“No crisis in Malaysia….only slowdown…..and correction…” (Chengho)

Chengho,
I wonder whether you purportedly try to mislead the Malaysian people on the existence of current global economic crisis or you are just a novice layman who knows nothing about economics.

If there is no crisis in Malaysia, then why should your political master, Najib, formulate a so-called Mini Budget in the Parliamentary session recently for purpose of spurring the economic activities (although it is just a vain effort)? Najib even offers the tax-free incentive for those bankers who voluntarily offer indulgence or grace periods to the bank loan borrowers in case the borrowers have difficulty to service (pay back) the loan and/or interest expenses to the bankers. Najib encourages the bankers to delay taking legal action against the defaulted loan borrowers, unfairly treating the bankers as the nanny who is to take care the kids in Najib’s own family.

Many Najib’s apple polishers praise Najib for making a proposal that encourages the bankers to allow delay in repayment of loan which falls due to the bankers by the borrowers. From the first glance, the so-called indulgence or grace periods may be a merciful grace to the loan borrowers who are in financially tight and illiquid situation due to lack of market demand for their products or services in midst of a global economic recession. However, indulgence and grace periods from the bankers may not be beneficial to the overall banking sector of Malaysia in the long run. If the Malaysian people are already getting used to the bad habits of liking to spend with debt-financing but always showing reluctance to pay due debt promptly due to the availability of indulgence and grace periods offered by the Bankers, then sooner or later the commercial banks in Malaysia will have to find that there are too many delinquent loans which have to be recorded in the accounting books and be written off as bad debt expenses due to the clients’ refusal to service the bank loan interest and refusal to pay bank the loan principal on the due date designated for loan repayment.

I wonder how much longer the commercial banks in Malaysia can sustain their long-term survival in the banking business if the bankers are not allowed by the high court to “lelong” the loan borrowers’ assets that have been pledged to the bankers as collateral. By looking at the number of people who have defaulted in paying back the credit card loan on time and then are forced to pay an overly high overdue interest, we can accurately warned that the number of bankrupt citizens of Malaysia will be on the trend of fast escalating when the high courts of Malaysia are to improve their work efficiency to allow faster hearing of bankruptcy suit being filed by the creditors or the bankers.

I will not be surprised if Chengho has to find that more and more people of his gangs are now living in the financial unsound situation and may be declared bankrupt by the High Court every now and then. Who dare to say again that there is no crisis in Malaysia?

“However what you wrote was only one side of the coin. How can you completely ignore the fact that banks, in many situations, are the main culprits that caused the present financial fiasco? They lent excessively and recklessly, taking excessive risk because the money in the banks was not theirs but belongs to depositors.” (Limkamput)

Limkamput,
I did comment in Lim Kit Siang blogsite not too long ago making accusation that the banking sector in Malaysia was a big hoax industry.

As a financial professional who works in Malaysia long enough, I know some credit controllers of the commercial banks did take bribe and in return offer consultation service to the bank’s clients on how to do account polishing with fictitious transactions in order to show the best financial ratio and market sensitivity presentation in the financial statement. As a result of the job-related experience, I personally don’t quite trust the financial reporting of some KLSE listed companies, whether they are from mainboard, second board or Mesdaq!

Anyway, there are still some so-called retail investors in Malaysia who like to do gambling with KLSE stock counters. For most prominent economists, the major concern about the economic crisis will not be so much on whether the stock market will be in the bullish mood or in the bearsih mood. The main concern will be on whether the global economy is going to have a V-shape curve, a U-shape curve or an L-shape curve in the intermediate term.

My guess is that Malaysia is going to have an L-shape curve for the next two years because many foreign investors have lost their confidence in the economic climate of Malaysia due to long periods of businessmen’s getting stuck in political instability, flip-flop government policy changes, and lack of concensus among the top political leaders of the ruling party within the party itself.

“In Malaysia, most government-owned commercial would not exercise adequate prudence in giving out loan to their clients.”

Sorry, a slide of pen!
In Malaysia, most government-owned commercial BANK would not exercise adequate prudence in giving out loan to their clients.

The commentator jbozz was trying to compare Malaysia to Taiwan and concluded that Taiwan also had the same problems as Malaysia in relation to “political instability, flip-flop government policy changes, and lack of consensus among the top political leaders of the ruling party within the party itself.”

However, jbozz failed to realize a crude fact which was a very important factor for the past success of Taiwan in its economic prowess during the 1970s, 1980s and 1990s. This crude fact was that Taiwan implemented a very strict and tight custom control on transfer pricing, which was the commonly used method for stealing in corporate world and then illegally transferring the money to and from Taiwan in respect of the outside world. One legal requirement which has been imposed on importation of foreign goods by anyone to Taiwan from foreign countries is that at the Taiwanese Custom Checkpoint during the custom clearance process, the imported goods must be supported with a proper shipping document, invoice, the official receipt of payment and the foreign remittance document which are to be duly signed and endorsed by the exporter. Taiwanese Custom will never allow custom clearance to be proceeded until an official receipt of payment and the foreign remittance document have been presented to the custom clearing officer. This legal requirement has never been required for implementation in Malaysia therefore it is very easy for the Malaysian businessmen to borrow with overgearing from the commercial banks by way of trade financing and then to steal by way of inflating the import cost through creation of fictitious proforma invoice by a foreign company.

In many cases, the financial accounts of the importers of Malaysia will indicate full payment has been made to the foreign exporters but only partial payment has been made through telegraphic transfer via the banking system while another partial payment would usually be paid with cash mode by the importers. In most cases, the payment by cash mode was indeed the money that had been stolen by the company director from the company’s banking account. That is the usual way how the money in the banking account of a publicly listed company in Bursar Malaysia can be coveted and the company then be turned into insolvency or bankruptcy by its managing director at the expense of the stock market retail investors.

With the existence of too many hanky-panky practices in the corporate world in Malaysia, it is no wonder that many economic fortune tellers can precisely predict that Malaysian economy will have a big down trend cycle in each and every ten years’ interval.