Lowest rate for US...it is wise?

Federal Reserve officials said record-low interest rates might fuel “excessive” speculation in financial markets and possibly dislodge expectations for low inflation, according to minutes of their meeting released today.

“Members noted the possibility that some negative side effects might result from the maintenance of very low short-term interest rates for an extended period,” minutes of the Nov. 3-4 meeting said, “including the possibility that such a policy stance could lead to excessive risk-taking in financial markets or an unanchoring of inflation expectations.”

While policy makers agreed that the chances of such effects were “relatively low, they would remain alert to these risks,” the minutes showed. Fed officials at their meeting indicated the benchmark lending rate would remain near zero “for an extended period” as long as inflation expectations are stable and unemployment fails to decline.

Gold prices touched an all-time high of $1,174 an ounce in New York yesterday as a slumping dollar boosted the appeal of alternative assets. The Standard & Poor’s 500 index has jumped 63 percent since its 2009 low on March 9, and the U.S. auctioned $44 billion of two-year debt yesterday at a yield of 0.802 percent, the lowest ever.

Speculative Capital

Financial officials in Japan and China, Asia’s two largest economies, said last week that the Fed’s interest-rate policy risks spurring speculative capital that may inflate asset prices and derail the global economic recovery.

“Participants noted that the recent fall in the foreign exchange value of thedollar had been orderly and appeared to reflect an unwinding of safe-haven demand in light of the recovery in financial market conditions this year,” the minutes said. “Any tendency for dollar depreciation to intensify or to put significant upward pressure on inflation would bear close watching.”

The dollar weakened to the lowest level versus the yen in a month after the minutes were released. The dollar fell 0.5 percent to 88.56 yen at 3:21 p.m. in New York from 88.97 yesterday, after touching 88.36, the lowest level since Oct. 9.

Less Than Estimated

A report today showed the U.S. economy grew less than initially estimated last quarter as consumer spending trailed forecasts. The economy expanded at a 2.8 percent annual rate in the third quarter, less than the initial estimate of a 3.5 percent pace of expansion, the Commerce Department report showed.

“Most members projected that over the next couple of years, the unemployment rate would remain quite elevated and the level of inflation would remain below rates consistent over the longer run with the Federal Reserve’s objectives,” the minutes said.

Policy makers debated the usefulness of selling assets as part of the so-called exit strategy from the unprecedented expansion of credit to help reduce the central bank’s balance sheet and reserves held by commercial banks.

Several officials said asset sales “could be a useful tool” and “reinforce the effectiveness” of paying interest on reserves held at the Fed by commercial banks. Other policy makers “had reservations about asset sales,” especially before any decision to raise interest rates, and said such sales may increase longer-term rates, the minutes said.

Trimmed Forecasts

Fed officials trimmed their forecasts for the U.S. jobless rate in 2010 and 2011, the minutes showed. Fed governors and regional bank presidents predicted the jobless rate will range from 9.3 percent to 9.7 percent in next year’s fourth quarter, down from their June projection of 9.5 percent to 9.8 percent.

The financial crisis has eased in recent months for banks and large corporations, which have issued a record $1.171 trillion in bonds this year, according to Bloomberg data. The cost of three month loans in dollars between banks was 0.261 percent today, according to the British Bankers Association. That’s down from 1.41 percent at the start of the year.

While large companies are taking advantage of the Fed’s low interest-rate policy in capital markets, consumers face tighter terms and less available credit. Consumer loans held by commercial banks in the U.S. fell to $846.7 billion in October, down 0.7 percent from the same month a year earlier.

‘Tight Conditions’

“Participants noted that the dichotomy between significant easing of conditions in capital markets and continuing tight conditions in the banking sector implied that financing conditions differed for large and small firms,” the minutes said.

The Fed’s mandate for “maximum employment” remains challenged as businesses continue to reorganize and fire staff.

The U.S. economy has lost 7.3 million jobs since the recession began in December 2007. The unemployment rate last month rose to a 26-year high of 10.2 percent. U.S. payrolls shrank by 190,000 jobs last month, and the average workweek held at a record low.

U.K. Urges G-20 to Keep Up Stimulus to Cement Rebound (Update1)

By Reed V. Landberg and Emma Ross-Thomas

Nov. 7 (Bloomberg) -- U.K. Chancellor of the Exchequer Alistair Darling urged the Group of 20 nations to maintain stimulus measures for their economies to cement a recovery from the worst recession in six decades.

“I hope we can agree we need to maintain our support for our economies until the recovery is established,” Darling told counterparts at the opening of the G-20 talks in St. Andrews, Scotland today. “Whilst clearly confidence levels have returned we’re still in a position where there’s a lot of uncertainty.”

Officials want to avoid derailing the recovery by withdrawing the stimulus too soon or by leaving it so long that the resulting debt spooks investors into pushing up market interest rates. The International Monetary Fund says the debt ratio of the advanced G-20 nations could be 40 percentage points above the pre-crisis level by 2014, threatening to push up borrowing costs as much as 2 percentage points.

The yield on the 10-year U.S. Treasury note has risen 139 basis points to 3.5 percent since the start of the year.

The fragility of the rebound was exposed yesterday by a report showing the U.S. unemployment rate soared to a 26-year high of 10.2 percent in October.

