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Jey
13-01-2010, 11:44 PM
Malaysia’s once strong foreign exchange reserves is bordering on collapse, according to a UBS Securities Asia Limited report. It says that in 2009, Malaysia experienced the biggest foreign exchange reserve losses among Asian countries.

source: http://freemalaysiatoday.com/english/?p=6839

anybody can solve the puzzle that even an international investment banker could not understand ?
:eek: :D

USJ27Resident
14-01-2010, 12:32 AM
anybody can solve the puzzle that even an international investment banker could not understand ?
:eek: :D

what is so hard to solve...

1/3 of the outflow is contributed by the fact that there are millions of foreign workers, sending their money back home....

another 1/3 is done by dirty politicians sending their ill gotten gain thru' our local moneychangers.... [t'was highlighted recently, then all went HUSH!!!!]

another 1/3 is circulated underground... :rolleyes:

do you really need a paper-cert from LSE to understand this !!! :p

Sentinel
14-01-2010, 01:09 AM
And of all the three reasons you quoted USJ27Resident, these folks also know that its better to send them money out quick coz they also know ANWAR*** is coming soon....

*** ANWAR - A Nation Without Any Ringgit.... :p

But seriously, just consider the following matters that happened in the last couple of weeks - Petronas reporting a 50% drop in revenue, government resorting to unpopular (and desperate) taxes like GST and RPGT, 1Malaysia unit trust grossly under-subscribed, government withdrawing bread & butter subsidies on sugar and bread (running out of ringgits?), potential power tariffs hike, potential road toll hike, Khazanah selling down Tenaga shareholdings and other major GLC shares (to beef up the coffers?), NPL of the country's biggest lender ballooning, failure of the recent investment-boosting exercises overseas, disappearing FDIs inflows, ineffective stimulus packages, rising racial tensions, etc... would you expect people to have more faith in this country sliding slowly but surely into a gutter? :rolleyes:

bugbear
14-01-2010, 03:14 AM
And of all the three reasons you quoted USJ27Resident, these folks also know that its better to send them money out quick coz they also know ANWAR*** is coming soon....

*** ANWAR - A Nation Without Any Ringgit.... :p

But seriously, just consider the following matters that happened in the last couple of weeks - Petronas reporting a 50% drop in revenue, government resorting to unpopular (and desperate) taxes like GST and RPGT, 1Malaysia unit trust grossly under-subscribed, government withdrawing bread & butter subsidies on sugar and bread (running out of ringgits?), potential power tariffs hike, potential road toll hike, Khazanah selling down Tenaga shareholdings and other major GLC shares (to beef up the coffers?), NPL of the country's biggest lender ballooning, failure of the recent investment-boosting exercises overseas, disappearing FDIs inflows, ineffective stimulus packages, rising racial tensions, etc... would you expect people to have more faith in this country sliding slowly but surely into a gutter? :rolleyes:
Not to mention that most government agencies are also given 30% lower allocation for this year compared to 2009. We are in for a rough ride my friends.

Jey
14-01-2010, 09:24 AM
Any village simpleton will know that foreign labor sending out money is a given and it happens in almost every country in the world. Some countries like Australia is having far more foreign labor sending out money than here. So this is not the question. Neither it is about black money being transfered illegally.

The issue here is regarding the near collapse of the foreign exchange reserves which Malaysia used to be one of the highest in Asia with 17%, now dwindled to almost on the verge of collapse and it is considered bizzare as there are no known explanations to warrant this situation.

And the issue of foreign capital outflow. This means the amount of investment the world has invested in Malaysia is being pulled out at an alarming rate.

Please read the article first so that you understand the issue. Below is excerpted from there;


Describing the situation as bizarre, it notes that Malaysia used to have the largest current account surplus in Asia–at around 17% of GDP.
“Over the past 12 months, Malaysian reserves nearly collapsed” while neighbours like Thailand, Singapore, Taiwan, Hong Kong and China “have seen sizeable increases,” it says.
It says foreign capital outflows from Malaysia in the last year was nearly 50 percent of its GDP.
“When we measure implied net flows using the same rough methodology as in used on Russia, the numbers are simply stunning. [Malaysia showed] peak outflows of nearly 50% of GDP,” it says, noting that the outflow was larger than anything witnessed in the world of emerging markets (EM).
The report also says Malaysia over the past 12 months recorded one of the biggest base money contractions in the entire EM world.
It asserts that recent outflows were “far, far bigger than those Malaysia experienced in the 1997-98 Asian financial crisis.”

