24.10.09
23.10.09
Malaysia Government Budget 2010: Big Conflict??
Today Malaysia Government announced the annual budget for 2010. Some were happy and some were not. One thing for sure: everybody is still busy debating on it.
Prime Minister of Malaysia really make me confuse. There are big conflicts between what he plan and what he implement in terms of economics.
The main goal / objective of this government budget is reducing budget deficit! Malaysia's budget deficit is at 7.4% of GDP in 2009 which is severe. That mean Malaysia government spent 7.4% more that what it earned. FYI, US recorded 7.4% government deficit in 2008, around the same figure as Malaysia.
In Economics (Keynesian), to cut deficit, government need to implement contractionary Fiscal policy which increase tax, decrease government spending or both. The cost of contractionary fiscal policy is slower GDP growth as higher tax or lower government spending will hit both private and public spending.
Classical economics basically has the similar idea.
This is simple: government spend more than they earn so either slow the spending(government spending) or increase the earning (tax revenue).
However, that is opposite of what government is doing!
Annual government budget 2010 implement lower taxes both company tax and personal income tax by 1%. This is clearly not contractionary but rather expansionary fiscal policy. Lower deficit by lower tax?????
Do they know what they are doing???
Fortunately, they also implement slower government spending. However, that's not clear. No clear information introduced by government. The only thing we know is:
"The main spending cuts came from reduced “operating expenditure”, lower food and fuel subsidies, a sensitive political issue for an unpopular government, and less money for development spending."
I am not sure they know this or not, but operating expenses of government is not part of government spending. Eg wages of public servants. So up until now, the only thing we know is that government will reduce subsidies in both food and energy sector.
Basically this is good idea in economics as subsidy is always a "bad" thing that interfere the free market system.
So that's a big surprise, instead of focus on demand side spending cut, Malaysia government focus on supply side spending cut. That's a very dangerous thing as unlike demand side spending cut, supply side spending cut will not only mean slower economy (slower GDP) but also higher prices (higher inflation).
This basically mean although Malaysian can expect slower economic growth, prices won't go down with it.
According to government consensus, government deficit will decrease from 7.4% in 2009 to around 5.6% in 2010. We know that taxes will be cut 1%. If I forecast 1% cut in taxes will result in 2-3% in tax revenue for government, then operating expenditure and subsidies will need to be cut around 3.8-4.8%.
If half of the cut is on subsidies, which is around 1.9-2.4%, we can at least expect 3 times (300%) the rise in actual prices which is around 5.7-7.2%.
So for Malaysian or people who will live in Malaysia next year, save now to buy expensive food and fuel next year!
Prime Minister of Malaysia really make me confuse. There are big conflicts between what he plan and what he implement in terms of economics.
The main goal / objective of this government budget is reducing budget deficit! Malaysia's budget deficit is at 7.4% of GDP in 2009 which is severe. That mean Malaysia government spent 7.4% more that what it earned. FYI, US recorded 7.4% government deficit in 2008, around the same figure as Malaysia.
In Economics (Keynesian), to cut deficit, government need to implement contractionary Fiscal policy which increase tax, decrease government spending or both. The cost of contractionary fiscal policy is slower GDP growth as higher tax or lower government spending will hit both private and public spending.
Classical economics basically has the similar idea.
This is simple: government spend more than they earn so either slow the spending(government spending) or increase the earning (tax revenue).
However, that is opposite of what government is doing!
Annual government budget 2010 implement lower taxes both company tax and personal income tax by 1%. This is clearly not contractionary but rather expansionary fiscal policy. Lower deficit by lower tax?????
Do they know what they are doing???
Fortunately, they also implement slower government spending. However, that's not clear. No clear information introduced by government. The only thing we know is:
"The main spending cuts came from reduced “operating expenditure”, lower food and fuel subsidies, a sensitive political issue for an unpopular government, and less money for development spending."
I am not sure they know this or not, but operating expenses of government is not part of government spending. Eg wages of public servants. So up until now, the only thing we know is that government will reduce subsidies in both food and energy sector.
Basically this is good idea in economics as subsidy is always a "bad" thing that interfere the free market system.
So that's a big surprise, instead of focus on demand side spending cut, Malaysia government focus on supply side spending cut. That's a very dangerous thing as unlike demand side spending cut, supply side spending cut will not only mean slower economy (slower GDP) but also higher prices (higher inflation).
