Friday, January 01, 2010

When I Started to Plant My Own Financial Trees (DRAFT)

I grew up without much 'financial education'. Other than the need to save, I learnt nothing else when young. Living hand to mouth, I guess things like investing etc did not mean much to my parents. So what to teach to us kids?

But growing up poor made me want to know how people 'make money' and get rich.

When I was accepted to study computer science as major in university, I was required to pick one other major and a minor subject. I picked maths as the other major and wanted economics as minor because of that desire to know how the financial world works. But they refused to let me take up economics. The reason being I did not do economics while in A levels. I appealed personally to the vice-dean of the Science faculty and said that my lack of A level econs should not matter if I was serious about it and willing to work to catch up with others who had head start. But they still refused. They were just 'following the book' and in those days their 'book' was very straight forward.

Years later, the local education system got more flexible after the authorities realised that their universities were not producing the kind of people they expected like young people willing to take risks. I guess if the ones doing the teaching were not even willing to take a risk to let a young man learn something close to his heart, then they could not expect better from the ones they were supposed to educate.

Despite that disappointment, things worked to my favour when I started working in Andersen Consulting. They offered me a job at the start of my 3rd year in uni so I went about my final year knowing a job was waiting for me. AC was considered one of the 'high profile' employers for computer science students then. So I was pleasantly surprised that I was one of only 2 that they selected that year because my grades were not great (only 'B' for Comp Sc) and I was sure many other fellow students had better grades than me. After that I was more relieved when I found that many of my fellow students could not get jobs for 1 to 2 years because of the financial crisis of mid 80s.

[Many years later I figured out why I may have been selected. My final interview was with a new American partner by the name of David Bushman. As part of the interview he had asked me about my parents and family background. I think he favoured me partly out of desire to help me out and for a reason I found out a few years later from one of the local partners. Apparently, AC had studied the profile of their partners and found that they tended to come from middle to lower class background. They reasoned that their less well to do upbringing made them more 'hungry' for success and willing to work harder.

One of my first 'major' assignment was on a project for a small dutch bank (NMB Bank) and that got me really excited. Finally, I got a chance to find out how the money world works! After that lucky break, I was considered a part of the 'banking industry team' and as a result all my subsequent assignments were in the banking industry.

In addition to the good working experience that going from one project to another gives (instead of doing the same thing over and over again like in other companies), AC also had very good staff training programs and materials that I benefited from.]

When I was jobless at 44 and told my family that although I had stopped working I could live off my investments, one of my sisters told me something that I had long forgotten. She said 'do you remember that when young you used to say that you want to be able to retire when you are 40?' We laughed as I said 'then I guess I missed it by a few years'

I started to invest in a significant way only in 2001 when the bank I was working in was in the process of merging with 2 others and many staff were retrenched or expecting retrenchment because some positions had 3 incumbents! The other reason was before that I did not have much savings because I was paying for new house and car in Singapore and some other bad investments in Malaysia. But the main push was my pending retrenchment and the desire to make sure I maximise my savings.

But my awareness of the need for passive income started when I was about 30 when a financially savvy AC colleague who had an MBA said that we could not rely on the salaries our company was paying us then and he would be looking for a new job.

[The background to that was this: One day, both of us interviewed a woman candidate for software sales manager role in AC. Soon after the lunch interview, that resourceful colleague Reuben managed to find out how much the company was about to pay that 'sales woman'. Disgruntled he came to me and said 'did you know how much they will be paying her? More than us. And that is for one who will be hee hee hah hahing with clients while we will be responsible for delivery. I am quitting!' I thought he had a point. True to his words, Reuben left AC a few months after that. Soon after, I was approached by a head hunter for a job in a bank and I took it]

In 2001, the first internet fund or unit trust distribution company in Singapore known as 'FinatiQ' started operation.

The good thing about FinatiQ was they had information on historical performance of the various funds online including charting features which I could use to compare performance of similar funds by different managers over different time horizons (I used 2 and 5 years as benchmark). For e.g. I could compare the different funds investing in India over 2 and 5 years. Thanks to the internet, I could do my research and buy the funds I wanted from office.

The other thing that attracted me was since everything was online and their clients were self-helping themselves, FinatiQ's commission rates were half the usual rates (usual rate is 5% but FinatiQ charged 2.5%). Better still, they were promoting their business by offering 1% rebates in the form of Robinson Vouchers.

In 2001, I had about $200K of cash savings. On top of that, I had some CPF money (CPF allow people to use a portion of CPF funds to buy approved shares and unit trusts) and was expecting a package from my pending retrenchment.

By July 2001, I had used all my cash savings, CPF and my retrenchment money to buy unit trusts investing in China, India and Asia Pacific, and holding on to a few thousand dollars worth of Robinson vouchers!

[There was no way I could use up all those Robinson vouchers. So one day I went to Robinson Orchard and approached other shoppers to exchange them for cash at a discount of 5%. That was an eye opening experience. Some people just dare not exchange despite me assuring them that those vouchers were real and I could stay with them until the cashiers accepted them but they still refused. I guess risk free also some people would not take. An Indian woman wanted more discount, so I gave her 10% off.]

The reason why I bought only China, India and Asia Pacific funds were because I found out that one of the causes of the 1997 Financial Crisis was that investment money had gone out of the 'Asian Tigers' and into those 2 countries! In addition, I also had the view that the US Dollar was a 'bluff' and would fall in value over time (thus no US funds).

However, soon after that Sept 11 struck and the value of my funds dropped by 15% or so. That got me worried for a while.

Fortunately, I was proven right a few years later. By the time I sold them out between Jan and Oct 2007 (just before the crash of 2008) the value of those funds had more than doubled.

2 things triggered me to start selling: the prices of most Asian shares were ridiculously high and Alan Greenspan's 'retirement' in end 2006.

In addition, I started shorting some HK shares in the second half of 2007 and learnt another bitter lesson. With the money from sale of my funds, I used some to short some HK shares using CFDs. In October, the market crashed and I had a book gain of about $200k. But instead of taking those profits I shorted some more! A few weeks after that, the market re-bounced above the previous peak and my holdings went into negative. Out of fear, I decided to 'cut loss' and incurred $200k loss (if I had held on a few months longer I would have made profit eventually when the market collapsed over the whole of 2008 but that is the problem with fear. I was scared stiff of further losses and decided to close position).

Lesson learnt: do not be greedy and never do short selling. If do that and price drop in your favour, take profit and do NOT short some more (at lower price)!

Sunday, June 21, 2009

A Gift For My Daughters

CCK Note: Bought book with above title written by Jim Rogers some time in 2009 and passed to Li Ling. Jim Rogers is a well known investor who moved his family from the US to Singapore a few years before 2009 because he thought that the 21st century will belong to China and he wanted to be near where the future action will be. One reason he chose Singapore was he wanted his daughters to learn Chinese...

Below is a review of the book:
 http://www.bigfatpurse.com/2010/06/a-gift-to-my-children-by-jim-rogers/

Jim Rogers wrote a book for his daughters, teaching them the way of life to achieve success and happiness. Here are the things I learned from the book:

About Life

Passion is key to happiness – “Try as many things as you can, then pursue one (or two, or three) about which you’re passionate. I became successful in investing because this is what I enjoyed most… The quickest way to success is to do what you like and give it your best. For me, my love for investing was linked to my fascination with researching amd learning in detail what was happening in different parts of the world… The least-happy people I know are those stuck in jobs they don’t love; many because they can’t imagine giving up a paycheck… People who follow their passions do not “go to work”. They get up each day and cannot wait to have more fun doing what they love to do… Even if you don’t become wealthy pursuing your passions, you will be rich with satisfaction. Plus, you’ll be happy. You can’t put a price on that.”

Have a dream – “In addition to finding a fulfilling vocation, you must have a dream. In my younger days, I though that making money was fun, but I didn’t really have a plan beyond that. Had I continued down that path, I would have lost interest by now… when you begin something, you may not always have a concrete picture or vision of the future. But if you continue to be passionate and work hard at what you truly love to do, then you will eventually find that dream.”

Do not be ignorant – “Ignorance is born of an outsized sense of self-importance. Never let yourself become arrogant. Study hard. The more you learn, the more you will realize how little you know – and armed with this humility, you will never lose sight of the distance that separates self-confidence and self-importace.”

Puruse your dreams – “I want you to pursue, without pause, whatever it is that stirs your passion. Keep working toward your dream, not someone else’s, and not mine, either. A lot of people try to live for others – their children, their spouses, their parents, their friends – and in doing so twist themselves into knots attempting to meet their often outsized and/or unrealistic expectations. That leaves little space for personal growth and progress, and creates resentment for lost opportunities.”

