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Saturday, January 30, 2010

Central Banks Slowly Starting To Raise The Interest Rates



The global economy crisis has led the central banks all over the world to reduce the interest rates to close to 0% which is the all time low. With interest rates that low, borrowing has been cheap which can indirectly spurs the economy - low interest rates, company can borrow to for company expansion, people can borrow more to buy properties and people are forced to spend their money or savings. In fact, the global stock market has been rallying non-stop since March 2009 because of low interest rates and this lead to the presumption that global economy has recovered, although the jobless in the United States stays at 10%. Some has the feeling that the stock market and commodities rally was led by low interest rate because people starting to treat stock market as just another legalized casino. Nevertheless, I do believe we are on the way of recovery but this road is expected to have a lot of potholes. With recovery on the way, central banks will be slowly starting to raise the interest rates.

But as the global economy is on the recovery and interest rates at all time low, no doubt interest rates have only one direction, up. In fact, China has already start tightening the lending policy and the US President, Barrack Obama has also voiced out to have stricter ruling and policy for the banks' activities in the United States. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz also said on the January 29th that the interest rates were reduced to the current 2% to avoid a fundamental recession as the global crisis had led to an emergency condition and the interest rates will need normalization, in other word raising interest rates is inevitable. Central banks will be pressured to slowly starting to raise the interest rates with inflation starting to kick in.

Raising interest rates is definitely inevitable, to cool off the soon-to-be overheat stock market and commodity. Problem is, can the economy sustain its road to recovery if the interest rates raised? The world stock market has been undergoing correction from the first day Obama and China start voicing out on stricter ruling on the financial sectors. Imagine what will happen to KLSE if Bank Negara Malaysia decided to do the same? KLSE will definitely take a beating. People are thinking that a correction indicates that the economy is not on the way to recovery and on the way to another crash, but after a nine months non-stop rally, correction like this is in fact healthy. You cannot expect stock market to go one direction, even though in a very strong bull market. What goes up must comes down and vice versa.

For those who is still thinking whether we should continue to invest, I would definitely say yes, and if we are foreseeing the global economy recovery to be a long but painful one we should continue to invest, invest in undervalue stocks or dividend stocks but not over invest as even the best company in the world will suffer setback during this correction. If we realized one thing, it is during market correction that we can get very stocks at cheap price. Warren Buffett quoted before, "Price is what you pay, value is what you get". So if you think a stock worth more than 1 and the current price is 0.70, why not buy it? The question will remain which stocks are undervalued? How we know whether the stocks are undervalued?

Wednesday, January 27, 2010

The uncertainty in the market...

While many people have been talking about 2010 being the year towards economy recovery. However, things does not always look too good despite of all these speculations. However, South East Asia stocks does not seem to feeling the positive push. And it could be that the whole world is feeling it as well. Singapore and most South East Asia countries have been on the fall for the sixth day, while Malaysia bank hits.

Singapore's index fell for a sixth session on Wednesday, weighed down by selling in Genting and other big caps, while Malaysia hit its lowest in almost a month, with banks suffering the most.

Most likely, the fall and impact especially towards the bank was due to worries among the public regarding the recent banking proposals in the United States by the Obama administration. There are tough and strict rules being proposed to limit the size and the scope of activities of the country's biggest banks. There are a lot of fears that this might eventually spread towards Europe and eventually the world.

Not only that, there are major concerns that Sentiment in Asian stock markets weakened amid fears that China's efforts to rein in soaring credit growth could hamper the global economic recovery.

Well, this is definitely a period of uncertainty in the market....

Sunday, January 24, 2010

Use your imagination

Sometimes it is probably easy to be talking about making more wealth and money. And we have people doing analytical studies on the economy. Investors and other financial consultant have been good in doing their job. Providing statistical data and analysis so as to see the potential growth of a company.

However, my question today here is that all it takes to be making a difference. To be way ahead is not just about being hardworking and getting the right facts, datas and knowledge. No doubt all these are important but what so many modern people lack of today is simply this, IMAGINATION. We were so caught up with our hectic schedules that we leave no room for iMAge. For an image of what the future would hold, of what the NEXT HiT would be.

Look at all these great men, Thomas Edison, Albert Einstein, Isaac Newton, Leonardo Da Vinci, Aristotle, Galileo Galilei, Warren Buffet, Bill Gates, Tony Fernandes (Airasia boss), Steve Jobs, Sergey Brin and Larry Page as well as many others. All these people have been able to capture an IMAGE, an IMAGINATION of what would be their hit. Of what that specialty would be and they succeed in it.

I decided to continue with my Idle Page blog, simply because I felt the need to be writing down thoughts, image and emotions that hit me everyday so that as I reflect on these, I might be able to dream a DREAM as well.

I talked about FINDING VOICES by the end of year 2009 in seeker and each day I found that challenge even more thrilling and crazy but yet I sensed that this is where the FUTURE holds...
So, here is my first post in 2010...use your IMAGINATION: Imagine Wealth, Imagine Future, Imagine HOPE, Imagine because in it is your STRONGEST WEAPON and SUCCESS STORY is only a step away from that.

Friday, January 1, 2010

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