-new QE3 debt-monetization campaign. So gold sold off.
Ever since 2013’s fateful initial trading days, those psychological cracks plaguing gold have spread. Every day that the stock markets’ levitation continued, gold fell farther out of favor among investors. And then every few weeks there was either an FOMC meeting or the minutes from one to spook traders into somehow assuming the Fed’s unprecedented open-ended inflation campaign would end prematurely.

The resulting heavy differential selling pressure on GLD shares is readily apparent above. This peaked in late February just after gold selling cascaded into a full-blown capitulation. In just 7 trading days late that month, GLD’s custodians were forced to sell 5.0% of its holdings (65.5t) to buy back enough excess share supply to keep this ETF from decoupling from gold. Like many market extremes, this became self-feeding.
As GLD dumped bullion to raise enough cash to buy back the flood of excess shares being sold, those very gold sales weighed on global gold prices. This caused more gold stops to be triggered, and kindled more fear, scaring still more traders into exiting. The lower gold went, the more people sold, and the more this selling forced GLD to add big supplies to a very weak gold market. It was a relentless vicious circle.

As of this past Wednesday, GLD’s holdings had fallen a mind-boggling 12.5% in just over 4 months! It has had to liquidate 1/8th of its total gold bullion to keep up with stock traders rushing for the gold exits. Over this same span, the gold price is down 8.6%. Since rising and falling GLD holdings reveal whether stock traders are buying or selling gold on balance, I’ve closely followed them daily since GLD’s birth.

GLD holdings trends are one of the best gold sentiment indicators available. And provocatively they’ve long proven rather “sticky”. While stock traders eagerly buy up GLD shares when gold is rallying and in favor, they have generally not sold too aggressively when gold was correcting. So the sheer degree of the recent GLD holdings plunge sure felt exceptional. I’ve been wondering if it was the biggest ever.

So this week I decided to look at all the GLD holdings “corrections” over this ETF’s entire history. And I was pleasantly surprised to find out that we’ve weathered worse. Coming off record highs, the recent 169.8t GLD dump is certainly the biggest absolute decline in its holdings. But in percentage terms, GLD’s holdings suffered even bigger retreats as gold fell deeply out of favor during 2008’s crazy stock panic.

My suspicion that the recent GLD holdings plunge was exceptional was generally correct. Outside of that once-in-a-century stock panic, GLD’s average holdings correction has merely been 5.9% over 3.9 months. So while the recent holdings correction’s 4.0-month duration is on par, its 12.5% slide more than doubled what has been typically witnessed for the vast majority of GLD’s lifespan. It was indeed very big.
The only comparable declines were leading into and during 2008’s stock panic, when GLD’s holdings plunged 12.6% over 1.4 months and later another 13.0% over 2.0 months. It is interesting that these were the worst GLD selloffs ever seen, and they happened in far-worse gold conditions.
While gold is merely down 8.6% during the recent GLD holdings correction, it plunged by 13.3% and 22.0% during 2008’s!

The latter is particularly interesting and relevant today. If there was ever a time for gold to shine as a safe haven, it was during that epic stock panic. In a single month in October 2008, the flagship S&P 500 stock index plummeted 30.0%! Fear was off the charts, with the definitive VXO fear gauge challenging 90 when only around 50 is normally the worst-case extreme. The financial world was crumbling right before our eyes.
Yet gold couldn’t catch a bid! Its price plunged 16.7% over that month-long span where the stock markets lost nearly a third of their value. Stock investors deployed in GLD rushed to sell their shares, both disgusted by gold’s failure to surge on a financial Apocalypse and trying to raise cash wherever they could. Between July and November 2008, gold fell an astounding 27.2%. It was truly a total disaster.

The main reason gold plummeted during that panic is because safe-haven buying flooded into the US dollar instead, driving its biggest and fastest rally (22.6% higher in 4 months) ever witnessed. But the key takeaway today is that the financial world was totally convinced gold was dead. If it couldn’t rally in that panic, then it was no longer a safe haven. There was no reason to own gold anymore, its bull was over.
Sound familiar? That’s the exact kind of thing we’ve been hearing in recent weeks. Because gold hasn’t rallied despite the Cyprus bank failures and record Fed debt monetizations, there must be something fundamentally wrong with this metal. Traders are abandoning it in droves, just like they did in late 2008.

But obviously they were dead wrong to sell low then when gold was hated. It was on the cusp of soaring.
Right as investors totally capitulated and gave up on gold in November 2008, it was carving a major bottom. It would ultimately power from around $700 then to $1900 by August 2011. And ever since it has consolidated high, it is simply at the low end of its multi-year trading range today. A major gold correction driving or being driven by a massive 1/8th GLD holdings selloff was the best buy signal of gold’s bull!
I suspect the recent 1/8th GLD holdings correction will prove similarly bullish. In order for stock traders to dump GLD shares rapidly enough to force it to sell so much bullion so fast, their sentiment has to be hyper-bearish. They have to be utterly convinced gold’s bull is dead to sell so aggressively.

But whenever sentiment swings to such unsustainable extremes, major bottoms are carved leading into major uplegs.Extreme GLD selling on a daily basis is also a fantastic contrarian indicator itself. I generally consider GLD differential selling pressure on any given day material if it is big enough to force GLD’s holdings down by more than 0.5% that day alone. And big GLD holdings liquidation days are over 1.0%. Clusters of these near gold lows are major bottoming indicators, they reveal sentiment in gold has grown too bearish to persist.
Since the February gold capitulation, we’ve seen 3 separate trading days where GLD’s holdings fell more than 1.0%. They are pretty rare over GLD’s 8.4-year history, only occurring 51 times or about once every 40 trading days. The last time a similar cluster was seen was actually in October 2008 during the stock panic, just before gold started more than doubling in its next mighty upleg that was being born in despair.

So historically big GLD liquidations, both in individual-trading-day and multi-month-trend terms, have actually been very bullish contrarian indicators. This precedent completely contradicts many of the gold bears dominating the financial media, who claim excessive GLD selling is bearish rather than bullish. In reality, stock traders panicking out of GLD shares is an indicator of fear reaching irrational extremes.
So smart contrarians fight the crowd and aggressively buy GLD holdings plunges. The only way to buy low is to be brave when others are afraid, and they are certainly afraid of gold today. Bearishness in this yellow metal has recently hit extremes not seen since the stock panic, the best gold buying opportunity of its secular bull. The recent GLD holdings liquidation was also panic-magnitude, utterly unsustainable.

Stock investors have been fleeing GLD, selling low, so they can plow their capital into general stocks near nominal record highs. The red-hot stock markets have fueled the dismal sentiment in alternative investments like gold. But as soon as they decisively turn, which ought to be imminent given how overbought and euphoric the stock markets are today, the precious metals will start returning to favor.
The same unsustainable hyper-bearish sentiment forcing the massive GLD liquidation in recent months is crushing the gold miners’ stocks. They are hyper-oversold, trading at their lowest valuations of their entire secular bull. The main gold-stock index is scraping fundamentally-absurd 45-month lows, trading as if gold and silver were 41% and 53% lower than today’s levels! The gold-stock sector is loathed today.

Which makes it an extraordinary contrarian buying opportunity! At Zeal we’ve been concentrating our buying around this major gold bottom in smaller dirt-cheap gold and silver miners with dazzling fundamentals. As sentiment inevitably turns in gold, the entire precious-metals realm is going to soar but the best of the miners ought to skyrocket. We are talking about stock prices tripling or quadrupling!
So if you have cultivated the mental toughness to buy low when few others dare, gold stocks are the place to be today. We are constantly researching that entire universe to uncover the most fundamentally-promising miners. Last month we published a popular new 31-page fundamental report profiling our dozen favorite junior gold producers in depth. Buy it today, buy some great gold stocks cheap, and thank us later!

We also publish acclaimed weekly and monthly subscription newsletters long loved by speculators and investors worldwide. In them I draw on our vast experience, wisdom, knowledge, and ongoing research to explain what is going on in the markets, why, where they are likely headed, and how to trade them. Our contrarian approach works, the 637 stock trades recommended in our newsletters since 2001 have averaged stellar annualized realized gains of +33.9%! Subscribe today!

The bottom line is stock investors have indeed been panicking out of GLD in recent months. This extreme bearishness has created a panic-grade drawdown in GLD’s holdings. All this excess gold supply from GLD’s forced selling has been a major headwind for gold, exacerbating its latest correction. But historically extreme GLD selling by stock traders is a major bottoming indicator for the yellow metal.

Like everything else in the markets, gold bottoms and embarks on major new uplegs when everyone is convinced it is dead. Widespread fear soon leads to selling exhaustion, leaving only buyers. So gold soon starts rallying again, gaining momentum. This coming upleg has the potential to be very large as the euphoric, overbought, levitating stock markets inevitably reverse. Alternatives will quickly regain favor.
Adam Hamilton, CPA

Source

T-Minus 30 Days Until The US Begins Defaulting

2013-01-10T08:21:00.003+08:00

January 9, 2013

We’ve now have just a little over 30 days until US breaches its debt ceiling.
We would have already done so, except Treasury Secretary Tim Geithner borrowed some $200 billion from emergency funds to buy a few weeks’ time (announcing that he’d be leaving his post before the actual ceiling was breached).

The “solutions” to the debt ceiling discussions range from outright insane ($1 trillion coins) to just staggeringly irresponsible (just get rid of any oversight and grow the debt without restriction).
Let us consider the facts.

The only reason the US is even having these discussions is because we’ve added $1+ trillion in debt to our balance sheet every year since 2008. The reason we were able to get away with this was because Congress hasn’t even implemented a budget since that time. Indeed, the last time a budget was even proposed (by President Obama in that case) it was rejected 97-0.

Let’s say a US family spent all of its savings and income and so began using credit cards to fund its purchases. Then, instead of implementing reforms and a budget, these folks decide to abandon any kind of tracking of their expenses and start spending even more. Eventually this family would begin to stop paying its bills.

What would you tell these folks if their proposed solution to this situation was to stop opening their mail?
At the core of this entire situation is a total lack of financial discipline. Indeed, at this point, the only thing the political class in the developed world seems to pay attention to is the bond markets: only when their bonds collapse and interest rates spike is there any sense of urgency to do anything (with massive debt loads, any increase in interest rates means hundreds of billions of dollars in more interest expenses).
On that note, the US 30-year Treasury appears to just have taken out its trendline:

Bear in mind, the US Federal Reserve has been the primary buyer of US debt. So if the US bond market begins to collapse at a time when the Fed is already buying this much, there isn’t a whole lot the Fed can do to fix the situation (other than just buy more… which inevitably leads to a debt implosion).
This situation has the potential to get very ugly. Remember the impact the failed debt ceiling talks had on the markets in July 2011?

At that time, the only thing that pulled the market back from the edge was the Fed’s announcement of QE 2. But the Fed has already just announced both QE 3 and QE 4. So this option wont be around to fix the fallout if the US breaches its debt ceiling again now.

