Now is the best time to overhaul – GM to the Bankruptcy

Before we hear (hopefully not) any more bad news from the banking institution (if any) it seems General Motors Corp.’s (NYSE: GM, stock) overdue problem is running out of fuel and is set to be known as early as end of this month – May 31st. People are betting that GM will have no other choice but to file for bankruptcy protection and the stock price plunged more than 25% on Friday to close at $1.43 a share, less than 50 cents away from becoming a penny stock. The last time a big chip became a penny stock before quickly rebounded was not many months ago – Citigroup. But there’s difference between both stocks.

While the U.S. government cannot afford to see Citigoup collapse, the Obama administration doesn’t really care if GM vanished from the motor industry, at least temporarily. In fact the Dow Jones erased only 15-points despite 25% plunge in GM’s stock price. So it’s OK for GM to call it a day because it’s 25% slide only constitute about 0.04% of Dow’s decline, thanks to the already low price of the stock. The U.S. government is prepared to cancel most or all of its existing debt in GM and invest in a “new” GM, just like how you play those video games – reload from the last save file when your character was in good condition.

Sure, the Americans still love the trucks and truck-based SUVs produced by GM but now is not the time the consumers would buy without thinking. There’s no doubt that GM will emerge stronger after the “reset” without any debts and this giant will starts making billions of dollars of profit very soon. In reality now is the time to overhaul GM and salvage the assets. Of course in the process the debt holders would be affected but in the long run it’s better to own a profitable GM than what they own now.

Furthermore Americans have very little savings as most of their monies were invested elsewhere – housing and stocks, both instruments in bad shape and lost most of its value. Without much money to spend but with many holes of debts to settle there’s only one thing you can expect from the current economy scenario – the good time of pre-recession wouldn’t reappear out from the sky tomorrow. But it’s a splendid window of opportunity to scope those very cheap stocks, provided you’re done your homework.

Najib’s New Game-Plan has Started

Every Tom, Dick and his “Siu Keong” pet Cockroach knows that there’s no way Najib’s administration can win the Penanti by-election *yawn, what’s new?*. It was predictable from the moment Najib announced that his government “may” not contest for the by-election, another way to test the water to see his peoples’ reaction. Nobody within his government dares to challenge his intention except his mentor Mahathir *who else*. Of course many suggested that since people are getting sick and tired of Perak fiasco it would do the people a great entertainment if Mahathir be nominated to carry the BN’s flag to the battlefield. For once I thought this old fox would suggest his name to Najib but sadly it didn’t materialize. I would be willing to bet a cool RM1.00 that Mahathir will win and send Anwar into retirement.

Frankly there’s no risk if Najib plays the game well – persuade Mahathir to offer himself to the press and as a token of appreciation Najib agreed to it. It would be the mother of all battles between Anwar Ibrahim against Mahathir Mohamad. If Mahathir wins, Najib’s problem would be solved once and for all as it would also demoralize the opposition PR to the bottom. If Mahathir lose then put the blame on the old man for being the loose cannon and this will teach Mahathir to watch his mouth the next time he dares to go against Najib’s wish. Sure everybody has been calling Najib the “coward of the century” with his intention in chickening out from the race. But it’s better to camouflage under the “not to waste public’s money” and “its’ opposition political game” than to enter the ring and lose badly.

At least there’s nomore “referendum” that people despises current government. The most they would say is Najib is a big coward, which is much better than lose the by-election and in the process demoralize the BN coalition further down the drain, not that their spirit is good at the moment. Furthermore how can you say BN lost when it didn’t contest in the first place? The fact is Najib was planning the same coup on Perak to the rest of the state captured by the opposition post-Mar 2008 general election – Selangor, Penang and Kedah. But because the plan didn’t work in Perak the rest of the states didn’t get triggered so you can be sure the frogs are still very much alive and kicking in these states. Imagine Perak fells under Najib’s great plan thus Abdullah Badawi has to pack his laundry follows by the domino-effect when Selangor, Kedah and Penang falls after Najib took over as the sixth prime minister. Can you feel the electrifying performance of a superstar?

It would make former PM Abdullah Badawi so surprised and amazed with Najib’s capability that for once he would be wide awake for the next 24 hours. It would also make Mahathir’s jaw dropped 86 floors down to the ground floor from his office in Tower One, KLCC. But the script didn’t work and it went so bad that foreigners are still wondering how a House Speaker could be dragged away like a stray dog before locked away inside a room. But who cares about Penanti by-election and the Perak state? At the moment Najib has better things to do. Perak coup was a good plan but it was executed at the wrong time at the wrong state while Penanti was like loose-change to the PM. Let Anwar and his bunch of boys celebrate Najib’s cowardice for all he cares. Najib has a set of new strategy specially made to counter Anwar’s ambitious plan to unseat the 52-year-old BN.

Najib knows he can’t fight heads on with Anwar and if he can’t fight then he needs to retreat. The people are still boiling with hatred towards BN and the percentage has increased several notches since the latest Perak’s fiasco. It’s time to act as a loser in order for Anwar’s coalition to become complacent and arrogant. If possible let Anwar’s team win big so that they become big-headed. It doesn’t matter even if Anwar were to win another 10 by-elections, as long as BN controls the federal government. At this moment it’s pointless to give “incentives” to the voters because these jokers will in turn give-away the money to the opposition and this makes Najib’s team really disgusted and cursed till foamed at mouth. It’s better to save the money to recruite more frogs and wait for the right time to act.

Of course the other strategy was to adopt the infamous “divide and rule” on the so-called famous Hindraf movement. You don’t think Najib’s administration was so generous as to approve the controversial Hindraf key member’s application for the registration of Malaysia Makkal Sakti Party, do you? If this new political party can deliver the Indian votes, Samy Vellu’s MIC party can go fly kite for all Najib cares. Samy Vellu has been given too long a time to retire and is now a nuisance to Najib’s administration. This Samy Vellu with an ambitious plan to push his high-school dropout son Vell Paari to become the MIC’s President has nothing to contribute but everything to scare the Indian voters away must be made to understand that his time and party has reached the expiry date.

While BN can shy away from by-election(s) it doesn’t mean it can’t sponsor Independent candidates. In fact this is a no risk gamble that worth every dollar. If the independent candidate loses his or her deposits it’s fine because it’s average-Joes money anyway. If for some reasons the independent candidate wins then he or she can announce the intention to join BN because only BN can bring development and so on and so forth – you know those standard excuses to join BN, don’t you? Bottom line is it’s not the time to fight, what more with MCA, Gerakan, MIC, PPP and other component parties still licking their wounds after more than a year since the general election. Najib needs all the time and resources to rebuild his coalition to face the next general election, not by-elections. But first he has to fix this Perak’s problem fast as the longer it drags the easier it would be for Anwar to fish for votes. The problem is Najib can’t say sorry and give back the Perak state, directly or indirectly, because he would lose face. So he passed the ball back to Sultan of Perak’s court.

McDonald, Fast Food that is Recession-Proof

Not many moons ago I wrote that the no-brainer or average-Joes yardstick to measure if the economy was getting bad was to look at how Starbucks’ (Nasdaq: SBUX, stock) business was doing. Furthermore at about RM10 a cup of coffee it’s considered a luxury, at least to the majority of the men on the street who may make less than RM3,000.00 a month. And that’s not a lot of money considering the forever escalating inflation in a country such as Malaysia. So the next time you wish to know the status of current economy, just go and observe the Starbucks’ sales for some hints. Recently when I sent my car to a Honda service center I asked the person at desks about the business and he mentioned that sales have been affected quite badly, and this is one of the top service centers that had won numerous trophies or awards, mind you.