Firefly
14-01-2010, 09:29 AM
Wonder how much the 2 reconditioned submarine contributed to this out flow?

Jey
14-01-2010, 09:36 AM
:eek: Holy Crap!
And I thought I had just explained what foreign capital outflow means.... :confused: :confused:

AllUrban
14-01-2010, 09:46 AM
:eek: Holy Crap!
And I thought I had just explained what foreign capital outflow means.... :confused: :confused:Perhaps there is a confusion between investment capital from foreign sources (FDI), spending on imports, or the reduction in the collective amount of foreign money held in Malaysian hands.

A serious decline in Forex reserves suggests that Malaysia is selling off its foreign money but there are many reasons why it might happen:

a) in order to have more money locally in the hands of the government - for local spending purposes.

b) Or perhaps there is an attempt to reduce imports - no need for foreign exchange reserves if you arent importing.

c) Perhaps that means that an election is in the offing?

d) Or perhaps there is a corruption scandal brewing?

e) Or maybe they are ready to reduce the 'management' of the 'float' the Malaysian Ringgit? They dont need all those reserves if they may not be intending to maintain the 'managed float'?

Does anyone remember comments about the rapid sale of Malaysia's gold reserves, which got someone banned from this forum?

It asserts that recent outflows were “far, far bigger than those Malaysia experienced in the 1997-98 Asian financial crisis.” This is a scary thought. It would be wise to invest in solid assets if this is the situation.

Hopefully we dont have a situation like Venezuela, devaluing the Bolivar to 'shore up oil revenues' which is 'good' according to international lenders and money managers but is going to lead to massive inflation in the country.

Cheers, m

bugbear
14-01-2010, 12:01 PM
Perhaps there is a confusion between investment capital from foreign sources (FDI), spending on imports, or the reduction in the collective amount of foreign money held in Malaysian hands.

A serious decline in Forex reserves suggests that Malaysia is selling off its foreign money but there are many reasons why it might happen:

a) in order to have more money locally in the hands of the government - for local spending purposes.

b) Or perhaps there is an attempt to reduce imports - no need for foreign exchange reserves if you arent importing.

c) Perhaps that means that an election is in the offing?

d) Or perhaps there is a corruption scandal brewing?

e) Or maybe they are ready to reduce the 'management' of the 'float' the Malaysian Ringgit? They dont need all those reserves if they may not be intending to maintain the 'managed float'?

Does anyone remember comments about the rapid sale of Malaysia's gold reserves, which got someone banned from this forum?
This is a scary thought. It would be wise to invest in solid assets if this is the situation.

Hopefully we dont have a situation like Venezuela, devaluing the Bolivar to 'shore up oil revenues' which is 'good' according to international lenders and money managers but is going to lead to massive inflation in the country.

Cheers, m
To me, I think a) in order to have more money locally in the hands of the government - for local spending purposes. is the most logical reason for the sudden lost in FX funds. We can see that our budget for this year has been slashed drastically by 30%. It can only mean that our national coffer is empty and is about to collapse. I hope this is not the scenario but can't help but worry about it.

Sentinel
14-01-2010, 07:17 PM
Read today's headline on front page of the financial daily The Malaysian Reserve - UBS Bank analysts said the outflow is due to divestments by foreign investors. Oh Oh... not only the FDIs are not coming, those that are already here gulung tikar! (packing up!) Sheesh.... :eek:

Jey
14-01-2010, 07:24 PM
...and at the rate of 50% of the GDP which is something that was never seen before. This is even worse than the 97/98 financial crisis. No one is realizing yet as there are plenty of petty issues being blown out of proportions. What is happening is raising alarm bells to outsiders and here we are having a dozen circus shows to entertain us.

USJ27Resident
14-01-2010, 10:34 PM
... What is happening is raising alarm bells to outsiders and here we are having a dozen circus shows to entertain us.

Ironic, isn't it.... :mad: every man in the street are beginning to sense something not right... and we have a bunch of clowns saying "hey! everything OK!!"

If and when - the sh!t hits the fan..... these rich sons of soil and their families would be comfortably cushioned with their overseas foreign accounts whereas you and me - would be having banana leaves [no rice, no side dishes, no papadam!] probably just the leaves.... :eek:

bugbear
15-01-2010, 08:45 AM
Could this be the reason for the banning of the A word ruling? To divert all our collective attention to the greater malaise in our economy? It is also any reason that both the PM and DPM was in London recently to solicit-ate for donation? It is also any reason that Tun M's son is in China also doing the same thing? Could it be that our economy is going south soon?