Source HERE

Richard Russell - The 60-Year Shocker, Silver Shorts & Gold

2013-01-08T09:01:00.002+08:00

With 2013 now under way, the Godfather of newsletter writers, Richard Russell, told his subscribers that after being in the business for 60 years, he has never seen anything like this (described below). Russell also discussed the massive silver short position and gold’s eternal value. Here is what Russell had to say: “Bull market or bear market? Below we see a listing of the year-end cost of gold denominated in Federal Reserve Notes (these notes are now commonly called “dollars”). From a market standpoint, we're looking at one of the greatest bull markets in history. But ironically, referring to “dollars alone,” this is one of the worst bear markets I've ever seen.”

Richard Russell continues:

“Bear market? Sure, back in the year 2000, for only 273 dollars you could buy one ounce of gold. But by 2012, you needed over 1600 dollars to buy the same one ounce of gold. The eternal value of gold doesn't change. It's the purchasing power of the Federal reserve note that has changed.

The price of gold in terms of “dollars” has now risen thirteen years in succession. But what is even more remarkable is the fact that most Americans have totally ignored (even despised) this remarkable bull market. Let a stock rise seven or eight years in a row, and it will be the talk of Wall Street and the talk of every social gathering in the nation.

Yet this amazing bull market in gold stands alone, sneered at and almost hated. I've been in this business for over 60 years, and I've never seen anything quite like it. However, I do think I know something about human nature. What I've learned about human nature is that it doesn't change. For instance, if a stock creeps up year after year, sooner or later the crowd will discover it -- and then they'll pounce on it, ultimately sending that undiscovered stock far above its reasonable price.

My belief is that somewhere ahead, the crowd will latch on to gold. Then, as disinterested in gold as they are now, the crowd will pile into gold with the same frenzy that overtook the storied “49ers” when they packed their bags, kissed their wives and kids good bye, and headed West in search of gold.

Gold is the only item that elicits both greed and fear. The greed factor is so well known that I don't have to explain it here. But the fear factor only arises when men (and women) see the “value” of their money disappearing. Nothing concentrates the mind as dramatically as seeing the purchasing power of one's hard-earned income and savings being ruthlessly destroyed.

As I write, Ben Bernanke's Federal Reserve is systematically shaving off the purchasing power of the dollar in the same way that you can peel the layers off an onion. The US has been in the process of constructing the greatest credit bubble in history. The world has never seen anything like it.

This enormous bubble is now being attacked by the worldwide forces of deflation. Fed Chairman Bernanke is terrified by the mere thought of deflation. Bernanke will not stand for deflation. He has said as much. And he will attack deflation and crumbling asset prices with all the inflationary power at his command.

As the ocean of new dollars pours out of the computers of the Federal Reserve, the purchasing power of the dollar erodes. It erodes slowly at first, but as the river of dollars turn into an ocean, slowly-rising inflation segues into a monster. Finally, the crowd recognizes what is happening to their money.

The loaf of bread that cost a dollar last year suddenly costs four dollars. The cup of coffee that cost a dollar last week goes on special today for two fifty. The college tuition that cost four thousand dollars now costs sixteen thousand and there's the extra for a dorm. You're suddenly paralyzed. A light bulb in your head starts to glow. And just as suddenly, the mad, frantic rush for gold is on.

Old timers shake their heads knowingly and repeat the old saw, “There's no fever like gold fever!” And the rush for the yellow metal turns into a full frenzy. Even as I write, the subtle but tell-tale signs of “gold-fever” are seen and heard. New gold funds and new gold ETFs are started.

Full-page advertisements appear in the newspapers, drawing attention to the loss of purchasing power in the dollar, and lauding the advantages of owning gold and silver. Gold vending machines appear at airports and in European and Asian department stores. Pressure is rising to force lawmakers to elect gold as legal tender.

On March 29, 2011, the state of Utah passed a law stating that gold and silver will be legal tender in the state of Utah. Imagine, just imagine -- gold being treated as real money! That alone shows us how far and how completely insane the nation's attitude towards gold and silver has become. Gold has been treated as money for 3,000 years. “As good as gold” is a well-known expression. Yet, today in the US, gold is not considered to be legal tender.

No fiat money has lasted for as long as a century. The US has had prior experience with fiat money -- the Civil War Greenbacks, the “Bills of Credit” of the original American colonies, the ill-fated Continentals during the Civil War. None of these have survived, and neither will the Federal Reserve notes that we now refer to as “dollars.”

I dislike falling back on the morality argument, but consider this. I may work a lifetime for five million dollars. Yet some academic working for the Federal Reserve can press some keys on a computer and create ten billion dollars instantly without working up a sweat. Is the ten billion dollars he creates moral money? Did anyone work for the money? Did anyone take a risk for the money? Did anyone drop a bead of sweat for it? No, then I claim it is immoral and actually evil money, and as such it is doomed.

The only power evil has is the power to destroy itself. I affirm that the Federal Reserve note is doomed. When the Federal Reserve note goes down the drain, all fiat money in the world will go down with it. Today information travels around the world with the speed of NOW. People around the planet will see that fiat money is a fantasy and a counterfeit fraud foisted upon them by unconscionable and unscrupulous bankers. It is then that the crowd will turn to gold, in much the way that people turned to gold back in 1978 to 1980.

Now this may be “far out.” I'm reading a lot about silver and its huge short position. I hear that the silver shorts are bigger than the amount of physical silver that is readily available. The silver mining stocks have already surged. And I wonder if silver starts to boom, whether that action wouldn't rub off on gold? Hmmm, it's a thought.”

source here

Corporate Earnings Disaster Setting Stocks Up for a Fall

2013-01-07T08:36:00.002+08:00

It is ironic that stocks are at five years highs going into what is probably going to be the biggest disappointment of an earning`s season since the 2008 financial crisis. We got a hint of 4th quarter results during the disaster which was the 3rd quarter earning`s season where most companies missed on the revenue side, and those that beat EPS guidance, did so barely, and most of that was created through stock buybacks and creative smoothing techniques.

Make no mistake when a public company sets earning`s guidance these are numbers that are very conservative, and they expect to blow these numbers away given a healthy business environment. When a company just barely hits or beats the EPS number, and misses on revenue you know they were buying back stock, and trying any possible financial trick to attain the EPS number. One of the oldest tricks on Wall street, besides giving easy guidance so that when it comes time for earning`s the stock shoots up because they “beat” expectations.

The fact that companies have to struggle so much just to meet expectations tells how bad things are from a corporate profit standpoint. They have cut their operations to the bone for the last three years, and built earnings up from the bottom, and that strategy has reached its point of exhaustion. No more to be squeezed out of that cost cutting strategy.

The Fiscal Cliff

Moreover, with the continual uncertainty coming out of Washington from a policy perspective, code word the Fiscal Cliff, it`s unlikely that CEO`s committed much towards year end discretionary CAP EX purchases which would spur corporate growth during the fourth quarter. So expect to hear the term Fiscal Cliff during Earning`s season quite a lot as the primary excuse for business headwinds by the executive teams during conference calls.

Deja Vu

Last quarter stocks were at these same levels, and companies started missing and no one wanted to sell hoping that they would get better earning`s reports, but firms just kept missing, and getting taken down one by one while the market stayed afloat at elevated levels.
Then more and more firms were missing on the same days, the big boys started missing, and finally the shorts were going to take multiple firms stocks down on the same day, and Wall Street pumpers threw in the proverbial towel on an options expiration Friday of all days, and took prices down to the next level in most stocks.

In other words, they tried to ignore the bad earnings and keep the rally alive, but the shorts are going to punish bad earning`s regardless of bullish sentiment.

Expect the same pattern of behavior as most fund managers are sheep and too stupid to actually get out before earnings season starts, and buy after the inevitable selloff. They wait and hope and once one big player unloads they all run for the exits at the same time leaving quite a carnage in stocks along the way. One benefit is that short sellers can get some very cheap puts and establish some very attractive entry points for the inevitable ride back below 1400 in the S&P 500.

The Debt Fight

Moreover, with the upcoming fight over increasing the debt limit just around the corner expect quite a sizable selloff in markets which sends everybody back into the comforts of bonds teasing bond vigilantes once again, and reminding everyone including the fed that we really are still in a deflationary, deleveraging cycle that will not turn until true growth based upon sound financial principles are in place in Washington.
Washington is the biggest reason this economy has taken so long to recover from the financial crisis in 2008. And their ineptitude has caused the fed to overcompensate with an unprecedented and borderline extreme monetary solution which remains to be seen what the eventual unintended consequences are of said policy.
As this is new territory for the fed, and a grand experiment which economists will be analyzing for the next 50 years of academic study as to the ultimate costs & benefits to our society.

Cost cutting versus top-line growth

Corporations have had to watch costs the last three years, work their employees longer hours, control costs from an operational standpoint, i.e., operate more efficiency and take advantage of low financing and borrowing costs to manufacture earnings where they can through stock buybacks and creative use of capital.
But the one thing that hasn`t been present for corporations is an environment where the economy is robust and we are adding 500,000 jobs a month to the economy, and they can afford to hire and grow profits from the top line through new growth opportunities.

Expect to see the 4th quarter earning`s season reflective of squeezing all that can be had from the bottom line over the last three years, and the lack of true growth opportunities, which showed its ugly head during the 3rd quarter earnings results, make a pronounced appearance this earning`s season.

Fund Managers are slow learners

Stocks will get hit hard as shorts take down the earning`s misses one by one, until the fund managers get the hint, and start selling before the shorts eat into their profits, and start dumping everything mid-way through this earning`s season.

The excuses will be prevalent, all pointing to a lack of certainty out of Washington, but the real reason is that you can only cut your way to profits for so long before you need actual real growth in the economy, and apart from the slight uptick from the bottom in the housing market, the rest of the economy is just not robust enough to produce earning`s growth that is reflective of top line opportunities.
By EconMatters

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THE NEXT RECESSION WILL BE TRIGGERED BY OIL

2012-09-18T10:09:00.000+08:00

I was confident that the Fed had already begun printing. That seemed quite evident by the overall action in the commodity markets, the dollar, and the fact that stocks were unable to correct in the normal timing band for a daily cycle low. However, I didn’t really expect Ben would come out and publicly admit it. That one took me by surprise Thursday. I guess Bernanke wants to get full value for his attack on the dollar and make sure that markets are rising into the election.

At this point all the pieces are in place for the inflationary spike and currency crisis I’ve been predicting for 2014. We now have open ended QE that is tied to economic output and unemployment. But since debasing currencies has historically never been the cure for the bursting of a credit bubble, all the Fed is going to produce is spiraling inflation. So as this progresses we are going to see the Fed printing faster and faster as the result they are looking for never materializes. This is what will ultimately drive the currency crisis at the dollar’s next three year cycle low in 2014.

At this point, watch the price of oil if you want to know when the next recession is going to begin. As I’ve pointed out many times in the past, recessions (well, at least since World War II) have all been preceded by a sharp spike in the price of energy. Any move of 100% or more in a year or less, has historically been the straw that breaks the camel's back. Modern economies cannot survive that kind of shock. It invariably triggers the collapse of consumer discretionary spending and economic activity comes to a grinding halt.

In 2007 oil surged out of the 3 year cycle low into a parabolic advance as Bernanke trashed the dollar in the vain attempt to halt the sub-prime collapse. That 200% spike in oil is what tipped the economy over into recession, which was then magnified in the fall of `08 as the financial bubble and debt markets imploded.