In time of economic uncertainties you can see how creativities come into play in order to sustain the business. Talk about fast-food (or rather junk food) and the first thing that come into your mind is McDonald (NYSE : MCD, stock), Kentucky Fried Chicken (KFC), Kenny Rogers and so on. There’re good reasons why McDonald could survive the harshest economic situation, the same way Wal Mart would not perish in the field of cheap merchandise. Fast-food player such as McDonald will survive because they offer cheap, well, fast food although you may argue that it’s not that cheap after all in a country such as Malaysia as compared to the U.S. Sure, I still remember those McValue-Meal that costed me only RM4.99 ten years ago.

Thanks to the current recession McDonald is bringing the RM5.95 Value-Meal which is applicable on daily basis but from 12:00pm to 3:00pm, although somehow I can swear that there’s something missing inside that McChicken burger. But I suppose I can’t complain much since they provide relative inexpensive food in a clean and nice environment served by friendly staffs. Somehow KFC always comes in second place when talk about such promotions. Nevertheless workers at fast-food chains are paid peanuts but then you may argue that such jobs do not need highly skill-sets so that’s what they deserve. No doubt the margin of profits are not much for that set of value-meals but the company make great money from the volume. And for that reason McDonald Malaysia which has about 185 outlets is one of the cash-cows in Vincent Tan’s empire.

Vincent Tan won the McDonald franchise back in 1981 and has never looked back since. This businessman who was once the King of “bonus and rights issue” and has little problem frying up his stocks has attracted criticisms and even boycott over his businesses especially when it was reported that he paid one of the frogs, Hee Yit Fong, RM25 million to switch side causing the opposition its Perak state. It’s unsure that exact amount of money involved but the fact that Hee Yit Fong was spoted with her new Mercedez Benz (and not the Toyota Camry which costs the state) means money changed hands. But this is not the first time Vincent Tan was accused of “donating” money especially to the government of the day because he’s “closely linked” to Mahathir since 1980s.

Anyway the call to boycott his business will work very little in affecting his businesses simply because people will still need to enjoy the little luxury left of them – McDonald, not to mention the need to punt over his Berjaya Toto’s betting outlets. It’s not that you can avoid McDonald and go to KFC because KFC and other fast-food chains for that matter are somehow related to the current government. It’s the same like what Mahathir screamed the other day to all Malaysians to boycott American products. Anyhow, it’s not healthy to eat those junk-foods at McDonald too often so the choice is yours.

Chopping Board for Stubborn Punters and Gamblers

Speculators and punters are at the crossroads now. Stock market has arrived at the traffic light – would it pause before continue its journey to the north or would it make a U-turn and go south? It’s freaking fun to see the look on the face of the speculators or punters now. If the so-called bear-rally has exhausted its fuel then it’s no brainer that you should start selling, prepare the cash and wait for the next low for entry. If the so-claimed bull was just teasing you by this temporarily pause before charging again, then you should buy more. So which is which? Nobody knows if the Dow Jones’ 2-month “rally” was the start of a genuine bull-run or merely a bear rally hence the sucker’s rally. We only know the 2-month “rally” has spiked about 30% from its’ low and such rally within a short-period of time is not healthy, not to mention dangerous.

But nobody cares because the crowds on the trading floor were shouting “Bull is running” and “Buy before you miss the boat”. It was enough to brainwash you to jump onto the bandwagon come rain or shine. Furthermore how could you be wrong when the daily transaction volume suddenly jumped to over 3 billion shares (KLSE)? You sweared on your grandma’s grave that you can see the bull showed you two thumbs up on the trading floor. You rubbished that the market-makers linked to the government were behind the manipulation to artificially create the feel-good atmosphere. Where did the money come from if it was true that the foreign investors did not come in, you argued? Many have forgotten that the so-called "hot money" came from the stimulus packages announced by almost all countries affected by the global economy crisis.

Without heavy selling by the foreign investors due to the fact that they did not hold huge local portfolio in the first place (as compared to 1997-1998 Asia Economic Crisis) the job of pushing up or down the composite index was extremely easy. In fact the local market-makers can artificially push up the index by 1-point everyday and you need less than 100-points to create 100-days of bull. Furthermore what the punters and gamblers would like to see is only positive closing. Just like honey the rest of the suckers would be flocking to the stock galleries and the market-makers can slowly by surely inload their holdings.

At the moment situation is quite tense at Dow Jones because the 8,000-level is being tested again. With yesterday’s closing at 8,284.89 after plunged 184.22 points or 2.2%, you’ve little buffer to play around and should the 8,000 level breached the next selling wave could be on the horizon. U.S. retail sales fell in April for second consecutive months, down 0.4%, worst than economists’ expectation. This is not surprising at all considering people are still licking their wounds from unemployment yet still have to pay their mortgages and credit cards debts. Do I have to remind you that the 8.9% jobless rate is still at 25-year high although some smart-suckers said it’s very far from 1929 Great Depression?

So, just because we may not hit the 1929’s Great Depression jobless rate, we’re on our way to recovery? Sometimes it’s amazing how these analysts got their job in the first place. One little thing I learn from investing stocks is not to count the chickens before they hatch, not to mention now you’ve actually many sick chickens that may not be able to mate and produce the eggs. As a matter of fact, KLSE has recover much faster compared to Dow Jones but when the Dow plunged to its’ lowest in Mar, KLSE didn’t follow through. Hence you can say that if the worst is not over for Dow Jones, KLSE has definitely not seen its worst yet.

May 13th Anniversary – the same Power Crazy Politicians

Would it be too cruel to say “I told you so” now that the Court of Appeal granted the so-called illegitimate Chief Minister Zambry a stay of execution on the High Court ruling yesterday that the so-called legitimate Chief Minister Nizar was the rightful Menteri Besar (Chief Minister) of Perak? From a state that fall into the hand of opposition after Mar 2008 general election to the magical creation of 2 (two) Chief Ministers, 2 (two) Speakers and now back to the unbelievable 0 (zero) Chief Minister it would take David Copperfield many more years to understand the trick. This Constitutional Crisis continuous tragedy has raised millions of eyebrows that other news such as the Altantuya murder case, PKFZ’s RM8 billion (someone said RM12 billion) scandal and the fuel hike of RON97 by 20 sen to RM2.00 a liter are taking the back seats.

Of course some of you claimed Nizar is still the rightful and legitimate Chief Minister but at the same time some would argue that Zambry is still the Chief Minister of the day thanks to three frogs, the Sultan of Perak and the single-instead-of-three Court of Appeal’s judge. In fact we should be proud that the country has her own version of Mahatma Gandhi and Nelson Mandela combined, at least that was what Zambry claimed he is, never mind the only similiarity is perhaps the skin colour. While Nizar was speechless about Court of Appeal’s verdict most of the average-Joes knew this stunt was about to happen. So it’s kind of funny that Nizar would be so naïve to believe the story ended the moment he was declared the winner by the High Court. It would be a miracle for the Ruler to grant Nizar the permission to dissolve the Assembly.