Darling’s call for continued action is likely to find support when G-20 finance ministers and central bankers including U.S. Treasury Secretary Timothy Geithner and European Central Bank President Jean-Claude Trichet release a statement after their talks conclude about 3 p.m.

Substantial Period

“This is not a self-sustained recovery,” Swedish Finance Anders Borg told Bloomberg Television yesterday in St. Andrews. The G-20 must continue “expansionary policies for a substantial time period.”

The G-20, which accounts for about 85 percent of the global economy, is also set to discuss funding for policies to tackle climate change after the European Union estimated developing countries need 100 billion euros ($148 billion) a year by 2020.

German Finance Minister Wolfgang Schaeuble said yesterday the G-20 would try to “at least make a little step forward in the area of financing climate protection.”

Doubts are growing as to whether a full agreement can be reached at a United Nations summit in Copenhagen next month. Yvo de Boer, the UN supervisor for climate talks, said in a Nov. 5 interview that too little progress has been made to conclude a treaty at the summit, and it may take another year. European Commission President Jose Barroso said Nov. 3 “there’s not time” to reach a treaty agreement ahead of the summit. The EU and US have yet to say how much aid they may give.

Urgency

Darling said he wants “commitment and urgency” on climate change, even amid diverging views.

“I am aware that around this table there are some different views,” he said. “It will be difficult negotiating.”

Divisions emerged yesterday over exchange rates as Chinese central bank Governor Zhou Xiaochuan deflected calls from European and Japanese officials to let its currency appreciate. Zhou said in an interview yesterday that “the pressure from the international community to allow yuan appreciation is not that big.”

His comments came after ECB President Jean-Claude Trichet said an “orderly and progressive appreciation” of currencies including the yuan would be “welcome.”

China has kept a lid on its currency since July 2008, making it track the dollar lower as the U.S. currency lost 15 percent against a basket of currencies since March. Japanese Vice Finance Minister Yoshihiko Noda said yesterday it’s “desirable for the yuan to be flexible.”

Too Weak

Carlo Bozotti, chief executive officer of STMicroelectronics NV urged European policy makers to talk down the euro currency, saying on Oct. 21 that “the dollar is too weak.” Sanofi-Aventis Chief Executive Officer Chris Viehbacher said the weaker dollar is a “problem” for France’s largest drugmaker, while Bank of Canada Governor Mark Carney said last month the strength of the Canadian dollar against its U.S. counterpart was a risk to growth.

Yuan forwards rose this week, with the twelve-month non- deliverable security rising 0.3 percent to 6.6305 per dollar, signalling appreciation of 3 percent. The contracts rose 0.4 percent this week.

To contact the reporters on this story: Reed Landberg in St. Andrews at landberg@bloomberg.net; Emma Ross-Thomas in St. Andrews at at erossthomas@bloomberg.net

Tax, Car, Proton and Malaysia

Global recession did not stop car buyers from purchasing their dream car, surprisingly, the number of sale are still in a competitive mood as most of the car manufacturer developing a new version of vehicle, engines, systems et cetera to caters the demands from the car enthusiast.
Couple of month ago when I was in Pattaya, Thailand, there's a friend of mine, Jill, who wished to reside permanently in Malaysia, and the destination he choose is Labuan, Sabah. He said that the beers are cheap, the cigarette still in a reasonable price compares to Singapore where the price are three times higher than Malaysia. So, when he asked me, how much would an Audi A8 cost? I said it’s around 800k in Ringgit Malaysia and I was not flabbergasted to hear he says WTF. He says the cars at his hometown in Wyoming just cost about 120-130k only, that's around 500k in Ringgit. I asked him why he doesn’t get on some budget car. A car only moves him from point A to point B. But being a petrol head since at a very young age, he knows what he's looking for in terms of reliability and stability. Jill was a liquor runner during 1930's when under President Herbert Hoover, the banning of consumption and selling liquor was once a good opportunity for people to smuggle the product domestically in States, so, for being an ex runner who run against the police and fed by car, Jill knows every inch and detail that he needs on his ride.
He asked me why the fuck does the tax were imposed so high, it is almost 300% from the actual retail selling price?
I told him that the high imposed tax was meant to protect the interest of the national car, Proton. To make sure the price of the Proton stays in a very competitive price and cheap enough according to the affordability of most Malaysian people.
But aren't that against the free-trade doctrines?
There were two perspectives to look at here. First, the national cars has less demand comparing to other well establish car manufacturer in the world. If you pick anybody from the world and ask his or her choice of car, higher possibility that Proton name won't be mention. So, to uphold the buying strength, only Malaysian will buy Malaysian car whether they like it in sense on patriotism (and later regretted) or they have no other option due to financial limitation. Sadly, the microeconomic freedom of choice has failed on this part.
Looking at average Malaysian meridian income, Rm1500 is the magic number. With this kind of basic earning of individual Malaysia, only 20% of the earning are recommended to spent on car and transportation while the other 80% will be spent on shelter, food, saving and entertainment. That's about Rm375 per month to spare for car, this amount if added up with the cost of gasoline per month, that’s more than 20% of the suggestion rate.
Looking back at the banks in Malaysia who offered loan for car purchasers, they provide installment repayment at maximum for 108 months with the interest of 2.8% to 4.7% for a new car. So, if a car buyer in Malaysia wanted to purchase a decent car, they need to scarify another 20% of his of her income in order to purchase a decent Proton car, price range around 15k to 50k.
So, on the first hand, Proton has offered a solution to the most average Malaysian dream on owning a car.
By keeping the tax of import car high, most Malaysian will choose Proton rather than a Toyota. But this action is not fair after all to the economic and to petrol head like me and Jill, we loves car, and love good car, the definition of good cars are utterly not Proton, hell no!
I remember an episode in BBC Top Gear, Jeremy Clarkson were insulting the Proton Savvy with his flamboyant colorful words. And as I browse again the clip on YouTube, I notice abundant of praise and agreement by the visitors for Clarkson quote. Yet, Proton has failed to gain its confidence among car buyers.
What seems to go wrong here? Why can't Proton regain a trust and confidence for car buyers that not from Malaysia? The answer I shall not write on this post. Every petrol head know which angles, which spots, which handling they expecting for a car.
But the main thing that has been gone wrong for a long time is the approach by the Malaysian government to fully let Proton monopolizing the car market in Malaysia that is by keeping the tax on import car high, by this action, the Proton has a big space to breathe in its homeland. If Malaysia size is similar with Singapore, it is not surprising to notice the car price is high, even if the price is skyrocket, the approach are only mean to curb and controls congestion. But Malaysia is big on its size.
If a price of LP640 were only 190k Sterling, in Malaysia it will cost at most 2.5 million, and only millionaire can afford a Lamborghini while back in Brit, you can own it for less than 200k?
I still don’t understand why does this approach was still be practice by the Malaysian government why in this competitive age, everything need to be float. If a product can’t succeed, let it collapse, if the Gov want to play Keynesian, create higher paying job for Malaysia.
Even when I realize the actual price in States compare to Malaysia several years ago, I get shitted off, the long lost dream of getting a Ferrari was almost impossible if the government still protecting Proton but not improving it. Or perhaps one day I will built another car company and imposed a high end quality ever offer on a car to satisfy my ego??? So that the Proton designed dude understand the meaning of quality, sexy and crazy?

