Tuesday, 24 February 2009

It just gets darker...

It was around 7 p.m. today when one of my bosses came up to me and told me a shocking news.

BNM decided to reduce OPR by 50 basis points effective from 1 March 2009.

I then asked him ,"What about SRR?" He paused and then said,"1% cut."

Source: http://farm4.static.flickr.com/3265/2477245264_089feac73c.jpg

Now before you get too happy and start cheering (since some of you might believe BLR might be going down as well), think of what the signal BNM is sending by sending OPR on another journey downwards. It was not too long ago (21 Jan 2009) that BNM reduced OPR drastically by 75 basis points along with it SRR by 1.5%.

As one should be aware, Overnight Policy Rate ("OPR") is an overnight interest rate, set by BNM, used for monetary policy direction. It is the target rate for the day-to-day liquidity operations of the BNM. So when BNM wants to lend or borrow for day-to-day needs, it will be transacting at a range of +/- 25 basis points or 0.25%. In effect, it is also a tool where BNM is telling the banks what is the risk free rate. By lowering it, they are indirectly telling the banks to lower their cost of lending.

Now, the January cut was largely expected but the quantum was kind of a shocker. But the February cut and the quantum involved is not something which I would expect.

The Malaysian economy has been adversely impacted by these global developments. Exports and industrial production have declined steeply, while private investment activities have slowed down in recent months as businesses scaled back their spending. Consumer sentiment has also been affected by the weakening conditions in the labour market. The domestic economic conditions are expected to continue to remain challenging in the coming quarters with the continued deterioration in the global economy.

Yup, that press statement released today from BNM confirms my worries alright. There is something the Government is not telling us, the rakyat. It is something we all knew it all along despite the reassurance that all is well until not too long ago, the DPM decides to tell us, actually, all is not well. And the latest move by BNM is merely an indication of the kind of magnitude they are expecting.

Anyway, to soften the blow from the signal they sent, BNM wrote this following the bleak prognosis of the coming economic downturn.

While this has raised the risk of an economic contraction in 2009, the prospects remain intact for an economic recovery once global conditions stabilise given that the economy is not overleveraged, the financial system remains sound, and the external position is healthy.

With inflation on a moderating trend, the task of macroeconomic policy is to support domestic demand until conditions in the global economy show signs of normalisation. Further measures will be introduced by the Bank to ensure continuous access to credit as well as to minimise the impact of the economic downturn on specific affected groups.

Basically, BNM wants us to do things per normal before the financial crisis. To keep spending and investing and boost the local economy.

Sigh... there seems to be no end in sight for the dark days ahead. I am definitely putting off some planned expenditures after what BNM announced.

But you know what is funny, I am still working till late nights. I guess like what someone once told me about being thankful; your bonus this year is you are still working.

Thursday, 5 February 2009

The End of Noble Idealism?

Have you observed the rather rainy CNY weather for the past year or so? It seems that the weather is going haywire and honestly, things aren't as predictable today as before.

I remember in my younger days, CNY were always hot and sunny. Year in, year out my dad will always say, CNY is a dry and hot season, just wait and see.

This year however he said quite point blank and forlorn, "It is a wet season this year. How the weather have changed."

But I love the rain.

Source: http://www.freefoto.com/images/16/05/16_05_76---Rain_web.jpg

I love watching the flow of water streaming down the skies, trickles turn into gushes of water flowing down the stones, into the pool and watching the carps swim by.

Life can be serene if you take time to stop and watch. At times, I simple forget about time and the things happening around me. Anyway...

A good lesson I learn today is watching how swiftly the Perak government fell. I guess in the game of politics, this is only natural. Afterall, we based our governance system on less than ideal system. We have inherited a governance culture that is alien to call it norm. A system build on idealising the monarchy, yet limited by constitution. Isn't it an irony that England has no formalised constitution yet functions within the expectation of modern westernised mature democracies?

I often romanticised about the idealism of a benevolent king, acting impartial and fair to his subjects. When I went to Kuala Kangsar recently, I felt happy. Call it irrational exuberance but I am honoured to walk and drive in this royal city which produced what I believed to be benevolent kings. I often kindle in my mind what great lineage indeed for the true royalties is the sole link back to the founder, Parameswara, of the great city, Malacca. How many royalties can claim such lineage and bloodline? Isn't this the bluest of the blue bloods? Perhaps it is just me but it is just unbelievable to breath the same air as they who graced our lives with their noble presence.

Source: http://img-fan.theonering.net/rolozo/images/rivoche/gandalf.jpg

Of course, my wife has to remind me that most of the time, they live in Ipoh, rather than the royal city, Kuala Kangsar. But she is the first to ponder retiring there after getting her washed and set for RM18. Is it so wrong to yearn for an institution that is impartial, fair and just? More so one by birth with a proud history.

I guess like every romantic affair, one tend to forget that the ones we love are also human beings. As glaring as the faults may be, all it takes is a brush off here, a trivialising there and a denial elsewhere to turn a mountain into an ant hill. Afterall, there must be no blemish for such personification which is makes little logic sense it is as plain, ordinary and common.

Oh how much I have been proven wrong today. I am sorely disappointed (and heart broken too... to quote Hee Yit Foong) to watch my idealism shatters before my sight.

Yet, I will not forsake my King. My pledge of allegiance remains much the same though nonetheless I am still heart broken and disappointed.

Oh how I yearn to return the days of old, where people are less divided and the constitution is cherished not altered like a piece of over sized pants or treated like a square peg to fit in a round hole.

Will I see the predictable sunny and hot CNY again? Will the bluest of blue galloped gallantly on a white horse save us at the hour of reckoning? Or must I just accept we live under an unpredictable and unexpected temperament of others, who determines our fate best rest in their hands, even as they are just as human and err as easily as us?