The political script which was reused again and again by BN for years appeared to be outdated judging from the feedback from the man on street. It’s so predictable. Now Nizar has applied to set aside the stay of execution order by the Court of Appeal and you don’t need to be a genius to guess where this whole thing is going to land – at Federal Court, the last court of hope. It was a fight that has already crippled Perak’s economy. It’s no longer about governing the state but more of face-saving – Najib and the Sultan of Perak’s face-saving to be exact. While Zambry and Nizar were busy entering and exiting the state secretariat building in a “now you’re Chief Minister, now you’re not Chief Minister” comical episode, their boss Najib and Anwar were nowhere to be seen. Both were strategizing and pulling strings from behind the curtain in their game to show who the best strategist is.

Today, 13th of May 2009, is also the 40th Anniversary of the bloody May 13th 1969 riot that had left hundreds of innocent lifes perished, thanks to politicians. PM Najib’s father was alleged to be the mastermind who architected the bloody riot 40 years ago, with the main objective in toppling Tunku Abdul Rahman, the first prime minister. Of course you won’t find such interesting history event printed in schools’ history books but you can find such books in bookstore and archives elsewhere. Many UMNO politicians especially the former premier Mahathir has used the riot as the basis to divide the Chinese, Malay and Indian for easier ethnic control. The scare, hatred and intimidate tactic worked well during Mahathir’s 22-year rule but people especially the internet-savvy younger generation now realized that it was not a riot due to racial differences but rather selfish ambition of politician(s) who was power-crazy. Of course it was academic about old-folks-tales that the architect of the riot died while in power because the God had summoned him for the many lost lifes.

Anyway the fact is both the Malay and Chinese, let alone the wealthy politicians, could not afford to have another round of similar riot simply because the stake is too high. Despite the many spins the economy cake was equally divided between both races although it is the cronies of the ruling government who controls the majority of the slice. In a nutshell everybody would be affected one way or another if some mad politicians were to push the button of riot destruction. Nevertheless May will probably be the month where we’ll see the climax in power-grabbing which involved not only the Chief Ministers, the Perakians, the police, the Speakers, the Monarchy, the judges and many more but also the Mahatma Gandhi and Nelson Mandela. I’m not sure if Najib’s camp realizes this but as long as the Perak’s Crisis is not solved by returning the rights back to the people, he would do Anwar a big favor. Anwar would be delighted if Najib’s administration continues to prolong this crisis till the next general election because by then Anwar can leverage on this crisis to bash BN and therefore gain easy support from the voters.

High Court Decision – Smoke Screen or A New Battle Plan?

I’ve to admit I was rather surprised with the High Court decision that declared Nizar Jamaluddin as the rightful Perak Menteri Besar (Chief Minister) instead of ruling government’s choice, Zambry. Equally surprise was the Zambry’s application for a stay pending appeal which was immediately rejected by the High Court. People especially from the PR (Pakatan Rakyat or People’s Alliance) coalition started the celebration as if the country has just won the FIFA World cup. The victory was actually many times better than orgasm considering that the perception on the street was the judicial was long-dead, since the day former premier Mahathir chopped down the judiciary’s independence and made the judges at the mercy of the Executive pillar.

Make no mistake about it, PM Najib’s plan in capturing the Perak state was buggy as he was rushing to show the UMNO delegates what he can do in the blink of an eye in his final push for his successor, Abdullah Badawi, to throw in his towel. In the process he only managed to seduce the tainted trio to jump ship while it was freaking difficult to win over the Speaker Sivakumar. If only Najib could win the heart of Sivakumar the Perak’s political landscape may be different today. By the time Najib realized his mistake it was too late, nonetheless the assault for the Chief Minister post had to continue. His apprentice Zambry was hoping for a smooth sailing when the Perak Assembly opened last week but Speaker Sivakumar had proven to be a hard nut to crack so much so he basically chained himself to the Speaker’s chair without even the need to answer nature’s call *hats off to him*.

The problem compounded exponentially when Zambry engaged outsiders (till now nobody knows if they are policemen or thugs?) to practically dragged the stubborn Speaker Sivakumar out of the House before locked him inside a room for almost an hour. It was the most embarrassing episode in the history of the country’s democracy and almost immediately gained global’s attention. It was a slap to the face of Najib who was trying to project 1-Malaysia concept. Most importantly foreign investors were rather worried though they were equally amused. If the present government can literally threw the much respected Speaker out of the window, what assurance or guarantee is there that the foreign investors’ billions of dollars of investment would be protected? Najib’s administration can justify their actions until foaming at their mouth but foreign investors are not stupid and they have other option to park their money.

Najib’s mentor Mahathir may have warned him that despite winning the battle (Perak state) he may lose the war (next general election) judging from the soaring temperature not only from the Perakians but also nationwide. It was indeed a dangerous game to pursue hence repair or salvage the situation or else. Strangely enough the Hindraf trio and 10 others were released from the draconian ISA one day after Home Minister Hishammuddin Hussein, who is also the cousin of PM Najib Razak, was adamant that the Hindraf trio should be in the detention center. The release was obviously to prevent another by-election at Kota Alam Shah of which it’s impossible for Najib’s coalition to win. Also by doing so it was hope the people especially the Indian’s hatred towards the ruling government could be reduced. Already there’re rumors that the Hindraf may be registered as a political party and may join Najib’s coalition since MIC is fast losing its shine.

So, is the High Court decision to award Nizar was actually a smoke screen? OK, I may have watch too much television series such as 24 but it could be also due to that fact that I basically read all the “Famous Five” by Enid Blyton during my primary school days. Najib and his boy, Zambry, are mooting the idea of appealing against the High Court decision and there’re already political analysts who believed Najib would most probably win the appeal. It’s another way for Najib to tell the world that the democracy is still alive. Nizar won the first round and Najib wins the next round. It would be a good strategy to divide the people’s perception that the Judicial is under absolute government’s control. So the PR cannot sulk if the appeal goes the other way. Even if Nizar won this round, the Sultan of Perak can still refuse to dissolve the State Assembly and if a vote of confidence were to be tabled, the BN may win the game considering they have the majority (remember the three frogs?). But what about the status of Speaker Sivakumar?

Now what if Najib-Mahathir’s plan was to actually give back the Perak’s state to the PR in an attempt to win back the tightly squeezed peoples’ support for the next general election? The clock is ticking and Najib does not have much time to play this guerilla warfare with PR, not to mention the Sultan of Perak has invited much criticism over his handling of the state’s constitution crisis. Knowing the mentality of Malaysian, the Ruler’s mistake may be forgiven almost instantly should he grants Nizar request to dissolve the State Assembly. Anyway Nizar and his team-mates should not be over excited that the Ruler will play the game as to reverse His Highness’s recent decision indirectly means the Sultan has erred. It’s all about face-saving. But the Sultan’s son, Nazrin, could be the right person to undo the damages if he decides to grant Nizar’s request, provided a ground could be established that Sultan Azlan Shah is unavailable for 30-days. Najib can also claim victory that his administration respects the court’s decision so he’s not a monster people perceived him to be.

Stress Test a Hoax? Another Wave of Banking Tsunami?

Something is not right here although I hope I’m wrong. Not many months ago the stock market happily plunged with a single bad news although there were dozen of good news accompanied it. Now a single good news plus dozens of bad news is enough to send the stock market to the moon. Everything was upside down literally. Maybe it’s the sentiment of the investors who chose to ignore or pretend the worst is over (although I hope the worst is really over). But we have to analyse logically and not jump onto the bandwagon. Sure, if you’ve already jumped and made good money then congratulation but still you need to ask youself – what’s next?

