I am glad I did a tribute to David Bowie back last September. His demise was sudden as his fight with cancer was kept well hidden from the media. Sad.
http://malaysiafinance.blogspot.my/2015/09/bowie-deserves-more-accolades.html?m=1
Monday, 11 January 2016
The Big Short ***** (5 Stars)
The director did a smart thing by getting a few "guests" as themselves explaining various investing concepts and terminologies to movie goers - that was a hoot. Especially with Margo Robbie in bath explaining investing terminologies ... then we had Anthony Bourdain and even Selena Gomez.
The Big Short will be a frontrunner for Oscars ... the overwhelming stupidity, criminality, conspiracy and institutionalised depravity of the financial system will ensure that this movie will At Least get nominated as Best Picture this year. The Academy likes to give out honours to very old people or to make a statement ...The Big Short falls under the latter category. The voting members are filled with liberal minded, mainly Democrats or socialistic leaning members.
Even I am very mad with the debacle, we can see the carnage, the devastation ... and we have more than sufficient information on who the culprits were ... and at the end of the day, ONE person goes to jail.
I will take the odds n bet that it stands a great chance. Btw Christian Bale and Steve Carrell were awesome, but Bale has his nose in front for Best Actor. ***** 5 stars.
In many ways The Big Short being a reality tale, is but a reflection or copy of the same shit in politics. The great thing about financial crisis is that we get a lot more transparency and a lot more information from reams of data and opinions from experts. Something we do not always get from the dastard "industry" that is politics. A place where almost everyone has an agenda that is selfish and egotistical, and lies and empty promises or silly sales speeches dominate the vernacular. Whenever shit hits the fan, there will be the blame game, everyone on a first out best dressed ... the mocking of the truth and what is truth... the belittling of goodness of the human spirit.
I think we need to study the book, the movie a lot more because we can learn more on how to behave better as human, and a lot better as investors. There is always repercussions to gains and losses, its not just the money, investing in assets or losing always has a real effect on lives, whether you are winning or losing. So, if you are on the right side, you may not be totally "right". Making money is good, we cannot distill all the repercussions or collateral damage on the losing side ... which is why we should do our best to give back, to balance the scales of justice where we can.
Before you go to watch the movie, you may like to re-read a blog posting (cum printed article) back in June 2008 - it was my take on who should be blamed for the subprime crisis. Pretty accurate methinks.
Back in JUNE 2008, I wrote an assessment of the blame game for the sub prime crisis. It was also published in StarBiz when I had my weekly column Investing Scents. Looking back, it was a very good assessment and I still stick by it. In fact, Michael Lewis' book just confirms most of what I opined back then.
The Bald, The Beard & The Ugly
I was watching the uncomfortable grilling by the US lawmakers on Bernanke and Paulson. I pity those two guys. They are trying to fix a problem which was inherited but had to suffer the embarrassment of trying to persuade them to approve the funds. We all must be wondering who actually are the culprits that brought about such a calamity. I shall try to ascribe blame to the relevant parties. Its a highly subjective exercise, and everyone will have a different opinion, but that's ok. Here's my two cents worth (and rapidly diminishing two cents in value):
30% Management of Investment Banks & Mortgage Lenders - They were greedy. They had thrown risk management out the window. They were overpaid for the work they do. When the going is good, they all pocket more than their share of the chips on the table. The worst punishment they got was to walk out the door with nary an apology. The vast amount of liquidity in the system and the thirst for mortgages prompted them to "invent" new fangled instruments to package these loans and resell them, with little regard to the leverage effect. Lenders kept pushing adjustable-rate and subprime mortgages, while investment banks bundled millions of risky loans and reselling them to investors. It was when these investment banks started to buy these same instruments themselves that really decimated their capital.
30% Management of Investment Banks & Mortgage Lenders - They were greedy. They had thrown risk management out the window. They were overpaid for the work they do. When the going is good, they all pocket more than their share of the chips on the table. The worst punishment they got was to walk out the door with nary an apology. The vast amount of liquidity in the system and the thirst for mortgages prompted them to "invent" new fangled instruments to package these loans and resell them, with little regard to the leverage effect. Lenders kept pushing adjustable-rate and subprime mortgages, while investment banks bundled millions of risky loans and reselling them to investors. It was when these investment banks started to buy these same instruments themselves that really decimated their capital.