I think it’s safe to say that Bernanke doesn’t understand his role in causing the recession of 08/09 as he is now making the same mistake again. I think he believes the recession was solely triggered by the financial meltdown. That was the icing on the cake, but not the initial trigger that caused the recession.

Despite the complete inability of QE to heal the economy or job market, and since he really has no other tool, Bernanke just keeps doing the same thing over and over expecting a different result, but never getting it.

Commodities are the check that prevents Keynesian economic policies from healing the global economy. Keynesian academics either don’t understand this, or refuse to acknowledge it. Until they do, or we install Austrian economic advisers in the government, we are destined to continue making the same mistakes over and over.

So we will watch the price of oil as it rises out of its three year cycle low. If it hits $160 by next summer that will probably be enough to start the economy on the next downward spiral. If politicians get involved (and I’m sure they will) and try to impose price controls, they will multiply the damage and probably guarantee that the next economic downturn escalates into a truly catastrophic depression.

Until we see the spike in oil and the corresponding damage to the economy, no one has any business try to short anything, well maybe bonds, but even that will be risky because the Fed is going to be actively trying to prop the bond market up and keep interest rates artificially low.

All in all there is going to be so much money to be made on the long side, especially in precious metals, that no one needs to fool around with puny little gains on the short side, especially in a market that is going to be hell to trade from the short side. The time to sell short will be in 2014 after the dollar’s next three year cycle low. The dollar’s rally out of that bottom will correspond with the next global economic collapse, ultimately caused by the decisions made by the ECB and the Fed this past week. I dare say if they could see the damage their decisions are going to inflict upon the world and the dire unintended consequences, maybe they would finally stop kicking the can down the road and let the economy heal naturally. Of course that would entail several years of severe pain and politicians, as we all know, are extremely allergic to that.

2014-2015 is when we are going to see the stock market drop 60-75% and the next great leg down in this secular bear market. But until then there’s probably a pretty good chance we are going to see the S&P at new all time-highs in the next 6 months – 12 months.

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The Problem is not Debt, it’s Interest

2012-08-28T09:09:00.003+08:00

Anthony Migchels – Real Currencies August 25, 2012

How do we know this?

Consider a mortgage. We borrow $200k, and after 30 years we will have payed about $500k. So we pay $300 thousand dollars interest over the loan.

What would happen with our purchasing power, if we only needed to repay the principal? It would mean we would have 10.000 per year more purchasing power during the 30 years we repay the mortgage.

Our credit would greatly improve, because our liabilities would be much smaller.

Interest is payed to those who have money, and payed by those who don’t, and therefore need to borrow.

Interest is therefore a wealth transfer from poor to rich. Margrit Kennedy, a German monetarist, has quantified this wealth transfer in Germany. Her conclusions: the 80% poorest Germans pay 1 billion euros per day (365 billion per year) in interest to the richest 10%. The next richest 10% pay about as much interest as they receive.

Also, with in the 10% brackets the same wealth transfer is happening: so the poorest 8% of the richest 10% pay interest to the richest 1%.

It stands to reason that the situation is more or less the same everywhere. This means, that the poorest 80% Americans pay about 1,5 trillion dollars per year to the richest 10 percent.

This is the key driver centralizing wealth in the hands of the plutocracy.

Another problem with interest is, that it is not transparent who pays what. The strange thing is, that even if you don’t have any debts at all, you will still lose up to 45% of your disposable income through interest.
Producers incur ‘capital costs’. They pass these costs on to their customers. The amount of interest they pay on the loans to finance their production differs per sector. But it transpires that on average 45% of the prices we pay can be related to cost for capital.

Now, back to the debt.

Is it reasonable that one should be able to get a mortgage? Is their something intrinsically wrong with the debt?

It is probably quite useful for the large majority of the people to be able to get a mortgage. Most people would not be able to buy their own homes if they were not able to go into debt.

Another important aspect is, that in the case of a mortgage the creditor incurs no risk at all: he has the house as collateral.

And who is the creditor? In most cases a bank. A bank basically is a credit facility. However, the bank has made us believe that it is their credit, that we are borrowing their money.

This is not the case. Credit is the result of collateral and future income. A person has about 30 to 40 productive years and it that timespan an average American will make about 1 or 2 million dollars.

This future income is what makes the bank provide the credit.

But this future income is not the Bank’s, it’s the individual’s income. It is therefore their credit.

So banks capitalize the credit of the population.

We know that in the current construct all this interest is being raked in by the banks by creating the money at the time the money is loaned out. Through Fractional Reserve Banking.

We consider it unfair that the bank has the right to create money. Therefore a full reserve gold standard is propagated. Not only taking away the iniquity of money creation, but also the nasty habits of banks going broke by overleveraging themselves.

But if we take out a mortgage in a full reserve gold bank, we would still pay 500k for a 200k home. We would still lose 45% of our disposable income through interest passed on in prices.

To further the above points I’ll leave you with a little thought experiment.

What would happen if………

We would nationalize all banks. This would not be unfair, they are all busted and they already needed 16 trillion in Federal Reserve handouts. They are still all under water.

We would weed out all the BS. Derivatives would all be canceled, all the funny financial products gone.

We would maintain real debts by businesses and consumers, mortgages, and the national debt.

But we would cancel all interest payments from now on. Of course, savers would also no longer receive interest, but keep in mind that the average American loses far more in debt service than he gains in interest on his savings.

If debts are repaid, the money supply deflates, to maintain a stable money supply we would give out as much new credit as there are loans being payed off.

What would this mean? A direct end to the depression, because enormous purchasing power in the economy would be released. Consumers would be twice as rich, prices would collapse because capital costs are gone.
The credit of the people borrowing from the banks would massively improve, immediately putting an end to solvency problems of these banks. There would be no more bailouts.

The Government would have an immediate windfall of 700 billion per year, which is what it currently loses on debt service. But the Government, too, loses half of it’s disposable income to capital costs through prices. Not to mention the increased tax income from an exploding economy. So it is likely that without any austerity the deficit would disappear quite soon.

The banks would be reorganized, many people, especially the expensive ‘traders’ and ‘investment bankers’ would all be gone. All that would remain are the people running day to day banking services. Therefore the costs of these banks would be much lower. These costs can (and must) be passed on to debtors, but they would be low.

I believe that managing a risk free loan like a mortgage should cost no more than max. 10% over thirty years, so you would pay maybe 220k for 200k home.

There would be no more bailouts, no more bonuses. The wealth transfer from poor to rich would end over night.

All these benefits would go to Main Street. It would imply a major decentralization of economic power, which is also a key point.

Of course, it would disown the Trillionaires, but hey, I say enough is enough.

Now, I’m not saying that this what we should do at this point. This is just a thought experiment.

It shows it is not debt that is the problem, but interest. It shows that it is not a full reserve gold banking system we need, but interest free credit.

Of course, with this analysis we have not addressed inflation, which is strongly on the minds of most proposing full reserve Gold backed currency. We will deal with that next time.

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Why Europe Matters… And How Spain Could Wipe Out Your 401(k)

2012-08-07T10:28:00.004+08:00

Aug 06, 2012 - 03:38 PM

By: Graham_Summers

Stock-Markets

Best Financial Markets Analysis ArticleMany people have been writing in to ask me, “why are you focusing on Europe so much? Who cares about Spain?”

The short answer is that everyone should care about Spain. Spain could potentially take down the banking system in Europe, which would mean the US facing a Financial Crisis at least on par with 2008.

How would this unfold?

To understand this, you need to understand how the European banking system works. By now everyone knows that many European countries have massive debt problems: Portugal, Italy, Ireland, Greece, and Spain, the infamous PIIGS.

Well, when these countries issue debt, it is mainly the European banks that buy it. So let’s say Spain issues €5 billion in new debt. Most of that will be snatched up by Spanish banks or some other European financial entity.

This bank will then park this debt on its balance sheet as a “senior asset” or an asset that has the least amount of risk (I realize this sounds insane given how bad Spain’s finances are, but this is how the banking system’s “risk models” work).

The bank will then use this Spanish bond to backstop loans to Spanish businesses, developers (not so much any more) even student loans: pretty much every other type of loan the bank might make.

On top of this, the bank will also use this Spanish bond to backstop hundreds of billions of Euros worth of trades.

Do you see the problem with this? If Spain defaults, one of the most important “assets” used to backstop its loan and trade portfolio goes up in smoke. At that point the bank is essentially insolvent and would have to liquidate its loan portfolio while trying to stave off a bank run (as you’ve likely noticed, Spain is facing bank runs galore).

So what? Who cares? This is Spain’s problem right?

Wrong. This is Europe’s problem as European banks across the board are sitting on Spanish debt: Spain’s sovereign bond market is €2.1 trillion in size.

So if Spain defaults, then a heck of a lot of EU banks (and some US banks for that matter) will see some of their “Senior Assets” go up in smoke, rendering them insolvent. This in turn could spread like wildfire throughout Europe’s banking system.

This is why the Spanish bank bailout was so rapid (it took only one weekend). EU officials know that if Spain’s banking system goes down, most of Europe will as well. This is also why EU officials continue to give money to Greece despite the clear fact that Greece is completely and totally bankrupt and has failed to meet fiscal demands placed on it throughout the EU Crisis.

Indeed, I wager most people at some point have asked themselves, “what’s the big deal about Greece? It represents only 2% of the EU economy. How is it that a country this small is still an issue after TWO YEARS!?!”

Now you know. By some estimates, Greece’s true debt exposure is north of $1 trillion. Lehman brothers had $649 billion in assets when it collapsed. Can you imagine the impact that a $1 trillion vacuum would have on the EU’s banking system (a banking system which backstops well over €200 trillion in derivative trades by the way).

How would the debt implosion of Spain’s $2.2 trillion in sovereign bonds affect the financial system? What about the effect of Europe’s $46 TRILLION banking system collapsing?

It would be Lehman by a factor of ten, easily.

So what does this have to do with the US?

The US banking system is $12 trillion in size. And this backstops over $220 trillion in derivative trades. Of this $220 trillion, 85% are based on interest rates. So…

If Spain, or any of the other PIIGS default, and Europe’s banking system (which is $46 trillion in size by the way) crumbles, interest rates across Europe will spike as the EU sovereign crisis spreads.

At the same time, Treasuries will spike pushing interest rates close to ZERO in the US, if not into negative territory (this happened when Lehman went under).

This in turn would very likely trigger an implosion of all those derivative trades based on interest rates. This blows up Wall Street and likely results in bank holidays and the stock market even being closed down for a period.

This is why Europe matters. This is why Spain could wipe out your 401(K). This is why European leaders are so frantic NOT to let a default occur in Greece or Spain (remember, the Spanish bailout was rushed through in less than a weekend).

In simple terms Europe is a HUGE deal for everyone. We’re not talking about some distant region far off in the distance that we will watch go down from our decks. We’re talking about systemic risk on a scale that would make 2008 look tiny in comparison.