How Wise Is It For RBA?

Begining from 12 August 2009, the Aussie has gain a seriously bullish momentum against the greenback, from 0.8220, the Aussie climbbed to 0.8472 before it starts to bear on 14 August 2009. Amids from it bullish scenario, it is a question mark for the currency for not in paralled with the gold price, and we all may assume it the Aussie was under speculation infuence. 

So when it come to the RBA (Reserve Bank Australia), they want to handle the economic global recession rebound in the manner of fully prepared, that is by raising its benchmark interest rate. Currently the rate set at 3%,  compares with other major economic leader such as United States at 0.25% and Japan at 0.1%.

Australian economic grew by 0.4% in the first quarter. So, if RBA wish to increase its benchmark interest rate, how high will the rate be?

Keynes Economic Achivement

Keynes stated that if Investment exceeds Saving, there will be inflation. If Saving exceeds Investment there will be recession. One implication of this is that, in the midst of an economic depression, the correct course of action should be to encourage spending and discourage saving. This runs contrary to the prevailing wisdom, which says that thrift is required in hard times. In Keynes's words, "For the engine which drives Enterprise is not Thrift, but Profit."

Keynes took issue with Say's Law - one of the economic "givens" of his era. Say's Law states that supply creates demand. Keynes believed the opposite to be true - output is determined by demand.

Keynes argued that full employment could not always be reached by making wages sufficiently low. Economies are made up of aggregate quantities of output resulting from aggregate streams of expenditure - unemployment is caused if people don't spend enough money.

In recessions, the aggregate demand of economies falls. In other words, businesses and people tighten their belts and spend less money. Lower spending results in demand falling further and a vicious circle ensues of job losses and further falls in spending. Keynes's solution to the problem was that governments should borrow money and boost demand by pushing the money into the economy. Once the economy recovered, and was expanding again, governments should pay back the loans.

Economically and socially successful economies have significant contributions from both the government and the private sectors. 

Keynes's view that governments should play a major role in economic management marked a break with the laissez-faire economics of Adam Smith, which held that economies function best when markets are left free of state intervention.

Sterling Weaken as BOE Shock Market

1.Swiss consumer sentiment index -42 points in Q-3, down from -38 in previous quarterly survey. 16-year low. Versus -43 median forecast

2.German Markit construction index, based on survey of more than 200 construction firms, rose to seasonally adjusted 43.7 in July from 41.0 in June

3.Dutch July CPI eases to +0.2% y/y compared to +1.4% y/y in June. Inflation data much weaker than median forecast of +0.9%

4.Italy June industry output seasonally adjusted -1.2% m/m, work day adjusted -21.9% y/y, much weaker than median forecasts of +0.4%, -20.0% respectively

5.UK new car registrations in July +2.4% y/y. First rise in 15 months

6.UK construction orders rose 18% in Q2 2009 compared to previous quarter , but still down 21% on the year- ONS