On Investing

Due Dilligence – “If you just read the annual reports of companies, you will have done more than 98 percent of investors. If you read the notes of the financial statements, you will be ahead of 99.5 percent of investors. Verify those financial statements, as well as future projections announced by the top executives, by doing your own legwork. Talk to customers, suppliers, competitors, and anyone else who might affect the company. Do not invest unless you can say with absolute certainty that you are more knowledgeable about this particular firm than 98 percent of Wall Street analysts. Believe me, it can be done. But only with the extra effort.”

“If one (currency black market) exists, then you know the country has problems. Black market exchange rates exist only when the government is imposing artificial controls. The difference in parity between the official currency rate nad the black market rate indicates the gravity of the problem in that nation.”

The importance of history – “In my course “Bull and Bear” at Columbia University, I instructed students to research major bullish and bearish markets of the past, then figure out which historical events had contributed to their rise and fall. What was going on in the world when prices skyrocketed or plummeted? Why did those events serve as a catalyst? Looking back upon history is an invaluable way to learn how to analyze trends. And better still, it teaches you how to anticipate future changes.”

The rise of China – “When we look back upon history, we know that Spain dominated the sixteenth century, while France was the more prosperous country two hundred years later. The nineteenth century was the century of Great Britain. In the twentieth century, the United States rose to prominence. Well, the twenty-first century belongs to China.”

Careful with shorts – “You need to careful though, that you are not selling short simply because prices are high. Never sell short unless price are astronomically expensive, and you detect negative change coming.”

Do not follow the crowd – “Whe you see so many people being unrealistic, stop and make an objective assessment of the supply-and-demand equation. Bearing in mind this basic principle will bring that closer to success… Anytime that you think you’ve become a financial genius – when, in fact, you simply have had the good luck to turn a profit – it is time to sit back and do nothing for a while. If you stumble upon success in a bull market and decide that you are gifted, stop right there. Investing at that point is dangerous, because you are starting to think like everybody else. Wait until the mob psychology that is influencing you sudsides.”

Debasing currency does not work in the long run – “Throughout history, many countries have tried debasing their currency as a way to revive the economy by making it a bit more competitive. It has never worked over the long run or even immediately. It can work in the short term, but not always.”

Wednesday, April 30, 2008

Gunning for the Divine

Interesting theory on a son of something...

http://www.latimes.com/news/la-fg-jesus29apr29,0,1333472.story?track=ntothtml

If you believe one bunch, some deity squeezed one of his offsprings into a virus-sized man-body (virus-size is perhaps giving 'em manhood too big a size given the domain the deities supposedly lord over but let's not quibble) just to show some big headed people how much the deity loved them.

If you believe the other bunch, that is all crap and the only thing squeezed into that man-body was just a small postcard (message), and their other postcard carrying fella was bigger.

Depending on who you believe, the character in question is either a son of a deity or just a small time delivery boy of a deity. The 2nd bunch is perfectly reasonable in thinking that if a deity can send 1 messenger the deity can always send another.

In that case, the 2nd bunch should be more correct since their idol should have more up-to-date messages from the deity since he came after the other bunch's idol. (This is based on my 'latest paper has the latest news' theory but that can of course be crap in which case I have another theory for it - 'latest paper has the latest crap')

But then why stop with the 2nd bunch's idol and not send more messengers? The deity gone lazy and decided to leave the task of communicating deitical messages to mullahs and priests? Or impotent? And what cheapo deity would bother to second such an important job as saving his 'children' to priests that fondle boys, hor?

Umh messenger theories sound crappy... So let's try the son of deity theory

If those big headed modern apes are so important to him, that deity can surely have some more sons and sacrifice them one after the other just to show his 'love' time and again can't he? What can't do? Who say no can do?

In fact, a 3rd bunch of fellas that lived 150 years ago in China during the Taiping Revolution said 'yes can do'. Those 'middle of everything' Chinamen who searched like hell for millenia finally found their 'true deity' 1800 years after the first bunch and 1300 years after the 2nd bunch, but only after the Jesuits had gunned their way into the Middle Kingdom.

So late then find and need a legion of Jesuit messengers some more (other people need only 1 or 2 fellas only, depending on which of the 2 other bunch you follow). Losers hor? May be not...

According to this bunch of Chinamen they found out that that deity had 4 sons, 3 of whom was living in China at the same time! Hey, that deity really 'delivered' in China (like true Chinamen)! And since these fellas came after the other 2 messengers they gotta be more up-to-date with deitical news.

Don't laugh okay - no respect for Chinamen seekers?

But alas, kowtowing to 3 yellow skinned sons of a deity and 1 almost white skinned son of the same was not at all palatable to the Biritish who went on to help gun those bunch of 'I-found-the-lord-and-more' Chinamen into thin air.

Which explains why present day Chinamen super-seekers had never heard of that history. Such history is of course conveniently made irrelevant by some of those Chinamen - to save their ego if not anything else..

Which also explains why super-seeker Chinamen of the present day are of the 'I-found-the-lord-of-the-whitemen-and-cant-find-no-more' type. Useless Chinamen hor? 150 years after the Taiping seekers and not just cannot find more but find lesser!?

2nd class losers indeed.

Just my theory but it can all be crap too. After all, what does a no-super-seeker Chinaman know hor?


An Iranian's vision of Jesus' life stirs debate

The new film, based on the Islamic version of Jesus' life, depicts him as a prophet rather than the son of God. Its director says he wants to further understanding.

Friday, March 21, 2008

Malaysian Hat Tricks

Comments posted in Malaysia Today on reports after the 2008 general elections of Perlis Sultan's insistence that all MPs appearing before him must wear the Songkok (Malay hat), and some DAP reps' refusal to comply.


A storm in a songkok

1st comment:

Much ado about what covers the head when what is needed for the country is to enlighten that which the hats cover.

Throughout history, all cultures (political and religious) in power deemed themselves honoured when their subjects are made to wear their costumes. What got to be put on the heads was apparently especially important to those 'powerful' people of the dark ages whether they were from Europe, Middle East or Asia.

As an example, to the arrogant Manchu rulers of China a century or so ago, their mandatory 'pig tail' hairstyle was the epitome of their overlordship (they had their own NEP system too) and was to be compromised only at the price of the head. The Qing, of course, gained more lasting infamy than respect from that antic of theirs.

The 'songkok' is, of course, something some people copied from the Turks.

History seems to show that it is the arrogant vile that feel most honoured if others ape after them, and feel most exalted by their one-size fits all version of 'only my way or nothing'. The US of George Bush Jr. is just the latest ‘global’ version of such arrogance.

Today we see first hand how our own version of such a 'My Way' attitude by an M character had created the Malaysian Dilemma. Forcing others to wear his stupid notions in their head is far worse than that of forcing outfits on others, but they all have small beginnings.

It may start with a book, a hat, or a megalomaniac's dream.

xxx



Subsequent posts (as web arguments on whether the DAP reps should or should not have submitted to the Songkok-or-nothing rule):


People can choose to have fun with others' costumes but they should not get to choose to have fun with others' liberty.

xxx


One can put whatever one likes on one's own head based on whatever reasons one can find or dredge up. One should however not think that one had it all sorted out and thereforth to insist that all others should ape after him.

It is perhaps better that one knows where to cap it all off.

And do you think that unto such as you;
A maggot-minded, starved, fanatic crew:
God gave the secret—and denied it me?
Well, well, what matters it? Believe that, too.
- Rubaiyat, Omar Khayyam

xxx

Various Postings on Malaysian Indians

Comments posted in Malaysia Today before the 2008 general elections on 8 March 2008 in which the opposition parties won more than 1/3 the Parliamentary seats and became states government for Kedah, Penang, Perak and Selangor for the 1st time.


Suara rakyat, suara keramat

The Malaysian Indians suffered from a combination of factors.

Culturally they are a people conditioned to accept whatever life has to offer. They call that fate. Which is why their Hindu caste system lasted for a few thousand years and still going.

The Hindu caste system also conditioned them subconsciously to submit blindly to whoever happens to be in position of power. Thus their past faithfulness to Samy Vellu and BN.

In our country, Indians had also been conditioned to submit to the Malaysian caste system where they are further placed below some other people that have 'special positions'.

All these had combined to instill in the least well-to-do segments of Malaysian Indians (which is the majority) an inferiority complex worse than that created by their Hindu caste system.

If Malaysian Indians had failed, it is because our country had failed them and made them feel worse than what their disastrous caste system had done.

If Malaysian Indians had failed, it is because our country had intentionally kept them down by forsaking or letting them forsake their children's education.

It is only through education and, thereof, the opportunity to partake in all the best opportunities the country and the world has to offer (this means equality and meritocracy), that Malaysian Indians can get out of the rut that their own culture and government had created for them.

It should pain all compassionate Malaysians to see those pictures of our Tamil schools operating out of huts and 2-storey shop houses.

It is clear that the Indian community is too poor to start with to have much opportunity to get out of their hole themselves.