This basically mean although Malaysian can expect slower economic growth, prices won't go down with it.
According to government consensus, government deficit will decrease from 7.4% in 2009 to around 5.6% in 2010. We know that taxes will be cut 1%. If I forecast 1% cut in taxes will result in 2-3% in tax revenue for government, then operating expenditure and subsidies will need to be cut around 3.8-4.8%.
If half of the cut is on subsidies, which is around 1.9-2.4%, we can at least expect 3 times (300%) the rise in actual prices which is around 5.7-7.2%.
So for Malaysian or people who will live in Malaysia next year, save now to buy expensive food and fuel next year!
22.10.09
Hong Kong Stock Market Analysis Video Oct 20th
This is a video produced by a friend of mine on Youtube on Hang Seng and various other markets including some stocks listed at HKSE. He will update his analysis video every weekend and Wednesday. So if you interesting in Stock market analysis especially Hang Seng Analysis, check it out!
21.10.09
Justice System 2.0
In justice system 2.0, i wanna talk about another part of our justice system, police force.
As we all know, society (you and me) give tremendous power to the police forces to implement justice. They got all kind of power including power to kill. They have the authority to involve in any criminal cases and power to hold and analyze all the evidence found. They have the power to forward the evidence to public prosecutor to continue with the trial.
We give all these powers to the police to maintain our safety. However, is our safety secured? does crime rate decrease? is our tax money well spent?
More importantly, are police doing their job according to rules and regulations?
Over the years, we have been informed with countless numbers of wrongfully convicted cases. It makes me wonder how polices determine their suspect and how they implement their investigation. It seems like they got it wrong so many times we lost confidence at them.
Recently i am pen-paling a death row inmates at San Quentin named William (Bill) Clark. Now i don't him and i can never be sure either he is guilty or not. However from the information and evidence of the case, it is very likely that he is wrongfully convicted and sentence to death primarily due to police misconduct.
Police is just a job / occupation. Police officials are human just like you and me. We have emotions such as anger and eager to win. If police officials choose the wrong suspect and determine to put the person behind bars simply because of anger or eager to prove their point. They got all the powers they need to manipulate, lie or create a virtual reality.
Another famous case of police misconduct is Ellen Reasonover case. Thankfully her case was overruled and she got her freedom now. The police department admitted they got it wrong and give Ellen 7.5 million for her 16 years in prison.
So, in reality, we give all the powers including license to kill (just like god) to a group of people just like us who work as police officials. They have the same emotional behavior like us, same IQ like us, same EQ like us and commit mistakes just like us yet we still trust them and continue to provide powers of god to them.
As we all know, society (you and me) give tremendous power to the police forces to implement justice. They got all kind of power including power to kill. They have the authority to involve in any criminal cases and power to hold and analyze all the evidence found. They have the power to forward the evidence to public prosecutor to continue with the trial.
We give all these powers to the police to maintain our safety. However, is our safety secured? does crime rate decrease? is our tax money well spent?
More importantly, are police doing their job according to rules and regulations?
Over the years, we have been informed with countless numbers of wrongfully convicted cases. It makes me wonder how polices determine their suspect and how they implement their investigation. It seems like they got it wrong so many times we lost confidence at them.
Recently i am pen-paling a death row inmates at San Quentin named William (Bill) Clark. Now i don't him and i can never be sure either he is guilty or not. However from the information and evidence of the case, it is very likely that he is wrongfully convicted and sentence to death primarily due to police misconduct.
Police is just a job / occupation. Police officials are human just like you and me. We have emotions such as anger and eager to win. If police officials choose the wrong suspect and determine to put the person behind bars simply because of anger or eager to prove their point. They got all the powers they need to manipulate, lie or create a virtual reality.
Another famous case of police misconduct is Ellen Reasonover case. Thankfully her case was overruled and she got her freedom now. The police department admitted they got it wrong and give Ellen 7.5 million for her 16 years in prison.
So, in reality, we give all the powers including license to kill (just like god) to a group of people just like us who work as police officials. They have the same emotional behavior like us, same IQ like us, same EQ like us and commit mistakes just like us yet we still trust them and continue to provide powers of god to them.
