Author: Hafiz Noor Shams

For more about me, please read this.

Categories
Economics

[1380] Of targeting for an unchanged Malaysian rate

Do we need a rate cut following the September 18 footstep of the Federal Reserve to properly manage the Malaysian economy from the monetary side of the equation?

The answer is possibly no. While the US is the largest trading partner for Malaysia, the state of the US economy is not the only factors that need to be considered in managing the local economy.

The slowdown of the US economy, partly signaled by the slowdown in demand for electronics as well as the subprime mortgage crisis affect trade between Malaysia and the US adversely. The effect however is being mitigated by large government spending and as mentioned earlier by Bank Negara, robust domestic consumption and investment. While I personally expect a slowdown in the Malaysian economy, I have a feeling that the state of our economy is healthier than the one suggested by those in the broking business. For those following the security industry, suddenly, they have become more pessimistic than me!

Anyway, with a respectable performance so far, there is limited need to cut rate in order to boost the economy. We need not appeal to the short time horizon that any financial indicator proffers.

At the same time, with the rate cut by the Federal Reserve, it might actually spur growth for the Malaysian economy. First of all, it might improve the US economy which in turn encourages trade between the two countries though Malaysian export will be more expensive compared to US goods; US export will be cheaper compared to Malaysian goods. Secondly, with the reduced interest rate differential between that in the US and Malaysia, more funds could actually flow into Malaysia. Both, sooner or later would strengthen the Malaysian ringgit against the US dollar as capital flows into Malaysia from the US.

So, against, less reason to cut the Malaysian rate the next time the Bank Negara Monetary Policy Committee sits in October next month.

On the other side, inflation seems to be well contained. Hovering around 2%, it might give a rate cut a chance but with the upcoming festive season as well as increasing crude oil price, it is not wise to bet for a rate cut.

If I were a voting member within the MPC and the environment stays practically the same, I would vote like how the MPC had voted earlier; do nothing to let the rate stays at 3.50%.

Categories
Liberty Society

[1379] Of superficiality is inferior to sincerity

I would have almost forgotten that religious police are patrolling the streets of Malaysia, trying to catch those that abstain from fasting during the month of Ramadan, if I had not caught a piece of news report stating so yesterday. In my mind, there is no confusion that the religious police forget that it is sincerity that matters, not coercion.

This is perhaps but a symptom of how for the Muslim society in Malaysia, specifically the religious conservatives, imposition of their moral values on others has become a favorite pastime instead of self-improvement. Several other issues that lead to the same conclusion are apostasy and moral policing.

Concerning cases of religious freedom in particular, religious conservatives are more interested in forcefully preventing a person from choosing his or her religion rather than understanding why the person is leaving Islam. Indeed, when debates on Lina Joy dominated public domain, some religious conservatives as well as other sympathizers leaned on superficial factor as the main issue — procedure — whereas those that see it pass skin deep know full well that it is about freewill; liberty; freedom.

All this portrays Islam in a bad light to outsiders. Thanks to religious conservatives, many outsiders see the religion as stressing on appearance rather than appealing to the heart. I have always in the opinion that religion is about the inner self, the content of a book, not its cover. This is why freewill is so crucial; sincerity and freewill come together. Without freewill, there can be no sincerity; an unfree conscience knows no sincerity. What is the point of having Muslims that are unwilling to be Muslims? What is the point of forcing somebody to do religious biddings? Looking the issues through Islamic tradition, would the supreme being not know what is the truth?

Religious conservatives fail to understand this. For this reason, religious conservatives will always be ridiculed for their preference for the superficial.

Categories
Economics

[1378] Of a gem by Dan Hamermesh

I was wondering how one of my professors is doing these days and so, I looked for him up on the internet. I did not take long for me to rediscover his website. Within the site, I found this gem. Here is a sample of his postings:

September 3, 2007—We took two of the grandchildren to the Schlitterbahn, a very extensive waterpark about one hour away. I spent the morning with the nine-year-old granddaughter going on various rides with her—and standing in lines too. We spent 10 minutes lining up to go on the Black Knight, but then had to spend 60 minutes in line to go on the Wolfpack. We debated whether waiting the 60-minute wait was worth it. The time spent waiting is like a price, so the first trip on the Wolfpack was 6 times as ”expensive” as the 2nd through 7th rides down the Black Knight would have been. So, was the marginal utility of the first Wolfpack trip equal to the marginal utility of the 2nd Knight trip, plus that of the 3rd, 4th, 5th 6th and 7th? My guess is that the marginal utility of additional Knight trips after the 3rd that day is probably zero. Moreover, judging by my granddaughter’s expression of sheer delight once we started down the Wolfpack, the marginal utility of the first Wolfpack trip exceed all the extra utility that would have been generated by 6 additional Knight trips. We made the right choice!

I really like it when he relates economics concepts to his everyday life.

In fact, he should start blogging and concentrate on that theme! I think it would be a popular blog if he gives it a chance.

Categories
Sports

[1377] Of first leg of the UEFA Cup: Ajax 1, Dynamo 0

I am relieved. With Ajax’s recent run, I had expected the worst but there is still hope:

LONDON, Sept 20 (Reuters) – Former European champions Bayern Munich and Ajax Amsterdam started their UEFA Cup campaigns with 1-0 wins in Thursday’s first-round matches.

[…]

Ajax also look in better shape than Bayern after winning at Dynamo Zagreb. Dane Dennis Rommedahl went round keeper Georg Koch to score the winner from a pass by strike partner Klaas Jan Huntelaar just after the hour mark. It was a mixed time for the money-spinning English Premier League clubs. [UEFA Cup: Bayern, Ajax get narrow wins. Soccernet. September 20 2007]

The away goal rule will be precious for the return match at Amsterdam scheduled in two weeks time.

And oh yeah, did I mention that Michigan razed Notre Dame to the ground?

Categories
Liberty Politics & government

[1376] Of throw away common law, says a corrupted judge

Not too long ago, Chief Justice of Malaysia, Ahmad Fairuz Sheikh Abdul Halim suggests that it is time for Malaysia to stop making reference to the English Common Law and develop its own common law. Later, the same individual is caught red-handed commitiing corruption of the highest order.

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Transcript is available here.

Previously, religious conservatives jumped on the proposal, supporting the Chief Justice. Little did they know that they walked hand in hand with a devil. Now, go and defend your hero.

This guilt of association, despite fallacious, is highly satisfying.

But there may be one thing that goes farther than fallacy. Recall that the same Chief Justice, or more fittingly, Chief Injustice, was one of two judges that voted against Lina Joy, much to the joy of local religious conservatives. It would be interesting to see if that case was fixed too, in the name of religion. Back in April 2007, Minister Nazri Abdul Aziz suggested that popularity is more important than justice….