Malaysia. Here Comes The Rain Again

Is the massive 1983 hit single from British duo the Eurythmics, taken from the album touch.

Malaysia, better watch out, because word in town is here comes the rain again!!.

Free Malaysia Today, has the story. Read below :

PETALING JAYA: Malaysia is likely to be hit by a recession in 2018, with most of the sectors expected to slow down, political and economic affairs analyst Prof Hoo Ke Ping predicts.

However, he said, the palm oil industry would do well due to the La Nina effect which will see more rain than expected, pushing production and prices for the edible oil upwards.

“Malaysians will feel the pinch of recession from next year onwards due to various factors, including a decline in consumer confidence and the retrenchment of workers from such sectors as oil and gas, banking, retail, and electronics,” he told FMT.

1MDB. New Rules

Is the current hit single from Dua Lipa, taken from self titled album.

There are new rules in place when it comes to 1MDB's case in the USA. Apparently now the USA is pursuing a criminal case against those who stole our money.

Does this mean Jho Low will soon be charged in court soon? The devil is in the details...talk in town is the fat boy, might end up being the WITNESS.

Reuters have some of the story here. Read below :

 The U.S. Justice Department is conducting a criminal probe into 1Malaysia Development Berhad (1MDB) and has asked for a stay on its civil lawsuits in connection with $1.7 billion in assets allegedly bought with money stolen from the scandal-hit state fund.

A total of $4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates, according to dozens of civil lawsuits filed by the U.S Justice Department in the past two years.

1MDB did not immediately respond to an emailed request for comment.

Malaysia. Rake it up

Is the current us top 20 hit by Yo Gotti & Nicki Minaj.

Malaysia looks like raking up, a long list of economic no no's, which soon could trigger a massive withdrawal by foreigners in the bond and equity markets.

Inflation is at an eight year high, foreign reserves held by Bank Negara stood at US99.1 billion compared to US141.4 billion in 2013.

To top it all up, reserve adequacy is low, compared to the countries near us.

Malaysia’s reserves are sufficient to finance 6.5 months of imports, according to data compiled by Commerzbank AG using a 12-month moving average.

That compares with 9.9 months for Indonesia, 10.8 for Thailand, 11.2 months for the Philippines, and 21.6 for China.

Shiller. I feel it coming

Is the massive hit for Weeknd & Daft Punk, taken from the album starboy.

The starboy in accurately predicting stock market crashes is Nobel laureate  Robert Shiller, with his own version of the price to earnings ratio known as the Shiller CAPE.

Shiller says I can feel it coming. CNBC has the story. Read below :

Yale University economics professor Robert Shiller has a warning for investors.

The Nobel laureate says low volatility paired with a questionable price-earnings ratio could wipe out a chunk of the stock market's value.

"The price increase just went step-by-step with the earnings increase. I think it's an overreaction to good earnings," said Shiller on Wednesday's "Trading Nation."

His comments came as the S&P 500, Dow and Nasdaq were hitting fresh all-time highs and the CBOE Volatility Index dropped to a record low.

In a special note to CNBC, Shiller writes that low volatility could be "the quiet before the storm." It's a phenomenon which Shiller says is making him "lie awake worrying."

And, that's not the only issue he's raising.

His Shiller PE Ratio, also known as CAPE, shows the price-earnings ratio based on average inflation-adjusted earnings from the last 10 years is over 30. The number carries significance because the only times it's been higher was just before the Great Depression in 1929 and mid-1997 to mid-2001.

"I worry that historically earnings have been trend-reverting," said Shiller. "Admittedly, we do have a president who's going to 'make America great again.' So if he's right, maybe then we're launching out in a whole new path. But it would be the first time in American history."

Shiller's latest analysis shouldn't be taken lightly.

His forecasting skills were recognized in 2013 when he won the Nobel Prize in Economics. He's known for predicting both the dot-com bubble and the housing bubble in his book "Irrational Exuberance."

If Shiller is right and the stock market ultimately goes back to trend, it could create havoc.

R A I N

Is the massive new single from the Script. It could soon be RAIN ING  for Jho Low.

The Singapore Business Times, citing former US ambassador to Malaysia, John Mallot drops a bomb shell : The USA will pursue criminal charges against Jho Low.

The story is below : http://www.asiaone.com/business/us-action-1mdb-could-put-time-limit-malaysias-political-chaos.

Najib Razak. The Good, the bad and the crazy

Is the 2015, massive hit for Imany, taken from their hot selling album French Women.

When you talk about Najib Razak these days, people only mostly see the bad.

So here is a special take on the good, the bad and the crazy, which Najib Razak has had a hand in where Malaysia is concerned.