7.German factory (manufacturing) orders rose +4.5% m/m in June, much stronger than the median forecast of +0.6%. Biggest gain since June 2007 and fourth consecutive monthly rise. Comes on the back of strong foreign demand

8.Moody’s: Global speculative- grade default rate rose to 10.7% in July from 10.3% in June, surpassing 2002 peak of 10.4%. Seen peaking at 12.2% in Q4 2009 and then declining sharply to 4.4% in July 2010

9.UK commercial property prices rose 0.2% in July, first positive reading since June 2007 – CBRE (World’s largest real estate broker)
Bank of England shocks markets and extends QE to £175 bln from £125 bln. Leaves rates steady, as expected

European Stock Futures Advance Before Interest-Rate Decisions

 
European stock futures climbed before interest-rate decisions from the Bank of England and the European Central Bank. U.S. index futures were little changed, while Asian shares gained.
Commerzbank AG may be active after Germany’s second-biggest bank reported a fourth consecutive quarterly loss. Deutsche Telekom AG and Zurich Financial Services AG may move after posting second-quarter profit that trailed analysts’ estimates.
Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 0.7 percent to 2,662 at 7:16 a.m. in London. The U.K.’s FTSE 100 Index may increase 24, according to Cantor Index, a betting firm.
“A packed economic and corporate calendar look set to dominate proceedings,” Jimmy Yates, head of equities at CMC Markets in London, wrote. “A positive session in Asia is helping a little, but there is a degree of caution ahead of some key data due to be released over the next couple of days.”
Europe’s Stoxx 600 has climbed 44 percent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The gauge is now valued at 37.5 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
Standard & Poor’s 500 Index futures slipped 0.1 percent before a weekly report on initial jobless claims. The benchmark gauge for U.S. equities yesterday fell from a nine-month high after data on job losses and service industries were worse than economists estimated.
The MSCI Asia Pacific Index rose 0.7 percent today as employers in Australia unexpectedly added jobs, Alumina Ltd. posted a smaller-than-estimated underlying loss and Nippon Telegraph & Telephone Corp. said earnings at its fixed-line units increased.

Interest-Rate Decisions

The Bank of England will announce the Monetary Policy Committee’s monthly decision at 12 p.m. today in London. The bank will keep the benchmark rate at a record low of 0.5 percent, according to all 60 economists in a Bloomberg News survey. Governor Mervyn King may need to spell out the central bank’s next policy step after completing the latest phase of its bond-purchase program, economists say. The European Central Bank will keep its key rate at a record low as it tries to get credit flowing again to strengthen an economy that may return to growth this quarter, economists said. The ECB announces its rate decision at 1:45 p.m. in Frankfurt and President Jean-Claude Trichet holds a press conference 45 minutes later.

Commerzbank, Deutsche Telekom

Commerzbank will probably move. The German lender posted a second-quarter loss of 746 million euros ($1.07 billion) after setting aside more money for bad loans and debt-related writedowns. The median estimate of 12 analysts surveyed by Bloomberg was for a loss of 648 million euros.

Deutsche Telekom may be active. Europe’s biggest telephone company reported a 32 percent increase in second-quarter profit, less than analysts had anticipated, as it lost U.K. mobile customers.

Zurich Financial, Switzerland’s largest insurer, reported a 29 percent decline in second-quarter profit because of lower general insurance earnings and investment losses. Net income fell to $892 million, missing the $901.7 million median estimate of eight analysts surveyed by Bloomberg.

Per-share earnings have slumped 41 percent at companies on the Stoxx 600 while more than half of profits have topped analysts’ projections, according to data compiled by Bloomberg. Of the 206 companies to have reported results since July 8, 104 have beaten estimates, the data show.

Alumina, NTT

Alumina, partner in the world’s biggest producer of the material used to make aluminum, surged 9.8 percent to A$1.80 in Sydney. The company reported an underlying loss of A$15 million ($12.6 million) in the six months ended June 30, beating the A$22 million median estimate of three analysts compiled by Bloomberg.

NTT, Japan’s biggest phone operator, climbed 2.5 percent to 4,070 yen. The company said yesterday that operating profits at its fixed-line units NTT East Corp. and NTT West Corp. grew at least 76 percent in the three months to June 30.

Friday. the dateline some the greater good of all

Is seems that every Friday, most people are practically hectic or stress by enormous news release that somehow, somewhere acted as a market mover. When charts are practically in a bullish mood, suddenly it will transform to bears in no time, followed by several sentiments and factors that brought by traders. Emotions such as greed, scared, anxiousness, security, policy were accelerating the next momentum.

Such as today, 19 of June when Canada is about to release their CPI, Retail Sales, Manufacturing Index and decision toward the next interest rate levels, this will eventually makes most of the traders and investors insecure. Ampules of speculation were made and even made it hyperbolic in a sense that the prediction is way exceed that forecast prediction.

If I can read the future, I am definitely became billionaire by now, sitting beside the beach and having cocktail with a bunch of beautifully girls around me.. yes.... it can only be just dream. (actually I cross my fingers for that.) But eventually, I didn't and nobody could, if someones could, that just utterly called luck.

The main thing about this whole craziness is financial market is the surprise that were made inside it, the adrenaline pumping that develop to such extend make people thinks that it is dangerous.