This is why I keep talking about Europe so much. And it’s why I’m more concerned now than I was in early

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YaPEIM To Increase Funds For Ar-Rahnu Financing To RM1 Billion Next Year

2012-07-10T08:46:00.000+08:00

SONGKLA (Thailand), July 9 (Bernama) -- Yayasan Pembangunan Islam Malaysia (YaPEIM) or Foundation for Islamic Development Malaysia, will be raising the funds for Ar-Rahnu financing to RM1 billion next year from RM800 million this year.

Its Director General, Datuk Dr. Abd. Malek Awang Kechil, said the move to increase funds was based on the rising demand from traders for the Islamic based mortgage product, particularly from operators of small enterprises.

"YaPEIM's Ar-Rahnu has received encouraging response due to its much lower mortage rates compared with other financial institutions.

"Besides that, the speedier processing time of 15 minutes has also contributed to the rising demand," he said following the launch of a corporate social responsibility programme at the Wittiya San Suksa Religious School here today.

Also present at the event was the founder of the school, Hasan Ali and Principal, Toha Cinda.

A total of RM108,000 in contribution was also given to help upgrade the school's infrastructures and its cooperative business to beef up the school's economic resources.

The contribution was in line with the resolution taken at the 2012 Regional Ar-Rahnu Secretariat Conference, which concluded in Pattani last night, to actively carry out CSR activities towards the well being of the Muslim community.

On the expansion of YaPEIM's Ar-Rahnu branches this year, Abd Malek said the foundation was aiming to open up 24 new branches this year involving an investment of about RM8 million per branch.

However, this would depend on the situation and if there are old branch offices in need of upgrading, they would be given priority rather than opening a new one, he said.

"The cost of investment needed for upgrading a branch would be about the same to building a new branch," he said.

Abd Malek said several franchise outlets will be also opened this year and that the foundation had already identified suitable locations for this.

YaPEIM currently has 256 Ar-Rahnu branches nationwide.

-- BERNAMA

Maybank offers silver investment account

2012-07-10T08:42:00.001+08:00

KUALA LUMPUR: Malayan Banking Bhd (Maybank) aims to attract RM32 million in the first year for its new product that allows investors to invest in silver.

The banking group is the first in the country to offer a silver investment passbook account, which allows deposits and withdrawals in the precious metal to be made at a daily price in ringgit.

Maybank said in a statement yesterday that this could be done at any of its branches, without the hassle of keeping the physical silver.

The product, known as the Maybank Investment Silver Account, comes as Maybank diversifies its offerings on previous metals.

Many banks in the country, including Maybank, already have a similar product for investment in gold.

Maybank's deputy president and head of community financial services, Lim Hong Tat, said investing in silver was appealing since it was highly valued for jewellery and industrial practices.

"In addition, silver will always be valuable regardless of the economic climate.

"The returns on customers' investment are dependent on the silver price fluctuations and the transactions would be recorded in the customer's passbook for easy record and maintenance," he said.

Lim said the new product would address increasing demand from those who had been investing in international grade silver bars.

The minimum investment for the product is 20 grammes.

Purchases of silver will be based on Maybank's current silver selling price quoted in ringgit per gramme. It was priced at RM2.95 per gram as at July 3.

"With this innovative option, we are targeting 20,000 customers in one year," Lim said.

In 1997, Maybank introduced the Maybank Gold Investment Account (MGIA) that enables customers to invest in gold.

The MGIA now has a portfolio of more than 66,000 accounts with investments totaling more than RM650 million.

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Pos Malaysia to offer Islamic pawn broking

2012-07-02T19:00:00.003+08:00

Pos Malaysia Bhd (Pos Malaysia) and Bank Muamalat Malaysia Bhd (BMMB) today signed a strategic partnership agreement
to offer Islamic pawn broking (Ar-Rahnu) services to the public at selected Pos Malaysia outlets nationwide.

Its chief executive Khalid Abdol Rahman said the ArRahnu@POS service would initially commence operations at Pos Malaysia Bandar Baru Bangi and the Kuala Terengganu General Post Office next month.

The services would be expanded gradually to 50 Pos Malaysia outlets within a year, he said, adding that the Islamic pawnshop system would be managed by Pos Malaysia subsidiary, Pos Ar-Rahnu Sdn Bhd.

"In view of the growing demand for Ar-Rahnu services, Pos Malaysia outlets which are strategically located would provide customers the convenience of accessing and performing Ar-Rahnu transactions," he said in a statement.

The existence of ArRahnu@POS would enhance the product offering at Pos Malaysia outlets besides offering an alternative micro-credit convenience to the public and small time entrepreneurs who may have difficulty in obtaining financing from a bank, he added.

Meanwhile, the statement also said Koperasi Pos Nasional Bhd has granted Pos Ar-Rahnu Sdn Bhd its Islamic pawn broking rights under a cooperation agreement signed between both parties.

Under the agreement, Ar-Rahnu services would be made available at selected Pos Malaysia outlets for three years. -- BERNAMA

I think the market has bottomed out

2012-05-28T08:28:00.000+08:00

"The crash is over", says an economist. "Housing can only go up," says another. "I think the market has bottomed out," says one builder. "It appears we have turned the proverbial corner," says a second.

After hitting a low with stocks in March 2009, U.S. single family building permits rallied in three waves into March 2012. The latest high is more than 65% below the September 2005 peak. A MarketWatch commentary insists, "Permits Push Signals U.S. Housing Boom." These assessments are flooding in even though many home buyers from 2010 and 2011 are already underwater! According to CoreLogic, more than one millions U.S. home buyers who have taken out low-money-down FHA mortgages over the last two years already owe more on their loan than their homes are worth. The FHA's policy of accepting almost no money down is deadly when..... continues in the May issue of EWI's Financial Forecast 10 page report available for FREE.
Download this special issue for free, but fair warning: It's only available until Thursday, May 31.
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Europe's debt crisis.
European political crisis.
Charts flashing danger signals.
What U.S. stock investors should know NOW.
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And much more, including detailed Elliott wave charts and insights on gold,silver, bonds, the U.S. dollar, the economy, inflation vs. deflation and real estate

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Secrets of the Spanish Banking System That 99% of Analysts Fail to Grasp

2012-05-01T08:09:00.001+08:00

Spain is a catastrophe on such a level that few analysts even grasp it.
Indeed, to fully understand just why Spain is such a catastrophe, we need to understand Spain in the context of both the EU and the global financial system.

The headline economic data points for Spain are the following:

Spain’s economy (roughly €1 trillion) is the fourth largest in Europe and the 12^th largest in the world.
Spain sports an official Debt to GDP of 68% and a Federal Deficit between 5.3-5.8% (as we’ll soon find out the official number)
Spain’s unemployment is currently 24%: the highest in the industrialized world.
Unemployment for Spanish youth is 50%+: on par with that of Greece

On the surface, Spain’s debt load and deficits aren’t too bad. So we have to ask ourselves, “Why is unemployment so high and why are Spanish ten year bills approaching the dreaded 7%?” (the level at which Greece and Portugal began requesting bailouts).
The answer to these questions lies within the dirty details of Spain’s economic “boom” of the 2000s as well as its banking system.
For starters, the Spanish economic boom was a housing bubble fueled by Spain lowering its interest rates in order to enter the EU, not organic economic growth.
Moreover, Spain’s wasn’t just any old housing bubble; it was a mountain of a property bubble (blue line below) that made the US’s (gray line below) look like a small hill in comparison.

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MYR: Near-Term Weakness, Long-Term Strength

2012-04-11T00:27:00.000+08:00

Malaysia - Exchange Rate Policy - Nov 10 2011

MALAYSIA CURRENCY FORECAST
	Spot	Ave-11	Ave-12
MYR/US$	3.1200	3.1100	3.1800
MYR/EUR	4.2714	4.4500	4.3800
Overnight Policy Rate (%)	3.00	3.00	3.00
Source: BMI, November 10 2011

Short-Term Outlook

We see increasing risks that the Malaysian ringgit could experience further selling pressures over the coming weeks due to resurfacing troubles in the eurozone. Following a sell-off across regional currencies in September, the Malaysian ringgit depreciated by around 7.5% before finding support at MYR3.2048/US$. Further negative developments in the eurozone could see the ringgit retesting its recent low of MYR3.2048. A break below this level would present significant downside risks to our year-end target of MYR3.1500/US$ for the currency.

External Headwinds Remain

Malaysia - Malaysian Ringgit Spot, MYR/US$

Source: Bloomberg, BMI

Core View

Global economic headwinds, including the sovereign debt crisis in the eurozone and growing concerns of a hard-landing in China, should spell further weakness for risk-on currencies including the Malaysian ringgit over the coming months. However, despite these downside risks to the Malaysian ringgit's outlook in the short term, we expect the country's robust current account dynamics to provide support for a steady appreciation in the currency over the medium term. Furthermore, a positive economic outlook should underpin strong foreign direct investment (FDI) inflows and fuel demand for the ringgit over the coming quarters. Nonetheless, we expect further weakness in the currency in H112 before the ringgit resumes its bullish uptrend in H212. This means that the ringgit should average at around MYR3.1800/US$ in 2012 before strengthening to MYR2.8500/US$ by end-2013.

Despite cooling external demand, Malaysian exports have remained resilient in recent months. Trade exports grew 10.8% year-on-year (y-o-y) in August (up from 6.9% y-o-y in July) while outpacing that of imports at 6.8%, resulting in a healthy trade surplus of US$3.7bn. Although we expect the trade balance to narrow over the coming months, a surplus would nonetheless be positive for the ringgit. Meanwhile, FDI inflows are likely to remain strong in 2011 due to a positive response from foreign investors towards the government's ambitious Economic Transformation Plan (ETP). In fact, we have already seen compelling evidence that investor optimism over the ETP has been a key factor behind the surge in capital inflows into Malaysia in 2011. According to a survey conducted by the International Trade and Industry Ministry, local and foreign private sector companies are expected to commit MYR50.6bn (US$16.8) worth of investments in 2011. We are optimistic that these FDI inflows should provide further support for the currency over the coming quarters.

Strong Cushion Of Reserves

Malaysia - Foreign Reserves, US$mn

Source: Bloomberg, BMI

According to figures published by Bank Negara Malaysia (BNM), the recent wave of selling pressure in the foreign exchange market drained the country's foreign reserves by 4.1% from US$134.5bn in August to US$129.1bn by the end of September. However, it is worth noting that the central bank's intervention in the foreign exchange market is largely aimed at limiting short-term volatility in the exchange rate, rather than an attempt to defend against a balance of payments deficit. As the accompanying chart shows, despite the central bank's intervention, the country's foreign reserves remain above its pre-crisis peak. Our view that Malaysia's trade balance will remain in surplus while FDI inflows will continue to grow over the coming quarters means that we should see a continued accumulation of reserves.

We note that movements in the Malaysian ringgit and the Chinese yuan are highly correlated as a result of BNM's conscious efforts to keep Malaysian exports competitive. Given that we expect external demand to remain relatively subdued in 2012, export growth should continue to slow over the coming months. This poses a risk that the BNM may seek to limit any significant gains for the ringgit in order to prop up exports.

Catching Up With The Yuan ?

