Juan’s Blog Heads

I better be writing this before somebody steals my thunder..

This is my 1^st article from Bodohland. I have been back for 4 days now and it has been tiring one for me.. Kiddo’s sick with mild HFM (not FHM la but HFM – Hand Food Mouth disease).

In my former post last week while I was still in Kiasuland aka Singapore, I wrote this (read here). I had in fact wanted to follow up with another piece soon after that but I put that thought on hold. Anyways here I am with what I had in mind all this while.

I am not sure who will be the hero of the world when he or she actually puts this idea into practice. What I am going to write subsequently is purely hypothetical yet I find it feasible to implement. Just that it needs the cooperation of everyone. When I say everyone, it means every single human being including NGOs, WTO, world governing bodies and what not.

The title of today’s post is another piece of economic fundamentals – How to recover from the current recession.

Today as we know, the world is in debt. US debt alone stands at USD10.8 trillion (as of last week). World debt on the other hand is definitely more than USD10.8 trillion. Every government is trying to revive their economy from the ultimate collapse by physically pumping financial liquidity into the market. That wont really help. Read on to know why I say so.

World population is 6.6Billion. If everyone can spend USD1 a day, that would flood the market by 6.6Billion US dollars in CASH. Yes, CASH amounting to USD6.6 Billion a day, just by spending USD1 a day on an average (I say it again).

Certain countries (like most African nations) which are in serious poverty cannot afford to spend more than USD1 as they can afford to spend just that USD1 a day.

Richer countries on the other hand can definitely spend more than 1 US dollar a day. Folks in Singapore can spend upto SGD300 on a Crumpler bag for no fuck reason. If 1 can spend SGD300 on a stupid bag why not use the SGD300 for good use instead? Ok that was a pretty lame example but I bet you get my drift.

On a realistic horizon, if the average spending a day could be USD10Billion, that would a week’s spending would be USD70Billion and a 4-week month would bring that amount to USD280Billion. We are talking about cash payment since no bloody one guy in his right frame of mind would be going on credit any longer. (and seriously credit aint gonna help the world economy at this present moment)

But then 1 would say that USD1 aint gonna buy me nuts coz the US dollar has devalued and on the other hand commodities or daily groceries have gone up in price by bountiful times. This is true for rice (Read here)

Let me define recession again. Recession – shortfall of sales and purchases as a result of higher price in commodities/groceries and lacking the purchasing power (which can also translate to currency devaluation).

1 family who used to be spending USD 10 on 10 various grocer items can now only afford to buy perhaps 3-4 items with that same amount of money.

When such scenario kicks in, a family will start to tighten their belts. For instance, I could be consuming a packet of sugar (USD1 per pack of 500 gms sugar) for 1 month but since that similar pack of sugar now costs USD2, I would consume less sugar hence my sugar consumption will last me 2 months or more.

From the economic point of view, I am now consuming 500 gms of sugar in every 2 months instead of 1kg of sugar in the same timeframe. (Or 250gms of sugar per month as opposed to 500 gms per month). Sugar producers will find it hard because now they are now producing less as a result of lower consumption by consumers. This applies for most of the major or key commodities or groceries. Imagine the chain effect in the long run. So how to beat this?

Instead of government pumping billions for no bloody use reasons (like bailing out AIG and whatever not), why not use this billions to subsidize commodities or groceries so that the normal (or at least somewhat normal) consumer trade can resume. Meaning to say, if 1 pack of sugar now costs USD2 (as opposed to when it was only USD1), why don’t the government subsidize a certain percentage of the cost. Read on and you will know why in the long run it will benefit everyone and how it ultimately kicks start the economy again.

As I said, the world is in serious debt. The world economy now gravely needs CASH, tonnes of CASH. And cash can only come from consumers, from all walks of life regardless if you a Red Indian, Chinese, Malay or European.

And that 1 way of generating cash is thru consumer spending. If every government instead of pumping billions into nowhere but instead subsidizes key consumer products, this would make it feasible for the consumers’ trade to take place again.