MARKET EQUILIBRIUM

Definition

Market equilibrium refers to a situation when a quantity demanded and quantity supplied is equal and there is no tendency for price or quantity to change.

When a market is in equilibrium, the quantity that the seller is willing to sell is exactly balances the buyers are willing to buy, and there is no tendency for the market price to increase or decrease. Equilibrium can occur irrespective of the price and quantity involve.

Government Price and Minimum Price

There are several types of government intervention on market equilibrium. The forms of intervention are the fixing of a higher limit or a lower limit on prices in certain markets and the imposition of taxes and subsidies for certain items.

Maximum Price and Minimum Price

The government controls and fixes certain goods and services such as sugar, rice cooking oil, cement, taxi fares et cetera. The government determined the price and not the price mechanism.

There are two types of price control: floor price and ceiling price

Ceiling Price

It is the government imposed regulations that prevent the prices from rising above a maximum level as set by the government. Ceiling price is also referred as a maximum price.

When the government sensed that the price of essential commodities were likely to hikes such as rice, cooking oil, sugar et cetera, then the government would imposed the ceiling price.

This method of price control is also applied to keep the monthly housing rental below the equilibrium level which also called rent control.

Under the ceiling price, consumers can buy product at lower prices which is an advantageous on consumer’s perspectives but by fixing the ceiling price also will creates an excessive demand for the product and this could lead to black marketing.

Floor Price

Floor price is a government imposed regulation to prevent the price from falling bellow the minimum level as set by the government. It is also known as minimum price. This price control method is initiated by the government in the agriculture sectors made to protect the farmer in the event where the prices of the commodities are too low in the free market.

Floor price is also imposed on the minimum wage rate. The minimum wage rate is the lowest wage paid by employer to worker to protect them from exploitation. The benefit of imposing this method is to reduce poverty.

When there is floor price, the incomes of producers are protected as the government buys up all surpluses of goods and services. The government will also store these surplus goods for future use. Lower paid workers are better off with a higher wage rate with the floor price which prevents incomes from falling below a certain level. But the disadvantage is where prices are higher than the equilibrium price under the floor price. Therefore, consumers have to pay more for goods and services. A surplus will occur when there is a floor price and the government will need to purchase excess supplies of agricultural commodities such as cocoa, corn, dairy products and other. Higher wage rate will create unemployment problems as the supply of labour is greater than the demand of labour.

TAXES AND SUBSIDIES

Effect of Taxes on Equilibrium Price and Output

When the government imposes a tax on the sale of goods, the price of the goods might rise by the same amount as the tax imposed. The increase in the price of goods whether in full or in part or none at all, depends on whether the burden of tax falls on the buyers or the seller.

Indirect tax is a tax that is imposed by the government to the producers or seller but paid by or passed on to the end-users. Indirect taxes consist of import duties, excise duties, sales tax, service tax and export duties.

REAL-TIME ECONOMIC CALENDAR

Economic Events

Date (GMT)		Country	Event	Actual	Cons.	Previous
Jun 16	09:00	EMU	Consumer Price Index (MoM) (May)	0.1%	0.0%	0.4%
	09:00	EMU	Consumer Price Index - Core (YoY) (May)	1.5%	1.6%	1.8%
	09:00	EMU	Labor Costs (YoY) (1Q)	3.7%	3.0%	3.8%
	09:00	DE	ZEW Survey - Economic Sentiment (Jun)	44.8	35.2	31.1
	12:30	US	Housing Starts (YoY) (May)		0.48M	0.46M
	12:30	US	Building Permits (MoM) (May)			0.494M

Farming...

Farming activity is the most widely practice in this world. It's also contributing to the rich world economy. Centuries people are trying to explore new method of farming and harvesting so they could increase output and productivity.

As the world most significant economic contributor, farming is widely regards as the heart of any nation economy. Nation such Malaysia, Thailand, Indonesia, Myanmar, Cambodia and some other nation are putting farming and harvesting as their first economy priority.

Farming provide food for people, why doesn't it be regards as vital?

When globalization and capitalism start to spread and influencing.. the perspectives of farming has been changed... to good and bad.

Government are starting to intervene a little bit by drafting bills, agency are squeezing the poor rural farmers, middle-man were buying the harvested goods at a very low price and sell it for a price that utterly unacceptable. This phenomena were not anymore happened in United States but undoubtedly occur in a poorer country such as Cambodia and Vietnam.

Yes, we all are shouting the same slogans. "Free Trade", but does that mean it's free to squeeze?

I've been to Isaan, Thailand, where most of the household economy are abruptly depending on planting and harvesting paddy. Most of the farmers are deriving less than USD 10 a day per ca pita. Some of them are even more worst, get hooked up with loan shark which in other hand giving them a high interest rates where sometime it is irrational in finance and economic perspectives. The Thai government are not to be blamed for all of this as they has already provide the necessary assistant as what they could, but the offer from other party are more fascinating compares to government offer.

The instant pills to help the farmers in Isaan is to invest in large sum of money to procure a more sophisticated machinery for doing the harvesting job, creates a body that will regulates the market price and the ceiling price so that the middle-man could not even monopolizing the price, providing a micro type of loans which are solely meant for farming purpose to farmers, creating a self-conscious and sense of pride to the farmers, and diversify the paddy market so that it would not be stagnated and also have a competitive value in commodity market.