17.10.09
Something I wanna say about Justice System
First of all, stock markets around the world keep making new highs. Dow broke the critical resistance level of 10000, Russia and South America markets make you feel stupid if you didn't invest.
However, I keep my "short" call and i still think somewhere before the end of this year we gonna see collapse (and not correction) of markets around the world. USD is way too oversold short term or medium term and precious metal is way overbought. Expect USD to reverse and go at least to test 80 level and gold retrace to at least 950 level.
Today I wanna talk about justice system. I am doing a research on criminology economics and come across various argument about our justice system. I am sure everyone aware that justice system was created way back during the ancient Babylon which is called "code of Hammurabi". The objectives of justice system is simple: to protect the population from danger / threat.
When i am studying justice system and criminology, I start wondering about our justice system. Every country in the world now has its own justice system and law and all of them are pretty much the same.
However the more I learn about that, the more i doubt it. Basically the justice system exist today require only a very small amount of people to determine the safety of our society. Judge(s) or jury team is the determiner in justice system. That mean the safety of the whole population is depend on few persons (normally less than 10). Besides that, how much trust do you have for these Judges or Juries? How many time did we heard of wrong conviction?
If wrong conviction does happen, well we can only say sorry for the "suspect" for wrongly convict him/her and put him/her behind bars for n years.
So that mean not only the safety of the population is under the shoulders of the judges or juries, the fate and life of suspect is under their shoulders as well. Again, do you trust them and confidence they will not make any mistake?
We can see the heavy bias and inconsistent factors exist in our justice system. 2 criminals who did the same crime under same situation may and (normally will) not not get same sentences. I would like to ask those judges WHY? How do they decide the exact sentence? Do they always give same sentence for same crime under same situation?
If not, why should i trust you and put you in charge of my safety?
However, I keep my "short" call and i still think somewhere before the end of this year we gonna see collapse (and not correction) of markets around the world. USD is way too oversold short term or medium term and precious metal is way overbought. Expect USD to reverse and go at least to test 80 level and gold retrace to at least 950 level.
Today I wanna talk about justice system. I am doing a research on criminology economics and come across various argument about our justice system. I am sure everyone aware that justice system was created way back during the ancient Babylon which is called "code of Hammurabi". The objectives of justice system is simple: to protect the population from danger / threat.
When i am studying justice system and criminology, I start wondering about our justice system. Every country in the world now has its own justice system and law and all of them are pretty much the same.
However the more I learn about that, the more i doubt it. Basically the justice system exist today require only a very small amount of people to determine the safety of our society. Judge(s) or jury team is the determiner in justice system. That mean the safety of the whole population is depend on few persons (normally less than 10). Besides that, how much trust do you have for these Judges or Juries? How many time did we heard of wrong conviction?
If wrong conviction does happen, well we can only say sorry for the "suspect" for wrongly convict him/her and put him/her behind bars for n years.
So that mean not only the safety of the population is under the shoulders of the judges or juries, the fate and life of suspect is under their shoulders as well. Again, do you trust them and confidence they will not make any mistake?
We can see the heavy bias and inconsistent factors exist in our justice system. 2 criminals who did the same crime under same situation may and (normally will) not not get same sentences. I would like to ask those judges WHY? How do they decide the exact sentence? Do they always give same sentence for same crime under same situation?
If not, why should i trust you and put you in charge of my safety?
11.10.09
Just Abolish The Death Penalty
I wanna take the chance here to talk about something i seldom talk. Death Penalty.
More than one third of the country in this world still maintain Death Penalty as an option in their justice system. Personally i think this is sad and should be abolished.
Yes, Death Penalty is created to punish those which commit a very serious crime and yes, the methods used for death penalty are some of the most humane way to kill.
However, it's still killing!
Let me put it this way. A person (man or woman) kill some one. He/she is guilty for murder. If we punish him/her by killing the person, does it make us guilty for murder too?
You may say the justice system punish him/her, but in reality we as a person authorize the government to kill a person still make us a murderer.
Furthermore, i thought prison/ jail/ correctional center should be the place to correct people, not punish people. Justice system suppose putting people behind bars to correct the person and make the person "not dangerous" anymore.
So do you think we can correct people using punishment and punishment only? i doubt it.
