What Causes Inflation?

Mortgages and Financial Stability Over 140 Years

New work by Jordà, Schularick and Taylor highlights the role of mortgage finance in the financialisation of advanced economies. It also reveals that real-estate lending booms are mainly responsible for financial crises and weak recoveries. I'm broadly sympathetic to their findings. In my new book Banking in Crisis, the role of mortgage finance in the demise of UK banking stability is highlighted. But I also highlight why banks have become addicted to high-risk mortgage finance. First, there is an absence of proper incentives which keep bankers honest. Second, it is in the interest of the political elite to let banks engage in risky mortgage financing.

For 17 advanced economies
Source: http://www.voxeu.org/article/great-mortgaging

What is Bank Capital?

Here is a nice post by Simon Johnson on what bank capital is and what it is not. Johnson is an advocate of higher capital requirements for banks. In my new book Banking in Crisis, bank capital plays a very important role in contributing to pre-1940 British banking stability and its absence played a major role in the 2008 financial crisis. 

Dollar Still Firm

The US dollar gained against most of the major foreign currencies last week, but the overall tone, leaving aside the yen, was largely consolidative in nature. The greenback was soft in the first half of the week but recovered in the second half.

The Australian and Canadian dollars were the only major currencies that managed to hold onto some of their gains (0.55% and 0.40% respectively). The yen was the weakest of the majors, losing 1.2%, as the panic from the week before died down. Equity markets were mostly higher, with the Nikkei's 5.2% rise, leading the major markets. US 10-year Treasury yields rose 8 bp. Core bonds generally traded heavier, but European peripheral bonds were firmer, in line with the calmer conditions.

We were never persuaded that last week's turmoil would prevent the Fed from completing its tapering operation, and see that in the market, cooler heads are prevailing. Talk of "tapering the tapering" has diminished, and no one is taking too seriously the prospects of QE4. Nevertheless, we note that both the December 2015 Fed funds and eurodollar futures contracts were unchanged on the week at 46 bp and 77 bp respectively.

Perhaps offsetting the diminished interest rate support for the dollar has been speculation that more action from the European Central Bank and the Bank of Japan could be imminent. Reports suggested that the ECB may consider adding corporate bonds to its asset purchase program. There were also report suggesting that the BOJ sees risk that inflation may fall, and this could prompt an extension of the already aggressive Qualitative and Quantitative Easing. We are skeptical that either will materialize in the coming weeks. The BOJ meets next week and the ECB the following week.

Technically, the euro looks poised to continue to consolidate. Most of last week's price action took place within the $1.2625-$1.2886 range set on October 15. In recent session, the euro flirted with the lower end and slipped to about $1.2615. The euro spent the second half of the week below the 20-day moving average, which comes in near $1.2690. This is the nearby cap. Of note, the nearly four-cent bounce in the euro has not been accompanied by a sharp change in euro positioning The confidence of the euro bears is palpable and quite widespread.

The bearishness toward the yen was more evident in the price action than in the euro. We had identified the yen's gains as among the most exaggerated in last week's technical note. The dollar's recovery last week recouped 61.8% of its slide from the push marginally above JPY110 on October 1. It closed above its 20-day moving average in the two sessions before the weekend for the first time since early this month. The RSI has been recovering, and the MACDs have now crossed higher. The risk is that the speculation of more action by the BOJ is getting ahead of itself. This may help cap the dollar, where a trendline drawn off the early October highs comes in around JPY108.70-80 next week.

From a technical perspective, sterling continues to look constructive.Bullish divergence continues to be evident in the daily RSI and MACD. It could be important that the $1.60 area largely held in the second half of last week. It appears that sterling may be carving out a head and shoulder near $0.8650. Before the weekend, the aussie tested both sides of the pattern. It closed firm, in an outside day, though off its high and just below the previous day's high. This is still impressive because of increased speculation that the central bank is considering cutting interest rates. This chart pattern is notorious for false breaks, and the technical indicators do not appear to be generating strong signals.

The US dollar pulled back against the Canadian dollar to challenge the past month's uptrend. It is found near the 20-day moving average, just above CAD1.1210. The US dollar could not get back above CAD1.13 in the first half of the week and came down to test CAD1.1180-CAD1.1200 in the second half of the week. It has been unable to close below the 20-day average for a month. The MACDs are turning lower, though the RSI is in neutral.

