US Senate Approval

The US Senate approved the $700 billion bailout package to stabilize the US financial system after it was rejected by the House on Monday. I really don't see much controversy to the taxpayers. Its not that they are really going to foot the bill. What you will see is the printing of another $700 billion new Uncle Sam bills to clean the US bank's balance sheet. I can't see disadvantages to the poor and unemployed. On the contrary, it is they who is vulnerable than to super duper rich billionaires. The cash infusion is important as it stabilize the financial system, eliminate credit crunch, protect savings and investment and create jobs. In Zimbabwe, it was reported in NST, the government has imposed a cap on the cash withdrawal on its citizens. Under the new law, depositors can only withdraw equivalent to RM 120 per month. This is to prevent outflow of money from the banking system. Gosh! Can this ever happen in Malaysia? I hope we won't fall into that level. Recently, the new MOF Najib, "PM in waiting" discussed with his advisers on the feasibility of imposing capital control and repegging of the RM. This is a response to Dr M's suggestion. Although it was unanimously rejected, the thought of it has cause another damange in Malaysia's reputation. We had once in 1998 till 2005. Now that's a possibility. We never recover from that day onwards. The outflow of funds is of great concern. Recent report by HLG Securities estimated that RM 195 billion has flowed out of the country in the first six months of this year compared to RM 90 billion for the whole of 2007. UNCTAD reported negative flow of foreign money into Malaysia, which is the first since 1957! The RM has depreciated from RM 3.2 in May to RM 3.5, a 10% drop in less than 6 months. I am not aware of major foreign investment into Malaysia of late. Our stock market is in a deep state of coma for 90% of the companies. Out political impasse and uncertainty adds to the risk premium of doing business in Malaysia. With all these in mind, nobody seems to be in a festive mood. The EPL looks more interesting news. Spurs are languishing at the bottom, the worse start in 53 years as reported. Ramos is under siege after off loading Berba to Man Utd for 30 million pounds. After so much promise at the end of last season, the enthusiasm is gone. That makes Spurs hot favourite to be relegated to the 1st Division. Tough luck. The Red Devils are still struggling despite a lucky 2-0 victory over Bolton on a dubious Ronaldo's penalty.