Friday, November 18, 2016

It's the economy, the bodeh yellow and red!

From Sin Chew Daily via MM Online - Why is ringgit falling despite China deals? an insightful analysis by Lim Sue Goa (extracts only):

Although the treasury has reduced its dependence on oil revenue, the RM10.6 billion tax revenue target for next year will likely be missed if crude prices slip below US$40 (RM173) per barrel. More subsidy and development expenditure cuts are on the way.

We simply have too many economic challenges ahead of us, but unfortunately our government gets so much carried away by the flashy economic data that it has overlooked the potential risks and the people's feelings, and has failed to adopt the necessary preventive measures.

We can only pray now that external conditions will not get too nasty. If the country sinks into another recession, the rift in the Malaysian society is set to widen. We can never count on Malaysians to donate their gold bars to salvage the national economy like the Koreans did during the Asian financial crisis.

In addition, we must also cross our fingers that the Red Shirts will not go [beserk] 
berserk during this weekend's Bersih 5.0 rally, or the country's vulnerable economy will take a further beating.

Both the ruling and opposition camps are only serious about wresting the power without workable solutions to tackle the country's economic plight.

The national economy is akin to a steerless vessel in the wide open sea. We can only pray that the sea is calm and we can make it to the opposite shore in one piece.

Once I had a visitor who called himself, if my recall is okay, 'Big Joe' or a moniker to that effect - I remember his words well, that Malaysians would be reasonably cohesive when the economy is okay but fall apart when the going gets tough. It seems we Malaysians are only fair weather brethrens.

Thus Lim Sua Goe of Sin Chew Daily has been spot on with statements like
 If the country sinks into another recession, the rift in the Malaysian society is set to widen.

And alas, Malaysians are not South Koreans where the latter has one of the most homogenised society in the world who know South Korea is their land, whereas Malaysians are a motley multiracial mixed-up (as in
suffering from emotional problems) bunch of f**king confused people, who sometimes wonder whether their country is Malaysia ...

[with some highly 'confused' idiots thinking and even believing their great grandfathers came from the Middle-East, or perhaps they wish - which may explain why some want to bonk their wives on the back of the camel, perhaps a specimen of Malaysia's indigenous fauna?]

... thus I doubt even the most Hang Tuah-ish person in our country will front up with his or her gold bars. Malaysians are berani-patriotik only with their mouths but not their pockets, wakakaka.

And while our legislation allows rallies and protest what-ever, now would hardly be the time for Red Shirts or Brown Sarongs to be clashing with Maria Chin's mob, as Lim Sua Goe has mentioned, the country's vulnerable economy will take a further beating.

Don't blame the GST as there are currently 160 countries around the world subscribing to this simple consumption tax system, including the following ASEAN nations
 & their respective GST rates (minus Midas-rich tax-free Brunei and Myanmar, the latter having instead a 'commercial tax'):

  • Indonesia 10%
  • Thailand 7%
  • Singapore 7%
  • Philippines 12%
  • Cambodia 10%
  • Vietnam 10%
  • Laos 10%
  • Malaysia 6%

Malaysia's GST rate is one of the lowest in the world second only to Japan, Taiwan and Niue of 5%. Please check where Niue is, wakakaka - for more on Niue, read here.

Besides, GST replaces the previous Sales and Services Tax (SST), where the latter was up to 10%.

This means that with GST, prices of goods and services could:

(i) remain the same (for a host of stuff which are not GST taxed including foodstuff such as meat, eggs, seafood, herbs and spices, haam taan (a favourite of sweetie Teresa Kok), fresh veggie and fruits, cooking oil, baby formula, coffee, tea and cocoa, 4000 over medicine on the National Essential Medicines List, etc),

for sweetie Teresa Kok 

(ii) go up for goods which were not previously taxed such as beauty products, toys and games, electronic gadgets, etc,

(iii) or even decrease as in the case of (from NST page): e.g. television sets, refrigerators, air-conditioners, home theatre system, irons, hair dryers, electric fans, cars, consumer items (eg. soft drinks, imported fruits) to items like diapers, sanitary pad, Dettol, toothpaste and furniture, which were previously subjected to SST of 10%.

Those who winch and whine about GST are just negative minded people who are always finding faults instead of seeing that the glass is half full of kopi-o rather than half empty, or political char-koay-teow sellers, wakakaka.

To reiterate, almost all the world has GST including the significant ASEAN nations, so just f**king get use to it. 

As I mentioned in my yesterday's post Incongruous alliances, about Old Fogies rushing pell-mell into their power-crazy lil' schemes to beat Father Time, Lim Sua Goe is once again spot on with a reminder that:

Both the ruling and opposition camps are only serious about wresting the power without workable solutions to tackle the country's economic plight ...

... which f**king include two confused Muslims, one wearing bloody Red and the other shitty Yellow.

Our karma!


  1. 'Both the ruling and opposition camps are only serious about wresting the power without workable solutions to tackle the country's economic plight ...'

    Talk is CHEAP! Dirt cheap, in fact, just buka mulut s'ja.

    Essay is even more lelong. Just put black & white rants onto papers.

    Hopefully, many bleeding hearts would accept & praise!

    Granted, both ruling & opposition parties have their own udangs.

    But...but what r the best, or put it mildly, the interim solutions to the current crippling issues, consisting of social, economical, religious & political impasses, facing M'sia?

    To you & your group of 'intellectuals', keep rantings & creating a farcical idea environment in your talks/writings & DO NOTHING. That's your takes!Hopefully, things will correct ITSELF. Everyone will be living happily after.