For one, they are now lower down in the Malaysian caste system than they had ever been in history, and cannot feed off others by the wave of a straight or crooked knife.

Just as their Hindu caste managed to keep their lowest members perennially subservient by keeping them continuously desperate, with whatever time they have spent on struggling to just survive not to say to figure out who among their leaders (all predators) were lying to them, the Malaysian caste system had done the same and worse with the help of a certain MIC and Samy Vellu.

The Indians may also be spread too thin to be able to run their Tamil schools cost effectively.

And if this country's government cannot or do not wish to uplift the Malaysian Indians who are unlikely to do so on their own, then the good people of the other races should extend a helping hand instead of talking to them condescendingly.

Going to so-called 'national' schools may also not be the solution as is obvious to anyone with some insight, including the discerning Malays who send their children to Chinese schools (even Mahathir talked about it when they were calling for his head).

The Chinese schools, on the other hand, have more critical mass (that is before a certain group of ‘special viles’ chase them out or kill them off with crooked knives), and the right people and value system to do that.

So I suggest that Indian and Chinese educationists consider the option of bringing the Indians into the fold of the Chinese school system/network.

If any group of people is able to do that, it is these 2.

Come on Indians and Chinese Malaysians, you have not much more to lose but all the more to gain by coming together, starting with our children and by imparting to them the knowledge and skills to compete successfully anywhere on earth, whatever dirt-princes notwithstanding.

2 people from 2 of the largest and greatest civilizations in history can surely find the space in our hearts and our schools to keep ourselves and our great cultures (except the Hindu caste system, of course) standing together upright against the odds posed by the vile predators that lord the Malaysian caste system.

xxx


Theva's desperate plea
Malaysia's middle class Indians can be ignored but there is more at stake than just votes
----

It is true that more than just votes is at stake but it is not true that Malaysia's Indian middle class can be ignored just because their numbers are small.

If number is all that matters in the advancement of the human race and in national development, then Malaysia should be lording over Singapore by now and Indonesia over Malaysia.

The truth is only a small number of minds really makes a difference in this world.

The rest are mere followers and hitch-hikers. Some are worse than that, as Malaysia show abundantly.

Although only a few really makes a difference, no one can ever foretell who those few will be and where they will come from.

Thus the need to give every single deserving individual the best opportunity they deserve to grow, and not waste resources on the undeserving. That is meritocracy.

The 7% Malaysians who are Indians may be small in number but we should be mindful that among all the races in Malaysia, that race have produced the largest number of Nobel prize winners. (Globally, there have been 6 ethnic Indian winners, 5 Chinese, and 0 Malays)

Some Malaysian races can claim to be princes of some soil or dirt, but none other than the Indian race in Malaysia can claim the honour of being awarded with the most Nobel prize.

It is perhaps timely to remember Chandrasekhar Subramanyam, the physicist from an Indian middle class family whose work was once publicly insinuated by his white mentor in front of a gathering of the Royal Astronomical Society.

None of the established European physicists of that time came to that young man's rescue.

One reason was that white mentor held the title of ‘father of modern astronomy’ and had arrogantly claimed that he was only 1 of 3 men in the world at that time that understood Einstein's theory of relativity. His name was Arthur Eddington.

The Nobel Prize committee was not impressed with Eddington but gave Chandrasekhar a Nobel prize for his work (on what became known as 'Chandrasekhar Limit') that arrogant Eddington scoffed at.

Chandrasekhar's uncle C.V. Raman was also a Nobel prize winner for his work on the Raman Effect (Physics).

Now, what race, not to say middle class family, can claim the honour of having 2 Nobel prize winners in 2 generations?


So Malaysian Indians,

Some people in Malaysia may look down on you or scoff at you but they will never be able to get anywhere near the achievements of your race.

Your people's achievements is Nature's way of showing you promise. And hope.

So hold your heads up high. Only fools ignore you to their own loss and detriment.

xxx


Malaysian Indian Muslims want to be called Malays
Kuala Lumpur, Mar 3 2008: Members of the Malaysian Indian Muslim Youth Movement (Gepima) want to be known as Malays and not Indians.
----

In the 19th century the western countries led by the British forced the Chinese to allow the sale of opium and made a lot of gold/money selling opium derived from India and Afghanistan (the British called that dominion 'the Jewel of the Crown').

At the same time their religious groups offered food and money (subsidised by that opium money, mainly) to any Chinese willing to convert to Christianity.

To the more humane in the west, the view was Christianity would humanise and civilise the Chinese.

Others like a British poet, Rudyard Kipling, considered the Asiatics and Africans (regions the west were fighting to colonise then) 'A Whitemen's Burden'.

And Kipling's poem of that name called upon the Americans to join the British in colonising these regions filled with 'half-devil and half-child'.

That poem was written when the Americans had whacked and taken possession of all Spanish dominions in the Americas and Pacific, and was occupying the Philippines.

Faced with the generosity of money derived the opium sale (so it was really money from the Chinese themselves) and the ineptitude of their own government, many of the poorest and desperate Chinese then took up the conversion offer to survive.

The other Chinese called the conversions 'shi jiao' or literally 'eating religion'.

The Indians of Gepima may also be just wanting to 'eat race'.

But are the people they want to join that generous, or would they just treat them as half-devil and half-child?

xxx

The Man and the Monkeys: A Wall Street Fable

Extracted from the Economist Views


Once upon a time in a village a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers knew that there were many monkeys in their forest. They left their farms on the plains and went into the forest to catch them. The man bought thousands at $10.

As the supply of monkeys started to diminish the villagers stopped looking. Finding and catching monkeys was soon no longer worth the effort for $10. They started to return to their farms to plant the spring crop.

The man then announced that he would buy monkeys for $20 each. This new higher price renewed the effort of the villagers and they headed back into the forest to find and catch monkeys again to sell.

When the monkey supply diminished even further that summer and the people started to return to their farms, worried they had not made enough money selling monkeys to buy all the food they needed but had not planted any crops yet either, the man raised the price he'd pay for monkeys to $25 each. The hunt was on again.

Soon the supply of monkeys became so small that a villager didn't see a monkey in a day of hunting let alone catch one. Even at $25 each the effort was not profitable so the villagers finally headed back to their farms that fall. After nine month's absence from their farms they knew the time had passed to produce enough food for the coming winter, but at least now they had enough money from selling monkeys to buy food to eat.

But the man wasn't finished. He announced that he would buy monkeys for $50 each! The villagers became very excited. He also explained that he had to go to the city on business and that his assistant was to stay behind to buy monkeys on his behalf.

As soon as the man left the assistant told the villagers, "So you think you have made a lot of money selling monkeys, don't you? But do you want to really get rich?"

"Yes, yes!" said the villagers.

The man's assistant went on. "I have a gigantic, enormous cage filled with monkeys. I will sell them to you for only $35 each and when the man returns from the city you can sell them to him for $50 each and make a fat profit. You don't even have to work to find monkeys at all. Then you can not only buy all the food you need for this winter you call all buy flat panel TVs, too."

The villagers were thrilled. They collected all of their savings together and bought all the monkeys in the assistant's cage then awaited the man's return.

They never saw the man nor his assistant again. All the monkeys that were once in the woods were now in the village. All of the villager's savings were gone.

Moral: Substitute housing for monkeys. As the winter of the US economy arrives, you still have the house you had before the price was bid up. Now that prices are falling back down, who has your savings?

Now you know how Wall Street works an asset bubble racket.

(Original by Anonymous, improvements by metalman.)

Paul Krugman: Partying Like It's 1929

Extracted from artcile in Economist Views

We're relearning the lesson that "unregulated, unsupervised financial markets can all too easily suffer catastrophic failure":

Partying Like It’s 1929, by Paul Krugman, CVommentary, NY Times:

If Ben Bernanke manages to save the financial system from collapse he will — rightly — be praised for his heroic efforts.

But what we should be asking is: How did we get here? Why does the financial system need salvation? Why do mild-mannered economists have to become superheroes?

The answer, at a fundamental level, is that ... having refused to learn from history, we’re repeating it.

Contrary to popular belief, the stock market crash of 1929 wasn’t the defining moment of the Great Depression. What turned an ordinary recession into a civilization-threatening slump was the wave of bank runs that swept across America in 1930 and 1931.

This banking crisis of the 1930s showed that unregulated, unsupervised financial markets can all too easily suffer catastrophic failure. As the decades passed, however, that lesson was forgotten — and now we’re relearning it, the hard way. ...

Banks ... sometimes — often based on nothing more than a rumor —... face runs... And a bank that faces a run by depositors ... may go bust even if the rumor was false.

Worse yet, bank runs can be contagious. If depositors at one bank lose their money, depositors at other banks are likely to get nervous, too, setting off a chain reaction. And there can be wider economic effects...