Asia - Spot MYR/US$ (LHS) & 12-Month CNY/USD NDF outright (RHS)

Source: Bloomberg, BMI

Risk To Outlook

FDI inflows will play a major role in sustaining a steady appreciation in the Malaysian ringgit over the coming quarters. To a great extent, this is heavily dependent on the successful implementation of the government's ETP. We warn that Malaysia's deteriorating fiscal position, which we expect to amount to a deficit of 5.6% of GDP in 2012, represents a significant risk to the government's ability to implement the ETP. Should investor sentiment start to wane on the back of growing concerns that the government could face difficulties in financing the ETP, a slowdown in FDI inflows would mean that the currency could see limited gains in H212.

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Kyat Could See Further Strength

2012-04-11T00:09:00.002+08:00

Myanmar - Economic Activity - Dec 06 2011

BMI View: On the heels of recent surprisingly fast-paced reforms, potential opportunities for Myanmar's economy are perhaps the highest they have been in over five decades. Moving forward, the economy could be set for a boom period in real estate, tourism, construction, and exports, but much will depend on the government's continued push towards reform and the eventual lifting of stifling US and EU sanctions. We see the Myanmar economy growing by 5.0% in 2012 following a 6.0% performance in 2011 even as growth in the rest of the world falls more sharply given the country's unique prospects of economic liberalisation.

One of Asia's best educated and wealthiest states prior to a military coup in 1962, Myanmar is now bereft with a cumbersome dual-rate exchange system, a major infrastructure deficit, and heavy sanctions from the US and EU following almost five decades of failed economic policy. However, on the heels of an election that was widely derided as a rigged handover of power from the military to its own factions in 2010, change may finally be coming in earnest to the beleaguered resource-rich state.

The culmination of recent (and surprisingly strong) reform efforts was US Secretary of State Hillary Clinton's November 30 visit to Myanmar, during which she met with President Thein Sein and political activist Aung San Suu Kyi. The visit represented the first time such a high level official from the US had visited Myanmar since 1955 and heralded a major thaw in relations between the two countries. Following such an extended period in isolation, the recent pace of change has been relatively breakneck and could open up myriad opportunities for Myanmar's struggling economy.

Dependence On China To Wane

Myanmar's sudden shift towards political reform is highly indicative of its intentions to stem its growing reliance on giant neighbour China. Over the past 18 months, Myanmar has received 20% more foreign direct investment inflows than it had over the preceding 20 years combined, with China responsible for 70%. President Thein Sein's September decision to halt the China-backed US$3.6bn Myitsone dam project signalled that the new government is serious about balancing the playing field with China, and to do so, Naypyidaw has now turned towards the West.

Shooting Higher

Myanmar - Stock Of Foreign Direct Investment, US$mn

Source: BMI, UNCTAD, Myanmar CSO

This is not to say that Myanmar's relationship with China is likely to deteriorate precipitously. Given China's thirst for Myanmar's natural gas and copper resources, and Myanmar's continued need for Chinese investment, the two countries' mutual interests promise to keep relations close. Moving forward, China is very likely to remain Myanmar's closest ally and largest investor as was indicated by head of Myanmar's armed forces General Min Aung Hlaing's auspicious visit with putative future Chinese president Xi Jinping just days before Clinton's arrival.

Lifting Of Sanctions Could Usher In New Era

Still, détente with the US in particular could present monumental economic opportunities for Myanmar. Since 1997, the US has forbidden all new investment by American companies into Myanmar as well as most Myanmar exports to the US. While the US has repeatedly stated that Myanmar's government will have to show considerably more progress on the political reform front before it can consider reducing or lifting sanctions, Clinton's visit is a major step forward, indicating that the US is likely to reward Myanmar further if the reform process moves ahead.

The lifting of sanctions by the US and EU would solidify Myanmar's re-emergence into the international economy and could eventually set the stage for the country to build its own economic miracle. Rich in natural gas, timber, gems, metals, and myriad other valuable natural resources, Myanmar could potentially become a resource exporting powerhouse. Furthermore, with a literacy rate near 85% and at least 5mn English speakers nationally (most of whom live in Yangon) out of a total population near 60mn, Myanmar possesses considerable human capital.

Secondary Axis Required

Asia - Annual Exports Of Goods, US$bn (Myanmar RHS)

Source: BMI

Still, it should be noted that corruption remains extremely widespread across Myanmar and will continue to plague its poor business environment for an extended period despite even swift wide-ranging reform. Myanmar's current state is underscored by Transparency International's most recent Corruption Perceptions Index rankings, which place the country second worst in the world, tied with Afghanistan and above only Somalia.

Real Estate, Tourism Set To Boom?

In the short term, Myanmar's real estate and tourism sectors stand to gain immensely from an opening of the economy. In stark contrast to just one year ago, when struggling local hoteliers were converting chronically vacant rooms to office space, room shortages are already cropping up in the country's largest and most economically active city, Yangon, as businessmen and tourists alike are drawn towards the country's rapidly changing atmosphere.

In the real estate sector, even though prices have risen for every year for the past 20 years (according to media and anecdotal reports), the hopes that reform will lead to reduced limitations on foreign ownership should keep already lofty prices underpinned through 2012.

With cash being far too risky for most wealthy Burmese to hold and foreign banking not an option for almost anyone holding a substantial amount of wealth, rich Burmese have plunged their capital into real estate, sending the market surging over the past few years. Prices have been reported as high as US$1,245 per square foot in the most sought after locations in Yangon, with properties in some upscale neighbourhoods hovering around US$375 to US$625.

Still, if and when serious economic reforms take place, foreign demand could lead to massive speculation in the market, driving prices even further skywards over the medium term in what remains an exceedingly underdeveloped market. Furthermore, whereas booming property prices have thus far been restricted to a very limited section of Yangon, they could begin to spread rapidly should economic reforms move ahead as hoped. In such a scenario, a lack of office space in Yangon (where there is only 540,000 square feet of office space, or the equivalent of one New York skyscraper) and across the country is also likely to portend a construction boom.

Kyat Could See Further Strength

Despite having the brightest outlook in nearly six decades, the Myanmar economy still faces major challenges before it can enter the pantheon of South East Asian miracle countries like Vietnam and Thailand. Standing in its way is a dilapidated exchange rate mechanism, where the black market rate of the Myanmar kyat to the US dollar is more than 120 times greater than the official government rate. As the official government rate of MMK6.4355/US$ is rarely (if ever) used to settle transactions, the black market rate, currently at MMK776.00/US$, is the effective exchange rate.

Although the government is working with the IMF in order to move towards a single-rate mechanism, it lacks the ability to control the currency in a meaningful way. In light of the suddenly reform-minded government, as well as historic communication with the US, we now see the possibility of continued strength in the kyat despite it having appreciated more than 20% over the past two years. As the economy opens up, foreign demand for the kyat will surge, underpinning the currency's already strong historical price.

Significant Upside Risks To Growth Forecast

Despite the growing chance of renewed recession in the US and EU, Myanmar's starting position as a nearly completely isolated economy means that it bears little exposure to the global economy's woes. As a result, risks to our growth forecast of 5.0% for 2012 are weighted heavily to the upside. Should either the US or EU ease sanctions considerably, we would consider revising our forecast upwards.

MYANMAR - ECONOMIC ACTIVITY
	2011		2012		2013		2014		2015		2016
Nominal GDP, MMKbn ¹	45,024.2	f	51,648.3	f	59,247.1	f	67,963.8	f	77,963.0	f	89,433.3	f
Nominal GDP, US$bn ¹	55.5	f	60.9	f	67.1	f	74.0	f	81.6	f	90.0	f
Real GDP growth, % change y-o-y ¹	6.0	f	5.0	f	5.0	f	5.0	f	5.0	f	5.0	f
GDP per capita, US$ ¹	890	f	956	f	1,033	f	1,117	f	1,207	f	1,305	f
Population, mn ²	62.4	f	63.7	f	65.0	f	66.3	f	67.6	f	68.9	f
Notes: ^f BMI forecasts. Sources: ¹ Asian Development Bank. ² World Bank/UN/BMI.

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The Iraqi government's goal of reducing its budget deficit by two-thirds by the end of 2014

2012-04-10T23:06:00.000+08:00

Iraq - Fiscal Policy - Nov 10 2011

BMI View: Iraqi Finance Minister Rafi al-Eisawi's plan to reduce the budget deficit by two-thirds, which relies on increasing oil exports and privatising state-owned enterprises, is feasible but will require a significant degree of political will in order to reform the business environment. Given our view that political instability will retard the pace of reforms, we maintain our budget deficit forecasts of 2.7% and 2.6% of GDP in 2012 and 2013 respectively.

The Iraqi government's goal of reducing its budget deficit by two-thirds by the end of 2014 is achievable, though will require a high degree of political will. On October 22, media sources quoted Finance Minister Rafi al-Eisawi as stating that the government planned to reduce the budget shortfall by increasing oil production and privatising state-owned enterprises (SOEs). Given the high degree of political instability in the country, we expect the business environment reforms necessary to attract foreign investment into SOEs will take a significant amount of time to enact (and therefore lead to but a few acquisitions, if any, over the medium term). Therefore, we maintain our budget deficit forecasts of 2.7% and 2.6% of GDP in 2012 and 2013 respectively.

Hydrocarbons Are The Easier Route

Fiscal revenues are set to increase dramatically over the coming years, mostly due to advances in hydrocarbon production that will allow for greater exports. Our Oil and Gas research team projects oil production to rise from an average of 2.8mn barrels per day (b/d) in 2011 to 7.5mn b/d by 2016, with export volumes rising from 2.0mn b/d to 6.6mn b/d over the same period. Although we foresee declining international energy prices over the medium term, from an average OPEC basket price of US$102 per barrel (/bbl) in 2011 to US$99/bbl in 2012 and US$97/bbl in 2013, the effect of rapidly rising oil production, and in turn exports, will cause oil revenues to rise sharply (see accompanying chart).

Hydrocarbon Revenues To Pour In

Iraq - Forecasts For Value Of Petroleum Exports

Source: BMI

Privatisations Entail Greater Complexity

Privatisation is another potential source of revenues, according to Eisawi, but we see several obstacles to successful sales of SOEs. Reforming the economy from a state-centric system to a market-based one is a high priority for the government, and there is certainly a large pool of potential assets available for privatisation (with 177 state-owned firms in the country). Approximately 43% of all Iraqi state-owned firms (a total of 76 enterprises) fall under the authority and supervision of the Ministry of Industry and Minerals (MIM), with ownership of 250 factories. Sectors span the areas of agriculture, transportation, telecommunications, utilities, construction, hydrocarbons, and financial services, among others, and given the high rates of growth that the country is projected to see (see our online service, November 8, 'Double-Digit Growth Ahead'), many of these could be attractive targets for investors.

A Large Pool Of Potential Assets For Sale

Iraq - Breakdown Of Number Of SOEs By Ministry

Source: BMI, Iraq Task Force For Economic Reforms/UN/World Bank

That said, we note that there a number of obstacles to the privatisation plans, and a high degree of political will would be required to ensure that the business environment is attractive enough for investors to bid. The lack of a favourable environment has proven to be a decisive factor in previous failed attempts by the MIM to establish public-private partnerships (PPPs) between SOEs under its authority and investors, according to the US Special Inspector General For Iraq Reconstruction (SIGIR).