If 1 pack of sugar could be subsidize upto 50 US cents making it now USD1.50, without a shadow of a doubt that more people could afford to buy them. Similarly if rice could be subsidized to a certain amount, more Asians could afford to buy more rice to eat rather than rationing them like it was the Japanese occupation.

Again, if raw produces like fish, meat or vegetables could be subsidized, more people would be able to buy them and eat them. Hey, after all everyone needs to eat. Eating a bit or eating a lot is still eating. At grave situations, one could live with water alone. Is that the world we want to live in at the end of the day?

Now, let’s look at the bigger picture. If there is more demand (thru all these subsidies) it is for sure that production will increase. If production increases for supply to meet its demand, cost of production will be reduced with greater scale. This in turn will reduce the price of the produce. When the price of the produce is reduced, more people can then afford to buy them. At this moment, the government can choose to either continue with the subsidy or lift the subsidy. Lifting the subsidy will not harm the pockets of the consumers because the price of the goods had already in effect dropped.

So, with higher production a packet of sugar now might only cost USD1.10 with government subsidy. The respective government can choose to reduce the subsidy by 30 US cents (assuming that it was 50 US cents before). That same pack of sugar will now cost USD1.30 instead.

The positive side of it does not just stop there. With higher demand of goods and with higher production it will in turn generate employment.

At times, economists need to think of the basic fundamentals of economics which is built around supply and demand. Economics aint rocket science for one. The waste of billions of investment to develop a pen that could write in the moon (gravity-less pen) is an explicit example of US’ stupidity when Russians were using pencils instead.

Segala pertemuan tentu ada perpisahannya. Segala permulaan tentu ada penamatannya. In English it means every meeting surely has its ending; every start surely has its ending.

I never thought I would say this but I started to have mixed emotions already. My days here in
Singapore are coming to an end very very soon. (I did mention it here before and I said I would write about it soon).

The past 1 year here in Singapore has been extremely an eye opener for me. I have worked in US twice (on an expat assignment) before for a total of 10mths. It was of a different experience altogether then. By the time I leave Singapore on Feb 15^th, it would be my 13^th month then. I am going to leave with a very heavy heart.

I have truly enjoyed my stay here. It was superb. But then it would have been great

1.      if the folks here were not 1 kind

2.      if I got to drive as I love driving a lot

3.      if my French boss did not fucked up so back to the point that I would not have any memorable thoughts of my future ex-employer!

All those above mentioned would have made my stay superb and great.

Overall, I love the city here. I love the public transport. I love the shopping. I love the weather and environment. Food wise, I still believe Penang has the best food ever in this world. I will always be a Penang kia. Bred, born in Penang and definitely will die as a Penang kia.

The reason why I have decided to leave Singapore is mainly my commitments. As a father and husband, I need to ensure that I fulfil my responsibilities to a certain extent. Age is catching up with me as well. I am going to be 33 this July. My kid will be 4 years old by then as well. Time really flies. Speaking of that, I never really got to feel the actual 12 months here in Singapore.

I will be starting a new job in March. Coincidentally, my future employer is the main service provider to my former employer (not my future ex employer but the actual former employer before I came to Singapore).

Anyways, I have acknowledgements that I need to do.

To Ken, my colleague, you have been a good friend, a good colleague. The past 13 months have been filled with joy, laughter, sadness, disappointment amongst others. All the best to you since you will be left alone with French Dick.

To Wilson and Susan, my close colleagues, you guys surely will miss my crap jokes and my uncensored language. I will definitely miss you guys too. It was nice knowing you guys who (I personally think) are not Singaporean-ized, especially you Wilson. I hope to see you guys one day either in Penang or when I come back to visit Singapore. May Christ Bless you both.

To Steven, Hoay Leet, Cresent, Daniel, Gunn and Fong Luan (all ex Intelliers), it was nice to have you guys as company especially Steven, my movie kaki.

Steven, (don’t put to waste your double degree from Engrand). Work smart and grab as many opportunities as you can. Don’t wait for opportunities to arrive (though they will arrive someday) but go out and grab them. I would like to see you being successful one day with your own company and I wont mind working for you then.