In Malaysia for instantly, farmers over there are also facing the same issues, based on Professor Ungku Aziz research in 70's, the condition of the farmers and the farming industry are absolute sad. There's discrimination, abuse of prices, deregulate trade and corruption. Time by time, after several effort done by the government, those sentiment are decreasing, but hardy, it is impossible to wipe it off. Up till today, Malaysian Government has spended RM 2 billion per annum just to buy fertilizer and the productivity can only cover 60 to 70 percent for Malaysian, and this amount is a huge sums for a small consumption, ad the initiative done by the government is to diversify the application of the paddy, just like what has Japan does, recycle it....

It is predicted could covers back at least 30 to 38 percent per annum.

Anyway, if the farming industry could be saves in a short time, it is perhaps that the industry is going to collapse.

Ironic, that's the fact of life 2

I Geez, it has been a while since I din't post any blog recently, due to ampules of bad trade that I derives recently, my personal problem dealing with hmmmmm, not girls (trust me), but Arithmetic.

The fuck that I gave a bloody care about the arithmetic and mathematics, I'm not Einstein....... but Ironically, I was a little bit carried away by Einstein Theory, the Quantum.......about relativity.

Well, that's was not what I'm suppose to talk about it today.... need to continue the last blog that I've posted several weeks ago.

Well, as what I was quoted before, education plays a substantial roles in creating the next valuable citizen in any respective nation..... Education make people think, interpret, innovate, invent, damage and protect. Education set a person status in the community, whether the person is being respected or neglected. But in economic perspectives, every person in the community plays a vital roles in economy growth. We can't expect everybody be rich, having the same things other haves, we can't expect everybody drives a ferrari, and we can expect every men in this world wore Jaeger-Le Coultre watch and ladies carrying Valentino handbag.

That is insane, the market wont be equilibrium.

I'm not encourage peoples in this world to become poor and I'm not planting an idea that the not-so-lucky person should forget their dreams and stick to the status quo. Hey.... I have several dream that I myself also haven't be fulfill, such as getting a ferrari, buying a boat, own several luxury watches and own a Vertu.... And believe me, this dreams is not impossible, just need to do something (I mean something right..) to get what we dream of.

Abraham Maslow states that there are two need that human are trying to achieves, first is needs, second is wants, and human are trying to fulfill the needs first rather than fulfilling the wants.

Question relies here then....

If a person holding a degree and worked as a CEO in a big company, his pays would be huge and his spending will be huge too. If another person holding the same degree and worked as a teacher, his pays wont be that huge and his spending power wont be that big compared to the lucky CEO.

Why that there's a big gap in between these two? Aren't the idea of getting good education is to get a good job and well paid salary in the future? (well, that were most parents are assumes of)

It's easy to says that CEO contribution towards the economy are more significant compare to the teacher.

A CEO with his company create an economy, but a teacher creates economy lesson.

So the idea of getting a good education for a good job and well paid salary in the future are totally absurd. Why can't I get a job that gave me a huge paycheck? Why does my Director in my previous company only hold a diploma (just acquires it recently) Why does my late schoolmate can own a Porche Cayman in just 2 month even he drop school at the age of 15? (yes, he deals drugs, but that's not the point here...)

Parallel with the title of this essay, that it is ironic, for the fact of life....

Economic theory is all about making a decision, whether someone choose to become this or that, it determines the quality of someone life.

Obama Unveils New Projects, Says Economy Has ‘Long Way to Go’

By Kim Chipman

June 8 (Bloomberg) -- President Barack Obama, trying to bolster an economy he says still has a “long way to go,” announced 10 projects aimed at creating or saving more than 600,000 jobs, according to the administration.The plans are meant to boost the effectiveness of a $787 billion stimulus measure sought by Obama and approved by Congress in February.

The projects will be a key focus of recovery efforts during the next three months and create or save four times more jobs than during the first 100 days since the rescue bill became law, according to a White House news release.“We have a long way to go on our road to recovery but we are going the right way,” Obama said in a statement. “Our measure of progress is the progress the American people see in their own lives. And until that progress is steady and solid; we’re going to keep moving forward.

The new projects are being framed as the beginning of a “summer of accelerated Recovery Act activity” by the administration and include new services at health centers in 50 states, work on 107 national parks, improvements at airports, highway locations and veterans’ medical facilities. They will also provide funding for schools to hire more teachers.

White House officials said yesterday they are encouraged by a slowing rate of job losses. The economy lost 345,000 jobs last month, fewer than expected and the lowest number since September, the Department of Labor reported June 5.

Rising Unemployment

Still, unemployment rose to 9.4 percent, higher than the 8 percent the administration projected when it pressed Congress to enact the American Recovery and Reinvestment Act.

“Hopefully, that is a sign that this is turning,” David Axelrod, senior adviser toObama, told CNN yesterday. “While it’s going to take some time for these unemployment numbers to turn around, for the momentum to completely stop and turn in the other direction, it feels as if we’re moving.”

Vice President Joe Biden, who later today will formally present Obama with the administration’s latest economic stimulus goals, said a “good foundation” was laid in the first 100 days of the Recovery Act.