15% Alan Greenspan - He will continue to deny it was his doing, but since 2001 he advocated a lowering of interest rates and continued a strong money supply growth policy. That prompted the public to buy properties and even speculate in them. Greenspan was well known for lowering rates aggressively to counter any crisis – the query was that by doing that markets were never allowed to adequately correct the imbalances. This led to the credit explosion. Alan did see deterioration in the credit market back in 2003 and 2004 or was he blind, but didn't warn lenders off using the "non traditional mortgages" now seen as precursors of what is now a credit crisis until December of 2005, shortly before Greenspan resigned. The excessive liquidity in the system was not just by the Fed, in fact major central banks were guilty of pumping vast amount of money supply into the system. Back in 2004 Greenspan opposed tougher regulation of financial derivatives, and actually praised adjustable-rate mortgages and refinancing for homeowners.
35% Ratings Agencies (S&P, Moody's, Fitch) - They are the unwitting culprits, and I am being nice here. They rated loans and bonds based on these mortgages AAA status, which caused many buyers to believe in their assurance that they were buying solid AAA papers. The ratings agencies again were too late to downgrade these papers, long after the damage is done. Its their stupid ratings and analysis which gave fuel to these instrument to be hawked to unsuspecting investors. Its their stupid ratings and analysis that gave the investment banks the bravery to keep piling up these instruments to the market. What kind of value added analysis are the issuers paying these rating agencies for? Its obvious that the analysts knew much of the packaged loans consisted of subprime. Were the fees too enticing? Were the ratings agencies trying to curry favor with the banks? Maybe the analysts and managers were interested in going to work for the banks, where they can earn a lot more money. If these ratings agencies cannot do their jobs without fear or favour, how are investors to rely on these ratings anymore? Maybe the US should empower the government to rate bonds, especially if the government requires certain kinds of fund managers to own only officially-rated bonds.
15% The Regulators – The financial markets and the various instruments have their respective regulatory units. You may include the Fed, the CFTC, the SEC, FDIC, even the FASB into the fold. They are supposed to regulate and oversee the markets and the financial instruments. Where was the voice of reason? The last six years' housing and subprime mortgage bubble and bust had little to do with excessive government intervention. Instead they had all to do with the lack of any basic sensible government regulation of the mortgage market, regulation in practice rather than in theory. They should have instituted new guidelines and rules to govern these CDOs, credit default swaps, and the leverage aspect of financial firms and their capital at risk. Even till now, they are mainly silent.
5% Paulson & Bernanke - They could have tried to reverse the damage in their early days as Treasury head and Fed chairman respectively, but they basically inherited a huge problem.
Now they talk about having to properly regulate derivatives and new instruments properly - sigh, there were institutions and people already appointed to do those jobs, its just that they did not do their jobs properly. I am still waiting for some of the above to be prosecuted for what they did and didn't do. At the end of it all, it appears that what some of them didn't do would be more punishable.
What about the American borrowers, the homeowners themselves should shoulder some of the blame, right? I left them out of the above equation for a few reasons:
a) I do think there should be an element of "personal responsibility" for your actions, but it seems to me that they are already paying the cost for their foibles. Many had their homes foreclosed already. They have lost their deposits and the payments made towards these loans. It seems to me, they are THE ONLY group that has actually "really lost" materially and is already being punished for that. It is very hard not to be drawn into easy money, uptrending markets without need for deposits or proof of employment ... just join the party and the fees are shared gleefully all the way down.
a) I do think there should be an element of "personal responsibility" for your actions, but it seems to me that they are already paying the cost for their foibles. Many had their homes foreclosed already. They have lost their deposits and the payments made towards these loans. It seems to me, they are THE ONLY group that has actually "really lost" materially and is already being punished for that. It is very hard not to be drawn into easy money, uptrending markets without need for deposits or proof of employment ... just join the party and the fees are shared gleefully all the way down.
b) The bailouts do not really bailout the end borrowers, they extend the life of the companies. Maybe the bailouts will allow the companies more time to foreclose these properties in an orderly manner. Very few of those will be able to renegotiate their existing loans on decent terms to allow them to continue to fund their mortgages. Most of the loans are priced at a time when property values are at least 30%-40% higher than now - better to declare bankruptcy than to continue to reconfigure the loan, isn't it?
c) The public are not equipped to regulate themselves. That is why there are agencies created with "capable people" to regulate and monitor the markets. You cannot expect the majority of borrowers to understand in detail CDOs, credit default swaps, or whether the brokers are leveraging themselves to the hilt. You can only have assurance in relying on top ratings agencies branding certain papers as AAA. Which person is able to go and read the 500 page report and examine for themselves that these AAA bonds consist of thousands of small mortgages spread out over the country, how to value the price trends and affordability ratios of these borrowers?
d) The public will often act in herd like mentality. They are driven by greed just like most people. They see people making 50% in 2 years from speculating in properties, they want to be part of it. They try to apply for loans, and were probably even more shocked that these mortgage lenders were more than willing to lend to them. The markets are often characterised by bouts of insanity, if you stir them up with enough incentives and carrots, people will act irresponsibly. The regulating agencies are there to ensure for an orderly market and to quell excesses. The people cannot do it themselves.