Hoay Leet, age is catching up. Pls do something about it. And don’t simply waste money. Money is hard to come by unless you plan to be a spinster your entire life. Even if you wish to be a spinster, you still need not have to waste so much. You can choose to invest in BOA (Bank of Ansxxxx you know?) Be focus in what you do. You need to understand what you want in life. Don’t always be a big prawn head.

Cresent, in several years to come you will be like Hoay Leet. You need to have the foresight and vision in life and in your career. You asked me once what I was going to do to face my fears. I told you that it was a matter of time that I left. The time has come. You decide your own path, your own destiny. (You definitely know what I am trying to get to as we spoke abt it before)

Daniel, I know you are a visionary and career driven. Like I said to Steven, work smart and push yourself all out. The sky is the limit. Just make sure you come back more often to Penang. That is where your roots are… Don’t shame us TBungah folks.

Gunn, it was nice knowing you. Start saving.. Don’t drink your life out, dude. I don’t want to read the papers to only see someone like Gunn, drunken and naked in Orchard. Lol… All the best too.

Fong Luan, similarly though time did not permit us to know each other better but I believe you are a very down to earth person. Kelate mari!! Oh btw, I know you are in a relationship. Is he a Singaporean? Lol!

Guys, more importantly, stand up to what you believe. We are the unique Malaysian Chinese breed. Don’t forget your roots. We are wearing the Malaysian hat wherever we go!

Finally, I will still be making frequent pilgrimages to Singapore since I am leaving some important matters here (to be overseen by Hoay Leet). So when I come over, you guys don’t run away from me. By then I will pay RM while you guys top it up for me.. Lol. Just kidding la.. I am not that cheapo ok?

So Hoay Leet, you better make sure you oversee my personal matters well or else not only I will give you IR but I will burn your Sungai Petani house down!

Thank you Singapore for the opportunities. I will surely leave with a heavy heart that I might not be able to imagine.

May God Bless..

….Juanito

P/S: Tofu, here I come dude… Let’s hold pinkies!

When it comes to ass saving time, no one is gonna help save your ass but yourself. Trust me. Be it Asians, Arabs, Americans or even Africans, everyone is for himself. But when it comes to distributing of the cake, everyone wants a share.

Having said this, this is the moment where you will see the dark side of the human race. Why this moment? Because the world is fucking up so badly that no one is gonna be so gracious in giving out hand-outs.

I don’t know which donkey created the word, Samaritan. When it comes to bad times, everyone is a devil. At this present time, a Samaritan aint gonna be saved if he was in such a big trouble that only a miracle can take place.

And yet we speak of the human race with such high regards..

FUCK THE HUMAN RACE!!!

When I saw this headlines, ‘Intel to invest USD 7Billion in US’ I just blew my top. Read the rest here. 

In any case if you didn’t know, Intel is the largest CPU manufacturing company. Intel is also the No.1 semiconductor in the world in terms of yearly gross revenue. Of late, Intel decided to shut 4 assembly test manufacturing (ATM) plants across the world; notably 2 in
Penang, Malaysia, 1 in Cavite, Philippines and 1 in Pudong, Shanghai and 2 Fab plants in US. The announcement of the closure of Pudong somehow came later in the month.

Many would speculate that Intel is preparing for the worst (as they have been doing ever since 2000). Demand has dropped significantly by about 40-50% worldwide hence the rationale is to consolidate these factories. I bet some would argue with me that the closure of 1 (of the 2 Penang plants) and the one in Cavite had been already pre-planned. Yes, I am aware of that – but still regardless. It just so happened that everything fell into places that the chop could be done with much more effect (and less grouses) at this present moment.

Obviously with the closures, senior management folks (likewise politicians) tend to give their best cock talk in justifying their actions. Reasons like cost effectiveness, lowering overhead cost and only those sitting in the executive seats will know what else to say.