A series of laws have yet to be updated in order to address potential legal issues of privatisation, and while an Economic Reform Law is currently being developed, changes also need to be made to the country's Companies Law and Investment Law. Furthermore, investors would need assurances that they would not receive any legal backlash from laying off workers (as many SOEs have excessively large payrolls). However, there are significant concerns regarding political stability in the country, which will slow down the pace of reforms and dampen investor interest (see our online service, October 19, 'Mounting Challenges To Stability').

Success Would Help On P&L

Should Baghdad succeed in spinning off even a few of its SOEs, we would expect to see substantial benefits. First, the government would see a large (albeit temporary) source of new revenue. Second, and more importantly, fiscal expenditures related to maintaining state-owned firms would decrease, boding well for the budget. Many SOEs have suffered heavy damage to their assets, rendering the firms inoperable and therefore unable to earn revenues, yet workers are kept on payrolls and paid from government coffers. Others are able to function but have a bloated workforce. These firms collectively employ over 633,000 workers, and employee compensation expenses took up 41.5% of total fiscal expenditures (US$22.8bn out of total expenses of US$55.0bn) in 2010. Thus, privatisations would have a major impact on both revenues and expenses.

IRAQ - FISCAL POLICY
	2008	2009	2010		2011		2012		2013		2014		2015		2016
Fiscal revenue, IQDbn ²	80,252.0	55,209.0	69,521.0	e	104,192.9	f	139,873.7	f	187,050.4	f	220,897.2	f	258,395.4	f	304,708.9	f
Revenue, % of GDP ²	51.6	43.8	45.0	e	51.2	f	56.8	f	62.5	f	64.7	f	66.7	f	68.8	f
Fiscal expenditure, IQDbn ²	59,403.0	52,567.0	64,351.0	e	104,425.2	f	146,436.1	f	194,760.0	f	228,577.7	f	261,439.3	f	291,748.0	f
Expenditure, % of GDP ²	38.2	41.7	41.7	e	51.3	f	59.5	f	65.1	f	66.9	f	67.4	f	65.9	f
Budget balance, IQDbn ²	20,849.0	2,642.0	5,170.0	e	-232.3	f	-6,562.4	f	-7,709.6	f	-7,680.5	f	-3,043.9	f	12,960.9	f
Budget balance, % of GDP ²	13.4	2.1	3.3	e	-0.1	f	-2.7	f	-2.6	f	-2.2	f	-0.8	f	2.9	f
Primary balance IQDbn ^1,2	21,757.0	3,343.4	5,988.3	e	3,745.7	f	-2,584.4	f	-2,912.6	f	-2,680.5	f	1,956.1	f	17,960.9	f
Primary balance % of GDP ^1,2	14.0	2.7	3.9	e	1.8	f	-1.0	f	-1.0	f	-0.8	f	0.5	f	4.1	f
Notes: ^e BMI estimates. ^f BMI forecasts. ¹ Fiscal balance stripping out interest payments on government debt; Sources: ² CBI/BMI.

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Will Iraq Devalue Dinar ?

2012-04-10T22:47:00.000+08:00

Iraq - Exchange Rate Policy - Nov 10 2011

BMI View: There is a strong case to be made in support of the argument for a devaluation of the Iraqi dinar, including improved fiscal dynamics, greater reserve accumulation, and export competitiveness. However, we believe political and other considerations in support of the current peg of IQD1,170/US$, including inflation and social stability, will prevail over the medium term.

We do not foresee a major change in the country's exchange rate policy going forward (apart from a potential redenomination - see our online service, April 15, 'Redenomination Of Dinar Will Have Negligible Impact). Local media sources reported that the Central Bank of Iraq (CBI) had sold US$205mn on October 31, above the prior week's sale of US$154mn, whilst it had consistently sold similar sums in recent quarters.

This peg, which is being set at an artificially high level, is costing the country billions of dollars per year in foreign exchange and reducing the government's revenues in local terms. However, it appears that Baghdad has continued this policy in order to limit imported inflationary pressures and to promote economic stability in the country, and we believe the policy will continue over the medium term.

The Case For Devaluation

Devaluation of the dinar would bring several benefits, most notably related to fiscal revenues. The government relies heavily on oil exports for its revenues, and a weaker dinar would allow each dollar of hydrocarbon receipts to go further in paying dinar-denominated expenses. Baghdad has been eager to invest in capital projects, particularly those related to electricity, energy, and housing, and also increased current expenditures on items such as subsidies and a larger payroll. A devalued dinar would go a long way towards setting the country on a path towards greater fiscal stability (see accompanying chart).

Depreciation Would Improve Fiscal Accounts Dramatically

Iraq - Budget Balance Under Two Scenarios

Source: BMI

A weaker local currency would also allow the government to accumulate reserves at a faster rate. As stated earlier, the current peg is causing the CBI to sell millions of dollars every week, and those funds could instead be used to build up foreign reserves even more. While Iraq's reserves, which amounted to US$55.2bn at the end of September, are far from being depleted, continued sales of foreign exchange may not be sustainable over the long term.

Cashing In On Higher Energy Prices

Iraq - Net Foreign Reserves, US$bn

Iraq - Net Foreign Reserves, US$bn

Similar to many countries across the Middle East, Iraq is seeking to diversify its economy away from oil, and a devaluation would make its exports more competitive in the global marketplace. With hydrocarbons making up over 90% of all exports and over half of GDP, along with double-digit rates of unemployment, a competitive export sector would facilitate greater investment in sectors other than energy and, in turn, create more employment opportunities.

Sticking With The Status Quo

While the aforementioned arguments suggest strong economic cases for a devaluation, we believe other factors will outweigh them over the medium term. Iraq is a major importer of food items, being among the world's top ten importers of wheat. Food also takes up a large portion of Iraqis' disposable income (as evidenced by the fact that food makes up over 60% of the consumer price basket). Thus, the importance of maintaining low food prices cannot be discounted, particularly at a time when price shocks have sparked large-scale unrest across the region.

Stronger Exchange Rate Has Contributed To Lower Inflation

Iraq - IQD/US$ Exchange Rate (LHS) And Inflation, % chg y-o-y (RHS)

Source: BMI, Bloomberg, COSIT

Higher food prices due to a devaluation would not only have an impact on the country's political risk profile, they would also force higher government spending. Baghdad currently runs a costly Public Distribution System, which provides a ten-item food basket to the large majority of households every month. This programme is intended to limit the impact of food prices rises on the public, and the government has allocated US$3.4bn of its 2011 budget (approximately 6%) to paying for all the goods. Thus, while a devaluation would make every petrodollar more valuable in local currency terms, there may be unintended consequences such as a larger food bill.

Projecting a sense of stability is a major goal of the government, as it would increase investor appetite for foreign direct investment (FDI), and the current peg to the dollar gives the impression of contributing to macroeconomic stability in our view. By relegating monetary policy to the management of the Federal Reserve, Baghdad is allaying investor fears that a mistake in monetary policy could send the economy crashing in the medium term. As a result, while export competitiveness is a major consideration, we believe the aim of building investor sentiment by linking Iraqi monetary policy to that of the US is an even more decisive factor and will continue to be over the medium term.

IRAQ - EXCHANGE RATE
	2008	2009	2010	2011		2012		2013		2014		2015		2016
Exchange rate IQD/US$, ave ¹	1,193.18	1,169.07	1,169.00	1,170.00	f	1,170.00	f	1,170.00	f	1,170.00	f	1,170.00	f	1,170.00	f
IQD/US$, ave % change y-o-y ¹	-4.9	-2.0	-0.0	0.1	f	0.0	f	0.0	f	0.0	f	0.0	f	0.0	f
Exchange rate IQD/EUR, ave ¹	1,746.36	1,638.00	1,551.96	1,673.10	f	1,614.60	f	1,521.00	f	1,462.50	f	1,462.50	f	1,462.50	f
IQD/GBP, ave ¹	2,200.53	1,813.50	1,813.50	1,907.10	f	1,942.20	f	1,989.00	f	2,047.50	f	2,047.50	f	2,047.50	f
IQD/AUD, ave ¹	1,012.37	928.23	1,075.23	1,224.99	f	1,053.00	f	877.50	f	877.50	f	877.50	f	877.50	f
JPY/IQD, ave ¹	0.08	0.08	0.07	0.07	f	0.07	f	0.08	f	0.08	f	0.08	f	0.09	f
IQD/CNY, ave ¹	171.04	171.32	172.31	180.69	f	182.96	f	184.81	f	188.58	f	192.43	f	196.36	f
Notes: ^f BMI forecasts. Sources: ¹ BMI.

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PHB announces income distribution of RM32m

2012-04-10T09:07:00.002+08:00

Pelaburan Hartanah Bhd (PHB), which declared an interim dividend distribution of RM32 million for its Amanah Hartanah Bumiputera (AHB) unit trust fund for the six-month period ended March 31, 2012, plans to expand the size of the fund.

PHB chief executive officer (CEO) and managing director (MD) Datuk Kamalul Arifin Othman said the fund is looking to buy more completed and income-yielding assets, as well as expanding its landbank and venturing into more property development projects.

“To further ensure the PHB’s portfolio remains up-to-date and competitive, sustained initiatives have been executed to actively acquire a more dynamic mix of properties,” said Kamalul Arifin in the press release. Yesterday, it declared the interim dividend distribution which amounts to 3.25 sen per unit.

This is the third income distribution to unit holders by AHB. Last year, a total of RM50 million was paid out — RM19 million on the first income distribution and RM31 million in the second.

AHB income distribution is payable on a six-monthly basis for periods ending March 31 and Sept 30, each year, and is tax-exempt.

One billion AHB units were launched in November 2010, and all were fully subscribed within three months, said PHB, with the highest take up in the Federal Territory (49.67%) followed by Selangor (14.51%).

To date, the fund has invested in eight completed properties in and around the Klang Valley, including the Darul Ehsan Medical Centre Specialist Hospital in Shah Alam, Selangor.

In October, PHB signed an agreement for a property development project with Gleneagles Hospital Kuala Lumpur, involving the extension of the hospital, at a cost of RM138 million.

Gleneagles will be granted a 15-year lease for the extension, with an option to extend the period for another 15 years.

The project is expected to be completed within three years.

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Bank Rakyat Declares 20 Per Cent Record Dividend For 2011 Financial Year

2012-03-28T14:13:00.001+08:00

KUALA LUMPUR, March 26 (Bernama) -- Bank Rakyat Monday declared a record dividend of 20 per cent or RM435 million payout for the 2011 financial year.

The cooperative bank said 15 per cent or a cumulative RM330 million will be paid in cash and the remaining five per cent totalling RM105 million will be offered in the form of bonus share.

The bank also declared 20 per cent dividend in 2008.

In announcing the dividend and the bank's financial performance for last year, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said the higher dividend was made possible by the 17.6 per cent higher pre-tax profit or RM301.9 million to RM2.02 billion, the highest since the bank's inception in 1954.

The pre-tax profit for 2010 was RM1.72 billion.

"The record pre-tax profit was achieved from the bank's focus on financing, mainly personal loans, besides quality asset appreciation despite challenges in the domestic banking industry," he said.

