Categories
Economics

[2696] Good news is bad news and bad news is good news

This is truly a bonked up world. Sometimes it is as if humanity as a whole does not really know what it really wants. No, what it wants, what the market wants, is to have its cake and eat it too. Ever since quantitative easing became orthodox monetary policy, signals have been mixed up that it confuses the whole market.

Take QE for instance and its effects in Asia. Experts were worried that the expansive monetary policy in the US and more so in Japan these days were fueling asset inflation in across emerging Asia and elsewhere. There is also effectively a manipulation of exchange rates even if it is unintended and done indirectly (do not call it competitive devaluation!), which helps the export sectors of economies which are committed to QE. Those who see their currency appreciating by too much blame QE.

But now that the Federal Reserve Chairman Ben Bernanke said will end when the economy recovers, the equity markets of the whole world are tanking.

From 10,000 feet high, the ridiculousness comes in the form that good news is bad news and bad news is good news. The exact reason for the end of QE is a recovered economy. Judging by the equity and bond markets’ response to Bernanke, it seems that those markets are afraid that the market is recovering.

This highlights how QE has truly detached from the real economy.

As a digression, that does not mean that the QE is not working. It merely means that QE has caused these markets to be divorced from the so-called Main St. The real economy in these QE countries with its high unemployment rate and stuff clearly does not go in tandem with equity market. In the same line, I am the accusation that “Abenomics” has failed only because the Nikkei has jumped off the cliff as missing the point about the function of QE. The QE remains an expansive monetary policy aimed at improving output and not pushing the stock market up, however the function of the stock market as a leading indicator. The fact that the stock market and all of those investment papers are not part of the GDP calculation only stresses the actual intention of QE.

Looking closer, the detachment is understandable I suppose. It is a world of cheap money where the transmission of monetary policy is imperfect. Not all of those money get to the real economy, however it lowers long-term borrowing costs.

Anyway, in non-QE countries, oh, boy! It is almost like a boom. Domestic demand is strong, the stock market goes crazy (relatively because, when the KLCI is compared to regional bourses, all one can say is meh) and yields are so low that it makes sense for the government like Malaysia to expand its borrowing.

But now with the speculation of a tapering and Bernanke’s statement of the end of QE, the same those who complained about asset inflation are panicking, begging, Ben, please, don’t send the ‘copher back home. Stock market is down, yields on government bonds are up and the ringgit got spooked.

And yes, who can forget the craziness of the Treasuries are an insurance to its own downgrade? The magic of reserve currency!

Oh well. Just another day in this crazy world of ours.

At least gold is going down and I am extremely delighted of that. And that is not crazy.

Enough ranting. I have work to do.

Categories
Photography Travels

[2695] Mountains greet thee

Bali was my final destination after two or three weeks travelling all the way by land from Jakarta. As I crossed the Bali Sea on a boat from Banyuwangi, Gilimanuk and this greeted me:

20121226Indonesia2 (123)

I do not remember the name of this mountain. It could be Prapat Agung but looking at the map, the twin (even three?) peaks might suggest it is not.

Categories
Photography Travels

[2694] Rocks smash romantic words

Prambanan's silhouette

When I first read of Prambanan, in my mind there was an amazing structure that overwhelmed everything. But my expectation of it proved too much. I felt too many words had romanticized blocks of big ancient rocks.

Please do not get me wrong. Prambanan, from afar, looks amazing, mysterious. It imposes itself on its surroundings.

It is just that the experience of actually being there erodes the very air that makes it out of this world. It likes being awed by a rainbow but once you have learned that it is merely an interaction between light and water vapor, it ceases to be mysterious. It becomes just physics. And here was Prambanan representing the gods of Hindu built by the Sanjayas, once rival to the mighty Sailendras and Srivijaya: a pile of ancient rocks.

It does not help that I have been to Siem Reap. There, reality was grander than anything I had imagined. Rightly or wrongly, experience informs expectation and Angkor pushed my expectation of everything else that came from that particular era of Southeast Asian history even higher. Whatever expectation I had of Pagan, Borobodur and Prambanan got pushed up no thanks to the Angkor temples.

