The Trump Effect and the UMNO-Red Shirt Buffoonery


November 27, 2016

The Trump Effect and the UMNO-Red Shirt Buffoonery on the Malaysian Economy

by Koon Yew Yin

http://www.freemalaysiatoday.com

 

I can see clearly that there are various push and pull forces at work in our economy. Some of these forces are linked to political ones which economists attached to banks or universities do not want to talk about publicly. But they are happy to do so privately or in coffee shops with their good friends.

Image result for The Trump Effect

Other forces are more obvious but it is still useful to emphasise them in case they are easily forgotten.

Let me flag some of these which will be of special concern to investors in the market.Firstly, there is of course the “Trump effect”.

Readers will recall that I had predicted – contrary to many analysts – that the US stock market would head higher post-Trump. Well, for now, my prediction has proven to be correct.

One of the world’s foremost business newspapers, The Financial Times, in a lead article on November 26 noted that when Wall Street traders departed for Thanksgiving, they could celebrate a rare achievement. On Monday and Tuesday, the four most widely cited indices of US stocks — the S&P 500, the Dow Jones Industrial Average, the Nasdaq Composite and the Russell 2000 —hit all-time highs simultaneously. The last time a “grand slam” took place was on New Year’s Eve 1999, at the height of the tech bubble.

The article noted the breakthrough for stocks in the US which had moved sideways for two years since the Federal Reserve stopped its quantitative easing programme, seemed to confirm a regime change. Prompted by Donald Trump’s victory in the presidential election, the narrative has changed to preparing for an era of tax cuts, deregulation and fiscal stimulus, after eight years of markets being guided by the Fed’s historically low interest rates.

I also predicted in my article “Trump is better for business than Hillary, that the Malaysian stock market and other Asian markets will also strengthen as a result of the US economic recovery.”

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The UMNO Redshirt Buffoons

Specifically I had written: “History has shown that when the Dow goes up, almost all the stock markets in the world, including KLCI, go up.”

 Well, the second part of my prediction has still to happen.On November 10 when my article was published, the KLCI stood at 1652.74. At the close of November 25, it stood at 1627.26 – a drop of 25 points.

Of course it is much too early to say what will happen next but my prediction that our market will move in tandem with the US market – that is upwards during the next 12-18 months still stands.

There are two big dark clouds hanging over the market. One is the big black hole left by 1Malaysia Development Berhad (1MDB) which most analysts are aware of but are too afraid to talk or write about openly for fear of being branded as anti-national or taken under Sosma and put into solitary confinement.

I will not go into the size of the 1MDB financial hole but will leave it to our accounting experts to do the mathematics. My main concern is not so much the actual financial loss incurred by the government.

Image result for Najib Razak

CIC of the Red Shirt Buffoons

Although this will go down in history as one of the biggest scandals carried out on a nation’s financial guardians and gatekeepers, frankly the actual financial loss is really not that big and it is one which the nation’s treasury can well afford.

What we cannot afford is the loss of confidence among foreign and local investors which cannot be easily quantified. Should this lack of confidence continue, then my predicted Malaysian market upturn will be undermined.

There is a second dark cloud – and this is the Red Shirts phenomenon. We have now seen the Red Shirts political ‘mat rempits’ come to centre stage in our political life. I am not only referring to Jamal Yunos but also his supporters and leaders who are now engaging in the use of force, threats of violence and other provocative actions in Parliament, Komtar and elsewhere and aimed at whoever they see as opposed to their vision of party, racial and religious dominance.

Everyone who has access to a smartphone will have seen the behaviour of these street and parliamentary hooligans and how they are destroying the peace and harmony of the country. Well, perhaps not everyone. It seems like the country’s leaders including the Prime Minister, the entire Barisan Nasional cabinet, the Inspector-General of Police, the Attorney-General and others responsible for law and order in this country have not seen these videos.

Or if they have viewed them, they do not care.

Let me be very blunt. The business community and investors in the country – foreign and local – do not read Utusan Malaysia or any of the Malay papers. They do not listen to Radio Malaysia or view TV3.

They care about how their money and the market is affected by these thugs and hooligans. They can make up their own mind on which way our national politics is going.

And if the Red Shirts phenomenon gets worse, we can expect some of them to take out their businesses and money.

Koon Yew Yin is a retired chartered civil engineer and one of the founders of IJM Corporation Bhd and Gamuda Bhd.

 

5 thoughts on “The Trump Effect and the UMNO-Red Shirt Buffoonery

  1. Improving the investment climates of their societies is a challenge facing all governments. In today’s investment climate in Malaysia, who else dare come to invest in Malaysia but China through its SOE’s?

    Hey, katasayang, lu tak payah balik Tongsan, Tongsan dah sampai. I now pronounce you not a pendatang. I do not want to hear the word pendatang from you again, ever. But layu-layu, you can continue with that silly thing. Now, go join the Red Shirts and teach them to sing The East is Red: “Dongfang hong, taiyang sheng, Zhongguo chuliao ge Mao Zedong….”

  2. I still do not get it why the pre-occupation with the Red Shirt. Even if thjey are well-funded by Najib and Rosmah with billions, they are only a few thousand strong and a waste of money.

    Ultimately, its Hadi’s PAS that is the problem. Mass addiction to delusion is massive, deeply complicated problem to fix. Wasteful cowardly malice, its just does not get that big..

  3. bigjoe99 :

    It is the potential fusion of religious extremism and intolerance (PAS-style) and redshirt street thuggery (Far Right, Malay supremacist, neo-fascism) which is dangerous to the future of Malaysia. It is called clerico-fascism.

    Notorious examples of clerico-fascism from the past in Europe include:

    Romania under its Iron Guard clerico-fascist regime
    Hungary under the Arrow Cross regime
    Croatia under the Ustasha regime

  4. The Red Shirts are used as a pretext for the police and army to use of force when necessary. A typical battalion consists of 300-800 soldiers. How many battalion is “a few thousand” Red Shirts? Don’t forget a few hundred sent to KL from Morib and Ampang area could start the May 13 riots.

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