The US dollar has also been riding the 20-day moving average higher against the Mexican peso. It comes in now near MXN13.48. The greenback has lost some momentum in recent day but has not pulled back from the highs very much. There is no compelling technical evidence to conclude a dollar top is in place.

- Marc Chandler

Cooking With Dali - Very Spicy Sweet & Sour Lamb

I think I had versions of this dish in many older Hakka establishments or those who cooked for colonial masters during their time.I have not had a decent one for a long time, so I tried to dissect the dish on my own. 

Its my own recipe, so you can tweak it as you like ... but let me tell you, its very very goooood!!!

I use lamb shoulder as it is more flavorful when you fry them or stew them. Ask your butcher or supermart guy to cut it into small pieces for you.

This is the list for making the sauce: vinegar, Lingam's chilli sauce, tomato sauce and chicken broth.

Pick and choose your veggies, I used large onions, red onions, capsicums, cherry tomatoes and bird eye chillies.

Use Lea Perrins to fry the lamb on a non stock pan for 3 minutes each side, adding Lea Peerins before they dry out.

I use Pomegranate juice for the sauce base, or you can use pineapple juice, but I always have pomegranate juice in my fridge... so ...

Fry 3 minutes each side and sprinkle a touch of sea salt, set aside.

The soft ones, cherry tomatoes quartered and chillies diced.

The hardier veggies, brown the onions first in a bit of oil, mid-low fire for 3 minutes. Then add the capsicum and stir for another 3 minutes. Put in half a cup of chicken broth and stir fry till almost completely dry.

The sauce is up to you. I poured in half a box of chicken broth. Half a cup of vinegar, Half a small bottle of ketchup. Three big spoonfuls of Lingam chilli sauce (or as much as you want for fire in your mouth... 3 spoons are a lot already). Add one cup of pomegranate juice or pineapple juice. Add two big spoonfuls of sugar... stir and taste and boil for a couple of minutes. You can add any of the above to tweak to your taste.

Add  a couple of tea spoons of corn starch with water to thicken sauce. Then put in all the veggies, plus tomatoes and chillies.

Add in the lamb, let it stew on medium flame for 10 minutes ...

You are good to go ...




(p/s kids will love this dish with rice, just substitute chicken pieces for lamb, remove all chillies and the Lingam sauce)













Previous manly cooking recipes:

CURRY PORK RIBS
http://malaysiafinance.blogspot.com/2013/08/cooking-with-dali-curry-pork-ribs.html

DRUNKEN CHICKEN
http://malaysiafinance.blogspot.com/2012/09/cooking-with-dali-drunken-chicken.html

BRAISED SPICY GARLIC FISH HEAD
http://malaysiafinance.blogspot.com/2013/09/cooking-with-dali-braised-spicy-garlic.html

PIG TROTTERS VINEGAR GINGER BROTH
http://malaysiafinance.blogspot.com/2012/09/cooking-with-dali-pig-trotters-vinegar.html

Dr Tareq Suwaidan's View

Ridiculous to stop non-Muslims from using ‘Allah’, says Muslim Brotherhood leader

BY MOHD FARHAN DARWIS

Published: 19 October 2014

Kuwait's Muslim Brotherhood leader Dr Tareq Suwaidan says there are many examples in Islamic history which shows that non-Muslims are not prohibited from using the word 'Allah'. – The Malaysian Insider pic by Nazir Sufari, October 19, 2014.Prohibiting non-Muslims from using the word "Allah" is ridiculous, says Kuwait's Muslim Brotherhood leader Dr Tareq Suwaidan.

He said this was because there was no law or ruling within the Islamic realm which prevented the use of the word by non-Muslims.

"I have been following this development in Malaysia, this use of the word 'Allah'... there is no law in Islam that says so," he told a forum organised by PAS international committee last night.

He noted that there were many instances in Islamic history where non-Muslims had been encouraged to use the Arabic word "Allah".

"Do not be confused, this is just wrong, I have hundreds. No, thousands of proof on this," he said, in front of a crowd of 100.

His comment came after an Indonesian scholar Dr Ulil Abshar Abdalla waded into the “Allah” controversy, saying Muslims who believed the word was exclusive to Islam were “confused”.

Ulil, who was denied entry into Malaysia this month for allegedly opposing its Islamic stand, said Muslims did not have a monopoly of the word “Allah” as it was a general term to refer to God.