That, in brief, is what happened in 1930-1931, making the Great Depression the disaster it was. So Congress tried to make sure it would never happen again by creating a system of regulations and guarantees that provided a safety net for the financial system.

And we all lived happily for a while — but not for ever after.

Wall Street chafed at regulations that limited risk, but also limited potential profits. And little by little it wriggled free — partly by persuading politicians to relax the rules, but mainly by creating a “shadow banking system” that ... bypass[ed] regulations designed to ensure that banking was safe.

For example, in the old system, savers had federally insured deposits in tightly regulated savings banks, and banks used that money to make home loans. Over time, however, this was partly replaced by a system in which savers put their money in funds that bought asset-backed commercial paper from special investment vehicles that bought collateralized debt obligations created from securitized mortgages — with nary a regulator in sight.

As the years went by, the shadow banking system took over more and more of the banking business, because the unregulated players ... seemed to offer better deals... Meanwhile, those who worried ... that this brave new world of finance lacked a safety net were dismissed as hopelessly old-fashioned.

In fact, however, we were partying like it was 1929 — and now it’s 1930.

The financial crisis currently under way is basically an updated version of the wave of bank runs that swept the nation three generations ago. People aren’t pulling cash out of banks to put it in their mattresses — but they’re doing the modern equivalent, pulling their money out of the shadow banking system and putting into Treasury bills. And the result, now as then, is a vicious circle of financial contraction.

Mr. Bernanke and his colleagues at the Fed are doing all they can to end that vicious circle. We can only hope that they succeed. Otherwise, the next few years will be very unpleasant — not another Great Depression, hopefully, but surely the worst slump we’ve seen in decades.

Even if Mr. Bernanke pulls it off, however, this is no way to run an economy. It’s time to relearn the lessons of the 1930s, and get the financial system back under control.

Financial Markets Panic: Losing Our Marbles

Extracted from an article in Economist Views


Steve Waldman explains how the house of cards can collapse:

Credit Crisis for Kindergarteners, by Steve Waldman:

David Leonhardt notes that it's pretty hard to explain what's going on in the financial world these days... Here's how I'd tell the tale to a child:

Alice, Bob, and Sue have ten marbles between them. Whenever one kid wants another kid to take over a chore, she promises a marble in exchange. Alice doesn't like setting the table, so she promises Bob a marble if he will do it for her. Bob hates mowing the lawn, but Sue will do it for a marble. Sue doesn't like broccoli, but if she ... promises a marble...

One day, the kids get together to brag about all the marbles they soon will have. It turns out that, between them, they are promised 40 marbles! Now that is pretty exciting. They've each promised to give away some marbles too, but they don't think about that, they can keep their promises later, after they've had time to play with what's coming. For now, each is eager to hold all the marbles they've been promised in their own hands, and to show off their collections to friends.

But then Alice, who is smart and foolish all at the same time, points out a curious fact. There are only 10 marbles! Sue says, "That cannot be. I have earned 20 marbles, and I have only promised to give away three! There must be 17 just for me."

But there are still only 10 marbles.

Suddenly, when Bob doesn't want to mow the lawn, no one will do it for him, even if he promises two marbles for the job. No one will eat Sue's broccoli for her, even though everyone knows she is promised the most marbles of anyone, because no one believes she will ever see those 17 marbles she is always going on about. In fact, dinnertime is mayhem... Mom is cross. Dad is cross. Everyone is cross. "But you promised," is heard over and over among the children, amidst lots of stomping and fighting. Until recently, theirs was such a happy home, but now ... no one trusts anyone at all. It's all a bit mysterious to Dad, who points out that nothing has changed, really, so why on Earth is everything falling apart?

Perhaps Mom and Dad will decide that the best thing to do is just buy some more marbles, so that all the children can make good on their promises. But that would mean giving Alice 19 marbles, because she was laziest and made the most promises she couldn't keep, and that hardly seems like a good lesson. Plus, marbles are expensive, and everyone in the family would have to skip lunch for a week to settle Alice's debt. Perhaps the children could get together and decide that an unmet promise should be worth only a quarter of a marble, so that everyone is able to keep their promises after all. But then Sue, the hardest working, would feel really ripped off, as she ends up with a much more modest collection of marbles than she had expected. Perhaps Bob, the strongest, will simply take all the marbles from Alice and Sue, and make it clear than none will be given in return, and that will be that. Or, perhaps Alice and Bob could do Sue's chores for a while in addition to their own, extinguishing one promise per chore. But that's an awful lot of work, what if they just don't want to, who's gonna force them? What if they'd have to be in servitude to Sue for years?

Almost whatever happens, the trading of chores, so crucial to the family's tidy lawns and pleasant dinners, will be curtailed for some time. Perhaps some trading will occur via exchange of actual marbles, but this will not be common, as even kids see the folly of giving rare glass to people known to welch on their promises. It makes more sense to horde.

A credit crisis arises when many more promises are made than can possibly be kept, and disputes emerge about how and to whom promises will be broken. It's less a matter of SIVs than ABCs.

Couldn't the parents force the kids to keep their promises (under threat of a large penalty for default)? Either do what you promised, or incur some punishment that makes doing the chores the only reasonable choice? That seems a lot like the way a court would enforce contracts, so we need one of the kids to declare bankruptcy (or simply refuse to work and accept the punishment of having assets stripped, getting sent to their room, grounded, etc.) to get this going.

Perhaps another way to make this work is to have one of the kids lose their marbles (literally, as in a bad investment) so that some debts cannot be repaid. This would break the chain, create worry and panic, and potentially generate a breakdown in the system. But in this case the role of the government (parents) is easier - if it acts fast enough it could replace the lost marbles using its magical marble making machine (print money), three or four perhaps, to make a loan backed by collateral to keep the system of credits and payments flowing.

As for the child who lost the marbles, the parents could teach him or her a lesson about being responsible by refusing to come to the child's aid, but that just wrecks the entire household - the other kids didn't do anything wrong. Better to loan the child the marbles to keep things flowing, enforce existing contracts, then once the crisis is past, determine how and why the marbles were lost. At that point, if there is reason for the child to bear the consequences of bad choices, then the consequences can be confined to the child rather than spread throughout the household. In addition, the parents could also consider instituting new rules (a regulatory response to the crisis), e.g. automatic penalties for non-performance of a contract (e.g. capital requirements, forfeiting a bike or some other toy to the other party, etc.) so that once a deal is agreed upon, the kids are less likely to renege, rules about how marbles can be stored so they aren't lost accidentally, and so on

Predicting Recessions

An article on a model to determine probability of turning in business cycles in the US using the Markov-Switching model.

http://www.uoregon.edu/~jpiger/cp_realtime_2_020907.pdf

xxx

Friday, December 28, 2007

Putting Ice Coffee in Perspective

Sister and family were back from Australia and we gathered at another sister's home in Johor.

One day upon rejoining the group after I went to park my car after dropping them off for lunch at a local coffee shop, niece Le was crying because her mother stopped her from having what the other kids had all ordered - ice coffee - because ice coffee was 'not healthy'.

That 9 or 10 year old kid was crying because she was wondering why she could not have what the other kids were having. And it was all because ice coffee is 'not healthy'!

I then told her mother off for not putting things in perspective. It was not like the kids were having ice coffee every day. The kids can be taught to be careful about having too much coffee but it does not mean that they shall never have that thing! It is okay to let the kids try something 'less healthy' once a while just for enjoyment. It was not going to kill them.

The other parents let the other kids had ice coffee because they had the sense to know that it is okay once a while to let their kids enjoy what they fancy at that moment.

Le's parents then relented and let her had her ice coffee. Her father's comment after that was, it's 'like in school, once a while there's hair down day'...

Friday, October 26, 2007

I Don't Care if You Use a Dog or Loud Speaker

When my 2nd daughter was in primary 1 (which was in the afternoon session), I would go fetch her from school after work and send her to my in-laws' house near mine where she would have dinner before going home.

The neighbouring house had a white dog which would bark incessantly at any one passing by that house. So being the only house next to it, my in-laws' family and anyone visiting them bore the brunt of that barking day in and day out which was annoying even for me who did not have to experience it daily. In addition the dog would do that while sticking its head through the grills separating the 2 houses which made it more annoying.

Once while watering his garden, my brother in-law sprayed some water at it. Other times, we threw some stones at it. But no use.

The dog's owners on the other hand made no attempt to try and control it. Once I saw someone peeping out of the window amidst all that barking but did nothing.

One evening when the usual thing happened even when its male owner was at his front door and did nothing, I shouted at the dog to chase it away.

That owner came towards me saying 'why did you do that? it is just a dog. I also know you threw stones at my dog' (obviously they had been observing everything from inside the house all along but made no attempt to control their dog)

My daughter was with me at the main gate when that happened, so I told her to go into the house.

