Terrible times ahead?

Take a break from GPS related topics. Share a joke or just chit chat.

Moderator: Moderators

Post Reply
Message
Author
User avatar
antyong
Councillor
Councillor
Posts: 434
Joined: Thu Feb 17, 2005 12:00 am
GPS: Garmin LegendC
Nokia E65 + Mobile10x
Location: Subang Jaya
Contact:

Terrible times ahead?

#1 Post by antyong » Sat Jun 07, 2008 8:10 am

Guys,

Several developments in the past few days got me very worried about the future. I am not an economist but had paid attention to the world and local economy to understand a bit. Here is my take. I hope those among us who are more educated in economy can correct my mistakes.

1. Crude oil price just shot up about USD18 per barrel over the past two days to reach another record of nearly USD140.
2. The quantum of increase is already frightening. The reason, or lack of it, is even more frightening. There is no disruption of supply or any fundamental reason for the increase. AFAIK, a Morgan Stanley prediction of oil reaching USD150 and a slight weakening of USD caused such a drastic oil increase. This prove beyond any doubt the current oil price boom is due to speculation and the bull is still very strong. It is anyone's guess how high crude oil price will reach before the bubble burst.
3. Malaysians were previously shielded from crude oil price increase by government subsidy. The Malaysian government had already indicated by raising petrol price 40% that it is either unable or not willing to subsidise anymore. Any increase in crude oil price now directly affect our purchasing power.
4. Malaysia's GDP growth over the past few years were driven by public (government spending) and private (population spending) consumption. As our purchasing power decreases, private consumption decreases and if not offset by increase in government spending, will start a bust economic cycle.
5. As crude oil continue its march towards USD200 and beyond, national economies falters. Weakest countries go first. Vietnam, Phillipines, Indonesia, Malaysia, Thailand, India. If the bubble is not burst by then, Singapore and China won't be spared.

If you find logic to my arguments above, perhaps it is time to get ready for rainy days. Malsingmaps got a lot of well to do members :mrgreen: so they will probably survive unscathe. However, those who is starting to feel financial strain should really get prepared. Instead of pointing fingers at everybody except yourself, probably it is best to think of how to start saving more (no new GPS :D ) or earn more money (sell char koay teow :D part-time). All working adults are part of the economy hence you and I are part of the problem and the problem will only start to abate when the oil bubble burst.
A new beginning.....

User avatar
waypoint
Valued Contributor
Valued Contributor
Posts: 439
Joined: Sat Mar 19, 2005 12:00 am
GPS: Trimble Ensign.Foretrex 101/401.Etrex H/Vista HCx.Nuvi 255W/205.NOKIA E72.iPad 64GB 3G.
Location: The L'il Red Dot
Contact:

Re: Terrible times ahead?

#2 Post by waypoint » Sat Jun 07, 2008 8:20 am

I can only agree. It seems that oil prices are going up based purely on speculative reasons and the oil cartels; UAE, Russia and others, are only happy to 'accede' by regulating supplies and production. Especially the russians, who are now the world's biggest oil suppliers and the happiest with the prices increases, giving them the buying power to improve on the infrastructure and basic facilities in which they have been lagging behind for so long but mainly because they have not been provided for in the first place by the government.
"Heroes are born when bullets fly, when the earth explodes, when cannons roar, When Trumpets Fade."

User avatar
SilverBeauty
MSM Global Moderator
MSM Global Moderator
Posts: 4928
Joined: Fri Aug 10, 2007 9:54 pm
GPS: Garmin Nüvi 1350, 3790T
Fenix
eTrex HcX
Pioneer AVH-P8450BT
Samsung Note3
Apple iPad2
Location: Sin-Ka-Pu-Ra
Contact:

Re: Terrible times ahead?

#3 Post by SilverBeauty » Sat Jun 07, 2008 8:50 am

Concur with bro waypoint analysis of the situation. Much of the oil price increase is due to unregulated futures speculation by hedge funds, banks and financial groups. There is no logic to justify such a drastic increase in such a short time.

User avatar
naim
Great Travel Bum
Great Travel Bum
Posts: 1050
Joined: Mon Oct 23, 2006 12:00 am
GPS: Samsung Note 2 :D
Location: Setia Damai in Setia Alam
Contact:

Re: Terrible times ahead?

#4 Post by naim » Sat Jun 07, 2008 8:58 am

This what Idris Jala, CEO of MAS, an ex-oilman, has to say ...
A former oilman himself, Idris Jala's recent remarks also raised eyebrows.

