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Friday, 27 January 2012

Obama and Bernanke: Cooking Up Another Market Bubble?


BY James Marshall Crotty, Forbes Contributor
 
"Ben, look. You have to keep interest rates low or I am toast, dude."

The two most important leaders on planet earth each delivered major public speeches in the last 24 hours. Last night U.S. President Barack Obama, in what might be the last State of the Union address of his political career, suggested that the economy is improving, unemployment is heading down, the world is safer, and America’s standing in the world vastly improved all because of his administration’s policies. In a press conference this afternoon, Federal Reserve Chairman Ben Bernanke (by far, the most powerful non-elected person on the planet) delivered a more cautious assessment, suggesting that improved economic conditions, including decreased unemployment and steadily low inflation, will be affected by what happens in Europe and in the broader non-U.S. global economy (hint: China). Today’s upward rise in the U.S. stock market suggests that investors believe both men might be right. That is, there will be economic headwinds, but the U.S. will manage those headwinds well.



Just to make sure, Bernanke signaled that the Fed would keep interest rates low at least through 2014. This is unhappy news to America’s savers and the rabidly anti-Fed Ron Paul (who believes Fed money printing is the root cause of our economic malaise), but music to the ears of investors, new homebuyers, and for what Obama terms those “responsible homeowers” seeking home refinancing (who will now pay a 30-year mortgage rate of just 3.88%). Who knows, maybe housing principal forgiveness is on the way too (ah, heck, throw in a toaster while’s you’re at it).

But, with such initiatives, are Obama and Bernanke just cooking up another housing and market bubble to go along with the current student loan bubble?

What are your thoughts on Obama’s State of the Union and the Fed Chairman’s news conference today? Are things slowly getting better? Will we be able to manage the turmoil in Europe and a slower growth China? Will their remedies make the U.S. economy stronger long-term?

Or are these two men missing some elephant in the living room?

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Thursday, 26 January 2012

‘Trillionaire’ Emperor mocked by Netizens!

kamal2

Kamal Ashnawi's tale draws scorn and sarcasm from online community

P. ARUNA aruna@thestar.com.my The Star/Asia News Network

PETALING JAYA: The Tanjung Malim-born, who claims to be a “trillionaire” and the owner of treasure stashed away in a secret cave, has got the online community buzzing about his proclamation of royalty, too.

Most of the comments were scornful and sarcastic, with many calling Kamal Ashnawi the creator of a mighty tall tale.

In response, Kamal said he was not surprised by the negative reaction, saying the “common people” would soon see evidence of his claims.

Facebook user Khairul Nizam Anuarul Hakim said Kamal’s story was illogical and compared it to popular Japanese comic character Doraemon.



“The story of Doraemon seems more logical than this guy’s story,” he said.

Kamal, 48, a Dutch citizen, claimed, in an article published in The Star yesterday, that he was a descendant of royal families in China, India, Java and Siam.

He said 86.7% of the money in the world belonged to him as he had treasures hidden in a three-metre-high cave, with gold bars stacked up like a pagoda, US$15mil (RM46mil) in jade and US$10mil (RM31mil) in diamonds and stacks of US dollars.


kamal_namecard

Kamal, who hopes to be recognised as the Emperor of Indonesia soon, claimed that the treasures belonged to the dynasties that ruled China, and that there was more in other mountains and vaults all over the world.


He had shown documents, allegedly from a London branch of HSBC, to prove that he has five trillion euros (RM20 trillion) in an account there.

Kamal said he had come forward because there were too many false claims by others who said they were owners of the royal assets.

Both the local and London branches of HSBC bank declined to verify Kamal’s claims, citing confidentiality.

Acting Indonesian ambassador Mulya Wirana said they had heard of others making such claims but “nothing of this magnitude”.

“There have been many others who have made claims about treasure belonging to Indonesian royalty and they have all turned out to be fake,” he said yesterday.

Mulya added that his government had never heard of Kamal but said he would look into the claims.

Related post:

A 'trillionaire' descendent of the Emperor of China is the ‘Emperor of Indonesia’?

Will China's rise shape Malaysian Chinese community?



Khoo Boo Hong of the Leong San Tong Khoo Kongsi clan associations in Penang, Malaysia. Khoo Boo Hong says overseas Chinese are no longer seen as the rich ones
 
In Malaysia's northern state of Penang, a distinct shift is being felt in the immigrant Chinese community, as it rides the wave of China's economic rise.

The Leong San Tong Khoo Kongsi, one of the richest clan associations, used to send money back to their ancestral home in Fujian province, China.

But that is changing as places like Sin Aun, a fishing village that the clan members' families hail from, are now bustling and have no need for money sent from overseas.

"In the past, overseas Chinese were seen as more wealthy but now the Chinese from China are even richer than us," says the clan association's Khoo Boo Hong.

Indeed, Chinese money is becoming more visible in Penang. A bridge that is currently under construction is being partly financed by a cheap loan from the Chinese government. The 4.5bn Malaysian ringgit (US$1.4bn) project is set to be the longest bridge in South East Asia, stretching 24km (15 miles).