At this moment there are more analysts who think that the worst is over than analysts who think the current rally is a sucker’s rally. And who can blame them when the bullish graph is there in front of their trading terminal. It doesn’t matter if the current rally could be just another sucker’s rally with stamina booster at the end of the day because their job is to go along the tide. And the tide now says the bull is in charge of the trading floor. You would need to have a dragon-heart to defy the tide but how many can resist the temptation seeing the stock price skyrocket. What if the rally is real and you’re actually the sucker missing the boat watching the stocks movement without any actions? This is why stock trading is such an exciting game teasing your emotion again and again.

The job losses registered in the month of April was 539,000 when the expectation was 610,000 hence the rally on Friday. But it’s still 539,000 jobs lost nevertheless and the unemployment rate is at 8.9%. What’s wrong with the people here? Has the “denial syndrome” pandemic spread from Malaysia to U.S.? OK, maybe the jobless figure was not that bad compared to the estimation but that’s because the expectation was set too low, not to mention the “special help” from government in creating 60,000 vacancies to help the situation. It was the same like what the Malaysia government did – creating artificial positions although the new recruits may have nothing to do. Where were these vacancies when the economy was in good condition? Get the picture?

U.S. banks’ stress test results were release and in total the banks need $74 billion more – Citigroup needs $5.5 billion, Wells Fargo needs $15 billion and Bank of America needs $33.9 billion amongst others. Ironically the stock market perceived the result as good because it was, well, better than expected although they played down the risk of credit cards. But we’re talking about $74 billion here which in another word means the banks are still in the risky zone, not to mention the banks’ better than expected earnings result was due to creative accounting. Of course everyone seems to bulldoze this fact and prefers or rather pretend that the banks are out of the woods already. Maybe they’re right considering the Obama’s administration would most likely bail them out if there’re still worms not out from the can.

Anyway, William Black, an Associate Professor of Economics and Law at the University of Missouri believed the stress test was purely a propaganda or rather a smoke screen to give an impression that everything is well with the banks when in fact it is not. What better way than to tell the public that the banks are well capitalized and the crisis is over? William Black’s simple argument was that Fannie Mae, Freddie Mac and AIG had passed much more stringent government stress test but still fails ultimately. In fact William Black predicted another wave of banking tsunami with losses of more than $2.5 trillion compared to U.S. government’s $599 billion estimate. Also the issue is – if the government foresees $599 billion in additional bank losses, why on earth the government was requiring the banks to raise $74 billion only? Where’s the remaining $525 billion?

It’s good to have celebrations once in a while but before you get too carried away with it, ask yourself if the U.S. banks’ problems are really over or it was another political lies hoping the scheme will work and the losses would disappear overnight. Either way you would have to make a decision and boy, isn’t this fun, challenging your emotion – to buy or not to buy? Or maybe it’s the opportunity for you to sell? Scratching, scratching head.

Chinese are a bunch of Cowards

Five thousand years of Chinese Civilization have transformed the Chinese into a unique race which possessed all the necessary ingredients to survive in a harsh environment. But they are still the same homo-sapiens that are clever yet selfish and cowards. Although the Chinese are complex they’re relatively easy to understand once you mix with them. And they don’t call Singaporean “Kiasu” (fear of losing) and “Kiasi” (afraid of death) without any good reason. As usual there’re two sides of the coin and hence the Chinese are known to be rich (or rather economical capable) yet they need to be led and controlled under communism regime for obvious reason.

Generally the Chinese (in China) are weak in politics thanks to thousands of years under autocratic dynasties’ rule. From the first emperor Qin Shi Huang to the last emperor Pu Yi, the Chinese never tasted real politics let alone democracy. So when the Taiwan’s lawmakers started throwing punches and chairs, spraying water at each other, pulling hairs and literally transformed the House into a wrestling hall, it was understandable as they were just infants learning the rope of democracy. However the Chinese are very good in business so much so that they “may be” the first race that invented corruption (whether they realize it or not) in order to speed up the business deals.


Because of the “Kiasu” characteristic, the Chinese are always in front of the queue when come to the business of making money regardless whether it is legitimate or illegitimate. They can naturally smell the aroma of money miles away and they are willing to enter the ring of no-holds-barred for the sake of making money. There’s not a single business which can make money without the presence of Chinese. From stock market speculators to drug smuggling you will see the Chinese have some parts in it. Yes, the Chinese are brilliant and can make huge amount of money quite easily but that’s because they’re a great spender as well. They can create an efficient economy mill within a small town with ease and you wonder how the hell the community can prosper. As a comparison, go to a kampong dominated by ethnic-Malay and your jaw will drop to the floor.

Unfortunately the Chinese are “Kiasi” at the same time. They have extremely high level of tolerance and as long as they can bring food to the table for their family, they can accept intimidation, inefficient and even a very corrupted government. That was the reason why they never strike back even though their husbands and sons were brutally killed and their wives and daughters were gang-raped during the riot in Indonesia of which many said was engineered by General Wiranto and endorsed by President Suharto. The Chinese have done a calculated risk and knew it wasn’t a battle for them thus they migrated leaving behind the debris but not before transferred billions of dollars out of Indonesia (mostly to Singapore). They understand the concept of live another day and you will still be alive to avenge your losses. Fight a losing battle and you’ll lose your life cheaply.

Having said that the Chinese would not tolerate if their country is at stake as can be seen when the China was invaded many times by outsiders. In fact historically the Chinese never invaded other countries (if my old memory serves me right) but was enjoying many civil wars within the current modern China territory. The Chinese had the greatest opportunity to expand their empire during the height of their naval power under Admiral Zheng He when the China generally ruled the seas but they didn’t. They’re happy to show off their power and as long as you do not poke their nose, they’ll leave you alone. And for this simple reason former PM Mahathir once said Malaysia (and other countries) has everything to gain and nothing to lose if China continues to prosper although the other superpower U.S. didn’t think so, out of jealousy I supposed.

Unlike the Chinese, the ethnic-Malays are specialists when come to the topic of politics. They’re willing to risk everything for their political beliefs including their lives and for this reason the UMNO supporters were easily intimidated and demoralized with the presence of a bigger crowds from PAS, both consists of Malays. There’re reasons why the “Bersih” rally was a huge success but the supposedly “Perak” rally yesterday was, well, a failure. Unlike the “Bersih” rally, there was no serious organizer for the “Perak” rally and everyone “thought” people will show-up naturally as if it was a “Michael Jackson” concert. But sadly the urge for the rally never reach the Perakians. Furthermore the “Kiasi” Chinese will only turn up if they see scores of Malays turn up. It was like a 100:1 ratio – if there’re 100 Malays then you’ll probably see 1 Chinese *grin*. They need PAS-Malays to lead them, period.

Seriously most of the Chinese in Ipoh consists of middle-age or retiree who do not have the stamina to run should they greeted by tear-gas. Also, they do not read blogs but still subscribe to the government-controlled newspaper, mind you. In addition, many of these Chinese are still haunted by the 13th May 1969 bloody incident. The youngsters who are “relatively brave” have mostly migrated to towns such as Kuala Lumpur, Johore Bharu or Singapore. They have yet to see that should they be whacked by UMNO-Malays, the PAS-Malays will come to their rescue and can you blame the Chinese considering they’re one bunch of “Kiasi” cowards?