When that man was facing me over the grills I pointed my finger into his face and said 'I don't care if you use a dog or a loudspeaker. But if you shout at me everyday, I'd whack you!'

That fella was stunned, said nothing in return and walked off. I guess he got the point loud and clear.

A year or so after that, I was told that they had gotten rid of that dog because it had bitten their baby grandchild. Serve them right.

You see, every credible dog trainer would tell you that dogs were descended from wolves which are pack animals. In the wild, every pack has a leader that will control the pack. With the leader around, other members of the pack would be 'very well behaved' i.e. submissive. In the absence of a strong leader, members of the pack would fight and try to dominate over the others to become the leader. It is just their natural instinct.

It is the same with dogs which is why one of the first thing that dog trainers tell owners trying to train their dogs is that from day one the owners must be firm and act in ways that show their dogs in no uncertain terms that they are the 'leader' that the dogs must submit to and not the other way around.

I guess only then would this saying by Mark Twain be true - 'If you take a dog which is starving and feed him and make him prosperous, that dog will not bite you. This is the primary difference between a dog and a man'

Saturday, September 15, 2007

No Need for Colored Glasses

Like most humans, Chinese fear change. There are other terms for this already used by the crass.

Like most fools, it is the stupid that think that inspiration, insight and guidance can be drawn from only one book, or the most beautiful scenery of nature comes in monochrome.

Thus voting for such people to put them in power is to tell the fools with a broom stick they have a working compass and should lead the way around the globe.

Or his monochrome NEP still camera is the best way to capture the beauty and essence of nature.

By following fools you may not run into problem tomorrow or day after but that does not make them or their followers less foolish.

The broom stick may work as well as a compass for our globetrotter, for a while.

The monochrome NEP still pictures may tickle the senses of the half-blind, for a while.

But you will someday have to pay for the fool's acts, it is just a matter of when.

It is as simple as that.

No need for crass, colored glasses, cross, crescent and other complicated notions.xx



14/09: Through a Chinese Looking Glass
Posted in Malaysia Today
By Wang Earn Swey

In a recent posting in Malaysia-Today.net (MT), Raja Petra lamented that in the last general election, the Chinese threw their lot in with BN; this despite the fact that PAS issued a statement that if a May 13-type race riot were to occur, PAS members would stand in front of the Chinese and face death if necessary to shelter the Chinese from harm. Thus, continued Raja Petra, the Chinese deserve the UMNO-led government they get.

The Malaysian Chinese mind is not well understood, and Raja Petra understands it least of all; this despite the fact that his wife is ethnic Chinese. In another article, he branded the Chinese as cowards.The Chinese are a pragmatic race. They value education. They love making money.

And the Chinese in Malaysia have sought to equate the value of education to the value of future income. Talk to any Chinese parents in the 70’s and they would list the ‘good’ careers for their sons and daughters to pursue; doctors, engineers, etc., all the big money careers. Tell our parents that we are studying to become a kindergarten teacher and we very possibly might be disowned. This thinking has deviated from the thinking of the Chinese of the Han Dynasty where the civil service was the ultimate goal. Back then, scholars studied day and night, travelled hundreds of miles to write the civil service examinations, which can last for several days. The subjects of study were mostly from the Confucian texts. All of that in pursuit of titles like “chuang yuan” or “siew chye”, etc. These were high ranks among scholars and they gained ministerial positions according to their attained scholarship.

A similar route to high civil office does not exist for the Malaysian Chinese. Besides, the government model of today is completely different from the imperial Han Dynasty government. So what is left? Education and money! Education itself has been thoroughly transformed by technology. The Confucian Ethics Specialist is just not in demand anymore. The real goal of education is money anyway. The Chinese have never, in the past, thought that having money translated to having economic power. They simply liked being wealthy. It’s about respect. The materialistic (western) world looks at money through a twisted looking glass: money and wealth are exalted, at the same time money is the root of all evil. Not the Chinese. We look with awe at Bill Gates, the richest man on earth and a college dropout. We love every rags-to-riches story, as if that validates that we, too, can become billionaires. We don’t pay so much attention to other equally against-the-odds success stories: such as the one about the child who overcame his severe autism, and struggle now as an adult working as a government clerk.

Back to the general election; any general election. The Malaysian Chinese citizen holds the ballot paper in front of him. BN, DAP, PAS, PKR. Hmm. DAP has never run a government. They have become synonymous with the word ‘opposition’. PKR, a nebulous party with meagre election wins in the past. That leaves BN and PAS. PAS has a track record of running a state government or two. Now, PAS has offered to protect the Chinese in the event of a race riot. Sounds good, right? Not so fast.

Let’s play out the scenario. Say PAS receives a respectable amount of votes, enough to threaten the shrinking BN majority. Say racial sentiments start to brew to a boiling point. But race riots never occur, because PAS members stick to their word and stand in front of the Chinese, confronting any UMNO member. Race riots thus become a thing of the past. Two or three elections later, PAS wins the majority and now expects the Chinese to be supportive of their new government, including support for instituting Sharia laws. After all, we owe them for their past protection.

This is where the Chinese mind comes in. With the current government, I get to keep 75 sen of every ringgit I make. And I have a fighting chance of getting some of that 30% economic pie allocated to the non-Bumis. (This number is made up. I don’t have statistics to back up the 30% figure.) Under-the-table-money further cuts into my 75 sen. But this has been going on for years. I’m used to it. I have deprived myself of luxuries for the past 20 years to save up and open my own business. Sure, there are obstacles upon obstacles. Money has to change hands under the table again to open my own business. But, finally, I get to open my dream business. I’ve become the local distributor of Christian books to churches around the country. Oh relax, I’m not that pious a Christian. I go to church to cozy-up to the movers and shakers of Malaysian churches, just so that as a book distributor, I have their ears. In fact, I go to a different church every Sunday.

One vote for PAS and all my dreams become fuzzy. Who am I? I am the Chinese Christian Books distributor. I am the Chinese pig farmer. I am the Chinese casino worker. I am the Chinese non-halal food distributor. I am the Chinese temple builder. Pragmatist? My life story virtually defines the word. Coward? Don’t think so. My elderly parents who depend on my 75 sen.

“What more do you want?!” Raja Petra asked. For one thing, dear PAS member, we don’t want your pledge to stand in front of us. We have always been able to take care of ourselves in all adversities. We would rather you stand beside us. We don’t need the “enemy of my enemy is my friend” faux friendship. We want to know if you do take power, what shape will the government take? The Saudi model? The Iranian model? The Taliban model? Or the progressive democratic model that Turkey is struggling to keep? We want to know if you will teach our future children that wars of any kind take two sides, neither of which is blameless. We want to know if your government will be the first to appoint the most qualified persons, bumi or non-bumi? We want to know if our children will be the first to hear you declare that Islam is not superior to any other religion, that we are all God’s children, and that words like infidels, pagans, goyims are all man-made words and are offensive in the eyes of God. We want to know if your government will be the first Islamic government in the world to have permanent Buddhist, Christian, and Hindu Religious Affairs advisors. We want to know if the NEP that we have grudgingly supported for so long will be revamped, so that its goal is to narrow the gap between rich and poor, with income as the only criteria.

Sorry, Raja Petra, pledging to become a human shield for me is the last thing I need.

Friday, September 14, 2007

Economics Sites

Minyanville:

US recession:
- frequency every 6 yrs,
- peak-to-trough in 8 to 11 months,
- adjustment in stock market 20 to 40% (avg 28%)
http://www.minyanville.com/articles/recession-1980-decline-GDP-equity+market/index/a/14069

Sharp ups and downs tend to exhaust themselves after 19-25 days
http://www.minyanville.com/articles/MDR-MON-BG-AGU-QMAR-metals-fundies/index/a/14087

Economist's Views:

Good collection of views from many different economists
http://economistsview.typepad.com/economistsview/

Sunday, September 02, 2007

Men of Faith

Do not rely on people whose primary outlook is not based on rational thinking but on faith to make sense of what is fair and proper.

History shows that other than loud bragging and destruction they do not improve anything on earth. All major human progress take place only when there are people willing to break out of the constraints imposed by blind faith.

People that operate based on faith will say things like these :
- My 'true story' said this, your story did not. My story did not say that, your story did.
- My story is 1% right here but yours 1s 1% right only there which is not as holy as my 1% here.
- Therefore my story is better than yours and yours is not as good.
- So my story is the real god story, yours is not.

That has been the story of the various religions for eons. Each of them claiming that their god is the true god and others' are not. But how can that be?

By faith, a Mohamaddan is damn sure his religion is the right one and the others are false. By faith, a Jew is cock-sure his is the special one while the others are crap. By faith, so does a Christian.

