Britain, a Ticking Depression Time-Bomb?

Make no mistake about it. Rosmah Mansor, the wife of Najib Razak, has made the necessary preparations for his husband to be sworn in as Malaysia’s sixth Prime Minister scheduled on this Friday. There shouldn’t be any more surprises which could delay the celebration. Sure, outgoing lame-duck Abdullah Badawi said the transition of power will happen in due course but he said so out of frustration. The fact is he has no other choice but to obediently hand-over the throne almost immediately after his schedule meeting with the King this Thursday. No matter how hard you pray and hope that something will happen that will deny Najib’s swearing-in, the writing is on the wall that Najib will definitely take over by this week.

And Najib didn’t give a damn if the sudden appearance of former dictator Mahathir who is also his mentor during the UMNO assembly closing ceremony was actually the greatest insult to Abdullah Badawi. The timing was perfect and immediately Najib scored some crucial points with influential Mahathir behind him. Badawi was supposed to deliver his last speech and given the face-saving farewell exit but suddenly Hulk Hogan appeared out of nowhere *minus the music* and all the cheers and thunders were stolen by the old man (Mahathir). If this is not the greatest insult to the outgoing PM, I do not know what else is. The tainted Najib needed all the points he could possibly get to lift his image. So the orchestra to inject feel-good atmosphere to the delegates and the public.

Like it or not Abdullah Badawi was a disastrous and historians are still having tough time figuring what was his greatest contribution(s) else future history books could end up with question marks on the past Prime Ministers’ achievements. Given the option businessmen would prefer (and hope) the new PM (Najib Razak) as the perception is that Najib would be a better leader than Abdullah Badawi. Sure, Najib’s academic major was in economic although his star shines in defence / military instead but businessmen was hoping at least Mahathir, rumored to become UMNO’s special advisor, could guide the Razak Jr. in putting the economy back on track after 6-years on auto-pilot.

Najib Razak’s brother, Nazir Razak, the CEO of CIMB Group (second largest lender after Maybank) has started the so-called no-pay leave offer to his 36,000 employees. Nazir claimed his "Staff Rejuvenation Programme" is a win-win scheme for both staff and company because staffs that opted for the scheme are assured of a job with the company – when the good time returns. But the employees returning from their “long leave” could be redeployed or transferred to other department. Everyone knows that when you’re being transferred to foreign department it’s actually a polite way of telling you to get lost soonest possible else. It’s not clear the next action plan if the recession worsen and refuse to go away after the programme expired in six months.

As much as CIMB would like to perform the clear cut of retrenchment or VSS, the political climate is simply too sensitive for the execution especially when his brother Najib Razak is about to take over the premiership very soon. After President Obama threw the spanner on the automobile players General Motors Corp. and Chrysler LLC that there would be no easy bail-out money for them despite the threat of bankruptcy, all the eyes are now on G20 summit in London.Obama was cool about the prospect that GM or Chrysler could go bust as that could be the long-term solution for the automakers. The last thing that Obama administration wants is to have another AIG who keep asking for easy money but paid hundreds of millions of dollars in bonus to its staffs instead.

The legendary currency speculator George Soros said the recession will last forever, a statement to mean that the world could face a depression worse than the 1929’s Great Depression if the 20 governments scheduled to meet in London still could not decide on a common consensus to fix the economic problem. George Soros could be betting great amount of money speculating currencies again but this man who broke the Bank of England and made $1 billion on Black Wednesday by shorting the pound is set to make billions again, if his bet is correct. In fact Soros thinks the current global recession is a much bigger problem than in the 1930s and Britain’s economic problem is actually worse than in America and Germany. Soros claimed he’s not shorting the pound now although he did so last year and made another cool $1 billion. He also refuses to give tips if the current plunging pound sterling has hit the bottom but then why should he tell you?

If Soros is right and the next economic chaoses were to explode from Britainthis time the scale of global depression would be intangible. Of course along the process Soros would be richer by many more billions of dollars. So, could the recent rights issue by Maybank and TMI was due to reasons only known by the insiders? Will the NPLs, if revealed would create an economic disastrous huge enough that require Mahathir-Daim tag-team to come back for the rescue? If the recession is a minor one, why CIMB boss is scrambling to cut cost creating unnecessary panic? Mahathir should have started advising Najib on his next step on how to revive the economy problem. As I’ve wrote before Najib should spend more time learning and combating the economic issues and leave the political challenges to his deputy and new knights.