AllUrban
15-01-2010, 03:41 PM
Could this be the reason for the banning of the A word ruling? To divert all our collective attention to the greater malaise in our economy? It is also any reason that both the PM and DPM was in London recently to solicit-ate for donation? It is also any reason that Tun M's son is in China also doing the same thing? Could it be that our economy is going south soon?Peak Oil for Malaysia is expected to be in 2011-2012...after that Malaysia becomes a true net importer, the subsidy on petrol has to be eliminated and the cost of everything increases.

Look what happened to Indonesia in 2006...when they hit peak oil and became a net importer. They removed subsidies on petrol, then cooking gas and kerosene, and even pulled out of OPEC.

Better start focusing on building up the assets that Malaysia does have. Education, human capital, agriculture and the electronics industry.....

Cheers, m

bobkee
15-01-2010, 07:29 PM
Better start focusing on building up the assets that Malaysia does have. Education, human capital, agriculture and the electronics industry.....Those assets don't make good sound bites for cheap shots and short term political support.

Sentinel
15-01-2010, 08:51 PM
Could this be the reason for the banning of the A word ruling? To divert all our collective attention to the greater malaise in our economy? It is also any reason that both the PM and DPM was in London recently to solicit-ate for donation? It is also any reason that Tun M's son is in China also doing the same thing? Could it be that our economy is going south soon?Remember what Tengku Razaleigh said at a recent speech at the beginning of this new year at the ISEAS seminar held at the Shangri-la Singapore? If I remember the words... "accelerated extraction of petroleum just to fuel the wasteful mega projects of someone's dream...."

How much longer does that mean we have in terms of oil reserve in those fields?

AllUrban
18-01-2010, 02:41 PM
Those assets don't make good sound bites for cheap shots and short term political support.agreed...but tell me what else we really have?

All the physical resources can and will run out one day.

Just look at Haiti as an example...they were the first independent 'black' nation in the western hemisphere, one of the first colonies to become independent and they used to be one of the wealthiest countries among the former colonies in the Caribbean & South America...

Now they have nothing and the earthquake destroyed any chance in the short term of creating something for themselves again.

Whatever happens to Haiti now will be at the whims & fancies of Canada, the US and France :(

http://www.photius.com/images/do03_04a.jpg
BW image of Haiti - Dominican Republic border (Haiti is on the left)

http://oglhaiti.files.wordpress.com/2008/11/haitidominicanboarder1.jpg
Image of Haiti - Dominican Republic border (Haiti is on the left) from http://oglhaiti.wordpress.com/2008/11/04/nadine-c-patrice-speaks-at-global-warming-conference/

http://www.earthsangha.org/images/displays/hmap.jpg
Image of Hispaniola from http://www.earthsangha.org/tb/tbmsn.html

Cheers, m

bugbear
18-01-2010, 05:02 PM
I think there is something seriously wrong with Haiti. Unless Malaysia do something soon to rectify our resource problem, we will be facing a bleak future. When those time come, do you think who got the right to call God by the A-word really matter? Sheeh...how narrow minded some people are.

Sentinel
18-01-2010, 09:56 PM
Right now Bugbear, we are still a net exporter of oil i.e. we sell oil overseas more than we import to use. I understand we will become a net importer in 2011 - hey thats next year!

As it is now, the gomen is having a headache trying to cope with subsidy, think about the possibilities next year!

We are gonna be in dire straits if you ask me, all because of 1 man who for 22 years pumped the oil out at a faster pace just to build his dream mega projects... the next generation and the generations after that will need to learn how to swim coz they need to swim across to Indonesia to work in their construction sites...

bugbear
19-01-2010, 07:59 AM
Right now Bugbear, we are still a net exporter of oil i.e. we sell oil overseas more than we import to use. I understand we will become a net importer in 2011 - hey thats next year!

As it is now, the gomen is having a headache trying to cope with subsidy, think about the possibilities next year!

We are gonna be in dire straits if you ask me, all because of 1 man who for 22 years pumped the oil out at a faster pace just to build his dream mega projects... the next generation and the generations after that will need to learn how to swim coz they need to swim across to Indonesia to work in their construction sites...
In that case we should not confer upon him the title "Bapa kemodenan" but rather "Bapa penyelewengan". ;) :D :p