But whose religion is the 'real true one' and who is right? They cannot all be right, can they? The rational part of us must admit that it does not make sense for all of them to be so different and yet all be right at the same time.

But a Muslim's faith is as strong as a Christian's and a Jew's. In fact, so 'strong' that some of them force others to accept their stories based on their own logic, and history had shown that they are willing to fight and kill each other just to prove that they are right and the others wrong (there is a saying that 'wars do not prove who is right but who is left').

Instead of facing up to the possibility that all are possibly wrong and faith is just blind parroting of some man-made stories and notions, some of them claim that they 'respect the others'. Perhaps by that they hope that the others will reciprocate and say they are 'right'.

But deep inside these people of faiths will still think that theirs are the true one and the others are idiots who have been misled or under enlightened.

If we want a better future on earth, humans must operate using our rational mind, not by faith.

xxx

Friday, August 31, 2007

Social Contract

29/08: MCA policy statement on social contract “blacked out” in MCA newspaper The Star – Why?

Category: General
Posted by: Raja Petra

Media Statement by Parliamentary Opposition Leader and DAP MP for Ipoh Timur Lim Kit Siang

This is most extraordinary and unthinkable – MCA newspaper The Star “blacking out” the MCA policy statement on the “social contract”!

The Chinese newspapers gave front-page headline treatment to the policy statement issued yesterday by the MCA Presidential Council following the shock declaration of the Prime Minister, Datuk Seri Abdullah Ahmad Badawi that Malaysia was an Islamic state and not a secular state.

Strangely enough, the policy statement was reported by the Sun but it is also conspicuously omitted in the New Straits Times and the Malay newspapers.

Releasing the MCA Presidential Council statement, MCA President Datuk Seri Ong Ka Ting said the Federal Constitution should be the reference to resolve controversies or confusion over the social contract.

The statement said that what had been agreed by the forefathers 50 years ago, especially the principles and the spirit in governing the country, must be preserved.

These principles and spirit were enshrined in the Constitution.

Two questions are in order:

Firstly, why the two-faced treatment of the MCA Presidential Council policy statement on the “social contract” by the MCA – having it published prominently in the Chinese media but blacked out in its own English-language newspaper, the Star and the New Straits Times as well as the Malay newspapers.

Secondly, why had the MCA Presidential Council betrayed the fundamental principles espoused by the early generation of the MCA founder-leaders like Tun Tan Cheng Lock and Tun Tan Siew Sin who had declared unequivocally both inside and outside Parliament 50 years ago that this nation was conceived as a secular state with Islam as the official religion and not an Islamic state.

In limiting its “social contract” understanding and commitment to what is in the Malaysian Constitution, the present MCA leaders have created the conditions to justify their support for the abandonment of the foundation nation-building cornerstone of Malaysia as a secular state with Islam as the official religion but not an Islamic state. This is to enable the present MCA leadership to support the distortion and misinterpretation of the Merdeka “social contract” of Malaysia as never having been an secular state and had always been an Islamic state.

The Malaysian Constitution is both silent on a secular state and an Islamic state. However, all constitutional documents leading up to the 1957 Merdeka Constitution and the 1964 Malaysia Agreement and the highest judicial pronouncements of the land spelt out clearly that Malaysia was conceived as a secular state with Islam as the official religion and not an Islamic state.

Now, through sheer political hegemony and against the public stands of the first three Prime Ministers of Malaysia, Tunku Abdul Rahman, Tun Razak and Tun Hussein, the “social contract” and Merdeka Constitution is being misinterpreted to jettison the fundamental nation-building principle of a secular Malaysia and to substitute instead an Islamic Malaysia.

The MCA Presidential Council policy statement yesterday has only one objective – to perpetuate the myth that MCA remains steadfast and fully committed to defend and uphold the Merdeka social contract when in fact it had already abandoned the fundamental principle that Malaysia was conceived as a secular state and was never meant to be an Islamic state.

How could Tun Tan Cheng Lock and Tun Tan Siew Sin rest in peace at such betrayal of principles by the present crop of MCA leaders?

Lim Kit Siang


CCK comment:

When Singapore refused to up the price of water supplied by Malaysia on basis that the legal contract under which it is supplied does not allow for it, government leaders and cronies went up in arms.

Ridiculously cheap and Singapore is an asshole country, they say.

In turn, this same bunch of characters expect entire people to submit to their whims and greed on the basis of a ridiculous interpretation of what they call 'social contract' under which easy money can be gotten by way of conspiratorial contracts and not endeavor.

And they complain about others going up in arms.

Thursday, August 30, 2007

No Gull Please

Comment posted in Malaysia Today in response to call to abolish the SJK schools


If a company has a proven record of producing good quality and reliable products, people around the world will go to it without the need for coercion or the likes.

The theorists will talk about dedication, intelligence, hardwork and many other notions being potentially the cause of a company's success.

They can also have many theories to explain why some companies lose out. In some countries they just go on a wild blame ride.

For the fair minded, the preponderance of a company's products is the simplest indicator of its quality. That is, you know a company is good when you see many of your neighbours buying its products.

A good example is Samsung which became one of the top 10 brands in the world over the course of a quarter of a century. Sony is not even on that list today.

And no salesman with any cock-n-bull story will be able to stop the tide of the mass consumer.

You also cannot force people to buy your product if you are a lousy manufacturer unless you resort to unfair means. A good example is our local Toyota wannabe.

The world is best being a pretty free market.

Those who believe that their favorite manufacturer produces the best products should stick with it. Good for them.

Those who think they operate a very good company should concentrate on producing world quality products. The crowd will naturally come to you.

But spare the other consumers who think otherwise the horror of being a potential gull.

Educational institutions are no different. The world class ones are obvious. So are the low down ones.

You decide for yourself and your children but please let the others make their own choices.

They will follow you if yours is clearly the best around. If not, you should perhaps scratch your head a bit.


Subsequent comment:

Useless products can only come from lousy companies run by sub-standard people using below-par materials.

Resorting to lelong sales pitches will not carry them far.

Hoping their products will improve by way of blowing hot air is a fool's dream.

Never put your capital into such companies.

Tuesday, August 28, 2007

The True Fathers of Malaysian Independence

Malaysia Today posting

28/08: The true fathers of Malaysian independence
Category: General Posted by: Raja Petra

by Anti-Jihadist

When Malaysians take time this upcoming Friday to reflect on the meaning of (what is widely referred to as) the 50th anniversary of Malaysian independence (a.k.a. Merdeka), they should spare a moment to thank one of the men who helped make it possible—Adolf Hitler.

That’s right. Adolf Hitler and his fascist allies, in an ironic twist of history, are in many ways the true fathers of independent Malaysia. Without their actions, Merdeka would have taken, at the very least, many more years if not decades to come to pass. Remember, in the years preceding World War II, Malaya’s status as a British colony was not seriously opposed by anyone, especially inside Malaya itself. British rule of the colony was unchallenged. And a unified Malaya not run by Britain was all but unthinkable.

The actions of one man thousands of miles away would change this status quo forever. It was Hitler’s Germany that launched war in Europe in 1939, and whose forces directly attacked the British homeland soon after. It was Hitler’s Afrika Korps and Italian allies who attacked British forces and possessions throughout the Mediterranean, and attempted to seize the British protectorate of Egypt and the vital Suez Canal. These assaults on multiple fronts concentrated British forces and planning on these theatres of war, and turned London’s attention away from Asia. The British Empire in 1940 and 1941 (when they did not yet have an official ally in the US) was stretched to the limit and fighting for its life.

Left all but forgotten at this critical juncture were the British possessions in the Far East—Hong Kong, Malaya, Singapore, North Borneo, and Burma. Stripped of military units that had been hurried westward to fight the Germans and Italians, these areas were tempting targets.

Such an opportunity was not to go unnoticed, especially by Hitler’s other ally—the Empire of Japan, who had been planning their so-called “Greater East Asian Co-Prosperity Sphere” for some time. Seeing that the chief colonizing power in Southeast Asia (the UK) had its hands full fighting the Germans in North Africa and elsewhere, the Japanese militarists carefully planned their coup de main. Germany’s conquest of Western Europe (and the fall of other colonial powers France and the Netherlands) also made for other ‘ripe pickings’ in Southeast Asia.

On December 8, 1941, Japan decisively struck the Malayan peninsula and landed a sizable invasion force near Kota Baru (on Malaya’s northeast coast). The few British units still left in Malaya resisted valiantly, but were outmaneuvered and overwhelmed in short order. Japan’s ‘jungle blitzkrieg’ succeeded enormously, and the seemingly ‘invincible’ British quickly surrendered in all of Malaya.

The resulting Japanese occupation of Malaya was humiliating as it was brutal. However, it did demonstrate to everyone (in particular, the Malays) two vital lessons that cannot be underestimated, and that ultimately paved the way for Merdeka. One, the British were clearly not unbeatable. And secondly, it could now be shown conclusively that a Malaya without British rule was possible.