“The term ‘Allah’ comes from two words which are ‘Al’ ‘and ‘Ilah’ which means God.

“If we mention the word ‘Allah’, it is translated as God. The people of Mecca also used the word ‘Allah’ before Islam came,” he had said.

Tareq and Ulil's view of the “Allah” controversy echoes that of Muslim scholars and clerics, both locally and worldwide, who have criticised the ban of the use of the word among non-Muslims here.

Even the United Nations Special Rapporteur on freedom of religion and belief, Heiner Bielefeldt, had said that many Muslims were of the view that the court ruling undermined the credibility of Islam, in a reference to the Federal Court decision that the word “Allah” could not be used in the Catholic publication, Herald, on grounds it was not an integral part of Christianity.

Earlier this month, evangelical denomination Sidang Injil Borneo (SIB) obtained leave from the Court of Appeal to seek a declaration that the word “Allah” could be used in Christian publications.

A three-man Court of Appeal bench, chaired by Datuk Rohana Yusof, said the Federal Court held that the September 14 finding that “Allah was not an integral part of Christianity” was a mere passing remark.

Among the groups which have defended “Allah” as exclusive to Muslims are Malay rights group Perkasa and Ikatan Muslimin Malaysia (Isma).

The “Allah” row started in 2008 when the Home Ministry threatened to revoke the Herald’s newspaper permit, prompting the Catholic Church to sue the government for violating its constitutional rights. – October 19, 2014.

- See more at: http://www.themalaysianinsider.com/malaysia/article/ridiculous-to-stop-non-muslims-from-using-allah-says-muslim-brotherhood-lea#sthash.Y7apqsfb.2ML4r9nZ.dpuf

Powerlessness and the Crisis

Paul Mason has a nice article on how the on-going crisis has imbued many with a feeling of powerlessness. Crisis is the new state of economic being and there is absolutely nothing we can do about it. We therefore become resigned to crises and increasing inequality. Mason raises interesting questions about the long-term consequences of powerlessness and he also alerts us to the dangers of powerlessness by pointing out how the rise of fascism, nationalism and Hitler quickly followed the crisis of the 1930s.

NEW Fund: Eastspring Investment Asia Pac (ex-Japan) Target Return

Continue looking good on the global outlook, particularly Asia Pacific region as the direct beneficiary of global economic recovery, this new fund would invest into those companies based on its attractive intrinsic value.

However, the road to recovery is not as straight-forward. The recent market sell down is a very good example. Market volatility was another concern for investors, which many of us cannot stomach it. Any solutions for that?

Yes... with this new fund...

The Eastspring Investment Asia Pacific (ex-Japan) Target Return fund aims to provide investors with at least 8% per annum growth over medium to long term whilst managing the downside risk of investments in Asia Pacific (ex-Japan) region.

By employing a value investing strategy, the fund aims to deliver the return regardless of market conditions. The fund manager when managing these type of portfolios will strike a balance between achieving capital appreciation and mitigating downside risks.

In general, the fund manager will strive to keep the volatility of the fund below that of the overall market.

How the fund can mitigate the market volatility?

1. First, the fund is managed based on value investing, which looks at companies with sustainable business models that are trading at a discount to their intrinsic value.
   
   
2. Second, the fund's portfolio is unconstrained (not based on benchmark index), allowing fund manager the flexibility in identifying and implementing most optimum investment strategy.

Click here to download the fund prospectus.

The Psychological Cost of the Great Recession

We all know about the effect of the Great Recession on wages and wealth. But what about its impact on psychological well-being? Jan-Emmaneul De Neve of UCL has worked on this area and in the video below he explains how recessions affects our mental well-being. His basic message is that because we weight economic losses more than economic gains, recessions can have a large effect on our well-being.

 

History of Inflation

Democracy would see poor people dominate vote, CY Leung saysas he initiates his own seppuku

Wow... I thought Malaysia had a stranglehold on politicians making the silliest comments. Now we have some competition. Hong Kong's Beijing-backed leader Leung Chun Ying told media that if the government met pro-democracy protesters' demands it would result in the city's poorer people dominating elections.Hence, you cannot run a HK democracy and that free elections were impossible.