Ismail Sabri said the bank's gross revenue rose by 13.3 per cent to RM5.5 billion from RM4.86 billion in 2010, with personal loans remaining as the main profit contributor besides the marked growth in the Ar-Rahnu Islamic pawnbroking business and investments.

On this year's outlook, Ismail Sabri said Bank Rakyat aims to achieve RM2.1 billion in pre-tax profit, driven by personal loans and Ar-Rahnu revenue.

Going forward, the minister said Bank Rakyat planned to open nine branches, one each in Pahang, Johor, Selangor, Kelantan and Negeri Sembilan and two in Terengganu and Sabah, respectively.

He also said the bank intends to open 10 Islamic panwnbroking franchise outlets, Ar-Rahnu X'change, this year nationwide.

Currently, Ar-Rahnu services are available at 135 branches and there are 38 Ar-Rahnu X'Change outlets.

Ismail Sabri said low non-performing loans at 2.8 per cent and the people's confidence in the bank's services are among the main contributors to the bank's better financial performance this year.

Asked on the bank's long-term prospects. Ismail Sabri said the bank should increase commercial financing to strike a balance on its dependence on personal loans merely.

"We cannot heavily depend on personal loans forever. I believe Bank Rakyat will come up with a plan to increase commercial financing," he said.

Last year, the bank's revenue from financing rose to RM4.46 billion vis-a-vis RM4.04 billion in 2010, 91.4 per cent or RM4.07 billion came from consumer banking and 8.6 per cent or RM385.2 million from commercial banking.

The bank also earned RM92 million from fee-based revenue last year, 75.7 per cent was contributed by will-based revenue, takaful (Islamic insurance) commission and automated teller machine service fee.

-- BERNAMA

Greece Makes Pact With the Devil Over Gold

2012-02-24T08:32:00.003+08:00

The one and only thing that might possibly spare Greece the agony of a completely worthless currency is Greece's small hoard of 111 tons of gold.

Pact With the Devil

Yet, in the fine print in the latest deal, Greece’s lenders will have the right to seize its gold reserves according to the New York Times article Growing Air of Concern in Greece Over New Bailout.

In the fine print of the 400-plus-page document — which Parliament members had a weekend to read and sign — Greece relinquished fundamental parts of its sovereignty to its foreign lenders, the European Commission, the European Central Bank and the International Monetary Fund.

“This is the first time ever that a European and probably an O.E.C.D. state abdicates its rights of immunity over all its assets to its lenders,” said Louka Katseli, an independent member of Parliament who previously represented the Socialist Party, using the abbreviation for the Organization for Economic Cooperation and Development. She was one of several independents who joined 43 lawmakers from the two largest parties in voting against the loan agreement.

Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal, and that future bonds issued will be governed by English law and in Luxembourg courts, conditions more favorable to creditors.

Causing a Nightmare Scenario

On Tuesday, Finance Minister Evangelos Venizelos defended the new debt agreement, calling it “the most significant deal in Greece’s postwar history” and asserting that it had “averted a nightmare scenario.”

Today this same puppet of the Troika installed government claims, as he has been for weeks, No Loan Deal Means Absolute Catastrophe

Greece Finance Minister Evangelos Venizelos said Thursday Greece would face an absolute catastrophe if it didn't approve the terms demanded by international creditors in exchange for a second bailout, which includes a EUR107 billion debt write-down plan.

Greece is already in a state of absolute catastrophe. The one thing 100% guaranteed to make matters worse for Greece is if Greece lost its hoard of gold to the thieves and plunderers at the IMF and Troika.

Rather than "averting a nightmare scenario" that pact is going to "cause" a nightmare hyperinflation scenario.

Value of 111 Tons of Gold

One tonne = 1000 kilograms = 32150.746 troy ounces.
At $1780 per troy ounce, the value of that gold is roughly $6.35 billion.

Given an estimated size of the Greek economy at $290 billion or so, that is not a huge hoard.

However, something is better than nothing as Zimbabwe proves. Something is enough to prevent a currency from going completely worthless, although obviously not enough to prevent a massive devaluation.

Still Time

There is still time for Greece to come to its senses and reject the deal. Also recall the conditions of the deal require a constitutional change and that is impossible before 2013.

For details, please see Greece Needs New Constitutional Provision Imposed by the Troika; Slight Problem, Constitutionally It Can't Do it

Biggest Hope for Greece is Germany

In an enormous irony, Germany may be the biggest hope for Greece. Although France and other countries do want this pact to go through, Germany's words and actions prove that Germany does not.

Germany has put up roadblock after roadblock attempting to get Greece to scuttle the deal, only to have fools like Finance Minister Evangelos Venizelos agree to them.

It may be up to Germany to come up with still more ludicrous demands in hope that the Greek finance minister and Greek politicians finally get the message "it's not wise to make a pact with the Troika devil", especially one that requires Greece to relinquish its gold.

By Mike "Mish" Shedlock

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Why Is Global Shipping Slowing Down So Dramatically?

2012-02-10T19:42:00.000+08:00

If the global economy is not heading for a recession, then why is global shipping slowing down so dramatically? Many economists believe that measures of global shipping such as the Baltic Dry Index are leading economic indicators. In other words, they change before the overall economic picture changes. For example, back in early 2008 the Baltic Dry Index began falling dramatically. There were those that warned that such a rapid decline in the Baltic Dry Index meant that a significant recession was coming, and it turned out that they were right. Well, the Baltic Dry Index is falling very rapidly once again. In fact, on February 3rd the Baltic Dry Index reached a low that had not been seen since August 1986. Some economists say that there are unique reasons for this (there are too many ships, etc.), but when you add this to all of the other indicators that Europe is heading into a recession, a very frightening picture emerges. We appear to be staring a global economic slowdown right in the face, and we all need to start getting prepared for that.
If you don't read about economics much, you might not know what the Baltic Dry Index actually is.
Investopedia defines the Baltic Dry Index this way....

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea.

When the global economy is booming, the demand for shipping tends to go up. When the global economy is slowing down, the demand for shipping tends to decline.
And right now, global shipping is slowing way, way down.
In fact, recently there have been reports of negative shipping rates.
According to a recent Bloomberg article, one company recently booked a ship at the ridiculous rate of negative $2,000 a day....

Glencore International Plc paid nothing to hire a dry-bulk ship with the vessel’s operator paying $2,000 a day of the trader’s fuel costs after freight rates plunged to all-time lows.
Glencore chartered the vessel, operated by Global Maritime Investments Ltd., a Cyprus-based company with offices in London, Steve Rodley, GMI’s U.K. managing director, said by phone today. The daily payments last the first 60 days of the charter, Rodley said. The vessel will haul a cargo of grains to Europe, putting the carrier in a better position for its next shipment, he said.

So why would anyone agree to ship goods at negative rates?
Well, it beats the alternative.
This was explained in a recent Fox Business article....

“They’re doing this because you can’t just have ships sitting. If they sit too long, then that’s hard on the ships. They have to keep them loaded and moving from port to port,” said Darin Newsom, senior commodities analyst at DTN.

If the owner of a ship can get someone to at least pay for part of the fuel and the journey will get the ship closer to its next destination, then that is better than having the ship just sit there.
But just a few short years ago (before the last recession) negative shipping rates would have been unthinkable.
Asian shipping is really slowing down as well. The following comes from a recent article in the Telegraph....

Shanghai shipping volumes contracted sharply in January as Europe's debt crisis curbed demand for Asian goods, stoking fresh doubts about the strength of the Chinese economy.

Container traffic through the Port of Shanghai in January fell by more than a million tons from a year earlier.
So this is something we are seeing all over the globe.
Another indicator that is troubling economists right now is petroleum usage. It turns out that petroleum usage is really starting to slow down as well.
The following is an excerpt from a recent article posted on Mish's Global Economic Trend Analysis....

As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market - I mean stock market.
This past week I actually had to reformat my graphs as the drop off peak exceeded my bottom number for reporting off peak - a drop of ALMOST 4,000,000 BARRELS PER DAY off the peak usage in our past for this week of the year.

I would encourage you to go check out the charts that were posted in that article. You can find them right here. Often a picture is worth a thousand words, and those charts are quite frightening.
Over the past few days, I have been trying to make the point that nothing got fixed after the financial crisis of 2008 and that an even bigger crisis is on the way.
Yes, the stock market is flying high right now.
Yes, even "Dr. Doom" Nouriel Roubini is convinced that the stock market will go even higher.
But this rally will not last that much longer.
Wherever you look, global economic activity is slowing down. The UK economy and the German economy both actually shrank a bit in the fourth quarter of 2011. About half of all global trade involves Europe in one form or another. As Europe slows down, it is going to affect the entire planet.
Many thought that the German economy was so strong that it would not be significantly affected by the problems the rest of Europe is having, but that is turning out not to be the case.
In a new article by CBS News entitled "German economic slowdown worse than expected?", we are told that industrial production in Germany is declining even more than anticipated....

German industrial production fell 2.9 percent in December from the month before, according to official data released Tuesday, suggesting the country's economic slowdown could be worse than expected.

So don't believe all the recent hype about an "economic recovery". Europe is heading into a recession, Asia is slowing down and the U.S. will not be immune.
Despite what you hear from the mainstream media, the truth is that the U.S. economy is not improving and incredibly tough times are ahead.
Thankfully, those of us that are aware of what is happening can make preparations for the economic storm that is coming. Others will not be so fortunate.

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IMF Warns of Deepening Debt-Crisis Recession

2012-01-26T10:00:00.005+08:00

The International Monetary Fund cut its forecasts for growth in 2012 on Tuesday and warned of a possible deepening downturn in Europe.

Revising an earlier forecast, the IMF predicted that the global economy will expand 3.3%, this year, down from 3.8% last year and lower than the 4% growth it had forecast last September. “The world recovery, which was weak in the first place, is in danger of stalling,” IMF chief economist Olivier Blanchard said. “But there is an even greater danger, namely that the European crisis intensifies.

In this case, the world could be plunged into another recession,” he said. Oliver Blanchard is spot on in identifying a serious threat to the world economy. His only error is from where he sees the threat coming and how bad it is. On Monday IMF chief Christine Lagarde warned of a worst case scenario in the form of a possible Depression-era collapse in the global economy. If however Europe follows IMF recommendations, she said, the fund expects the euro zone to face a mild recession this year.

Nonetheless, it should be emphasised that this is still a “best case scenario.” Economists are increasingly concerned that Greece will default within weeks. Even worse, the larger economies of Spain and Italy are now under threat, pushing up the cost for Rome and Madrid to borrow to cover the risk of default. The IMF 2012 forecasts that the economies of both countries will contract, with Italy facing a contraction of 2.2% and Spain a fall of 1.7%.

Neither is expected to recover economically until 2014, at least. Meanwhile bigger economies such as the U.S., Japan, the U.K, France and Germany are expected to expand by only 1.5% on average next year, a growth rate too slow to curb rising unemployment levels. Moreover, the IMF forecast of slowing global economic growth is based on the assumption that the world will not see a dramatic rise in the price of oil. If that were to happen then the IMF’s most optimistic forecast would be null and void, making its worst case scenario seem optimistic. Iran’s recent rhetoric about “closing the Straits of Hormuz” seems intended to play on such concerns; with growing fears that a dramatic rise in the oil price could completely undermine prospects for global economic recovery.

