rightcoastconservative

"We are now Europe!"  So said Rick Santelli on CNBC yesterday, as he responded to the negative GDP growth announcement for 4th quarter 2012.  Santelli is right.  We are now having the same silly discussions that go on routinely in Europe.  We now think that somehow, someway the central bank can do something that makes it all better.  And that somehow, someway, with sovereign debt exploding off into infinity, we can continue to spend and borrow our way to prosperity.  It can't be done. Economists have routinely become apologists for absurd economic policy, both in Europe and in the US.  They often advocate raising minimum wages to increase employment.  They have been in the forefront of advocacy for Obama policies that have brought the US economic recovery to its knees.  Thank goodness for Santelli.  He correctly notes that US sovereign debt problems are approaching Greek levels. There was a time when US capitalism was the envy of the wor...

The Obama Administration continues to trumpet the illusion that the economy is doing well.  It isn't, Today's 4th quarter GDP numbers point to a declining GDP, not a growing GDP.  The Obama enthusiasts in the media quickly found things within the report to like -- what else could they do?  But, the undeniable fact is the economy is going nowhere. If it were only the tax increases.  But, there is so much more.  Obamacare is kicking in and the EPA is clamping down hard on the economy.   Meanwhile, Dodd-Frank implementation is destroying credit availability.  The combination of all these things seems to get the Obama folks where they want to be -- the destruction of the American economic engine.  They are succeeding.  This morning's numbers bear testament.  Stay tuned.

Aberdeen Islamic Asset Management Sdn Bhd has recently launched two shariah unit trust funds for the Malaysian market, the Aberdeen Islamic Malaysia Equity fund and the Aberdeen Islamic World Equity fund . The new funds are the company's 1st shariah retail products in Malaysia - and the 1st from a foreign fund manager under the special scheme - and come almost 8 years its parent company Aberdeen Asset Management Sdn Bhd was established to manage assets in Malaysia for institutions and corporate investors. Malaysia: Turning promise into profit Malaysia has long been rich in promise - rich because of its abundant natural resources, physical infrastructure and educated workforce. However it has not always maximize its advantages. In recent years that has changed as the country streamlines priorities. There is more emphasis now on efficiency, the private sector has a greater say across industries and more value is being created for shareholders. This enterprise is taking Malaysian co...

There seems to be some euphoria surrounding the Obama White House that the economy may finally be on track.  The stock market's behavior this month is a glowing chorus of approval, according to many observers.  Perhaps, the economy can be managed after all.  Perhaps, taxes and health care costs don't really matter after all.  Perhaps, the collapse of Europe is irrelevant.  Perhaps.... The cold reality, though, is that the numbers on the ground are still pitiful and have the potential to get worse.  What little pulse the economy has is now an occasion for celebration in the White House.  Strange.  The American economy has historically provided 3 to 4 percent economic growth as the American middle class became the envy of the world. Yes, the middle class has greatly improved its economic position over the last three decades.  Only if employee benefits are left out of the calculation, which now amount to over 30 percent of employee compensation,...

The stock market has thundered forward since the turn of the year.  Unemployment claims are near their twelve month low and even California thinks it sees balanced budgets ahead in their future.  So, are we there yet? Unfortunately, nothing has really changed.  Let's begin with California.  California, New York and Illinois face an almost immediate crisis with their pension systems.  These problems are far, far larger in magnitude than their total annual spending budget for everything else they do.  And, the clock is ticking.  These problems don't get better every day; they get worse.  California, like New York and Illinois, believe that higher tax rates have no effect on economic behavior.  They are wrong.  Thus, the revenue projections these states are expecting from higher tax rates are an illusion.  Even without pension funding issues, these states are on a straight line to some form of bankruptcy, even if the day of reckoning i...

Obama's inauguration speech yesterday makes it pretty clear.  He has no intention of discussing ways to lower the deficit and begin to tackle our national debt problems.  Quite the reverse!  Obama has more spending, taxing and regulating plans ahead for the next four years.  As if the economy wasn't bad enough, Obama is planning more anti-capitalism moves. You wonder if his advisers have any idea what the implications are for the economy of all of this.  There was always the chance that a Republican House would block the most extreme measures, but that is becoming increasingly unlikely as Republicans tack feverishly in Obama's political direction. Given Europe's situation, which is far, far worse than the pundits are saying, the economic outlook for the US is pretty bleak.  The best that can be hoped for is more slow growth and stagnant employment.  That is the very best that one can hope for!  The worst is that the economy could begin to slip int...

There is no better time to blog about this post. After the plunge of KLCI yesterday, citing election risk, we came across an interesting research report by CLSA. As such, we would like to take this opportunity to share with you. By CLSA, An unexpected opposition Pakatan Rakyat (PR) coalition victory in the impending 13th General Election (13GE) would spark a broad sell-off in Ringgit assets . Changes of government are not uncommon in ASEAN. Looking at the experience of Indonesia, Thailand and the Philippines over the last decade, parliamentary control has seen significant shifts and governance has been possible despite the lack of a parliamentary majority. However, Malaysia has never experienced a change in government, meaning any change will come as a shock and with a host of uncertainties. From an equity and debt market perspective , Malaysia has always enjoyed a political premium for the stability in governance and policy-setting stemming from majority control of parliament...