He said there was no shortage of oil in the world, but prices were being driven up by unreal speculation in the oil futures market.

He also said that the US$135 price of oil per barrel was unrealistic and that a fair value of crude oil at present was US$40 per barrel.

"Oil tankers are moving and petrol is still being sold at pumps. Thus, there is no shortage," he added.

In fact, there is more than enough supply.

But the clear conclusion to be arrived at is that crude oil prices are spiralling to historic highs, no thanks to greedy speculators.

And it won't be easy trying to turn around greedy people when they are making untold profits at someone else's expense.

http://www.bernama.com.my/bernama/v3/ne ... ?id=337817
Also read this op/ed in The Star.
The Star
Saturday May 24, 2008

Stormy waters ahead for Singapore
INSIGHT DOWN SOUTH
BY SEAH CHIANG NEE

The island-state, once a mere 'sampan' tossing about in a turbulent
South-East Asia, is today a large ship cruising international waters.
However, its dependency on the world for its daily necessities makes
it vulnerable to any global economic downturn.

AFTER several years of explosive growth and a red-hot property market,
Singaporeans are facing the prospect of stormier times ahead.

The party spoiler is the prospect of a combined sharp slowdown and
high prices spilling over here.

Supported by strong reserves and a diversified economy, the state
would likely emerge from the crisis without serious damage, but the
same cannot be said of the fate of ordinary workers and elderly
citizens.

Except for the wealthy, people are already bearing the brunt – a drop
in living standards and savings and assets being valued lower.

To say that the government is worried about a world recession visiting
here – or even stagflation, a rare combination of slow growth and
rising prices – is an understatement.

Once brimming with optimism, some senior economists have turned
cautious about prospects for the next two years.

It is a grim reminder to Singaporeans that – despite becoming a First
World economy – their island-state remains a ship in a stormy sea.

The difference is that it is now no longer a "sampan" tossing about in
a turbulent South-East Asia as described by then Prime Minister Lee
Kuan Yew in the 1960s.

Today, it has become a large vessel that sails international waters –
but nevertheless a ship it remains.

It is vulnerable because of its size and its dependency on the world
for all its daily necessities, including oil, food, and trade, to
survive.

Some gloomy developments include the following:

- The huge jump in the price of oil, so crucial for its existence, to
a record US$135 (RM437) a barrel with no signs of a let-up;

- The prices of imported staple foods, such as rice (50% costlier
here) could stay high for the next three years, says a World Bank
official, hindering the battle against inflation;

- Inflation has risen to 6.7%, a 26-year high, and may take an
economic downturn to control;

- A slowdown in the housing market has prompted two banks to predict a
dramatic plunge in home values of up to 40% in the next two years.
This is bad news for nine-tenths of Singaporeans who own property;

- The government forecasts a sharp drop in economic growth this year
to 5.6% – sharply down from the booming 2007 (7.7%) and 2006 (8.8%);
and if the US goes into recession, it could fall to 3%;

- Respected former deputy prime minister Dr Tony Tan said that – in
the worst case scenario – the world could be hit with its worst
recession in 30 years; and,

- The values of a portion of the tens of billions in Singapore's
assets invested strategically in foreign banks and properties have
been wiped out, leading to fears of higher indirect taxes here.

However, judging from the booming shopping plazas and restaurants and
the jump in credit card usage, it appears that many people are
shrugging away the gloomy signs.

The more cautious – usually older, crisis-hardened people – are opting
to prepare for trouble, skimming a little here and there, like packing
meals from home or cutting down on outings.

But for the bulk, it is business as usual. They continue to shop, eat
and travel abroad for holidays.

One retired accountant said: "Many people are spending past savings
because their earnings are not enough to cope with inflation."

He believes the splurge could be due to two factors: one, insufficient
awareness of the seriousness and, two, "a younger set being too
addicted to the good life to be able to rein it in".

Prime Minister Lee Hsien Loong thinks that some Singaporeans are
spending beyond their means.

"We often see families who have over-committed themselves financially
– for instance, extravagantly doing up their homes with renovation
loans, or buying expensive furniture or large-screen TV sets on hire
purchase," Lee recently said.

"The ones with the most serious problems have bought homes which are
larger than they can afford, and taken mortgages which they are then
unable to pay off."