The Chinese community in Malaysia acts as a bridge for business opportunities in China. The Chinese community in Malaysia acts as a bridge for business opportunities in China.
 
In 2010, Malaysia was one of China's biggest trading partners from South East Asia. Two-way trade hit 147bn Malaysian ringgit (US$46.3bn) last year, with a push to more than double that amount by 2015.

'Special relationship'
 
Much of the trade has been established by the Chinese Malaysian community, says Oh Ei Sun, the former political secretary on Chinese affairs to Prime Minister Najib Razak.

Malaysia was the first South East Asian country to form diplomatic ties with China in 1974.



China's diaspora

  • First major emigration in 14th-16thC by traders and seafarers
  • Colonial powers used Chinese as labourers in SE Asia and the Americas
  • But also have reputation for business success
  • There are about 30m overseas Chinese in total
  • Indonesia and Thailand have the biggest numbers - 7-9m each (estimates)
  • Singapore has the highest concentration - 3m, or 75% of its population
As a result the two countries have a special relationship, and the Chinese in Malaysia have tried to exploit this kinship by developing business ties with China, says Mr Oh.

The Chinese began arriving on Malaysian shores in the early 15th Century. Today, they make up 24% of a population of 28 million, and have always been more prosperous than other ethnic communities.

According to a 2011 Forbes magazine list, eight out of the top 10 richest Malaysians are ethnic Chinese.

This wealth imbalance has fuelled long-standing resentment among the Malay majority. It erupted into deadly race riots in 1969 - violence that two years later led the government to implement an affirmative action plan called the New Economic Policy.

This gave ethnic Malays and indigenous groups privileges over the Chinese and Indians, such as cheaper housing, priority in university scholarships and civil service jobs. The policy officially ended in 1990 but it has been succeeded by similar plans.

Businessman Lim Cheah Chooi hires Malaysian or Singaporean Chinese managers for his factories in China Lim Cheah Chooi hires Malaysian or Singaporean Chinese managers for his factories in China
 
"The quota system is still in place on so many levels," says Teo Nie Ching, a lawmaker from the opposition Democratic Action Party. This limits job prospects for Malaysian Chinese in certain businesses, including listed companies, she says.

"After so many generations [the Chinese] still feel that we are second class citizens," Ms Teo says.
Analysts say this sense of alienation has made many Malaysian Chinese look for opportunities elsewhere, including China.

Speaking the language
 
As the Chinese economy opens up, Malaysian Chinese act as a bridge because many are educated in the United States or Britain but they can also understand the Chinese language and culture, says Lim Cheah Chooi.

His engineering firm, Unimech Group Berhad, has production factories in China, but he employs Malaysian or Singaporean Chinese at the middle management level.

This is something you see even among local Chinese companies who export to the West, says Mr Lim.

"How many people can say they speak Mandarin, multiple Chinese dialects, Malay and English? Most Malaysian Chinese can," he says.

This advantage is maintained because of Malaysia's multilingual education system. Ethnic Chinese and Indians can choose to study at the primary level in their mother tongue.

With the rise of China, more and more people, including non-Chinese, want to learn Mandarin, says Yong Yeow Khoon, CEO of the Chinese-language newspaper Guang Ming Daily in Penang, who is also a board member at an independent Chinese school.

The number of non-Chinese in Chinese vernacular schools is estimated to have grown to over 60,000 over the last three decades.

Even the Malay prime minister has sent his son to learn Mandarin at the Beijing Foreign Studies University.

Optimists point to this as a sign of increasing acceptance of Chinese culture by the Malay community. But some say this is wishful thinking.

Attitude change?
 
Although the government has been pushing for national unity through the 1Malaysia slogan, analysts interviewed by the BBC do not believe that there is a fundamental change in attitude towards the Malaysian Chinese.

Economist Cheong Kee Cheok, who used to work for the World Bank, says some Malays do not distinguish between the Chinese from China and the ones from Malaysia.

"Malaysia in some ways is hostage to its own politics," says Mr Cheong.

He also says that Malaysia needs to be more aggressive in accessing the Chinese market. It may have had a head start in China, but "unfortunately...never used this advantage".

He believes much more can be done to facilitate relations between the two countries. At the moment most businesses who get into China are through the individual efforts of Malaysian Chinese businessmen, he says.
He says Malaysian leaders are not serious about China's rise.

The latest visit from Chinese premier Wen Jiabao in April could lend credence to this theory.

Malaysian blogs were filled with complaints about the grammatical mistakes on the welcome banner put up for Mr Wen in Chinese, suspected to be roughly translated from Malay.

Interpretations vary but the Chinese banner read: "Official welcoming ceremony, with him together his Excellency Wen Jiabao official interview Malaysia."

Many comments on Lowyat.net forum said that was shameful, given that ethnic Chinese people form the second-largest population in this multi-racial country.

"What do you expect? No Chinese working in government," wrote automan5891.

Related post:

Chinese, and truly Malaysian?

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