Conclusion and side-admissions:
a) the poor people know nothing in HK/China
b) the other 50% deserve less than a vote per person as citizens
c) the poor do not know what's best for the country
d) HK only serves the rich and powerful, otherwise how did we get here
e) you, the other 50% are basically screwed and I am telling you in your face
f) poor people, you are Fucked and Fuck You

This is almost like the political crisis in Thailand, in that the poorer rural folks side with the ousted Thaksin and his cronies, while the city folks think that Thaksin is the devil incarnate and that the rural folks are stopping genuine demands for liberation and freedom from cronyism and excessive corruption.

Anyway, back to CY Leung:

"If it's entirely a numbers game and numeric representation, then obviously you'd be talking to the half of the people in Hong Kong who earn less than US$1,800 (S$2,250) a month," Mr Leung said in comments published by the WSJ and INYT.

Mr Leung's latest comments are likely to further fuel the anger of protesters who see him as hapless, out of touch and pandering to the whims of a small number of tycoons who dominate the financial hub.

("Gee... I am royally fucked by what I said" ... "must go to Chinese medicinal shop and ask for cure for foot-in-my-fucking-mouth disease")

His quotes also echo that of Mr Wang Zhenmin, a well-connected scholar and regular advisor to Beijing. Mr Wang said recently that greater democratic freedom in the semi-autonomous city must be balanced against the city's powerful business elite who would have to share their "slice of the pie" with voters.

"The business community is in reality a very small group of elites in Hong Kong who control the destiny of the economy in Hong Kong. If we ignore their interests, Hong Kong capitalism will stop (working)," he said in August.

If it’s entirely a numbers game – numeric representation – then obviously you’d be talking to half the people in Hong Kong [that] earn less than US$1,800 a month,” he said in reference to the median per capita wage. “You would end up with that kind of politics and policies.”

Equity Strategy

 A decent piece of research overview from KAF.

Following lacklustre trading for most of the year, the FBM KLCI has broken down in the past month. The sell-off was sparked by concerns over weaker global growth and collapsing oil prices. Although the oil price decline is a concern, we think the risk on the current account, in particular, is manageable. We expect GDP to be buoyed by resilient domestic demand, which should get a boost from the large scale infrastructure projects expected to begin next year. We view the correction as an excellent buying opportunity and introduce an end-2015 index target of 2,070, offering 17% potential upside.
 

Why bother?
Issues To Consider 

 ·         Another global sell-off - Although global growth expectations may have been too high a few months ago, we do not think the situation is as bad as during the European sovereign debt crisis in 2011. In fact, it is probably more comparable to the QE tapering jitters seen in July/August 2013. The FBM KLCI fell by as much as 16% during the 2011 sell-off while the correction last summer was under 7%. More importantly, the index recouped its losses in four months following the 2011 sell-off and in about a month last year, trending even higher over time. 

·         A big picture perspective - We believe the US is on a strong footing while China should deliver healthy growth albeit slower than in the past few years. The main external concern is Europe. Locally, private consumption has slowed along with fiscal consolidation, but we believe GDP growth of 5.8% this year and 5.4% next year is achievable. The 2015 Budget, while providing good follow through of last year’s reforms, also shows greater flexibility on the part of the Government now that desired results from reforms are coming through. Along with public-private initiatives, infrastructure projects worth as much as RM75bn should take off in 2015. We believe that investment activity should pick up further next year while the budgetary measures coupled with the significant infrastructure multiplier should shore up sentiment. 

·         Two key risks to key an eye on - We discuss the exuberance in property prices over the past 2-3 years and the present collapse in commodity prices, mainly Brent crude. Interestingly, we find that the country’s large surplus from energy is mainly from LNG exports, as Malaysia became a net importer of petroleum early last year. Property prices have slowed in the past three quarters but there needs to be further easing in order to prevent an unwanted accident. 

·         Good value emerges despite index target being pushed back - Despite earnings disappointments, we believe expectations built into share prices are quite modest. The market’s 1-year forward PER has fallen from 16.6x last December to 14.4x currently while ex-defensives, it is trading at only 12.9x 2015F. Following the latest sell-off amidst rising risk premiums, we are lowering our YE index target to 1,905 from 2,000. Under the assumption that Malaysian risk premia should still ease over time, we introduce an end-2015 index target of 2,070, offering 17% potential upside. 

·         Compelling entry points - Besides compelling opportunities in Banks, Oil & Gas and Technology, we highlight the resilience and growth upside of sectors linked to domestic themes such as Construction and Property. We also cover several companies trading at attractive valuations and offering strong cash generation and healthy yields that are largely insulated from external issues.