The apparent unconcern could be due to a mistaken belief that the
financial problems of America and Europe would not affect Singapore
too badly, now that it is tied to China's strong economy.

"We're okay. What has America's banking problems got to do with us?"
is a frequent comment I hear.

After an age of stability and prosperity and media hype that plays up
the good news and plays down, or avoids, the bad, many Singaporeans
have been lulled into a sense of invincibility about their country and
its leaders.

They believe that if things go wrong, the government can be relied on
to put it right.

"Well, we are not invincible," Minister Mentor Lee Kuan Yew told his
people following blunders that allowed top terrorist suspect Mas
Selamat Kastari to escape from detention this year.

All this will not undermine fundamentals that include a diversified
economic base and strong reserves, an efficient infrastructure and
large overseas investments that will continue to support the future.

Almost a year ago, before the world crisis became apparent, Lee senior
sketched a rosy picture of a golden era and a vibrant Singapore in
five years' time, if it played its cards right.

It is not known if he feels the same way now, but I believe his
general optimism still remains.

Singaporeans can only hope that this vibrancy, when it happens, will
be reflected in their individual lives – not just in the state's GDP.

http://thestar.com.my
Pls visit my travel pictorials at http://naim.my

ace
Valued Contributor
Valued Contributor
Posts: 574
Joined: Thu Jun 09, 2005 12:00 am
GPS: Nuvi 2565, Nuvi 255W, HP iPaq 3715 with Rikaline 6033 (retired), Mapking G10 (retired)
Location: Singapore
Contact:

Re: Terrible times ahead?

#5 Post by ace » Sat Jun 07, 2008 9:30 am

The dynamix of oil prices...I think I will leave to Lost4ever to explain.......there are many factors that cause the oil prices to go up and anyone can be a problem.

My take.
1. The weakness of USD....the price of USD reflects the strength and weakness of the US economy. As we all read and hear. The man in the streets of USA is probably stress out by the debts they are carrying and can consume no extra more. The cheap goods they import have now become more expensive...look at the price of USD. So if the world greatest consumer is having some stomachache, the consumption cycle slows, the chain reaction starts....the interest rates goes down, the investors in US currency ran for the hill....

2. One of the greatest pastimes of the people is driving (we all are.. :mrgreen: no driving no malsingmaps :mrgreen: ). But they love SUV and this jokers consumed petrol. Petrol comes from refineries....Refineries was last built 30 years ago. You want more....supply is limited. Gasoline (that's what they call it) prices goes up... Gas goes up, more cash gone to oil companies. Less to others. So the cycle is also here....Consumption of all goods are reduced because the resources, ie cash, can buy less physical number of units of goods. So you call this inflation. With inflation, interest rate goes down because papa FED duty is to contain inflation. And the tool in a consumption nation is interest rate.

3. The blame game. All this is not the US fault. It is China. And India's fault.. They say this two countries are now consuming more resources than them. Er? Why huh? Where did all the goods they countries produce goes to? You now, the very price competitive goods versus those of the US of A. I thought USA is the number 1 consumer? But right now, they are blaming the Beijing Olympics for the resources consumption. When its over, I wonder who they will blame?

4. The fortuner tellers or some call them the speculators. They look into the future. They see troubles... It is no surprises that the current prices are all future prices set in futures markets where all this fortune tellers gathers and trade. What did they see? Oil used to be easy to find... Now it is difficult. Any rumour that an area in a particular country is a potential oilfield have nations arguing over who that area it belongs to... When the world is awash in oil, it is not a problem... When current output = current demand but not equal to future demand, everybody becomes enemies all the sudden. Fingers starting pointing at each other.

5. Alternatives? Some smart ass have an idea. Let's goes green. Let's use renewable resources. Let turn food into oil to feed our greedy demand for gasoline. Great idea. Food goes into vehicles instead of human. The fortune tellers look into their crystal ball and says "this can't be good".. The world population is growing. The food production is stalling. Natural disasters are everywhere. So guess what? You have food prices inflation. Just look around. Everybody is blaming somebody.

So, :mrgreen: my thinking, change ourselves lah...change our living styles, cut down on unnecessary purchases.... :mrgreen: Of course, all these cut in consumption will lead to pain in our economy...but the world economy is not in equilibrium and that's one of the problem. The have and have not is growing wide. So this natural cycle have to happen... Gloomy days ahead. :cry:
I don't have free fish......

quaky
Regular
Regular
Posts: 141
Joined: Fri Aug 10, 2007 8:00 pm
GPS: Holux GPSlim + XDA 2
Holux M241
Location: Singapore
Contact:

Re: Terrible times ahead?