When the British returned to Malaya in 1945, they did so as victors, but in full awareness that continued British rule in Malaya would not, and could not, continue as it had before. The British had won the war, true, but their victory over Hitler and fascism had bankrupted them, and they had lost much of their desire for empire as a result. Their soon-to-be former subjects, the Malays, knew that the genie was out of the bottle, and realised that they had to finagle the most favourable terms possible from the soon-to-depart British.

It was merely a question of time, of process, and of form, but thanks to the schemes of the Nazis and their friends, Malayan independence had become inevitable.

Remember that this week when you display your Jalur Gemilang.


Comments

TheWrathOfGrapes wrote:
.More like surrogate fathers.One Fuhrer with his Lebensraum, and one Emperor with his Greater East Asian Co-Propsperity Sphere, resulting in the dismantling of the old colonies.Some good coming out of something bad..
28/08 15:29:43

rakyatmalaysia wrote:
good one joe, but that does not mean i will look hitler as my hero but a blooody bastard who massacred million of jews.
28/08 15:31:22

theantijihadist wrote:
I couldn't agree more with that assessment of Herr Hitler. May he burn in Hell for eternity.
28/08 15:36:28

WanSinga wrote:
Hitler! How I adore him very much. Not because of his cruelty but to his inflence & absolute power.Think again.Jews were shot dead. So be it. But why? Because they are weak, like the rest of us.Think again.Every history has a lesson...
28/08 15:46:52

ShyteStirrer wrote:
Anti-Jihadist, please do not fall into the trap of all the apologists of the Nazis and the Fascist Imperial Japanese when they say that their actions precipitated the independence movements in Asia. It is true that it may have been a unintended by-product. However, do not forget that the Nazi's and Japanese were inperialists who wanted domination of peoples and raw materials. Please also do not forget the millions of people that perished because of their imperial dreams. They never intended freedom for anyone - they only wanted complete domination. Please do not twist history.
28/08 15:52:43

shardik wrote:
'Mein Kampf' becomes bestseller in Turkey
Publisher: 'The times we live in have a definite impact on sales'http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=43380
28/08 15:55:55

cheekhiaw wrote:
The victors had conveniently blamed Hitler for WWII. But history shows that the seeds of WWII was sowed by the victors of WWI i.e. the British, French and Americans.

The Versaille Treaty for Germany's surrender in WWI exacted huge reparations (contrary to expectations set to the Germans by the Americans) that resulted in super-high inflation.

John Maynard Keynes the famous economist who represented the British Exchequer in that event resigned in compassionate protest over its unreasonableness. The super high inflation arising from that and the great depression set the ground for extreme German views/actions.

Germany fought WWI because she was a new nation and wanted a share of the colonial pie dominated by the older powers. By end 19th century, Germany was only 30 years old but its economic might (along with US) was second only to Britain.

Lord Balfour the British Foreign Secretary in WWI was recorded to have suggested years before to the Americans that they should start a war with Germany so that they could 'maintain their standard of living' i.e. to whack Germany to keep it from challenging them.

During WWI the same Balfour (a Jew) issued the Balfour Declaration on behalf of Britain which made public the British government's support for the creation of a Jewish state in Palestine in return for financial support for the war from the Jews. That 'letter' was addressed to a certain Lord Rothschild of the financial world.

According to historian Paul Kennedy, access to cheap financing is 1 of 3 key factors that decide the outcome of modern wars. This is why the Germans hated this other group of people so much.

Thus the final collapse of the British empire was partly the result of their own insidious actions and not just the challenge of upcoming powers Germany and Japan.

We should therefore thank the British themselves.

The Israelites do that. Which is also why they can afford to be so arrogant towards the Palestinians.
28/08 16:01:34

cruzeiro wrote:
Hey AJ,I think it was rather unfair.

You should've said that it was Roosevelt, as the British could've easily held on to Malaya with all it's riches. There were enough turncoats who benefited directly or otherwise from the colonization, to perpetuate it. After all, the questions of Malayan Union, and the muted resistance, came about after WWII, becos of the conditions imposed on the British by Roosevelt and Gang!So it was Roosevelt, AJ. Or else, we might be worshiping the Hirohito, and saluting Japs today.As an alternative, you could probably thank and give some credit to the Jewish lobby/ bankers who had vested interest in an open market!
28/08 16:01:36

farouk wrote:
You mean to tell me, the British DIDN'T give us independence because they thought we were matured and capable of running a soveriegn state? ;)
28/08 16:01:55

shardik wrote:
In any case the Brits were bankrupt, sapped up and their manpower drastically reduced after the war. They did not have the energy to hold on to their colonies. They needed to rebuild the home country and it made more economic sense to decolonise.
28/08 16:03:51

cheekhiaw wrote:
To see who we should really thank for the outcome of WWII, we should compare the price each country paid in lives of its people.

3 nations had more than 10 million casualties each (Russia, Germany, China)

The Americans, British and French had about 1 million in total between them or about 2% of total global war casualty. [My original comment as pointed out by another blogger is incorrect:'The Americans, British and French had less than 100,000 each.']

The Americans and British sat out of most of the war and pretended to fight Germany in Africa, and moved into Europe only after the tide of war there had already changed. Thanks to the East Europeans/ This is why world leaders had the 60th anniversary of the end of WWII in Russia 2 years ago.

As to Asia, China paid the highest price and the Americans won it on the cheap via the bomb. During most of the war, China was left pretty much to its own. Those who brandish small crooked knives around town here should note this.
28/08 16:13:47

cruzeiro wrote:
Shardik,I don't think they would've, had they not been forced to do so by "Roosevelt"- what more, when they needed even more wealth to rebuild their economy!In fact they were looking for reasons not to give the Independence.Malaya with its tin and Rubber which were prime commodities, would've helped a lot, with little cost on their part.
28/08 16:14:05

theantijihadist wrote:
Cheekhiaw's WW2 casualty stats are a little off.The UK's casualties for WW2 are estimated to be 450,000. The US is a bit less (~420,000) and France 562,000. These stats include both military and civilian deaths.

Source: http://en.wikipedia.org/wiki/World_War_II_casualties#Casualties_by_country
28/08 16:18:39

shardik wrote:
In fact they were looking for reasons not to give the Independence.Malaya with its tin and Rubber which were prime commodities, would've helped a lot, with little cost on their part.
________________________________________

Even after independence, they were able to hold on to these through the various companies. Only after `69 were things to change.But by giving independence they were able to concentrate on developing the home country. Though the emergency and konfrontasi did hurt some in addition to keeping the Overseas Forces in M`sia.If they had to monitor the whole country their expenses would have been much much greater.In fact the pullout of Allied Forces in `67 hurt the m`sians much more. States like Malacca/Negeri Sembilan/Penang suffered badly.
28/08 16:22:43

rakyatmalaysia wrote:
anyhow, this bastard did talk something sense here. Maybe its an advice to the malaysian.

“We have only to kick in the door and the whole rotten structure will come crashing down.”— Adolf Hitler
28/08 16:25:27

shardik wrote:
Recurrence of the night of the long knives?
28/08 16:28:27

shardik wrote:
and moved into Europe only after the tide of war there had already changed
____________________________________

And what changed the tide of war?
28/08 16:30:25

cheekhiaw wrote:
Russia since it is still not obvious.
28/08 16:46:40

shardik wrote:
How silly of me. N the allies were just as you obviously put it `sat out of most of the war and pretended to fight Germany in Africa`.
28/08 16:59:15

cruzeiro wrote:
Even after independence, they were able to hold on to these through the various companies. Only after `69 were things to change.
============

Of course.I was talking about the events prior to Merdeka ..... the Malayan "resistance/ independance" movement was virtually non-existent or puny at best, compared to that of countries that had to literally fight for it to the very end, like India.They could've held on if they wanted to, without breaking sweat - but with India gone, it (the refusal for independence) probably just wasn't worth it anymore.The trouble of 5.13 was an event that was anticipated by the British, in their absence. They were quite aware of the workings of the "powers" in the alliance, that took on the role of the "new Tuans".But that's another story .....At the end of the day "we" reaped the harvest, of a series of world events without paying a price (relatively speaking).That is why, some people are today quite while stupidly arrogant about "supremacy", demand to rob the nation blind, using all avenues at their disposal - and the real victims, in their ignorance, are actually cheering them on as the true champions!
28/08 17:17:11

cruzeiro wrote:
shardik wrote:How silly of me. N the allies were just as you obviously put it `sat out of most of the war and pretended to fight Germany in Africa`.
=============

Yes shardik - the Nazis despite having some "bite" when they faced US/UK, were already quite a spent force by then after the Russian campaign. The US/ UK forces were largely against the "kids" on the western front, compared to the Eastern front - but they were still quite potent ....
28/08 17:23:54