Now, after seeing how an Indian-Hindu Speaker Sivakumar was humiliated and dragged away as if he was a stray-dog by, God knows if they’re real police, do you think the already “Kiasi” Chinese will not think thrice to come out, if there’s another rally in the future? If the so-called police can treat a Speaker in such manner, what guarantees are there that an average-Joes will not ended up like toasted-bread with several broken bones? Yes, in this case the Malays are well-built wrestlers such as Hulk Hogan, Batista, Triple-H or Goldberg but the Chinese are just novice with body no better than Tian Chua. So it’s not a level playing field with Tian Chua holding a poster while Hulk Hogan holding a steel-bar thirsty for blood. Oh yeah! Do you want to know the court’s decision on Monday to decide who the rightful Chief Minister of Perak is? I’ve the crystal ball for this *grin*.

Perak - it’s over in 2 hours, thanks to Mahathir’s plan?

What would PM Najib do without his mentor Mahathir? In a nutshell Najib is clueless and screwed without Mahathir’s intelligence especially on the matter of Perak State’s power-grab controversy. It was a huge mess as a result of a coup without a proper plan and Mahathir openly admitted that Najib’s plan to forcefully take over Perak state was done with huge loophole – another way to say Najib should take care (kautim) of the Speaker (Sivakumar) instead of the Camry-crazy Deputy Speaker (Hee Yit Fong). Anyway all is not lost as Mahathir (and his advisors) might just have the workaround to solve Najib’s problem although it’s not perfect. At least Najib can hold on to the Perak state until the next general election and in the process will not lose his face by losing back the Perak state.

Of course the first thing Mahathir need to do is to declare (which he already did yesterday) that the Sultan of Perak does not have the power to remove or sack a Chief Minister to whom he appointed. This makes Mahathir a temporary angel and the oppositions sing the songs of praise. But on the other hand Mahathir secretly deviced a strategy so that the BN coalition led by Najib can retain the Perak state. It’s pathetic to read that IGP (Inspector-General of Police) Musa Hassan has the cheek to say that literally it was not the fault of the police if pregnant women were to die as a result of tragic (fell off from motorcycle or ran over by car) snatch theft. Ironically the IGP has excessive reserve of policemen that hundreds of them could be sent to Perak to intimidate and harass the average-Joes wearing black.


As part of Mahathir’s evil plan, the first thing the police need to do is to arrest basically anyone within the 500-meter exclusive zone around the state secretariat building, that’s provided the person(s) could even come so near to that zone considering road-blocks were deployed much further away from the 500-meter zone. Not a single mosquito was supposed to fly into the American-style “No-Fly-Zone” in the Iraq’s war. Maybe the policemen were bored without much retaliation so they somehow went berserk and arrested most of the average-Joes who were enjoying their breakfast at a coffee-shop. At the last count, more than 60 people were arrested and dumped into police trucks incuding people elected representatives from the oppositions. Boy, Mahathir must be delighted to see the re-occurance of his favorite Operasi Lallang though the scale is smaller this time.

While the PR was so focus in grabbing their seats the BN led by Zambry was instructed to focus on the microphone. Yes, it’s a simple strategy but it works seamlessly in removing the PR’s Speaker. In fact it was like a child-game. Those who hold the microphone speaks louder and become the captain. Zambry was to move a motion to remove the Speaker who is expected to scream at top of his voice asking Zambry and his boys to go out. Zambry and his team should not move an inch because basically the Speaker will be paralyze without the co-operation of the sergeant-at-arms to remove Zambry. Didn’t I tell you money and power can move mountains *yawn*? Thank God this is not Taiwan otherwise we would be watching assemblymen throwing punches and assemblywomen pulling each other’s hair.

The turning point was when the Speaker Sivakumar left the House to escort Raja Muda (window of diversion) the microphones belong to the Speaker and PR assemblymen were quietly switched off. And the traitor deputy Speaker Hee Yit Fong was to announce that BN has the majority and successfully removed Speaker Sivakumar. PR (Pakatan Rakyat) may have the chairs but the BN has the microphones and they quickly appointed BN’s Ganesan as the new Speaker, never mind that PR’s Speaker refused to budge from the official Speaker chair. In fact during the recess all the PR’s assemblymen including its Speaker refuse to leave their seats but frankly the PR seems to have lost the battle. It’s a matter of time before Speaker Sivakumar needs to answer nature’s call right *grin*? So while the PR was adamant about not leaving their seats, the BN brought in a table for their new Speaker to continue with their agendas.

However it would be interesting to see if what transpired in the House is legitimate and legal considering that Raja Muda of Perak Raja Nazrin Shah has not officially deliver his speech and declared the state assembly open. Anyway BN has the upperhand with the latest twist, not to mention the support from the police and sergeant-at-arms. It doesn’t matter if the PR assemblymen decided to glue themselves to their chairs till midnight today because come the next asembly, the sergeant-at-arms will be super-efficient in removing anyone from PR should they try to grab the official “government seats” in the House. Furthermore do I have to repeat that democracy is dead since Mahathir took over the country more than 28 years ago?

Heck, looking back it seems the Perak State now has not only 2 (two) Chief Ministers but also 2 (two) Speakers. Aren’t you proud to be Malaysian? Maybe those assemblymen currently aligned to either PR or BN can have a coffee-talk and form their own alliance and appoint their own Chief Minister and Speaker as well, especially those who would not get to be appointed executive councillors. OK, the above may not be the plan hatched by Mahathir but if it was, it’s plain stupid although hilarious. BN is guaranteed to lose the Perak state in the next general election and it could be another Kelantan in the making. As of writing time, the assembly is not over yet so let’s continue watching, shall we?

Stock Split and Zambry Pamela Anderson

General Motors Corp. has notified its shareholders – a reverse stock split of 1 share for 100 shares held. What it meant is shareholders will basically hold only 1 share for every 100 shares they currently own. It’s a huge loss but then it’s better to have 1% of something than 1% of nothing. Shareholders who are currently holding 610.5 million shares floating in the stock market have no choice but to accept it as part of the agreement with the Treasury Department in order for the government to assume half of GM’s debt in exchange for the company’s shares.

So far GM has received $15.4 billion in U.S. government loans and the government is to own 50% equity stake in GM in exchange to write-off $10 billion of the loan taken, unless GM would like to go into Chapter 11 bankruptcy protection. After the shares restructuring (1 for 100 shares split) General Motors’s floating shares are expected to balloon to a whopping 62 billion shares, roughly 100 times more than current shares. Frankly this is perhaps the best option to ensure the company’s continuous listing in the stock market. At least there’s a chance the shareholders could recover their investment losses when the bull rides again, no matter how distance that is.

When the stock market was doing well, we heard of stock split (or rather bonus issue for that matter) hence naturally the reverse stock split now that the company is in deep trouble *yawn*. Thursday will be another interesting day – the official release of U.S. government stress-test result on major U.S. banks. Thursday is also the day a tiny town, Ipoh, will gains worldwide recognition when assemblymen from both PR (Pakatan Rakyat of People’s Alliance) and BN (Barisan Nasional or National Front) coalitions set to dash for their seats, thanks to the already confusing yet amusing political fight for the state government.