Don’t get me wrong btw. I am ok with those reasons at the current present economic situation. Almost every company is doing the so. Either you hear the company rolls or it starts retrenching like there is no tomorrow. So practically I am all ok with the reasons given by Intel Management.

BUT…… BUT not when this piece of news followed up after the headlines. Is Intel serious or what? Investing 7billion in US of fucking A and yet hiring 7000 employees? Seriously what the fuck?

Ok don’t come telling me bullshit like Intel has to invest to be One Generation Ahead of AMD, to be in the fast lane of technology and what not. That motherhood statements aint buying shit! For one, ATOM is considered to be a failure, if not failure then it has yet to meet expectations.

Intel decides on closing down 4 ATM sites in Asia and 2 Fabs in US only to hire 7000 fucking American employees?!?!?!??!

What fucking kind of logic is that? Worse still, investing 7billion in several Fabs in US of fucking A to enhance their manufacturing efficiency? Is that the typical American bullshit?!?!

The closure of these 4 ATM sites in Asia is affecting more or less 6 thousand employees. But wait, here Intel nicely words it that the closure of the Penang plants will not affect all employees because some of them get to choose to work in Intel Kulim (which is just across the Penang Channel over on the mainland of Malaysia). Fuck that!

You get to choose to work in Intel Kulim but if you don’t choose that (which happens to be the only option which is not an option at all since options have to have more than 1 choice) then hell with you!! Intel doesn’t give a fuck after that.. And over in the US of fucking A, they plan to hire 7,000 employees?! Hell that sure makes fucking sense all right. All of a sudden 1+1 is 3. It sounds like 3, it looks like 3 but it might not be 3.. 

I bet some mutha farker seating in the executive seat had this to say during one of the senior management meetings, “Fuck the Chinese ass, Fuck the Malaysian ass, Fuck the Filipino ass, fuck them all. We aint saving their butts. The only ass we are gonna save are the AMERI-CUNTS ASS!!!”

Quotes from Paul Otellini (PSO), CEO of Intel

“We’re investing in America to keep Intel and our nation at the forefront of innovation”

And I have this to say to you Intel, and I am quoting this from Russell Peters btw..

‘Hahus..lalalala Fuck Amerika’

So it is the Ameri-cunt ass that you have to save, huh? Why marginalize us Asians? Are Asians less of a man kind to you? What is the difference between you guys and Barisan Nasional in this case? So now Asians are 3^rd class citizens eh??

Hell sure you guys didn’t literally say Fuck the Chinese Ass and so on and so forth (or else you guys would have been subjected to ODI) but you guys just ended the day with a very beautiful and diplomatic manner of saying so. Note: ODI is some open door domestic inquiry into unethical manner of employment

That is so bloody political.. I smell bullshit and basically this is full of political crap! And here we are talking about human race and unity and what fuck not.. Talking about saving asses, my ass!

Bloody stupid Intelliers better stand up in the next quarter’s Business Update and start querying the hell out of PSO and his cronies. Each and everyone’s rice bowl is at stake and they are taken away only to be given to the so-called 1^st class fucking American citizens! Wake up dudes!!

But seriously having said the above, I have 2 parting statements to make…

1.     Serve the Malaysians right. You guys wanna mix racial politics with work and this is what you get at the end of the day.. Intel is a US-based MNC (in case you hv forgotten MNC means Multi National Corporation unlike some TNB or Petronas) and some smart idiot introduced diversity because the Malays were the Un-Represented Minorities (URM) in Intel. Fuck you!!

2.     I truly hope Intel lands itself in deeper shit after this. I cant wait to see Intel slog so hard that they forgotten that they had a black President.

p/s: I am just so hoping that those Intel fanatics will come shoot my ass after reading this piece because I am so fucking prepared to take them on…

Up Next – Intel and its URM (Un-Represented Morons)

US President Barack Obama’s economic stimulus plan was today passed by the Senate but with limited Republican support.

The $838billion (£572billion) package of tax breaks and public spending projects was approved by a 61 to 37 votes, after just three opposition senators were persuaded to back the bill.