Actionable Ideas
·         We maintain a bullish stance on Banks along with Oil & Gas, Construction, Technology and Property.
·          Big-cap stocks we like are: TNB, CIMB, HLFG/HLBK, BAB, RHBC, MISC, and IJM.
·         Key mid-caps are: MSGB, UNI, PETR, MPR, WCT and SWB.
·         Five key stocks to sell are Public Bank, PPB, Petronas Gas, Top Glove and Astro.

Key Catalysts
·         Implementation of key budgetary proposals, we believe, should act as a re-rating catalyst for the market especially if there is good follow through in rolling out the slew of large projects. Also, better earnings delivery, good investment growth, some recovery in commodity prices, and resilient consumption.

Key Risks
·         The main risks are poor earnings delivery, sustained weakness in CPO/Brent prices and sharp slowdown in domestic demand. A key component of earnings delivery is the timely implementation of ETP projects and fiscal policy, in general. Sharp US dollar appreciation is also a potential risk.

Turbulent Markets

Global stock markets and commodity prices have been on a downward trajectory over the past month. Why? Markets have been spooked by mixed economic signals coming from the US and more hawkish sentiment from central banks (interestingly central bankers have rowed back on this following the turbulence - click here). They have also been concerned by the state of the Eurozone, with even Germany entering the economic doldrums. The Ebola scare has even been blamed for the turbulence of the past few weeks. However, the greatest fear in financial markets is of a slowdown in China. A slowdown in China means a fall in demand for commodities (hence the fall in commodity prices) and a fall in demand for other goods and services (even university education!). Could China's debt-fuelled construction and economic boom be coming to an end?

The Paper Sculptor

Anna-Wili's sculptures are stitched together from archival cotton rag. Her works explore the organic qualities and resistance of paper, generating a tension between the complex realism of form and the limitations and economy of the materials used. They represent animal life in an immediate way that conveys the energy, movement and physical character of different creatures. Her aim is to engineer a moment of contact with nature in a way that emphasises both the startling differences and similarities of human and animal forms and consciousness.


Born in Sydney 1980, the daughter of a Puppeteer, Anna-Wili studied Fine Art at the National Art School, Sydney. In 2008, after working as a Scenic Artist for Opera Australia, she began making sculptures independently by commission. Her works are held in private collections around the world and have featured in numerous publications.

Which Bank Survives a Crisis?

My colleague Chris Colvin, along with Abe de Jong and Philip Fliers (both of the Rotterdam School of Management), has recently published a paper in Explorations in Economic History looking at what determined bank distress during the financial crisis which occurred in the Netherlands in the 1920s. Their working paper is available here and the published version is here. Below is a video where Philip Fliers outlines the main findings of their paper.

Carl Icahn's Letter to Apple

Carl Icahn, the famous activist investor, has written an open letter to Apple's Tim Cook encouraging him to increase share buybacks and return cash to shareholders. The full text of the letter is available here.  Icahn believes that the market is undervaluing Apple's future growth potential - he seems very excited by the iPhone 6. Given Apple's huge cash pile, it makes sense for it to repurchase shares which are significantly undervalued. An FT Lex video on the Icahn letter is below.

Nobel Prize in Economics

This year's winner of the Nobel Prize in Economics is Jean Tirole. Tirole is best known as someone who has formalised (in a mathematical sense) key concepts in microeconomics and industrial organisation. Click here to read Tyler Cowen's comprehensive post on Tirole's contribution to economics. Tirole played a large role in my education. I read / studied two of his books during my graduate studies - The Theory of Industrial Organization (1988) and The Prudential Regulation of Banks (1994). Notably, both of these books have stood the test of time - as will his book The Theory of Corporate Finance (2006).

Why Oil Price Is Sagging

The respected site oilprice.com did a summary of why oil prices are sagging, but MISSED out one big factor. 

The strengthening USD over the past few weeks. Three or four months back, the turmoil in Iraq was causing some disruption anticipation to oil supply, which have been eased following the "drones strategy with partners". 

The USD has rallied over the past few weeks in anticipation of a uptrend in interest rates there, coupled with better recovery in the US compared to other developed counterparts. However, to me the strength in USD is not that permanent but rather a rebalancing and will not rise by much from hereon.