At this moment it’s purely speculation as to what strategies both sides will adopt to ensure they win the control of the assembly. For all you know they may wear Nike sports shoes (no high heels for ladies) since a difference of a split second could determine who gets the seats especially the Chief Minister chairs. It would be hard for PR to prevent the barred illegitimate (as claimed by many Perakians) Zambry and his six executive council members from entering the state secretariat building, let alone preventing them from taking their seats, as the police and other enforcement officers will be there to assists the BN’s assemblymen. On the contrary PR’s Speaker Sivakumar may face difficulties getting to his throne.

Heck, for all you know the scenario could turn out to be a peaceful assembly with Zambry and his boys plus the three traitors (who would most probably sneak in via backdoor) together with the Sultan of Perak allowed into the building while the PR assemblymen forced by the police to have “their” own assembly under another “rain tree” again. A new Speaker would be nominated without much hassle and the BN win the battle. The PR assemblymen, the thousands of their supporters and bloggers would cry and curse till the cow comes home but who cares. Nevertheless it would be interesting to hear what the Ruler has to say in his speech prepared by the BN.

Of course it would be better than orgasm if all the PR’s assemblymen somehow supported the removal of their own Speaker with the Speaker himself admitted defeat and presented the throne to Zambry. This could happen, mind you, since Zambry was accused to have engaged top bomoh (sorcerer?) to cast charming spells in the state secretariat building. Known to be more powerful than Harry Potter, the bomoh could have applied some love portions on PR’s assemblymen seats already so that they would fantasized Zambry was actually Pamela Anderson with the swimsuit on. That would be fun, wouldn’t it? But seriously there’s only one way to save the kingdom of Perak – go back to the people.

Cover-Up and Face-Saving – A Rush for the Chairs

Money was not the main driver to people who are already filthy rich. People such as Bill Gates do not have to worry about money so much so that his “real job” now is running the Bill and Melinda Gates Foundation. Politicians especially from certain countries in Asia are also filthy rich but don’t expect them to do charity, not because they do not want to but they simply can’t. It was an open secret that former Indonesia President Suharto was so rich due to corruption that his personal wealth was estimated at no less than $45 billion and the late Suharto was once the world’s sixth richest men on planet Earth. On the contrary corrupt politicians usually use charitable body to mask their “activities”.

Of course Malaysian politicians are much cleaner and it would be absurd to even think that they would do such thing (corruption). Former Prime Minister Mahathir and his buddy (former finance minister) Daim Zainuddin were accused to have amassed great amount of wealth themselves but definitely that can’t be true *grin*. It was always said that politicians’ goal are money and power while successful businessmen are obsessed with money and women. Either way money is the main menu on the table; for this same reason a well-known model from Sabah was willing to become “sugar-honey” of one of the biggest bankers in town. But I suppose with money you would automatically gain power and women (or gigolo for that matter).

But there’s another thing that sometimes rank higher on politicians’ radar – face. The higher you are on the hierarchy chart the more you value your face or your honour (if they ever have one in the first place) than money. Perhaps that was the reason why former Works Minister Samy Vellu always threaten to sue the hell out of anybody who say something “not so nice” about him, regardless of how silly the subject was. For some strange reasons the new PM did not initiate any lawsuit against the author of Malaysia-Today even though the author wrote many disastrous articles about him, and his wife. If U.S. had Majestic 12 (twelve) or better known as MJ12 (nope, that’s not MetroJaya) that sparked public distrust to their government, the Mongolian beauty’s gruesome murder or better known as Altantuya may be Malaysian’s equivalent version.

MJ12 was derived from the secret committee of top military officers, scientists and government officials formed in 1947 by an executive order by President Harry S. Truman to investigate the UFO activity after the Roswell incident – crash of an alien spaceship near Roswell, New Mexico, in July 1947. At least four aliens were killed and thus the U.S. military launched the initiative to cover the infamous UFO conspiracy theory; at least that was what the public perceive of their government till today. In short the American would rather believe former President Bill Clinton did not receive the “special job” from Monica Lewinsky than to believe the U.S. military did not involve in any of the UFO cover-ups.

But unlike the Majestic Twelve which involved the terristerial from outer space, the Altantuya case involved an individual whose life was “destined or fated” to become the sixth PM. The public perception now is that the PM has something to do with the Mongolian, one way or another. And the poor PM is hoping this scandal would go away so that he could concentrate building his “One Malaysia” concept *grin*. However the immediate attraction is definitely the coming 7th May Perak’s Assembly which could see the repeat of a childish game – the musical chair. The legitimate and illegitimate teams of PR and BN respectively would run for the chairs the moment the whistle is blown. The fun part is there are now 2 (two) Chief Ministers and by this Thursday the state could have another pair of Speakers.

The Constitutional Crisis is expected to worsen and it’s not about power struggle anymore. It was obvious the backdoor coup d’état by BN government was the worst plan ever architected but there was no turning back since and the plan did not provide any exit face-saving hence the current situation. Given choices, the architect would rather pay $500,000 to the Mongolian lady and never launch the power grab on Perak but it is too late now. The BN government might has the advantage that it controls all the pillars namely the executive, judicial, legislative and the monarchy plus the police, Election Commission, Malaysian Anti-Corruption Commission (MACC) and perhaps the military but the present government could be digging its own grave come next general election. Let’s hope the current Speaker Sivakumar would not disappear on 7th May else his former deputy Hee Yit Fong would be laughing all her way to the bank – millions of dollars, new Mercedes Benz and a temporary position as the most powerful person in the Assembly (deputy Speaker)

Swine Flu is not another Black Death so be Happy

Swine flu epidemic is spreading like wildfire from Mexico to Asia and Europe without mercy with Mexico leading the score with 473 cases including 19 deaths. Call it influenza A (H1N1) virus or whatever name you like but the worst effect is still the same – death. The scary part was the virus could mutate (brings back the sweet memory of Ninja Turtle) and overall global cases touched 800 figures and growing. Nevertheless just like SARS it’s a matter of time before this swine flu brought down. Thanks to medical technology today, the Europe’s Black Death in 1340s which saw an estimated global 75 million deaths will not happen again. Hence there should not be public panic over the swine flu.

But it seemed the stock markets reacted almost instantly to the flu as if millions of people are about to lose their lifes. The single news of swine flu was sufficient to spook investors although there were many more negative economic news which failed to remind investors that the worst may not be over. Maybe investors were finding excuse to unload their stocks literally. Local stock market also saw an instant pullback. That particular temporary pullback actually tells quite a lot about the recent bullish market. It confirmed that the "bullish" sentiment was due to local funds and has little to do with foreign investors. Foreign investors do not or rarely play the game of swing trading, not ever since the 1997-1998 Asia Economic Crisis.

As you may already know the foreign portfolios in the local stock market is quite limited and those who are holding are for long-term investment. So you’re betting against the local government-linked funds (do I need to tell who they are?). It’s the same old game – push up the Composite Index and naturally the second and third liners will follow soon, hence the escalating volume. There’s nothing wrong with this but you’ve to be on your guard because this market-makers are controlling the stocks movement. When you’re buying they’re actually selling and vice-versa. Thus there’s nothing to shout about even if the Composite Index breach the 1,000-points sometime next week.

Last week, U.S. Fed officials said all 19 banks that underwent the stress tests will need to keep extra capital on hand beyond what's now required in case losses on loans and other assets continue to climb - a signal some banks would have to raise more cash, including Citigroup and Bank of America. Already received $45 billion in taxpayer funds, Citigroup may need additional $10 billion to meet the government's increased capital standards for banks outlined in its stress tests. In fact, the U.S. regulators may force as many as 14 of the nation’s 19 largest banks to raise money based on the stress tests’ result. So what does this tell you?