Although Tehran’s ambassador to the U.N. may have only been bluffing when he spoke recently about the “option” of closing the Straits, he seems to have hit a raw nerve. Within days Western powers despatched naval vessels to the Straits of Hormuz – assuming, of course, that they had not planned this some time ago and were merely using his threats as an excuse. Either way, as the European Union voted to impose harsher sanctions on Iran’s oil – and Iran responded by suggesting it could close the waterway through which 35% of the world’s oil is shipped – French, British and American warships were all sailing toward the gulf.

In response Iran declared defiantly that sanctions would provide it with an economic stimulous and repeated threats to close the straits. Between claim and counter-claim and trading threats the West and Iran seem to be on a course for a confrontation. If it erupts into armed conflict then the world may not only face a slowdown in growth and financial meltdown.

For both Russia and China have warned that they view the prospect of conflict with Iran with grave concern. In fact Russia has repeated these warnings recently, as if to emphasise how seriously it views the situation. While China signalled a clear rejection of any new sanctions on Iranian oil. We live in dangerous times. They could be about to become even more perilous.
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Hormuz oil spike could spark global recession

2012-01-05T09:00:00.004+08:00

Escalating tensions with Iran have pushed the cost of crude oil higher as fears mount that a 1970s-style jump in the oil price could send both Eastern and Western economies into recession. Iran's threat to cut off access to the Strait of Hormuz – through which 40pc of the world's oil is shipped – has provoked an angry rebuke from the US, which has the Fifth Fleet nearby.

Today, French foreign minister Alain Juppe supported the American hard line with Tehran, and urged European leaders to impose an embargo on Iranian oil exports and freeze Iranian central bank assets by the end of this month. Currently, Italy imports 13.3pc of its oil from Iran, Spain 9.6pc, Greece 34.7pc and France 4.4pc. International strains over Iran's nuclear ambitions were further exacerbated by the country staging three days of war games in the Hormuz area. However, Tehran said that increased sanctions could result in it closing off the strait, which it declared was "easier than drinking a glass of water".

But Iran's own oil supply is only part of the problem - the real threat is that disruption would halt the passage of oil from other Middle Eastern countries such as Saudi Arabia - the world's largest oil producer – and Kuwait. Qatar's liquified natural gas supplies would also be affected. Roy Jordan, of FACTS Global Energy, said: "If supply through the Strait of Hormuz is cut off, just about everybody in the East and West would be in trouble. It would disrupt major proportion of the world's oil and gas at a time when many of the world's economies are very fragile and would not be able to sustain a serious oil spike."

Mr Jordan said that its effect on Asian countries, which are driving world growth, would be devastating. China, Iran's number one customer, imports 10pc of its oil supply from Iran. "All it would take for Iran is a few mines put into sea, and ship owners and insurance companies would not go up there," said Mr Jordan. Brent crude rose $3.74 at $111.12 and Mr Jordan warned that if Iran's threat was fulfilled "there would be an instant escalation of price – we saw $147 in 2008 – and it could definitely reach that level and even higher." In 1974, after the Yom Kippur war and Iran's own embargo of its oil to countries supporting Israel, oil prices increased 400pc in six months.

However, Iranian officials have threatened to close the strait in the past but have not done so. But according to Mr Jordan if sanctions became such that Iran couldn't sell its oil then the country would have nothing to lose in its dealings with the West. "This is a situation we must avoid," he said. If no resolution is found, or hostilities break out, the International Energy Agency would have to force its members to try to make up the shortfall by releasing supplies from their reserves. But alternatives to Hormuz are few and far between. Iraq can already get its production into the Mediterranean through a pipeline across Turkey and a new Abu Dhabi pipeline is being built. This will come on stream early this year with 1m barrels of capacity, compared to the 18m that travel through Hormuz.

However, a recent article in Mashreq News, which is close to the Iranian military circles, pointed out that the new construction was "within range of Iran's missiles". Analysts suggested that while the closure of Hormuz remained a threat a premium was already priced into internationally traded crude that would slowly tick higher and higher. But if the strained supply days of the 1970s were to return, governments – including the UK's – would have to enforce demand restraint, with only essential services like ambulances and police getting access to petrol.

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A Hedge Fund Insider Explains Why Retail Investors Should Flee The Stock Market

2011-12-07T09:21:00.001+08:00

Regular readers know that ever since 2009, well before the confidence destroying flash crash of May 2010, Zero Hedge had been advocating that regular retail investors shun the equity market in its entirety as it is anything but "fair and efficient" in which frontrunning for a select few is legal, in which insider trading is permitted for politicians and is masked as "expert networks" for others, in which the government itself leaks information to a hand-picked elite of the wealthiest investors, in which investment banks send out their "huddle" top picks to "whale" accounts before everyone else gets access, in which hedge funds form "clubs" and collude in moving the market, in which millisecond algorithms make instantaneous decisions which regular investors can never hope to beat, in which daily record volatility triggers sell limits virtually assuring daytrading losses, and where the bid/ask spreads for all but the choicest few make the prospect of breaking even, let alone winning, quite daunting. In short: a rigged casino. What is gratifying is to see that this warning is permeating an ever broader cross-section of the retail population with hundreds of billions in equity fund outflows in the past two years. And yet, some pathological gamblers still return day after day, in hope of striking it rich, despite odds which make a slot machine seem like the proverbial pot of gold at the end of the rainbow. In that regard, we are happy to present another perspective: this time from a hedge fund insider who while advocating his support for the OWS movement, explains, in no uncertain terms, and in a somewhat more detailed and lucid fashion, both how and why the market is not only broken, but rigged, and why it is nothing but a wealth extraction mechanism in which the richest slowly but surely steal the money from everyone else who still trades any public stock equity.

From Reddit: I work in Wall Street and work in hedge fund analysis. I'm the only person in my office who supports OWS
This is a self-post, so I'm not trying to karma-whore or anything. I have a message I want to share with anyone who's interested.
I'm writing this in hopes that the OWS movement can have a better understanding of the hedge fund industry and the financial markets. With OWS being the zeitgeist of current politics, I think it's important to know how exactly the hedge funds, along with the financial markets are destroying the 99%.
Hedge funds. These guys are basically the vehicles of choice for ultra-rich people to get into the financial markets, besides family offices and private wealth managers. What are hedge funds? They are funds that have a 1-5 million deposit minimum, cater to the mega-rich, and can invest in anything without regulatory restrictions, use leverage to pump up their exposure by 15x, and pretty much eat up a vast majority of the industry's profits.
These guys invest in EVERYTHING. Instruments you've heard of - stocks, bonds, forwards, futures, currencies, and instruments that you, me, or anyone else have never even heard of, much less know anything about: commodity future swaptions, FRA/OIS swaps, CLOs, exotic future options, p-notes, index/commodity/equity exposures, and a huge array of OTC (over-the-counter) instruments that no regular investor would ever have access to.
Why I bring this up: the financial markets are rigged. 99% of the investing public has access to services such as basic brokerages, 401k/IRA's, mutual funds, pension plans, etc. Some of these services, especially pension funds, will invest into hedge funds, who take an additional 2 and 20 (meaning 2% of assets plus 20% of capital gains).
What this means is that if you go any of the traditional retail routes, you are utterly screwed facing off against the hedge funds.
First, you are paying exorbitant fees. Commissions on every stock trade. Mutual fund managers taking a cut - an annual % cut, as well as a % per profit cut. If these managers (i.e. pension plans) invest in another fund, that fund is also taking another % cut. You're down 2% the minute you invest your money.
Next, if you're doing the investing yourself, you're paying ridiculous spreads. The bid/ask spread of a stock will cause you to be down another 2-3% the minute you buy the stock. For example, if you're buying a share of company at $4.25, you can sell back at only $4.15.
Furthermore, you have absolutely no chance in terms of access to the best services. Hedge funds have a direct line to investment bank's institutional brokerage teams - these are the guys that spend day and night sucking up to hedge funds, trying to get them the best deals at the cheapest rates. This means that while you're buying stocks and bonds, hedge funds are getting special rights, warrants, sweetheart deals, private placement deals, options, bigger discounts on bonds, and much better bulk commission rates and lower spreads on stocks. If you're paying 4.25$ for a 4.15$ stock, they are paying something like 4.16$. And they are eating alive your profits because when the stock goes up to $4.30, they can activate another warrant to purchase 20m shares at $4.25, diluting the value of your shares.
Next, you lack information and exposure. You have no idea what is going on in the market besides what you see on the news - while hedge funds have analysts working around the clock and a bunch of service providers who give minute-by-minute analysis of their portfolio opportunities and weaknesses in all markets with exposures to nearly everything. Meaning, if there is an opportunity in the real estate market (i.e. legislation), it might take you weeks to get in - hedge funds will have gotten in the minute the legislation was passed. Furthermore, when IPOs come out for companies, hedge funds get top billing on the primary market shares - which means investment banks are selling directly to them. Once the secondary market becomes available, hedge funds are up 15-20% on these investments, sometimes within hours.
Finally, you have no capital compared to these hedge funds. The people who invest in these hedge funds are not just the 1%, they are the 0.1%. These are the guys with 500million dollar bank accounts and the ability to do whatever the fuck they want. Hedge funds know this, and they invest without having to care about whether their clients can pay the rent or send their kids to college. All of that is irrelevant. Their sole purpose is to earn money, not to mitigate risk.
What does this all mean? It means the hedge fund industry is making a gigantic proportion of the profits. The top .1% is earning nearly half of the profits in the industry, through not just hedge funds, but other similar vehicles.
The finance industry is a complete scam, designed to funnel money from the 99% investing public into the hands of the top .1%. Sure, some of you will make good money, but stastically, the rest of us will lose, and who is feeding off us? Hedge funds, and the .1%. You have better odds going to a casino and playing slots, the worst-paying game in the house, but still better than the stock market.
Also, the government is in bed with the financial industry. Tax loopholes give hedge funds and other top players the ability to write off losses and not pay taxes on gains for years at a time. For income they derive from the hedge fund (profits), they pay only 15%, rather than the 35% income tax charged to most people earning 80k and above. Meanwhile, you have to pay taxes for not just your own income but also capital gains.
The worst part by far is that the government "encourages" you to put your money into your 401k through 'tax exemptions', which basically puts your money with the lowest tier of the financial industry - pension funds, retail wealth managers, and retail asset managers. These guys have shit strategies like long-only or domestic equity (which means they only invest in American stocks), and have nowhere near the capability and reach of hedge funds. These guys are even more likely to lose your money than you are, and even worse is they will take a 2.35% cut while doing so. And you get penalized when you try to take your money out early. How f***ed up is that.
In other words, if you aren't in the .1%, you have no access to the derivatives markets, you have no access to the special deals that hedge funds and other wealthy investors get, and you have no access to the resources, information, strategic services, tax exemptions, and capital that the top .1% is getting.
If you have any questions about what some of the concepts above mean, ask and I will try my best to answer. I'm a first-year analyst on wall street, and based on what I see day in and day out, I support the OWS movement 100%.
tl;dr: The finance industry funnels money from the masses to the ultra rich, through vehicles like hedge funds which dominate all of the financial markets.
h/t Scott

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