First the good. Under Najib Razak this year, foreigners have pumped in more than US$2.4 billion. This is the most for any country in South East Asia, with the exception of Singapore.

Malaysian exports have shot up, outpacing that of Thailand, Vietnam or Indonesia, largely because the seven per cent drop in the Ringgit, makes the ringgit, the cheapest currency in South East Asia,  cheaper than even the Philippines peso for foreigners.

Malaysia is now not overly reliant on oil money to keep the GDP numbers rosy. Najib Razak has helped diversify the economy.

The bad, it's obviously Jho Low and 1MDB.

The crazy is despite all the positive economic vibes, Najib Razak is hugely unpopular in the Malay heartland due to the mess up in Felda and the GST hurting Malay businesses more than their Chinese counterparts.

Bloomberg has most portion of this story covered . Read below :

When the global trade rebound came this year, Malaysia held one advantage over its peers: the cheapest currency in Southeast Asia.

The ringgit is down more than 7 percent against the dollar in the past year, even after recovering in 2017. Exports from Indonesia to Vietnam are surging but Malaysia’s shipments are growing the fastest, accelerating to a seven-year high of 33 percent in May.

After a couple of years of slowing growth, declining investor sentiment and a corruption scandal involving a state-owned investment fund, Malaysia’s fortunes are turning. The World Bank raised the nation’s growth forecast in June by the most in East Asia, inflation is easing and foreign investors are more bullish on the stock market. That’s taking the pressure off the central bank to add more stimulus to the economy after last year’s interest-rate cut.

“The ringgit went through a difficult period but it is now helping exporters,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore. “That is boosting the economy and with domestic consumption improving, the central bank is very, very likely to keep rates unchanged in the next six to 12 months.”

Rate Decision

Bank Negara Malaysia will probably hold its benchmark interest rate at 3 percent on Thursday, according to all 21 economists surveyed by Bloomberg.

“Bank Negara is in a sweet spot now,” said Irvin Seah, a senior economist at DBS Group Holdings Ltd. in Singapore. “We had a strong run in the first quarter in terms of gross domestic product growth and inflation is gradually moderating. This provides room for policy makers to maintain the policy.”

The World Bank predicts Malaysia’s economy will expand at least 4.9 percent annually from 2017 to 2019, from 4.2 percent last year. Malaysia’s exports are equivalent to about 70 percent of gross domestic product in 2016 at constant prices, according to government data.

While risks remain -- including a general election and doubts about the strength of the trade recovery -- foreign investors are piling in. Non-residents purchased about $2.4 billion of Malaysian stocks so far this year, the most in Southeast Asia excluding Singapore.

An improving growth outlook means the odds are rising that the central bank will start signaling a more hawkish stance, said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore.

“The two most important things for Bank Negara are the growth outlook and financial stability risk,” he said. “Given the strength of growth, led by exports and palm oil, the probability of a hike next year is higher than a cut.”

Equities. Bridge over troubled waters

Is the current top five UK hit for the star studded Artist for Grenfell.

Goldman Sachs says that the stock markets low volume suggest that , it's a mere makeshift bridge over troubled waters.

Bloomberg has the story. Read below:

War or Recession Might Be Needed to Break Low-Vol, Goldman Says

Markets have been stuck in ‘low volatility regime’ for a year

Recent pickup unlikely to be sustainable without large shock

It’ll take more than central bank tightening to shake volatility from its yearlong slumber, according to Goldman Sachs Group Inc. A large shock such as recession or war is usually required.

That’s generally been the case for the 14 similar low volatility “regimes” since 1928, at least in equity markets, Goldman Sachs strategists Christian Mueller-Glissmann and Alessio Rizzi said. These periods on average lasted nearly two years, featured short-lived spikes and realized S&P 500 volatility was usually at or below 10.

Swings picked up across assets in the past week and investors are positioning for a shift higher, in part because of fears of central bank tightening, the strategists wrote in a July 3 report. But a sustained breakout is unlikely without an escalation in uncertainty or recession risk, they said.

“Volatility spikes have been hard to predict as they often occur after unpredictable major geopolitical events, such as wars and terror attacks, or adverse economic or financial shocks and so-called ‘unknown unknowns’ (e.g. Black Monday in 1987),” London-based Mueller-Glissmann and Rizzi said. “Recessions and a slowing business cycle have historically resulted in a high vol regime across assets.”

Goldman Sachs puts the chances of a recession in the next two years at 25 percent.

Low volatility isn’t unusual and tends to stem from a favorable macroeconomic backdrop with strong growth but anchored inflation and rates, similar to a “Goldilocks” scenario, Mueller-Glissmann and Rizzi said. Markets have reflected this since January, with equities reaching record highs, strong global growth and declining bond yields, they said