The worst is over? Maybe, at least that’s what most of the investors would like to believe simply because they do not want to miss the boat. Maybe not, if the financial institutions are hiding another set of accounting figures especially on the credit-card’s health. Investors are betting heavily that Obama’s administration would not let institution such as Citigroup, Bank of America and AIG go bust and will do anything to save them. It’s true that people have high hope on Obama but there’s so much you can do to contain the fire. If the worst is over then that’s good but if the second tsunami is about to hit then you’d better prepare yourself for it. Maybe the extremely low expectation from the quarterly earnings was giving excessive false alarms.

Transportation – Silly PR Stunt and PKFZ Scandal Revisit

Isn’t it both funny and laughable to read how the prime minister opted the cheap-skate method of doing their PR stunt? The sleepy former PM may have left us for good to enjoy his forever honey-moon period but I bet everyone can still recall how he took a ride on LRT in an attempt to score some political and PR points. Now you’ve the new PM who did the same thing and it would be foolish to think such a stunt would do him any good. The next question that comes to your mind – doesn’t the PM has a better PR team to rebuild his public approval rating? The fact remains that no matter how many times the PM took the ride on public transportation systems and how hard the government-controlled media spinned the story as if the PM was a superhero Superman, the people are simply too sick and tired of the silliness of the whole stunt.

People still remember how the PM (was deputy PM then) took the easy way out by telling the average-Joes to bite the bullet and change their lifestyle when the government increased the fuel hike not many moons ago. Frankly do you really need to show how silly you are by taking public transport just to conclude that the system sucks? Didn’t the new PM promised to deliver a better public transportation from billions of ringgit of savings resulting from the fuel hike back then? Stop beating around the bush and put the right people to study and improve the public transportation once and for all.

Sure, the new PM’s latest attempt to bring back the lost confidence in the business sector by abolishing the 30% bumiputra equity policy from 27 sub-sector were on the right path but why stop there? What’s holding back from abolishing the controversial and obsolete NEP (New Economic Policy)? Of course people are still wondering if this is another short-term political ploy as the present government is known for flip-flop in its policies. There’s no guarantee that one fine day they would suddenly reinstate the 30% bumiputra equity again and you can’t do a single damn thing about it, not with the judicial pillar totally under executive’s control.

It’s too early to say if the new administration’s intention is genuine but besides giving away the carrot in the form of increasing foreign ownership, the government should probably look into the cancerous corruption at its backyard. You can only do so much for so long by sweeping all the corruptions accusations under the carpet. And why did the Transport Minister Ong Tee Keat suddenly burst into anger that TheEdge Weekly published the infamous PKFZ (Port Klang Free Zone) scandal revealing that the cost has just ballooned to RM8 billion from its original RM2.3 billion. People were puzzling why a person (Ong Tee Keat) who was seen as a clean politician is trying to prolong the release of the audit findings by independent auditors PricewaterhouseCoopers (PwC) on the scandal.

Like it or not the perception is that the PKFZ scandal was tainted with corruption from the very beginning – from former MCA President Ling Liong Sik to Ong’s predecessor Chan Kong Choy. Ong may have thought that the PKFZ was quite a straight-forward project without much hanky-panky elements and hence his big promise to reveal all but soon after he became the President of MCA he began to realize how huge the scandal is. He must be kicking himself for opened his big mouth with the promise to tell all about the PKFZ scandal. And since Ong Tee Keat refused to acknowledge or deny that the scandal is now costing RM8 billion, people would think what was reported by TheEdge is correct. Unless Ong is serious about suing the weekly publisher the MCA President would be seen as tainted as well. It seems Ong is buying time hoping the PKFZ could attract more investment and as such could neutralize the irregularities in the scandal.

Interest Rate Hike on Non-National Cars – Why?

Investors were doing the right thing by dumping financial stocks. At least they’ve realized the stupidity of keeping these stocks knowing the worst is not over. Citigroup plunged 19 percent and Bank of America erased 24 percent with Dow Jones tumbled 3.6 percent or 289.60-points. There’re only $109.6 billion left in the $700 billion bailout fund and the U.S. Treasury Department is hopeful some institutions can pay back as much as $25 billion by next year. Before Bush left office his administration has committed $355.4 billion inclusive of $117 billion to American International Group Inc.’s (NYSE: AIG, stock), Citigroup Inc. (NYSE: C, stock), Bank of America (NYSE: BAC, stock), General Motors Corp. (NYSE: GM, stock) and Chrysler LLC.

The IMF (International Monetary Fund) estimates that global financial institutions could suffer more than $4 trillion in losses with the U.S. leading the way with a total of $2.7 trillion - double of what IMF predicted six months ago. In order to bolster capital reserves, the Obama administration seems to have little option but to convert some of the $200 billion in loans to ailing banks into common stock. And this is one of the reason why you should avoid banking stocks because the floating shares would be enlarged thus diluting the share price. So far country such as Malaysia has not shown any sign of severe recession, thanks to jobs well done in covering the actual situation.

There’s no doubt that the Malaysian financial institutions are better equipped after the 1997-1998 Asia Financial Crisis. However that doesn’t mean these banks are insulated from the effect of the current global crisis. The latest move by banks in raising interest rates for purchases on non-national (meaning non-Proton) cars could open the Pandora-box – the NPL (non performing loans) from car loans could be deadlier than expected. However, the immediate reaction and perception was the government is trying to help national car makers, Proton Holdings Berhad (KLSE: PROTON, stock-code 5304. Coincidently this strange measure of raising interest rate happens during the new Najib’s administration with his mentor Mahathir observing over his shoulder.

Hire purchase interest rates for new non-national cars (such as Honda, Toyota and Nissan) have increased to 3.25% for loan tenures of five years and below, 3.4% for six to seven years and 3.5% for eight to nine year loans - previous hire purchase interest rates were in the range of 2.4% to 2.5%. On the other hand Maybank has started slashing interest rates for Proton cars – 3.5% for loans of five years and below, 3.65% for loans of six to seven years and 3.75% for loans of eight to nine years. Previously Maybank charged flat rate of 3.75% for Proton cars.

Banks are said to be trying to recover losses from NPL by raising the interest rate for non-national cars but seriously it’s more like an attempt to push the buyers from the non-national cars cage into Proton cars cage. Those who can afford Honda, Toyota or Nissan will never look back. But buyers who are considering trading in their Proton for the Japanese cars and has just enough budgets to do so may put off their plans now. Already the Malaysians are being slapped with unfair excise or sales tax on non-national cars, giving advantage and different playing field to Proton. Decades of unfair advantages are also the reasons why Proton is still the village champion, unable to compete when it try to expand its wings into other countries.

Proton, the brainchild idea from Mahathir, has lately awaken from its’ slumberland and added more models such as Proton Saga and Exora. Now that Mahathir has come back as a shadow in Najib’s administration it should not surprise anyone if the latest idea was his to shut people who owning non-national cars and again force the average-Joes to Proton cars, infamous for its power-window mulfunctions trademark. It’s a known fact that in “true playing field” Proton could collapse and disappear from the automobile industry. Nevertheless non-national cars can still sell their cars with creative and innovative promotional programmes of which the interest rate could be very competitive. Maybe Mahathir wants to kill or ban such promotional activities as well. Before he do that maybe he should get rid of this Porsche Cayenne.