The ones who got out early will think they are very smart. The ones who got hit will think they were unfortunate victims. Both are wrong in their perception of their actions, financial decision making and brainpower. Both groups are closer to each other in every aspect than they would like to think. Its financial musical chairs, winners and losers depend on when the music stops, not whether you were smart.
Thursday, 7 January 2016
What Is Wrong With China (Markets)
What caused the calamity:
a) the Chinese stock exchanges have grown terribly big over the past 7-10 years
b) the regulatory side had been lacking in many areas - no strict imposition of margin lending; wishy washy rules on shorting, so much so that some foreign funds have been able to short the China shares pretty easily(thanks also to Citic Securities); the silly rule that allows companies to suspend themselves indefinitely for no reason, etc...
d) the stupid imposition of no selling by substantial company owners ... its like the T+4 phenom here ... Jan 8 was the day they could sell, so guess who is selling ahead of them, if you want ti impose some sort of selling restrictions - do it gradually (e.g. can sell only 5% of their total shares every 3 months till further notice)
e) the lack of maturity and coordination by their central bank and the exchange regulatory body ... left hand does not know what the right hand is doing ... either they did not know or they knew and did not foresee the subsequent effects... how can you suddenly drop the currency and intervene to make it weaker in a substantive manner, didn't you realise that as the second biggest in almost everything, what you decide for monetary policies have significant effects ... obviously NO consultation was made to ECB or Fed ... as they would have advised to do it in steps and gradual basis, and certainly not when your stock exchanges are in crisis mode...
So what now, they have remove the circuit breakers ... now the company owners can sell as well ... you are right at the lowest point of the previous scary correction a few months back ... I would change the rules for company owners to limit their selling by staggering them (as mentioned above) ... intervention is likely to be more aggressive by Beijing and they can marshal almost unthinkable resources... following 2 days of 7% = more than 15% ... another 7% would really put it in ridiculous territory which should see some genuine buying coming in.
The currency realignment does not hit Malaysia that much as the industries and SMEs no longer compete on the same stuff as China. Yes there will be repercussions but a weaker yuan is mild compared to what the USD did to us. Buying power may be reduced from China but the weak ringgit to almost every other has already shifted our clients elsewhere.
Saturday, 26 December 2015
Best New Restaurant 2015 - Dewakan
For a restaurant, located away from city centre ... amidst industrial offices and a plethora of half occupied condos ... to garner full bookings for dinner almost every night for the past couple of months (after opening for less than a year) ... is nothing short of amazing.
Mostly just by the powerful word of mouth. Its an amazing feat by Darren Teoh and the team led by Mohd Hafriz.
Darren Teoh, a molecular gastronomy lecturer at KDU’s School of Hospitality, Tourism and Culinary Arts, this restaurant was two years in the planning. Well-known in culinary circles, Teoh has an impressive background that includes staging (culinary apprenticeships) at restaurants like two Michelin star Noma in Copenhagen and the three Michelin star Restaurant Amador in Germany. Teoh first showcased an imaginative and progressive type of cooking coined as modern Malaysian cuisine in his 2010 book Re-definition: Molecular Cuisine: Traditional Recipes through a Modern Kaleidoscope.
Thankfully, at Dewakan, Darren exercised utmost restraint in his molecular cuisine approach, which I think helps diners to focus on his brilliant cooking abilities, and less on the hype and bells& whistles of molecular gastronomy.
The pleasant surprise at the end of the meal ... fresh, organic ice cream potongs with local flavours ... the assamboi one did not gel but the pomelo and pineapple ones were great. Very local, very Malaysian, very nicely done ...
Why Dewakan was the best new restaurant in 2015 for me:
- A definitive strategy to use ONLY LOCAL ingredients ... for far too long whenever we say fine dining, its always the "Western model" of exotic or hard to get ingredients. Malaysians tend to too easily favour anything foreign and too fast to pooh-pooh anything local. At Dewakan, we continued to be marvelled at the amazing variety of produce, condiments and plants that are all around us... being presented on plates worthy of any Michelin starred place.
- There is a strong sense of sincerity and integrity in the food cooked, the way they are presented, to allow for an enhanced appreciation of each and every ingredient used.
- PLUS, the food tasted bloody good. While not all dishes were home runs, the majority were ... and even the lesser ones were more than decent.
