masterwordsmith-unplugged

If one were to skim through the articles of various newspapers (both local and international), one message resounds in a unified fashion - we have to brace ourselves for tough times ahead of us. While enjoying my cup of hot coffee this morning, it was most depressing for me to read the following articles ....

In Malaysia, The Star reports:

* Malaysia Airlines (MAS) is mindful of the current economic situation and its impact on the airline. “We don’t know how bad it is going to be. Whatever it is, it is going to be very tough and we are watching our business on a daily basis,” managing director and chief executive officer Idris Jala told reporters after the signing of a code-share agreement with Jet Airways yesterday.

* More than half of the mid-level managers in Malaysia are feeling the impact of the economic downturn in their work environment, especially on concerns over job security, according to a recent global Accenture study.

* Malaysians are not saving enough and they are not prepared to face a financial meltdown should they lose their job or be retrenched.

According to the latest findings from Citi’s Financial Quotient (Fin-Q) 2008 survey, only two in five (39%) Malaysians actually save and less than one-in-three (28%) make and stick to a monthly budget.

* Palm oil planter Kuala Lumpur Kepong Bhd’s (KLK) net profit for the three months ended Dec 31 fell 77% to RM65.8mil from RM291mil in the previous corresponding period.

Business Times reports:

* ESSO Malaysia Bhd (3042) recorded a fourth quarter net loss of RM327 million due to stockholding losses, from a steep decline in crude oil and product prices in the second half of 2008.

The company said it expects the industry to continue to be challenging in 2009, in view of extreme price volatility and growing global economic uncertainty.

* The research house notes that more developers are providing more incentives and rebates to attract home buyers

CITI Investment Research continues to hold a negative view on Malaysian developers, saying that the sector's worst is yet to come.

"We noticed that more developers are joining in the bandwagon to provide more incentives and rebates. Clearly a sign of more difficult times and a reflection of significant drop in monthly sales," the foreign research firm wrote in a report dated February 13 2009.

During the 1998 financial crisis, residential property transactions fell by 30 per cent, it added.

* THE ringgit lost ground against the US dollar for three consecutive days yesterday on fresh concerns about the global banking sector, dealers said.

At 5pm, the ringgit closed at 3.6545/6595, its lowest level since November 2006, compared with Tuesday's 3.6380/6420.

The dealers said a deepening global recession prompted investors to dump high-yielding currencies and this led market players to the greenback.

* Asian shares fell yesterday after taking their cue from a plunge on Wall Street where investors appeared to have doubts over the effectiveness of President Barack Obama's economic stimulus package.

"Investors are still trying to figure out the exact scale of the nonperforming loan problem in the US," a dealer said.

"A number of factors have combined to weigh on global sentiment today ... creating a very negative environment," said IG Markets analyst Ben Potter in Sydney.

"It's a sea of red for all sectors today, with the financials feeling the brunt of the pain." Hong Kong went against the grain to end up 0.6 per cent after chief executive Donald Tsang said his government may take measures to help the city's economy.

* BUMIPUTRA-Commerce Holdings Bhd (BCHB)'s (1023) net profit for 2008 may have fallen by more than expected because of higher bad debt provisions at its Indonesian unit, analysts said.

AmResearch's Fiona Leong sees BCHB making a net profit of RM1.98 billion, which is 11 per cent lower than a year ago and 6 per cent less than her earlier forecast of RM2.1 billion.

The New York Times reports:

* New-home construction fell to its lowest level on record in January as builders virtually closed up shop amid falling demand, tightened credit markets and a flood of foreclosure properties.

The Commerce Department reported on Wednesday that privately owned housing starts in January fell 16.8 percent from December, to an annual rate of 466,000. That was the slowest pace since at least 1959.

The numbers show a housing market that is still declining after more than two years of slumping prices and lower demand. Home values, which rose steadily for more than a decade, have fallen by an average of about 25 percent from their peaks, and economists expect that prices will continue to slide as more people lose their jobs and the economy slips deeper into recession.

* The New York Times also gave a comprehensive overview of Credit Crisis — The Essentials at this link.

* The Federal Reserve cut its economic outlook for 2009 on Wednesday and warned that the United States economy would face an “unusually gradual and prolonged” period of recovery as the country struggles to climb out of a deep global downturn.

In economic projections released by the central bank, the Fed’s Open Market Committee said it expected that the economy would contract by 0.5 percent to 1.3 percent this year, that unemployment would rise to 8.5 to 8.8 percent and that inflation would remain under greater pressure. Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates “more than offset” any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook.

With such a bleak outlook all over the world, I sincerely hope that our political leaders and the relevant departments both at the federal and state levels will double or triple their efforts to steer our country's economy in the right direction by paying more attention to immediate needs rather than other issues that seem to divert the nation's attention from what is more serious and needs immediate attention.

We need to stop living in denial and pretend that things are not that bad in our country's economy when the statistics say otherwise. It took quite some time before reality set in for our country's Finance Minister.

On 17th February, Malaysiakini reported:

The government will have to cut its 3.5 percent growth forecast for 2009 if the decline in the country's exports hits double digits, Finance Minister Najib Abdul Razak said today.

"In view of the increasingly challenging international environment and as an open economy, Malaysia is also expected to face the effects of the slowing economy and world trade," he told the Dewan Rakyat.

"This development is expected to continue this year and will impact the country's economic activities throughout it," added Najib, who is also deputy premier and is expected to be appointed prime minister next month.

As it is, it appears that the focus seems to be on supposed nude pictures and wannabe-leaders going on moral crusades and senseless tirades on whether so and so should resign. Sigh. Which is more important? The rakyat or unfair attacks on ONE person?

Can we all have some degree of optimism for our future? However, the fact remains that such optimism can only be developed if the relevant departments put their nose to the grindstone to restore confidence in our country's economic outlook. In the mean time, we all have to tighten our belts and really watch our spending patterns and lifestyle....only God knows what will happen in the next few months.