#6 Post by quaky » Sat Jun 07, 2008 10:29 am

Somebody told me that the oil will run out in 2050, donno true or not :-? :-?
But maybe current oil price is due to a group of rich man trying to make money :-? :-?
Did oil price started going up after US attacked middle east :-? :-?

stimix
Valued Contributor
Valued Contributor
Posts: 650
Joined: Mon Nov 28, 2005 12:00 am
GPS: Nokia N78 (Garmin MXT for Navi & Racechrono for tracking)
Location: Puchong, Selangor
Contact:

Re: Terrible times ahead?

#7 Post by stimix » Sat Jun 07, 2008 10:43 am

The real winners of this unreal price hike are those Petroleum producers & future speculators :fire: leaving the rest of world population suffering. I just hope there is a panic /stop button in the future bourse to cap the price further...horrible.. :fire:

Current measures (For me-lah);

1) Invest in CNG/NGV conversion kit
2) Less/No more weekly family shopping/traveling >10km radius & Less going back hometown
3) Use public transport & more Rapid KL trip to KL
4) Short distance ride bicycle.
5) Cut down unecessary burdens such as Fitness 1st membership/ reduce Astro subscription/
6) MSM tracking activities on car stopped excpt MTB.. :cry:

drtamil
Valued Contributor
Valued Contributor
Posts: 405
Joined: Fri Feb 18, 2005 12:00 am
GPS: Treo650+MobileXT+GPS10; VistaC; 60CSx-7units
Location: Subang Perdana U3
Contact:

Re: Terrible times ahead?

#8 Post by drtamil » Sat Jun 07, 2008 12:52 pm

quaky wrote:Did oil price started going up after US attacked middle east :-? :-?
Image

Image

drtamil
Valued Contributor
Valued Contributor
Posts: 405
Joined: Fri Feb 18, 2005 12:00 am
GPS: Treo650+MobileXT+GPS10; VistaC; 60CSx-7units
Location: Subang Perdana U3
Contact:

Re: Terrible times ahead?

#9 Post by drtamil » Sat Jun 07, 2008 1:03 pm

ace wrote:3. The blame game. All this is not the US fault. It is China. And India's fault.. They say this two countries are now consuming more resources than them. Er? Why huh? Where did all the goods they countries produce goes to? You now, the very price competitive goods versus those of the US of A. I thought USA is the number 1 consumer? But right now, they are blaming the Beijing Olympics for the resources consumption. When its over, I wonder who they will blame?

4. The fortuner tellers or some call them the speculators. They look into the future. They see troubles... It is no surprises that the current prices are all future prices set in futures markets where all this fortune tellers gathers and trade. What did they see? Oil used to be easy to find... Now it is difficult. Any rumour that an area in a particular country is a potential oilfield have nations arguing over who that area it belongs to... When the world is awash in oil, it is not a problem... When current output = current demand but not equal to future demand, everybody becomes enemies all the sudden. Fingers starting pointing at each other.
Image

Currently production is at its highest ever. Therefore the high price is due to speculation, not due to demand & supply inequality.

User avatar
antyong
Councillor
Councillor
Posts: 434
Joined: Thu Feb 17, 2005 12:00 am
GPS: Garmin LegendC
Nokia E65 + Mobile10x
Location: Subang Jaya
Contact:

Re: Terrible times ahead?

#10 Post by antyong » Sat Jun 07, 2008 1:56 pm

I would like to look beyond the cause of increase (we are quite sure it is speculation) and ask what it is going to do to the world economy. I am predicting the looming crisis will be worse than the Asian Financial Crisis '98. The financial crisis affected mostly companies with high foreign debts. All sectors of the economy except oil and gas will be affected by the upcoming crisis.

Malaysia is still lucky because she is still net oil exporter currently. If we do nothing to reduce our consumption, we will be in deep trouble in the future. Indonesia has just turned net importer. But then, Indonesians are hard-working enough to work as maids and labourers in Malaysia. Will we let this happen to our sons and daughters? :-' Is it enough just to force our children to study at Chinese schools for the whole day, carry bags heavier than themselves and push them to score straight 'A's ? :-k
A new beginning.....

Post Reply

Who is online

Users browsing this forum: No registered users and 18 guests