“We plan to build on that foundation and accelerate our efforts so we can accomplish even more,” Biden said in a statement. “We’re going to get more dollars out the door, more shovels into the ground and more money into the pockets of workers and families who need it most.”

Committing Funds

In the three months after the Democratic-led Congress approved Obama’s stimulus plan, the government doled out about 11 percent of the emergency stimulus funds, according to a progress report released by Biden’s office on May 13.

The administration says it will commit about 70 percent of the money by the end of the next fiscal year, less than the 75 percent that White House officials projected in February.

Biden, citing “significant progress,” stressed in the May report that most programs and projects were running ahead of schedule and under budget.

The act resulted in 150,000 jobs being created or saved in the first three months, the assessment said.

The 10 new projects to be financed with stimulus funds include hiring or retaining about 5,000 law enforcement officers, starting 200 new waste and water systems in rural areas, creating 125,000 summer jobs for young people and initiating 2,300 construction and rehabilitation projects at military facilities across the nation, the administration said.

“We will not grow complacent or rest,” Obama said. “Surely and steadily, we will turn this economy around.”

To contact the reporter on this story: Kim Chipman in Washington atkchipman@bloomberg.net.

Friday, the Non-Farm Payroll

Damn... the figures of the unemployment rate for the month of May is 9.4% was it optimistic? Fundamentally.... yes! But rationally..... it is still early to see the green shoot.

Almost all over the places in all over the world, peoples were talking about the end of the recession, everybody placing a big hope for the end of this worst financial crisis in 21st century.

Analysis with more analysis comes and giving different figures and dates of their predictions, on when will the recession is about to end..........

For me to personally... the most vital thing is that the government and central banks need to regulates well each respective nations deficit to meet each equilibrium.

Let the nation heals from it sick then gave them the additional supplement when the time is right.

HUMMER,, A SAD STORY

We all has been flabbergasted by the recent action done by the GM (General Motor), they filed bankrupt and turning the firm into a smaller firm.

Alright then.... the Big Three are seems unable to be saves anymore. Mr Obama abruptly going to be disappoint due to the failure of the "mega stimulus bailout plan", then what will happened to the Big Three?

I personally wont give any bloody care for Chrysler though.... Ford? nahhhh.......big NO! then lastly GM? they own several brands that are seems to plays a sentimental roles in American history. Brand such as Lincoln, Cadillac, Holden, Hummer, Pontiac and other major brands under their line are part of American culture and urban legend.

I'm not saying that Ford and Chrysler didn't played a very significant part in American society. But I felt that GM should be highlighted on this essay. (Technically)

When GM filled for bankruptcy, they also intended to sell some of their unprofitable brands. But when they intend to sell their Hummer brand to a China company.

Most people will says @#&$..........

Sichuan Tengzhong Heavy Industrial Machinery is the Lucky company to acquire Hummer. (we'll see how lucky are they...)

The price of the purchase has not been disclose yet but according to GM, Bankers have said that Hummer could fetch about USD 100 million in cash.

Sichuan Tengzhong Heavy Industrial Machinery is expected to resume Hummer in the third quarter of the year. This will marks the first China company buying one of the most struggling American car maker.

The issues here is not about the ability of Sichuan Tengzhong Heavy Industrial Machinery purchasing Hummer. This is a free-trade world under globalization tag. "Who has the money, they're the winner" and "who does not, they'll be the looser" But the vital issue is that this event will marks that China has the ability to be the world economic leader.

Minister Mentor Lee Kuan Yew once quoted on a conference in Singapore by saying that China will be the next emerging market leader.

How true is that actually? I don't exactly know. Even if Sichuan Tengzhong Heavy Industrial Machinery ability to purchase Hummer, it's still not a solid concrete indicator to verify that China has the credibility to be the next market leader.

How will Hummer under China production? Will the future manufacturer will still maintain the front silver grill on the SUV? Will it go with 19' rims? alloy some more....Will the carbon fiber part still be maintain? I don't know....

We can't predict how does the standard of China productivity. Are they following the ISO as with other country in the world... It's hard to say right now..

But one thing I can assure all of the petrol-heads out there. Hummer will not be the same again if the Luxury SUV be manufacture in the People Republic Of China.

I'm not here to condemn or discriminate the ability of China and its production workers, it's not my right to do so.. and it is still early for me to justify the credibility of Sichuan Tengzhong Heavy Industrial Machinery..... but I just sad that my favorite brand go to other unknown name and not with some other famous brand which will in other hands improvise more on the SUV..

GOLD

Today topic will be quite interesting to the ladies especially, it's all about gold..

ever since the Neolithic period, human all over the land are starts to appreciate gold

as an asset or something valuable belonging.

Centuries of excavation and mining were done to acquire this valuable commodity.

Bloods, sweats, killings, war and conquering and so on are recorded

in the history just for the sake of gold.

One classic literature related to gold is the story about King Midas.

The king has been cursed because of his greediness, everything that he touched will

eventually turned into gold, until he die because he can't even eat or drink.

There's also other classic stories from ancient Greek, Rome, Scythian and so on which tells about their warriors fought and won or loose, dying in the battlefield for the reason of gold.