Oracle offered $7.4 billion for Sun after IBM walked away

After IBM walked away from the initial deal to acquire Sun Microsystems, it's Oracle turn to offer the company for $9.50 a share or about $7.4 billion. Earlier Sun Microsystems was kinda outraged that IBM lowered the offer price from $10 to $9.40 a share. Interestingly both Oracle and Sun Microsystems were the leaders during the internet dot com boom and both are allies – any new release of Oracle database or Sun Solaris would be tested in the lab so that they would work on each other platform. Oracle was once so successful that its founder Larry Ellison has almost taken over from Microsoft Bill Gates as the richest man on planet Earth.

It was reported that Sun Microsystems’ directors have unanimously approved the transaction. Sun Microsystems anticipated the deal to be closed this summer, subject to Sun stockholder approval. Oracle said it expected the purchase to add at least 15 cents a share or roughly $1.5 billion to its adjusted earnings or profit in the first year and more than $2 billion in the second year. If the these figures are achieved, Sun would actually yield more profit than the combined contributions of three other major acquisitions by Oracle - PeopleSoft Inc., Siebel Systems Inc. and BEA Systems, of which Oracle had forked out a total of more than $25 billion. This would make Sun Microsystems’ acquisition very attractive indeed.

The deal will end Sun's 27-year history as Silicon Valley's brash independent and give Oracle ownership of the Java programming language, which runs on more than 1 billion devices around the world. With the acquisition Oracle is expected to venture into storage and computer hardware as it accelerates its attempts to become a one-stop technology shop for more than 300,000 corporate, government and academic customers. As usual the question would be the number of excessive staffs to be axed - Oracle employs about 86,000 people worldwide while Sun has about 33,000 workers.

Unlike earlier deal-talk with IBM, Oracle-Sun might not be plagued by the same antitrust issues since there is significantly less overlap between the two companies. Sun Microsystems which during its glory day commanded market value of about $200 billion will definitely add more value to Oracle than to IBM. But it’s too early to say it’s a done deal and if this deal fell off again, would other players such as EMC knock on Sun’s door?

Citigroup’s Accounting and Najib’s Political Creativity

Let's clear the confusion on this company called Citigroup Inc. (NYSE: C, stock) which suddenly attracted all the cheers from the trading floor because the financial giant had done something extraordinary and awesome – it made money. However I thought you should know the creative accounting behind this great story although I believe many saw through it judging from the stock price that plunged almost 9% after it gapped up right after the earnings result. This is the same way the current Najib’s administration desperately trying to save his day via creative political game.

First of all there’s nothing wrong to celebrate Citigroup’s latest result because the institution was ailing with losses and had consumed three bailouts from Washington costing $45 billion of taxpayer money. You may call it smokescreen or an attempt to create an impression that U.S. banks (together with Wells Fargo & Co, JPMorgan Chase & Co and Goldman Sachs Group Inc.) are stabilizing and recovering so that investors will start pouring their money in them thus minimizing the need for more taxpayer money (or rather bailouts). Citigroup posted its first profitable quarter in 18 months mainly because traditionally first quarter was a busy quarter with huge business transactions.

But that’s not all. Citigroup actually employed creative but legal accounting tactics (or rather gimmicks) to increase its reported earnings. Using “Credit Value Adjustment”, Citigroup actually added a cool $2.7 billion to the company’s bottom line for the quarter which appeared on the accounting book as “net income”. In a nutshell, Citigroup’s debt has lost value in the bond market because of concerns about the company’s financial health. However under accounting rules (it’s legal dude), Citigroup was allowed to book a one-time gain approximately equivalent to that decline because, in theory, it could buy back its debt cheaply in the open market. Of course Citigroup did not actually buy its debt but who cares.

Citigroup also took advantage of beneficial changes in accounting rules related to toxic securities that have not traded in months – they (the banks) now can book only a “portion of the loss” from the value of certain “impaired assets” as compared to “full loss” previously. Citigroup actually saw a sudden surge of $413 million after-tax profits by doing so. Citigroup also allocate a smaller amount for NPL (non-performing-loans) hence putting more money as “profit”. Desperate time requires desperate measures but it’s equally important for you to know the truths so that you won’t get carry away with the accounting creativity. Talk about creativity, it’s amazing how much the new PM Najib has learned and applied it in his political survival series.

Make no mistake about it. Najib’s propaganda and slogan “One-Malaysia” didn’t work as according to the plan, thanks to extreme factors from government-controlled Utusan Malaysia and certain extremist politicians. Najib and his mentor Mahathir are probably still putting all the jigsaw puzzles to the blue-print and framework to ensure UMNO’s relevance and survival come next general election. Najib’s “One-Malaysia” concept is actually an excellent and creative piece of art, if today was the year 1980(s), the decade when Mahathir rules the land. Unfortunately just like Chinese Feng Shui, Mahathir’s Midas-Touch has reached its expiry date. Everyone is waiting eagerly if the legendary Mahathir would help his Najib in the coming by-election campaign in Penanti. But it seems Najib is playing safe by announcing that his government may chicken-out from the by-election after all.

Despite what many claims, it’s untrue that the new PM has lost his guts for refusing to meet the opposition inside the ring for the fight. After losing the two Bukits by-election Najib was actually trying to save public money, at least that was what the BN’s media is drumming. It was indeed a brave move *grin* by Najib as he was willing to be booed in exchange for millions of dollars saved by refusing to go to the battle, never mind it was actually the police that had used 5 (five) to 20 (twenty) times the money as compared to Election Commission for each of the previous 5 by-elections. For example while Election Commission only used RM580,000 the police actually used a whopping RM11.5 million in Kuala Terengganu by-election. The creative reason for Najib’s refusal to enter the ring for Penanti by-election – it was opposition’s political ploy *huh?*. This is both laughable and puzzling considering that this is the chance for BN to wrestle back the seat from the opposition unless of course, BN has zero confidence. This is perhaps the first time in the history of the country that the ruling government is not participating in a by-election.

Najib’s creativity has taken another level when it was learned that all the government-controlled TVs are prohibited from mentioning the PM’s name, his wife’s name and even his adviser Razak Baginda in relation to Mongolian beauty Altantuya’s murder. Nevertheless nothing beats the creativity of Election Commission when it was reported that the supposedly independent body is toying with the idea of limiting the number of supporters allowed at nomination and polling centres. Apparently the body is upset that somehow the opposition coalition’s supporters “always” drown the ruling government’s supporters in most of the past by-elections. The ruling government may felt intimidated and frustrated by the huge voluntary supports garnered by the opposition but the voice on the ground is the new administration does not have confident at all in the Penanti by-election.

It makes perfect sense to chicken out now on the excuse that it was a political-ploy rather than sending another candidate to get slaughtered and score another loss. At least Najib’s administration can claim they didn’t lose at all. Sure, if you didn’t contest in the first place how can you lose? Brilliant isn’t it? But was this another tactic by Najib’s advisers to prevent further humiliation (of another defeat) to the newly installed prime minister? If yes, then this is definitely not a very clever strategy as it would strengthen people’s perception that the ruling government is so weak (and coward) that the only thing it dares to do was stupidly planted 19 young trees around Pakatan Rakyat’s “Democracy Tree” to deter another new memorial plaque from being re-erected. It seems the new administration has found many creative ways in strenghtening the wall of denial syndrome – Bravo!