Saturday 29 July 2017

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 500Dow 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.

Thursday 27 July 2017


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 :

Thursday 13 July 2017

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.”

Tuesday 4 July 2017

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

Saturday 1 July 2017

Malaysia, Qatar, UAE, 1MDB. We didn't start the fire

Is the smash hit from Billy Joel taken from the album storm front.

There is a storm front building, and even if we didn't start the fire, get ready for the headlines : 1MDB, emerges in Saudi Arabia- Qatar mess.

The Wall Street Journal has the story. Read below :

Yousef al-Otaiba linked to Malaysia 1MBD scandal: WSJ

Companies connected to UAE's envoy to US received $66 million from accounts linked to Malaysia's 1MDB fund, WSJ reports.

Companies connected to the UAE's ambassador to the US received $66 million from offshore accounts that contained money allegedly embezzled from Malaysia's 1MDB investment fund, according to documents reviewed by The Wall Street Journal.

In 2015, allegations emerged that billions of dollars were stolen from Malaysia's state-owned 1MDB.

The WSJ said leaked emails of ambassador Yousef al-Otaiba included "descriptions of meetings between Shaher Awartani, an Abu Dhabi-based business partner of Mr. Otaiba, and Jho Low, the Malaysian financier the [US] justice department says was the central conspirator in the alleged $4.5 billion 1MDB fraud".

The US justice department said that the billions had been stolen from 1MDB by people close to Malaysian Prime Minister Najib Razak.

The fund is also at the centre of investigations in many other countries, including the United Arab Emirates and Singapore.

Najib has denied any wrongdoing and 1MBD officials have said it has found no evidence of misappropriation.

According to the WSJ, in addition to the meetings between Awartani and Low, "a Singapore criminal case against a Swiss banker disclosed $50 million of payments made to the companies connected to Mr. Otaiba, including Densmore Investments Ltd. in the British Virgin Islands and Silver Coast Construction & Boring in the UAE". 

The WSJ added: "In separate documents reviewed by the Journal related to Singapore's investigation of alleged 1MDB-linked money laundering, authorities describe Densmore as controlled by Messrs. Otaiba and Awartani. Those documents also describe another $16 million of separate payments to Densmore in the form of loans from a company connected to the alleged fraud."

Hackers from a group that calls itself "Global Leaks" began leaking emails from Otiaba's inbox earlier this month.

According to the WSJ, a number of those emails show communications between Otaiba, Awartani and Low.

"On May 5, 2015, a Dubai-based financial executive working at a company controlled by Messrs. Otaiba and Awartani told Mr. Otaiba in an email that Mr. Low had instructed the men to close their accounts at BSI Bank, a private Swiss bank that investigators in the U.S., Switzerland and Singapore say played an instrumental role in the alleged 1MDB fraud. Densmore held an account at BSI," the WSJ said.

The WSJ said Otaiba declined to comment on its findings, but a spokeswoman for the UAE embassy told the news organisation that the embassy "noted the existence of numerous orchestrated dossiers that have been prepared … targeting the ambassador and which are purported to contain hacked emails".

She also said the embassy notes "the context of the role of the UAE in the current suspension of diplomatic and economic relations with the state of Qatar" and as a result, the embassy "will not talk to or respond to any of these dossiers".

Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic ties with Qatar and imposed sanctions on the country on June 5, accusing it of supporting "terrorism", an allegation Doha has rejected as "baseless".

Last week, the Saudi-led bloc gave Qatar 10 days to comply with 13 demands to end a major diplomatic crisis in the Gulf, insisting, among other things, that Doha shut down Al Jazeera, close a Turkish military base and scale down ties with Iran