My expectation was Icarus. Reality was the sun. Prambanan is not as impressive as I had first imagined.

But I am glad that I visited Prambanan anyway. As always, it is always good having something concrete to back up the stuff I read in books to reaffirm that things out there are not just some fancy imagination concocted by the human mind. They are real and once upon a time, they were the centers of the world.

Categories
Personal Photography Travels

[2693] A farmer in Bali works harder than me

I have not been updating this blog of mine as often as I would like to. I have been busy with work and life in general.

Still, I have lots to say but just not enough time to write. I partly blame Twitter for that, which allows me to blow some steam off so that none accumulates to make me really wants to write anything in full. It is surprising how 140 characters can do wonders sometimes.

The fact that I have stopped writing for The Sun and Selangor Times after the May 5 election does not help in pushing me to write more.

But there is stuff in the pipeline and I want to warm up before things get too fast on that front. So, blogging is a good way to give me a giddy-up moment.

Also, one thing with me is that I feel ashamed if I see somebody works harder than me. And here is a self guilt-tripping for me:

A farmer in Bali

He is a farmer somewhere in Ubud, Bali, Indonesia, some time late in the morning. And he works way harder than me.

This was pretty far off from the main road. I was on a bicycle, exploring the place and took a nap somewhere under a coconut tree. It was an awesome in-between jobs vacation.

Okay. I want to take more holiday. Crap.

Categories
Politics & government

[2691] Soon, Reformasi will fade

The wisdom of our age has it that young adults are more likely than not to vote against Barisan Nasional. A survey carried out by the Merdeka Center for Opinion Research backs this up. In a report it published on May 3, the poll agency found out that Malaysians in their twenties and thirties preferred Pakatan Rakyat to BN by a significant margin. In contrast, support for BN was the strongest among those aged 50 or older. In a country where the median age is younger than 30 years old, that offers some hints about the political future of the country.

While that is so, nothing guarantees that wisdom will last for too long.

The generational divergence Malaysia is witnessing now has a lot to do with the political turmoil of the late 1990s. The sacking of Anwar Ibrahim as the deputy prime minister and the subsequent events that followed made a lasting impression on the minds of these young Malaysians who then were still in school, in university or new to the labor market. Whether it was about Anwar or about a larger sense of justice — that something was extremely wrong — they were moved by the event.

These Malaysians are also the largest age cohorts that Malaysia has ever seen yet. It is not merely a coincident that BN comes under intense political pressure exactly when these generations are maturing and exercising their political muscles.

Each generation has an episode which defines their political belief and partly, their worldview. Those above 50 years old now remember the old Umno and hold dearly onto those nostalgias. Future young Malaysians, those in their teenage years and even younger, will no doubt have their very own episode.

Unlike the others however, these new young Malaysians have their book wide opened and its pages unwritten yet. There has not been any big wake-me-up moment for them so far.

One thing is certain though. Time has the power to make society forget the past. The old old generation will disappear into the background, hopefully bringing with them the ghost of May 13, among others. The old new generation — the young adults of today — will have their political views at the new bedrock of Malaysian society. The new new generations will challenge the prevailing views, as youth always do all around the world.

These new young Malaysians will not remember the events of 1998 because they will never experience it. It is much like how young adults today do not remember the events of 1988 when the old Umno was disbanded and the judiciary came under assault by the Mahathir administration. It is the exact reason why many young Malaysians today are not swayed by May 13 and scaremongering opportunists who fuel their sad career on racist politics.

History books alone are insufficient to influence a whole generation so comprehensively. No matter how moving words in the archives can be, reading them in a dark library room up in the stacks or deep in the basement is a passive, cold action. Words of history may work for a minority with true appreciation of history who read heavily but for the majority, they have to be in the dizzying mist of action before the essence of the era seeps into his or her being.

So the new new generation will forget. Society will forget. Slowly but surely, the what-we-call Reformasi era will take a bow, come down off the stage and be relegated to the pages of history.

That may be a comfort to BN. It is a second chance for them in what seems to be a contest between BN the rock and PR the water.

Nevertheless, BN will have to suffer the demographics and the momentum of time for now.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
First published in The Malaysian Insider on May 31 2013.