Sep 17th, 2008 (0013h)
Folks,
http://m.themalaysianinsider.com/articles.php?id=9014
http://m.themalaysianinsider.com/articles.php?id=8988
But we're still seeing the effect of the sub-prime crisis in the US.
AIG is also reportedly in some kind of "trouble" .... and we're talking here about giant financial institutions.
On the electronics industry, news is hot that Kemet (US-based), one the leading supplier of capacitors, is also in financial crisis.
It seems like when US sneezes, the rest of the world still catches some cold.
The much talk-about scenario of US de-coupling is in fact, still remains a tall order.
Global markets is slowing down, stock market finally reacted with the key indices showing downtrend 1 to 2 Qtrs after the sub-prime crisis blew up, plus the effects of fuel hike.
On the local front, yup ... KLCI is downtrending, CPO prices going down, inflation going up (of coz, fuel prices went up 41% in July). Though the crude on Nymex has fallen below US$100/barrel currently, that is I believed mainly, a "technical" correction as the USD strengthened against other major currencies (as opposed to the earlier weakening trend).
However, my point here today is not to go into the financial mumbo-jumbo & economic analysis ...... I was trying to do a correlation between economic meltdown AND the political crisis in Malaysia.
So, backtrack ... from the time I understood a little bit about politics & economics ....
1) 1987/88 :
The world & M'sia was in recession (I didn't know what was the reason back then).
Politically, UMNO was also in crisis ... Ku Li-Musa were challenging Mahathir-Ghafar.
As a result, UMNO was declared "illegal", thus the formation of UMNO Baru.
Of coz, we all knew Mahathir's team won & KuLi went on to form the now-defunct Semangat 46.
2) 1997/98 :
East Asia Financial Crisis, triggered by the Thai baht massive devaluation.
Overnight, Thailand's economy collapsed .... followed by the regional economies of Malaysia, Indonesia, Phillipines, South Korea & to a lesser extent, Singapore, HongKong & China.
I still remembered the exch. rate of USD-MYR gyrates from an average of USD1:MYR2.5 to a max of USD1:MYR 4.3 .... finally being pegged at USD 1 : MYR 3.8 **
Bank's interest rates skyrocketed from a steady +/- 6% p.a to as high as 14% p.a
(** the peg was finally lifted in July 2005).
So, what happened on the political front ?? ... I think most of us will remember this.
Yup ... u got it ... has to do with UMNO again.
Anwar Ibrahim was fired as UMNO No. 2 & DPM ; being charged for corruption & sodomy ; put in jail etc. ... this triggered the Reformasi movement ; formation of Parti Keadilan ... and the final effect of this, the 1999 GE saw the Opposition gaining more parliamentary seats, while PAS maintained control over Kelantan (that it captured since 1990).
3) 2008/2009 (?) :
Well, back to present ....
Political crisis ... u got it again ... started with the 3/8 GE, which many called it a "political tsunami" ; but this time, not only UMNO but all the major component parties of BN .. suffered great losses in the 12th GE. To add salt to the injury, BN lost the 2/3 majority for the 1st time & 4 more states to the Opposition (in addition to Kelantan) and with the current state of affairs, the Opposition Pakatan Rakyat is actually posturing to even take over the Federal Government.
It seems like for every 10-year cycle, we will have both economic bust AND a political crisis locally. Hmmm ... is this a coincidence ?
But the "bad" news is ... the severity of the crisis seems to get worse with each cycle.
Just compare the economic crisis between Cycle # 1 & # 2 ... it has gotten worse.
Likewise can be said on the political front.
And, from Cycle # 2 to Cycle # 3 .... no doubt that the political scenario has gotten much uglier.
Hence, the million-$ question is ... will the economic crisis this time be .... the mother of all crisis ?!
So much for a political tsunami ... looks like we have to brace ourselves for a "Financial Tsunami" as well.
I hope my hypothesis is incorrect this time.
God bless.
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