Do book way ahead of time for dinner. Corkage for wine is RM50 per bottle. They do have a limited wine list. Get there before they start raising prices.
For me, Dewakan easily bulldozes its way to being among the top 3 best fine dining places in the country. Darren changes almost half his menu every 3 months I think. If he keeps hitting home runs with new dishes in 2016 ... Dewakan may even reign as the best fine dining restaurant in the country in 2016. Its creative, innovative, immerses the diner with the pleasures of the ingredients ... its just bloody well done.
Dewakan will be taking a break from the 1st to the 17th January 2015. During this time, reservations will be closed and will resume on the 15th January. The restaurant will be opened on the 18th January.
Darren Teoh, a molecular gastronomy lecturer at KDU’s School of Hospitality, Tourism and Culinary Arts, this restaurant was two years in the planning. Well-known in culinary circles, Teoh has an impressive background that includes staging (culinary apprenticeships) at restaurants like two Michelin star Noma in Copenhagen and the three Michelin star Restaurant Amador in Germany. Teoh first showcased an imaginative and progressive type of cooking coined as modern Malaysian cuisine in his 2010 book Re-definition: Molecular Cuisine: Traditional Recipes through a Modern Kaleidoscope.
MENU
Thankfully, at Dewakan, Darren exercised utmost restraint in his molecular cuisine approach, which I think helps diners to focus on his brilliant cooking abilities, and less on the hype and bells& whistles of molecular gastronomy.
The pleasant surprise at the end of the meal ... fresh, organic ice cream potongs with local flavours ... the assamboi one did not gel but the pomelo and pineapple ones were great. Very local, very Malaysian, very nicely done ...
Why Dewakan was the best new restaurant in 2015 for me:
- A definitive strategy to use ONLY LOCAL ingredients ... for far too long whenever we say fine dining, its always the "Western model" of exotic or hard to get ingredients. Malaysians tend to too easily favour anything foreign and too fast to pooh-pooh anything local. At Dewakan, we continued to be marvelled at the amazing variety of produce, condiments and plants that are all around us... being presented on plates worthy of any Michelin starred place.
- There is a strong sense of sincerity and integrity in the food cooked, the way they are presented, to allow for an enhanced appreciation of each and every ingredient used.
- PLUS, the food tasted bloody good. While not all dishes were home runs, the majority were ... and even the lesser ones were more than decent.
Do book way ahead of time for dinner. Corkage for wine is RM50 per bottle. They do have a limited wine list. Get there before they start raising prices.
For me, Dewakan easily bulldozes its way to being among the top 3 best fine dining places in the country. Darren changes almost half his menu every 3 months I think. If he keeps hitting home runs with new dishes in 2016 ... Dewakan may even reign as the best fine dining restaurant in the country in 2016. Its creative, innovative, immerses the diner with the pleasures of the ingredients ... its just bloody well done.
Dewakan will be taking a break from the 1st to the 17th January 2015. During this time, reservations will be closed and will resume on the 15th January. The restaurant will be opened on the 18th January.
OPERATING HOURS
Lunch: Mon to Fri – 12 Noon to 2:30pm
Dinner: Thur to Sat – 7pm to 9pm
Closed on Sundays and certain public holidays.
Dinner: Thur to Sat – 7pm to 9pm
Closed on Sundays and certain public holidays.
For Phone Reservations:
Monday to Friday only @
10am to 12pm, and 3pm to 5pm only.
Monday to Friday only @
10am to 12pm, and 3pm to 5pm only.
CONTACTS
Lower Ground Floor
KDU University College, Utropolis Glenmarie
Jalan Kontraktor U1/14, Seksyen U1,
40150 Shah Alam, Selangor, Malaysia
+60355650767
Email: dewakan@kdu.edu.my
KDU University College, Utropolis Glenmarie
Jalan Kontraktor U1/14, Seksyen U1,
40150 Shah Alam, Selangor, Malaysia
+60355650767
Email: dewakan@kdu.edu.my
Sunday, 20 December 2015
Meet Your Second Wife
Saturday Night Live... fun show with elements of adult humour, poking fun at politics and celebrities. Every now and then they hit the nail on the head with a superb sketch on "Meet Your Second Wife". The truths and facts that no one wants to examine or be examined. Its achingly funny but also instructive and enlightening at the same time. Enjoy ...
Saturday, 5 December 2015
Cairo Confidential 2007
Wanna feel like Indiana Jones? Here’s just the place for you ....
A diversion from the norm. Four years back I had the opportunity to go to Cairo. It was part business and some post-conference partying. That was when I still had a 9-5 job. Well, after the uprising in Egypt and ouster of Mubarak, no one should be visiting Cairo anytime soon till things settle down. I am so glad I was there before the whole thing blew up.