LChuah wrote:
cruzeiro wrote:> the Nazis despite having some "bite" when they faced US/UK, were already quite a spent force by then after the Russian campaign.]]Stalingrad - the mighty struggle of the Soviets will be remembered for all time. Sitting out "of most of the war" was the West's strategy: American opinion shapers were openly calling for the Germans and Russians to finish each other off.
28/08 17:36:07

shardik wrote:
I think it was the Russian winter that really wrought havoc. The allies in that sense learnt from Napoleon`s similar disaster in Russia.Also on the Western front the only country left was an extremely weakened Britain. In fact, if I remember correctly the Treasury was empty, cept for 50,000 pounds of gold belonging to the Belgian Govt. which was borrowed by the Brits.Things only began to change when the US declared war on Germany in Dec.`41.As for the Desert Campaign I hardly think it was just a simple matter of `sat out the war`. There were British/Indian forces for instance in the siege of Tobruk and other battles.It was attrition on a massive scale which depleted the German forces (despite Arab assistance).There were the Desert Rats operating behind German/Arab lines. Then of course there was El Alamein. So slowly the Germans were rolled back.
28/08 17:39:37

cheekhiaw wrote:
Sowly is the keyword. That's another way of saying what we meant.
28/08 17:45:22

shardik wrote:
cheekhiaw:If you go to the top [navigation] click `admin` n then click `browse your comments`, you can edit or delete your comment.
28/08 18:02:48

cheekhiaw wrote:
shardick, thanks. take care.
28/08 20:35:25

007zain wrote:
.Deii!!! India also!! Indonesia, too!!=>
BIG DEAL!!!!!!!
GOD SAVE MALAYSIA!!!.
28/08 21:33:54

suv wrote:
Ya,in a way,Hitler helped to destroy Imperial Brits,
butwe must oso remember Brits gave dominion status to Ireland well before WW11(which led to full independence),

and Brits were willing to give dominion status to India oso (Stafford Cripps mission) but Gnadhi as usual f*ked things up
28/08 21:45:33

A Merdeka Dream

Poem posted in Malaysia Today site and comments arising

27/08: A Merdeka Dream
Category: General Posted by: Raja Petra


by Joseph David

Fifty years of freedom
We celebrate with joy today
A rich and peaceful kingdom
We hear the whole world say

We remember all the warriors
Who gave lives with no ease
Let’s look beyond all barriers
And learn to live in peace

Our leaders gave us vision
That we may walk the path
Let there be no contention
That makes way for wrath

The future lies in our hands
To bear the torch and lead
Let no man go with hunger pangs
Because of pride and greed

Malaysia, O Malaysia
How I wish you well
To be the light of Asia
Let the future with pride tell


Comments


krisingh1 wrote:
Hidup UMNO!
Hidup UMNOputera!
Mana ada Bangsa Malaysia!
27/08 09:43:28

smeagroo wrote:
MErdeka's dream? Wake up late and go party with friends for a get together and tell them how corrupted the govt is and we can hv a laugh. JUst another holiday to me. When my son saw the 6 jet planes fly by this monring, i told him that's our PM going for his holiday again.
27/08 10:32:08

hakim abdullah wrote:
Fifty years of freedom?
you must be confuse I say
A corrupted Animal Kingdom
that's what you'll hear us say

who remembered the warriors
all hidden from public eyes
If they are not with Umno
they all deserve to die

our leaders gave us lesions
from bottom and on our head
what is there to walk
when we all have no legs

What lies in UMNO hands
is blood, pride and greed
It matters not to them
unless it is their own shit

Malaysia, O Malaysia
How I wish you can tell
with our current ministers
we are all marching to hell

27/08 10:34:04


jabins wrote:
hakim abdullah "You Said It Well!!"
The undercurrents brought to the surface!!!
27/08 12:24:47

raven1958 wrote:
Enough.....Merdeka day this year must be treated as a funeral and everyone must where a black arm band..........
27/08 13:50:20

sampalee wrote:
Nice word without facts is simply bullshit.It is definately bullshit that malaysia is light of asia,when malaysians are living in darkness.
27/08 15:37:15

jules wrote:
.FLY THE FLAGS UPSIDE DOWN............
27/08 20:00:53

msiaman wrote:
Not trying to be racist here but UMNO knows that Indian are the most obedian. However opressed, they still can sing praises for the ruling dogs.

Makes you wonder where Namewee was staying. He must have been left out in the slump of the country or this writer is a real dreamer. Maybe someone should slap him out of his dreams!
27/08 22:50:58

qwerty wrote:
Fifty years of freedom
To plunder, rob & rape
The treasurys’ ours to keep
Nary a fart hoi polloi

We remember all the warriors
We slaughtered with schemes & lies
Those we could not kill, we bought.
For it’s said, everyman has his price.

Our leaders gave us vision
From outside looking in
As UMNO & cronies with feast galore
We waited for crumbs they kindly tossed.

The future lies in our hands
To bear the cost of living skyward bound
Families feasting on garden escargot
Burnt to death TENAGA bills not paid

Malaysia. O Malaysia
If only you could speak
“Have you not heard, Am now the Sickman of Asia.
Heck, 50 years of crap I am calling it quit!"

<><><><><><><><><><>
Apology to Joseph David.
Just couldn't stomach your poem.
Read that Dato Zakaria got off scot free YET AGAIN! He has more lives than a cat! That's 50 years of Merdeka for you.

Smell the coffee.
Cheers.
27/08 23:19:54

Graham Stone wrote:
Merdeka A Wet Dream, or reality!!!!

You have the vote!....so it's up to you!

No use blogging about it...do something!
28/08 01:11:32

Graham Stone wrote:
malaysiakini...

Prime Minister Abdullah Ahmad Badawi has today for the first time said that Malaysia was an Islamic state and not a secular state.
28/08 01:38:44

TheWrathOfGrapes wrote:
.A Merdeka Nightmare.

Fifty years of fiefdom
We endured with toil
Untold riches for UMNOdom
But not for the hoi polloi.

We remembered the fake warriors
Who waved their crooked keris
And barked like bull terriers
Trying to disrupt the peace.

Our leaders gave use nightmares
NEP, Islamic state, Ketuanan Melayu
Challenge us – don’t you dare
Racial harmony? – it had gone askew.

The future is careening out of our hands
No one is leading; no one bearing the torch
What’s happening to this resource-rich land,
That’s being ranscked, plundered and scotched?.

Malaysia, O Kesal Malaysia
From almost an economic tiger
That vision is now blurred
Reality is – you are now the sick man of Asia.
28/08 10:29:50

Hockchew wrote:
Ape tu Merdeka?<<>>
28/08 11:46:05

harimau kayu wrote:
Brethren and all,

There is no secret in all these. The people are fed up with the corrupted and lying BN government led by a sleeping Bodowi and a womanising Najis!! Phui..phui...phui!! you lying busturds..may you rot in hel..

We want a free and independent country,
we want discrimination to be eradicated,
we are a secular state not an islamic one..
we want an independent judiciary..
we want meritocracy
we want an honest and fair police force

Is that too hard to understand..you muter phuckers!! Stop the corruption. Start managing the country.

The time for pro-active action is NOW. If you are pissed with this corrupted government embezzling millions of Rakyat's money, then you should march for peace and democracy on 31st August.

Saudara saudiri dari semua kaum, Bergerak la pada Hari Merdeka, bukan meyambut Merdeka..tapi untuk Protest against the Government.

31st August - Let's rumble in the streets of Malaysia
31st August - End of the corrupted BN government
31st August - End of NEPotism and Cronism
31st August - End of Mediocracy
31st August - End of Police state
31st August - Restoaration of an independent judiciary
31st August - Restoration of freedom of speech
31st August - Restoration of freedom of religion!!

Brethren of all races (not just Chinese), do you have the balls to act for the betterment of Malaysians??
28/08 12:23:53

cheekhiaw wrote:
Hi fellow Malaysians with poems of many kinds,

Celebrate Merdeka Day anyway you wish but please note that the day has nothing to do with the people that led or are leading the country. Let's not mix them up.

We all has the right to make the day special in our own ways with our dreams, aspirations, cynicism, criticisms and all.

But let's not lose hope of a better future. For when we lose hope we forsake our souls and human decency which I am sure is not in the spirit of this site.

This land is still special and perhaps even sacred too to us in our own ways.

Let's use our combined intellect, compassion and endeavor to help build a better future.

That can best be done if we reach out to each other in a positive manner and not be ruffled by the slightest or frivolous misgiving or disagreement.

Let's direct our dismay and anger at the culprits likewise and conduct ourselves with the dignity and decorum our hopes and this site deserve.

Then we can say that we are indeed different and on a higher plane.

All the best to you all.
28/08 21:17:45