-----------------------------------------------

By Chris Pedersen for Oilprice.com

1. The U.S. Oil Boom
America’s oil boom is well documented. Shale oil production has grown by roughly 4 million barrels per day (mbpd) since 2008. Imports from OPEC have been cut in half and for the first time in 30 years, the U.S. has stopped importing crude from Nigeria.  

2. Libya is Back
Because of internal strife, analysts have until recently assumed that Libya’s output would hover around 150,000-250,000 thousand barrels per day. It turns out that Libya has sorted out their disruptions much quicker than anticipated, producing 810,000 barrels per day in September. Libyan officials told the Wall Street Journal last week that they expect to produce a million barrels per day by the end of the month and 1.2 million barrels a day by early next year.

3. OPEC Infighting 
There have been numerous reports about the discord between OPEC members, leading many to believe that OPEC will not be able to reign in production like it has done so in the past. The Saudis and Kuwaitis have reportedly been in an oil price war, repeatedly lowering their prices in order to maintain their market share in Asia. John Kingston, the news director at Platts, believes that the Saudis will not be willing to give up market share like they have done during previous price drops.

4. Negative European Economic Outlook
European Central Bank president Mario Draghi has left investors concerned about the continent’s slow growth. Germany’s exports were down 5.8 percent in August, stoking the fears of anxious investors that the EU’s largest economy had double dipped into recession last quarter. Across the Eurozone, the IMF again lowered its growth forecast to 0.8 percent in 2014 and 1.3 percent in 2015.

5. Tepid Asian Demand 
Beyond slow economic growth and currency depreciation, a number of Asian countries have begun cutting energy subsidies, resulting in higher fuel costs despite a drop in global oil prices. In 2012, Asia’s top spenders on energy subsidies, as a percentage of GDP included: Indonesia 3 percent; Thailand 2.6 percent; Vietnam 2.5 percent, Malaysia 2.3 percent, and India 2.3 percent. India is a primary example. Between 2008-2012, India’s diesel demand grew between 6 percent and 11 percent annually. In January 2013, the country started cutting the subsidies of diesel. Since then, diesel consumption has plateaued.

Could Malaysia Be The Next "Houston" (oil & gas hub)

Interesting article from oilprice.com:

Helped along by a stable, transparent, pro-business government, Malaysia has been quietly building itself into an oil and gas hub, and the world’s oil and gas companies -- who increasingly see this country as a natural base for their broader Asian operations -- have noticed.

With Singapore now the world’s most expensive city, Jakarta in constant gridlock and Bangkok the center of recurring coup activity, Kuala Lumpur is fast becoming the preferred central location for businesses looking to take advantage of the expected growth in South East Asia.

The South East Asian market holds great importance for oil and gas firms due to its location in the center of the Asian-Pacific; some estimates are that it will account for 70 percent of global oil demand from 2015 to 2020.

The region will also be boosted by the development of both onshore and offshore gas markets driven by growing regional demand and high gas prices in Japan and South Korea, which could see shallow water drilling grow 29 percent between now and 2020.  

In addition, next year there will be an increase in development wells drilled offshore in the region: Thailand will drill some 370, followed by China and India, each of which will drill around 200. The regional total by 2020 will be 1,600 wells -- a growth of more than 30 percent over 2014.

To manage these opportunities effectively, a robust Asian Pacific central hub is considered crucial, and with Malaysia’s strong pedigree in training, the full range of oil and gas skills, operators, engineering firms, oil field service companies, and consultancies are rushing to expand in Kuala Lumpur.

Malaysia Petroleum Resource Corporation (MPRC) is also driving this growth by recommending appropriate policies relating to the oil and gas sector as it reviews existing business regulations and tax incentives. With 4,446 international and domestic companies registered with the state oil and gas company PETRONAS  (Petroliam Nasional Berhad) that already contribute 20 percent to Malaysia’s GDP, this has the potential to be huge.

EarthStream predicts Malaysia could be the hottest oil and gas job market in 2015, and over time, it could well become the “Houston of Asia,” with career opportunities for expats and locals alike.

The real winners in all of this will be the returning Malaysians, whose skills are in extreme demand. Already, companies are putting employment packages together to attract local workers back from their tax-free assignments in the Middle East.

By Kevin Gibson of Earthstream

Humility, Economics and Bank Regulation

Hester Pierce of the Mercatus Centre at George Mason University has published a really interesting piece in the American Banker on the need for bank regulators to have humility - click here to read it (hat tip  - Graham Brownlow). This is a lesson that F. A. Hayek tried to teach the economics profession several decades ago.