The long ride from the airport to the hotel was an eye opener. If you thought the drivers in Malaysia and Thailand were nuts, wait till you get in a car in Cairo. They cannot drive without their horns for sure. Cars slide in and out of lanes like well oiled machines. After ten minutes, I found a way to de-stress myself, just keep looking out the side windows, don't look ahead.
Crossing the roads would be a cinch for Malaysians as we are so used to dancing and weaving through the traffic – Malaysia's national sport? The difference being, its less stressful crossing the roads in Cairo than in KL. At least motorists in Cairo do not accelerate just as they have spotted you trying to cross the road. I have always wondered why Malaysians do that – do we really want to kill or scare the daylights out of pedestrians?
The buildings are in all shades of brown. I asked a colleague why is that and he explained that the buildings were brown, not by design, but as a result of the dust from the desert. Eventually, all the buildings ended up looking the same.
Egypt is an Islamic nation but you can easily find good places to drink yourself silly. Most hotels have a small casino (ten tables or less) but they are opened to foreigners only – still an interesting fact. And it has a fair share of dancing – there's dancing during dinner and at hotel lobbies, people simply break out in song and impromptu dancing in celebration. Extremely refreshing, to say the least.
Walking around on the tourist trail, visiting the pyramids, the sphinx and museums can easily delude one into believing he or she is having an Indiana Jones moment. You almost feel like stealing some treasure or rescuing some maiden.
The first impression, like most first impressions of things so widely talked, written and read about .... is that the pyramids are much smaller than what you had envisioned in your mind. They are barely 10-12 stories high.
The highlight of my trip was the camel ride. Its not the pussy 5-10 minute camel ride, mind you.
When the bus pulled up to this group of 70 camels and their drivers, I thought it was only going to be a five-minute joy ride and photo opportunity. But hey, it was the real deal. Imagine riding in a huge pack of 70 camels for 45 minutes traversing across the desert. Imagine Lawrence of Arabia leading a band of troopers to conquer some tribe.
In the distance you get to see the setting sun and images of the pyramids as well. That was golden. Many of my friends have warned me about the ruthless camel drivers who will try and fleece you for huge tips at the end of the ride. I was prepared for that.
My guide was a boy, probably 15, or 16 tops. The funny thing was he tries his best to “connect” with his customer with his limited English.
Here was the best memory from the trip. He kept asking me “Are you happy?” ... the first couple of times, I gave my polite short answers. When he gave me the same drivel for the tenth time, I lost it. He was like an old zen master disguised as a young camel driver. For the first few times, you'd answer “Yes, I am happy” but when continuously prodded on, you start to ask yourself “Am I really happy?”
You laugh out in sheer frustration, but against such a glorious backdrop you cannot help but marvel at the same question.
Here I was on a camel ride watching the sunset, feeling a bit like Lawrence of Arabia, in the historical land of Moses ... seeing the sphinx and the pyramids in a distance ... If you are not happy NOW, right here, when will you ever be?
But isn't happiness a lot more than just that? Do I have a happy soul? Am I really content? The temporary grandeur and material comforts fade into obscurity. Wow. It was more than just a camel ride (which in itself was excellent). Thanks to my “zen master”, I now “know” that I AM happy.
If you get the chance to go to Cairo, book yourself into one of 3 better hotels on the Nile (the Four Seasons, Hyatt and Sofitel). The room rates have not exploded yet and are about the same as in Malaysia. Funnily, there are about 5 casinos within 5 hotels in Cairo. They are not huge, open only to foreigners. Only 10 odd tables per hotel, but its fun to be in a casino (half empty) with table all to yourself.
Naturally you should go to any one of their museums, its incredible but go to one is more than enough unless you are a big historic buff.
Not all things are wonderful, many of the retail outlets operate much like Petaling Street – you have to bargain like hell. Taxi fares are highly negotiable and many of the tourist destinations will be full of “modern day pirates” – plenty of people dressed in ancient Egyptian garbs wanting to take photos with you for free. But it's never free.
In that sense the Egyptians are actually fighting with Malaysian taxi drivers for the trophy as the worst place on earth to get a cab. Not a place for two ladies, go in a group of 3-4 for safety in numbers.
It was a unique experience to go to one where it is still very Egyptian and very local. I was never one to go abroad and clamour for McDonalds or KFCs but honestly, I found myself dying for some KFC after the fourth day. As it turns out, there is only so much of hummus, chickpeas, kebabs and bread one can consume. Can't wait for things to get better to go back to Cairo again.
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