    Right? In your dream, man.

    Wake up lah! Dream is not a reality that the bolihland's r experiencing everyday in real life!

    Remember - no pain no gain. New life is only for the challengers. Status quo ONLY brings decay, with an undeniable & ultimate tragedy.

    The cruellest part is being knowing & do nothing! Ain't that what your group is proposing?

    Our f**king karma is that besides the two extremes, there r 'learnt' idiots fence-sitting here & there to ponder an ideological utopia approach while Rome is burning!

    Now GST. Being the most efficient mean of taxation DOESN'T mean it's the fairest.

    Similarly, been implemented by majority of the countries in the world for consumption tax DOESN'T mean it's the best.

    At most GST is the easy way out for an administration to squeeze more revenues to meet fiscal shortfalls.

    Suffice to say it ignores many other factors, in an empirical economic model, that the lower strata experiences.

    And a 'bleeding heart's like you want to promote it, just bcoz of what you think you can see but not been able to fathom the connecting issues deeper?

    1. are you starving right now, or is there anyone starving?

    2. Go to some ulu places, like the depilated estates in P M'sia, the drought hit highlands of Sarawak or the pirates infested Sabah coastal villages.

      U will see yr poor anehs, the struggled Ibans and & the ignored Kadazan-dusuns starving!

      Good life DownUnder makes u forgetting those places, right?

    3. Ibans, Kadazans-Dusuns don't starve - I've stayed with them

    4. Oh ye!!!

      When is yr last trips back from Oz to visit/stay with the Ibans, Kadazans-Dusuns who don't starve?

      Forget those in the cities of the Sarawak&Sabah lah. They r the well connected!

      Oooop.. maybe in yr mind, the wandering Penans r not Sarawak native. And they r not starving even when the ongoing deforestations have being deflecting their conventional food sources.

      Good life in foreign land CERTAINLY makes one forget about these peoples!

    5. I like your style of changing from Ibans and Kadazan-Dusuns to penans, which prove your knowledge of who Sarawak and Sabah natives are.

  2. Here is a simplistic economic lesson that's confronting every Joe M'sian now.

    The ringgit is falling like ten pins within the sea of FX fears. In fact, it falls the most, exaggerated by the triumph of Trump to the White House.

    Many would say that's the goner. Apa nak jadi? Wang lain negara pun jadi juga.

    RM falls bcoz there is a flight of foreign money out of bolihland. This money used to be invested in securities like shares, property & govt bonds.

    Currently, there is very low foreign money in shares as most of them has already cashed out.

    Property is not so mobile, thus it takes long gestation time to unwind the position. Besides, many investors r not desperated enough to sell now due to the depressed market.

    The govt securities like MGS bonds r large sums of IOUs incurred by the govt. There r huge amounts, hundreds of billions RM at current count, owing to various investment outfits in varied tenure. Forefingers hold 30 to 51% of these debt papers, depending on who u r listening to. 51% should be the right figure at the current stage.

    Like all IOUs, once matured, principle & interest need to be repaid. Unlike layman's IOU, MGS can also be traded in open market freely. Thus it's very liquid, irrespective of amount & time.

    Under normal circumstances, most of the investors roll-over the principle upon maturing.

    Within the next 6 months, RM30.25B of bonds r maturing.

    However, bolihland is been hit by

    1)poor economic data

    Suddenly every foreigners, worth his/her socks, want to get out of MGS.

    This sudden flood of RM denominated papers & demand for US$, causes the bond yields to rise & the exchange for US$ to drop.

    In-shore RM exchange is tightly controlled by BNM. But off-shore RM exchange is a free market FND that BNM has zero say. Due to BNM's frequent interventions, the local RM exchange isn't reflective of its true underlying value.

    Most of these foreigners also hedge their MGS with RM FND financial tool since RM is not foreign tradable. Thus most foreigners use off-shore FND exchange to unwind their positions.

    Due to the huge amount of unwinding MGS in the oversea market via FND, there is a huge gap difference between the local & oversea RM exchange, causing a further panic selling of RM.

    Local institutions, like EPF, have already over-burdened due to their own financial commitments. BNM's foreign reserve is limited due to frequent exchange interventions.

    The shortfalls caused by the flights of the foreigners must be quickly filled. Otherwise, the 97 Thai baht free fall would happen if the hedge fund vultures seize this lopsided RM position vis-a-vis in-shore & off-shore exchange gap.

    Hence ahjibgor's beggings to China & Japan.

  3. I blame the GST as it is being implemented and executed in Malaysia

    One of the key pillars of any sustainable GST system - Input Tax Reimbursement for businesses - is not functioning in Malaysia as far as small businesses , especially Chinese-owned business is concerned.
    Kastam is denying the reimbursements, bullying small businesses. Claiming for input tax will trigger a very intrusive and hostile Kastam audit (and opportunity for demanding kickbacks).

    When the Input Tax reimbursement system breaks down, prices of goods will go up definitely more than just 6%.

    Ktemoc blogging from 6,000 miles away just doesnt' know what is happening in Malaysia.

  4. You conveniently ignore the RM 42 Billion in debts which Najib 1MDB has racked up, with nothing to show for it.

    As economists will tell you, Debts per se, are not automatically bad. Its OK to borrow IF (a) you have the means to repay it and (b)you are getting some worthwhile in return for the cost and risks of incurring the debt.

  5. Comprehension please!

    Unless wordsmith extraordinaire has a selective set of comprehension so that he can play lawyer..tsk...tsk..

  6. yr writes sound more n more like that abdul aziz.