Academics can go one of  two ways when it comes to humility. One way is for them to have an exaggerated view of themselves and their abilities - the ego takes over and they think that they know best. The second way is that the more they learn about the world around them, the more they realise that they do not understand it and the more humble they become.

Budget 2015: Which Stocks to Watch?

After the Budget 2015, investors are bracing for the first trading day tomorrow. Before the opening session kicks off, what's the potential counters should investors focus on? How to relate those counters with Budget 2015 ?

The biggest beneficiaries...

Obviously, one of the biggest beneficiaries was construction sector with the announcements of various highways, MRT and LRT projects. Meanwhile, we can break it down to a few potential counters:

1. Gamuda:
   Another MRT line from Selayang to Putrajaya with an estimated RM23bil. With its expertise in tunneling works and PDP role of existing MRT line, Gamuda is the favorite to clinch the job again.
   
   
2. Bina Puri, Sunway and TRC:
   These are another few companies which already clinched some construction jobs for current MRT or LRT projects. The new line announced would definitely benefiting these counters, since they already have the experiences and also cost advantages.
   
   
3. IJM:
   When mentioned about the RM5bil West Coast Expressway (WCE) project, automatically IJM will comes into the picture.
   
   
4. Huayang and Sentoria:
   These two companies which involves in the building of affordable houses should benefiting from the PR1MA and various affordable housing scheme.

Other than construction sector, consumer sector also benefiting given the expanding lists of items being exempted from GST...

1. QL Resources
   The largest egg producers in the country would benefited after eggs was being listed as GST exempted item.
   
   
2. Nestle
   The largest food and beverage company would benefited after cocoa powder and coffee powder being GST exempted also.

How about the RM150mil financial assistance to SMEs for the purchase of accounting software? Yes...

1. Censof, YGL and IFCA MSC
   These are the major GST related software providers in the country. The latest financial assistance provided may speed up the enrollment process for SMEs to be GST registered companies, hence the need for such software.

With RM2.7bil going to spend within 3 years to further boosting the high-speed broadband services in the country, these two counters should be more than happy to heard the news:

1. Redtone
   Extensive track record in implementing and laying of under sea cables.
   
   
2. OCK
   The standalone telecom towers owner with extensive experience in building and maintaining telco towers. As announced, 1,000 new telco towers will be build.

That's it for all the beneficiaries of those good news. Wait...

Some counters may also benefiting purely because there is NO bad news being announced.

1. BAT
   The tobacco counter will smile in relieve simply because absence of duty hike as anticipated by many analysts.
   
   
2. Carlsberg and GAB
   These brewery counters also will smile after escaping from another round of duty hike. Moreover, the government efforts in promoting tourism industry seen as a positive news too.

Happy Trading...

Great Find - Double Claypot Curry Fish Head (SS2)

I go to SS2 quite a bit so whenever there are new shops I would notice. I think this eatery just opened less than a week or two ago. Basic, clean spartan design with a visible open kitchen, which makes sense nowadays as we diners like to see how hygienic the food preparation process is.





 
 
 Gave it a try, and the verdict is very very good. They are so confident that they only have two main dishes, the fish head curry (Chinese style) and the ribs pot. Main thing here is the curry fish head, certainly one of the best ever (Chinese style). They have servings for 1, 2, 4, 6 pax .... so no worries there. Everything that needed to be in that claypot were there like old friends for mahjong... ladies fingers, eggplant, cabbage, taufoopok, fuchuk, long beans and long beans... and the fish head of course (as the heads are not cheap, there will never be enough fish head parts in the curry to satisfy us ... but I think the veggies go very well with the lemak curry anyways).

I think I tasted tomatoes too, it was a good move as the sourishness balances out the lemak. Its hard to call it the best ... its more like you go to a friend's house whose mum can cook very well, and she serves the most complete and sincere fish head curry (no shortcuts) ... thats the best home cooked feeling I got.  9.5/10

 Its on the same row as Watson's, Bee Chiang Hiang, Jojo's Kitchen and the pet shop. But, close on Mondays I think.

The braised ribs is actually soft bones, which I really liked. Its pretty good ... 8/10 ... just needed to add fatiu and partkok.... then would be a 9/10.

Remember to order the side of fuchuk, freshly fried and crispy... to dunk into the curry.

Seriously Side Splitting Signs