Death Penalty also has a big problem. What if the person is innocent? He/she may not has the chance to prove it. Over the years we seen countless number of death penalty inmates executed before found innocent.
Besides that, most death row inmates are placed in a small cell, 24 hours a day, 7 days a week, decades before the execution of death penalty. So that mean not only the convicted person have to encounter death penalty punishment, but also mental punishment as well.
So the whole point of death penalty is not about correctional, but isolation. The convicted person is claimed by justice system as "too dangerous" to live among us and has to be isolated and put away for good.
Wait, i thought we got something for that situation. It's called the Life in prison without parole. Why Death Penalty and why not life without parole?
I can only see two benefits of life without parole vs Death Penalty. First, cost. An inmates cost around USD 100-30,000 per year depending on country.
Reason 2: fear. The whole point of Death Penalty to public is to inflict fear among us to stop serious crime.
Both reasons are bulls**t.
If we can spend USD 100 million or more to build a prison or jail, why can't we afford the small amount of death penalty inmates. Remember every year we only got around 100 new death penalty recipient. I mean if we can go to moon 40 years ago and only got few tons of moon rock for few hundreds billions dollar, what's the problem of supporting inmates?
Second point is absolutely useless. Over the years, murder cases have been increasing with high percentage. Other serious crimes' number are also fast on the rise. That mean although everyone does feel fear of death penalty, serious crimes still happen.
People who commit serious crimes never thought of the punishment simply because they think they gonna get away from it. They think they can escape from justice. So the death penalty sentence does nothing to stop crime.
No, i do not think murderers "good" people. I hate them as much as all of you. I just don't think the death sentence is suitable and humane way of stopping crime. It's just torture. It's murder as well.
So next time you see a death sentence inmates executed, you, your country and your country's justice system are the murderer!
More than one third of the country in this world still maintain Death Penalty as an option in their justice system. Personally i think this is sad and should be abolished.
Yes, Death Penalty is created to punish those which commit a very serious crime and yes, the methods used for death penalty are some of the most humane way to kill.
However, it's still killing!
Let me put it this way. A person (man or woman) kill some one. He/she is guilty for murder. If we punish him/her by killing the person, does it make us guilty for murder too?
You may say the justice system punish him/her, but in reality we as a person authorize the government to kill a person still make us a murderer.
Furthermore, i thought prison/ jail/ correctional center should be the place to correct people, not punish people. Justice system suppose putting people behind bars to correct the person and make the person "not dangerous" anymore.
So do you think we can correct people using punishment and punishment only? i doubt it.
Death Penalty also has a big problem. What if the person is innocent? He/she may not has the chance to prove it. Over the years we seen countless number of death penalty inmates executed before found innocent.
Besides that, most death row inmates are placed in a small cell, 24 hours a day, 7 days a week, decades before the execution of death penalty. So that mean not only the convicted person have to encounter death penalty punishment, but also mental punishment as well.
So the whole point of death penalty is not about correctional, but isolation. The convicted person is claimed by justice system as "too dangerous" to live among us and has to be isolated and put away for good.
Wait, i thought we got something for that situation. It's called the Life in prison without parole. Why Death Penalty and why not life without parole?
I can only see two benefits of life without parole vs Death Penalty. First, cost. An inmates cost around USD 100-30,000 per year depending on country.
Reason 2: fear. The whole point of Death Penalty to public is to inflict fear among us to stop serious crime.
Both reasons are bulls**t.
If we can spend USD 100 million or more to build a prison or jail, why can't we afford the small amount of death penalty inmates. Remember every year we only got around 100 new death penalty recipient. I mean if we can go to moon 40 years ago and only got few tons of moon rock for few hundreds billions dollar, what's the problem of supporting inmates?
Second point is absolutely useless. Over the years, murder cases have been increasing with high percentage. Other serious crimes' number are also fast on the rise. That mean although everyone does feel fear of death penalty, serious crimes still happen.
People who commit serious crimes never thought of the punishment simply because they think they gonna get away from it. They think they can escape from justice. So the death penalty sentence does nothing to stop crime.
No, i do not think murderers "good" people. I hate them as much as all of you. I just don't think the death sentence is suitable and humane way of stopping crime. It's just torture. It's murder as well.
So next time you see a death sentence inmates executed, you, your country and your country's justice system are the murderer!
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