———————————————

That was the announcement made by Obama 2 days ago with regards to his USD840Billion stimulus plan to save the world but I think just suffice for the country…perhaps.

Sometime last year in July, I wrote this piece. Dont worry, I will post some of the excerpts below (since it was a lengthy one). Then in October the same year, I re-posted the article because my former web hoster, Go Daddy had already fucked up my subscription (read here if you missed it).

Back in July, I wrote this piece because the warning signs of an impending recession was soon to take place. Everyone was speculating when and how bad. I didnt bother about the magnitude of the recession. Everything is the same when it comes to economic recession, slow downs, crises and what-so-ever-not. What I cared was (more or less) when it will happen and prior to that, what should we as greedy investors or careful investors do.

Everyone knows what a recession is or what it means by now. If you dont, I will take the liberty to explain again in the most possible layman terms. Recession comes from the root word, RECESS. To take a recess means the economy is taking a short break. Economy is built on the fundamentals of supply and demand meaning sales and purchases of goods, produces. When the economy takes a break, it means that there is a shortfall of such activity, i.e. lacking sales and purchases of goods. But why? Everything has a chain effect in this context. Here I am pasting the excerpt of the articel I wrote then.

The fundamental of economics is solely made up of demand and supply. No demand therefore no supply. Too much demand, less supply, price hike. Less demand, too much supply, price drop… Enough supply but price too high and yet no demand - economy recession! You will notice that when the supply is way above the demand, the natural course is reduce the price but in the case of a recession, the price is deemed too high and too expensive. This means the normal average earning family will find it hard to actually survive on such a scenario. Let me give you an explicit example.

Meanwhile, recession from a country’s perspective means that the country has had 2 or more consecutive quarters of negative GDP (which correlates to real economic growth). Again, when the country falls into negative growth they are contributed by the following possible reasons (as below).

If the GDP of a country is decreasing, it can mean many things. Higher imports vs lower exports; lower exports can mean people are buying lesser of your product; higher import can also mean higher consumption of foreign goods and lesser home produced goods, higher spending by the country in all ways of expenditure, losses to exchange rate differences, lacking investment to boost the gross income and many more.

Everything is weighted against the USD currency. With USD devaluing, things are bound to be more expensive than they should because when the GDP as also formulated using the nominal value of the exchange rate, the GDP number will drop drastically as contributed by the devaluation of the USD.

Many would ask what the ways to revive the economy are. Again back then, I wrote this

In order to sustain your country’s GDP, and the fact that USD is devaluing and as a result, goods are becoming more expensive, there are several actions that can be undertaken. 1 - Increase your exports, more cash flowing into the country, 2 - Reduce imports, less spending and maintaining your cash in the country 3 - Appreciate the currency exchange against USD to reduce losses deficit….When spending > earnings, you would fall into a deficit. Where is the extra income or cash flow coming to sustain the economy from collapsing? Resort to the own Federal Reserve?

To survive the recession or basically to revive the world economy, tonnes of money have to be injected into the market; irrespective if it was a local or global market (depending on how you see it). In short the shit has hit the fan, and everyone is ‘enjoying’ a slight piece of the shit! The economic structure was built around credit; hence the credit bubble burst and basically US just faltered so badly that they couldnt even recognize their next President was a black.

My main deliverable today is with regards to the stimulus plan of 840Billion US Dollars by Obama. How much is it going to help? What will be the overall impact from this stimulus plan?

Look at this 2 indicators; Foreign Reserves (here) and Foreign Exchange (FOREX) market (here). These 2 indicators are going to be my yardstick of my delivery.

A country’s foreign reserves (as mentioned before) is to basically sustain 2 important aspects of a country’s macro-economics. ONE - the importance of foreign reserves in determining your country’s exchange rate (and curb inflation in the process) and TWO - the necessity (in terms of period/length) of a country to use its reserves to survive without any income flowing in (worst case).