In early 15 century, Portuguese has start their voyage to the far east, bringing with them 3G's,

Gold, Glory and Gospels. Sailing to southern America at the west and Malay Archipelagos on the

east to colonise, conquering lands and their 3G's. (sadly mobile phone are not available at that moment)

El Dorado is the classic example to proof the Spanish arrival, and so does the Mayans gold in Mexico.

History is the most classic witnesses to testify human eagerness on their quest to obtain gold, but, centuries has passed until today the 21st century, and do we understand the value of gold.

Why does the gold has been given such a substantial value in every culture community? Where does the value derives from? Whom responsible to give value of gold? What kind of valuation that need to be determine during gold valuation?

Before the Bretton Wood Agreement, the value of United States of America currency are pegged to the value of gold, until the greenback receives a huge devaluation, they abort the pegging and let the greenback float. That's much of the accreditation were given to gold on the time.

There's an old words saying that if the stock market heading towards uncertainty and possibly getting bears for a significant period, it's better to buy gold as it is a safe heaven.

But, does gold were that vital in economic perspectives?

My mom owns several accessories made from gold, time by time she will pawn her jewellery just to make sure there's food on the table, (well, that was about 10 years ago....)

When I asked my mom why does she like to buy and collect gold jewellery? and she answer me by saying that it's an investment, (the most conservatives investment...) it's the most risk free investment that anybody can easily mastered, except, the only risk here is only thieves.

At least there's a good things by acquiring gold....... pawn it when you need cash.

But, gold are actually just a piece of metal.

I still remember when my ex-girlfriend asked me whether I would by her any jewellery on Valentines Day, I said yes, and she says she want her gift to be gold, and I say 'what?'

I was naive on that time, I don't know that by saying 'what?' is such an offence to her at that particular moment, I should have know that she was a materialistic.. (sorry Ariel...)

The point is, gold is just a piece of metal,

history has proves that gold has caused so much trouble in this world, (exclude my case please....)

The reason it has a value in any community is just because it's the most practical medium of trade. That's all, end of conclusion.

Democrats agree to IMF money in US war bill

Bank of America Corp, JPMorgan Chase & Co and several other banks said they have raised at least $18 billion as lenders scramble to extricate themselves from Washington's grip.

Banks are raising capital as investor sentiment for the sector improves and, in many cases, to show regulators they are capable of functioning without government support.

'Markets are providing an avenue for banks of all sizes and stripes to raise money unless you are at death's door,' said Gary Townsend, co-founder of Hill-Townsend Capital in Chevy Chase, Maryland. 'The market also seems to be making an assessment that credit problems are manageable and that the environment is improving. In my view, that is correct.'

JPMorgan sold $5 billion of stock, Morgan Stanley $2.2 billion and American Express Co $500 million after the Federal Reserve on Monday imposed capital-raising requirements on large lenders hoping to repay bank bailout fund.

Goldman Sachs Group Inc, which also hopes to exit the Treasury Department's Troubled Asset Relief Program, sold $1.9 billion of its stake in Industrial and Commercial Bank of China.

Meanwhile, Bank of America said it has raised close to $33 billion, including $7 billion over six days, nearly all of the $33.9 billion that regulators demanded after a 'stress test' of the bank's ability to handle a deep recession. The bank said it expects to 'comfortably exceed' the $33.9 billion figure.

Also, SunTrust Banks Inc late Monday sold $1.4 billion of stock to help plug a $2.2 billion capital hole.

Nineteen of the largest banks underwent the stress tests, and the Fed plans to announce next week which of the 19 will be permitted to repay bailout funds. Nine of the banks were told they had enough capital to withstand a deep economic downturn, while 10 were told to raise $74.6 billion.

In morning trading, American Express shares fell 4.6 percent to $24.80, Bank of America rose 1.2 percent to $11.34, Goldman fell 0.2 percent to $144.09, JPMorgan fell 3.3 percent to $34.91, Morgan Stanley fell 3.4 percent to $28.88, and SunTrust rose 10 percent to $15.18.

NEW RULES

The Fed on Monday said large banks hoping to repay TARP must show they can access public equity markets, sell long-term debt without government backing, foster lending, maintain sufficient capital, meet their funding obligations, and support their subsidiaries.

American Express, Bank of New York Mellon Corp, BB&T Corp, Goldman, JPMorgan, Morgan Stanley, State Street Corp and U.S. Bancorp have signaled their intent to repay the government, people familiar with the matter have said. Some of the requests have not been made public.

Repaying TARP could leave recipients 'free and clear, like a real American free citizen, corporate citizen, like we were in the past,' JPMorgan Chief Executive Jamie Dimon said on a conference call on Monday.

To free themselves from Washington, banks still need to buy back or get rid of government warrants to buy their shares. The government got these when they injected money from TARP.

More than 600 banks took TARP money; about 20 have paid it back, Treasury Department data show.

American Express took $3.4 billion from TARP, Bank of America $45 billion, Bank of New York Mellon $3 billion, BB&T $3.1 billion, Goldman $10 billion, JPMorgan $25 billion, Morgan Stanley $10 billion, State Street $2 billion, SunTrust $4.9 billion and U.S. Bancorp $6.6 billion.