Meanwhile, it was once mentioned that the volume of FOREX trading amounted to USD1 trillion or more per day back in the late 90s. If you look at the FOREX Market in April 2007, the volume of FOREX traded was an astonishing USD3 trillion a day. Pls bear in mind this was volume traded meaning money changing hands in effect. Volume is totally different from turnover. The context spoken of is the amount of money that literally or physically changed hands in the FOREX market in a single day was USD 3 trillion!! People across the world were trading FOREX upto USD3 trillion or more. What does this tell you?

This means that at any 1 point of that time, Forex had created a volatile market that was capable of making 3 trillion in exchange. It also means that such volatility could over night collapse the market by that amount. No doubt there were such liquidity floating around in the world market but with such volatility, the risk was even greater. 3 trillion is approx 40% of the world reserves. If this volatile market collapsed as we are seeing it now, it literally will eat up 40% of what the world reserve (USD7.34 trillion) is capable of.

Having pointed out those 2 indicators, what is USD 840Billion gonna do? Frankly, it is not going to pull us out of the doldrums and the way I see it, it will only mitigate the current crisis to a certain extent, mainly helping Americas at most. If you read carefully between the lines of the 840Billion stimulus plan, tax exemptions or tax rebates are part of the 840Billion. Hey, cost avoidance is still considered as cost savings afterall. The ability in avoiding expenses is somehow savings to a certain extent.

Seriously, US has 71Billion in its foreign reserves. Dr. Mahathir once said that Fort Knox has runned out of gold. So where do you think Obama is taking the 840Billion which is 12 times its foreign reserves from? Money afterall aint raining from the skies (unless US skies are different than the skies we live in).

Like I said, the 840Billion stimulus plan is made up of not only physical cashout BUT with various tax rebates, exemptions and many more. Meaning to say, the actual physical cash injection to its economy is DEFINITELY less than 840Billion.

Let me give you an example. If a working American had to pay 30% tax in the previous year (amounting to let’s say USD10k a year), and with the stimulus plan he now has to only pay 15% hence he only needs to pay USD5k a year starting from this year onwards.

If you apply the same 15% rate of tax exemption (assuming USD3k on an average working American) and multiply that with 50% of the US population who are law abiding tax payers, let’s say (USD3k x 155Million Tax Paying Americans), this equates to USD 465Billion of tax rebates/exemptions alone! This is already ~50% of the 840Billion stimulus plan. It might be more since I was very conservative in its numbers..

If USD 465 billion is coming from tax exemptions alone for the once mighty US of A, how much do you think it will help the world economy looking at the fact that

1. Current credit crunch is amounting to USD 10.7 trillion and climbing as I write (click here to see live debt ticker)

Fark, even if the entire world were to drain dry their reserves to pay the debt, they still owed by USD 3.4 trillion. Damn!! And what the hell USD 840Billion is gonna do globally?

One smart guy, not sure if he was forced to comment said last week that it will take 9 months to know if the world economy can climb back up pending Obama’s stimulus plan. I am not sure where he got the number 9 from. Maybe he likes 9 since he is a Chinese. But seriously, how much homework did he do in order to justify his 9 months? For such comment coming from the great LKY, Singapore’s MM, it was truly disappointing.

In my next post, I will write about how we as individuals can really make a difference to our livelihood in the current crisis and indirectly it will boost the country’s economy.

Btw, this is my last few posts before I leave Kiasuland for good. Tomorrow in fact will be my last post of my past 13-mth stay here. I will be leaving come this Sunday and starting next week onwards, I will be posting and reporting from Bodohland.

Bodohland here I co-meeeeeeeeeeeeeeee

Police brutality at its best… Turmoil in Kuala Kangsar as FRU fires almost 30 over shots of tear gas..

Watch it below

Najib and gang, I hope you guys see this and pls I tell you, pls believe in Makkal Sakthi – The People Power.

If I were to be you, the DPM and after having seen what had transpired with my poster, I will jump off KLCC.. (Click here for unfolding events with pictures of Kuala Kangsar today)

I have said it and I am saying it again.. Don’t play play with 22 million of us citizens.

Allahu Akhbar! Hancur BN!!!