Fiddling while Rome burns...

Legend has it that Nero Claudius Caesar Augustus Germanicus, the fifth and last Roman Emperor of the Julio-Claudian Dynasty, fiddled while Rome burned. Though this may be the popular belief, some historians say that this is fitnah (malicious lie) spread by his enemies, namely Suetonius, Cassius Dio and Tacitus, to ‘smear his reputation’. Hmm....sounds very much like modern-day Malaysia does it not?

Anyway, whatever the case may be, as in most so-called historical accounts, it would be quite impossible to completely separate fact from fiction regarding Nero’s rule. Nevertheless, on the night of 18th July in the year 64, the Great Fire of Rome erupted and burned for five days, destroying almost half of Rome’s 17 districts. The fact that the fiddle had not been invented yet in the year 64 means that there are probably some untruths in the story. But no one can dispute that Rome did burn, and in five days was almost reduced to ashes.

Anyhow, legend or otherwise, ‘fiddling while Rome burns’ is a most apt phase to use on any ‘emperor’ who is either in bed (though not necessarily sleeping, if you know what I mean....wink, wink), partying, fiddling, singing, or as the Malays would say, berpesta (having a ball) while the country goes down the drain. And would not Malaysia and its sleeping ‘emperor’ fit this bill like a hand in glove? What better way to describe Malaysia than as a ‘burning Rome’ and its ‘emperor’ as fiddling while it burns?

Everything works in cycles. The world itself has a cycle determined by its seasons and the 365 days to complete one yearly cycle. Power is cyclic -- you go up, then you come down again. Our life is cyclic -- we are ‘dead’, then we are born, then we die again. Nothing escapes the cycle, which the scientists would label as the natural course of nature and the religionists call God’s grand design. The Quran, in fact, is full of verses that talk about God’s predetermined cycle of ‘nature’ if anyone would care to research it.

One such cycle that is of concern to and which would affect most Malaysians would be the ten-year economic cycle (some say the cycle is 12 years). In mid-1970 (1974), mid-1980 (1985) and mid-1990 (1997), we saw downturns in the economy. Every decade or so, we go through an economic slump. The recovery period for the mid-1970s slump was not that long. I think within three years (by 1977) we were back to normal. The mid-1980s slump took a bit longer though. And the mid-1990s slump was even longer still.

I suppose the mid-1970s episode was our first ‘heart attack’ (at least as far as our generation goes because there were others before that, including the Great Depression before the outbreak of WWII). We were younger then, so we recovered faster. By mid-1980 we were slightly older, plus it was our second heart attack, so the recovery period took longer. And by mid-1990 we were even older still, plus, being the third heart attack, we have sort of just recovered only recently.

But if we get another heart attack, the fourth in our generation, how long now will it take us to recover or will we never recover but continue to be bedridden for a long time to come? The Chinese have this thing about the number ‘four’. They don’t like the number four because four also means die by way of pronunciation. That is why seat ‘14’ (or is it seat ‘13’?) in the MAS planes do not exist plus the 14th floor becomes floor 13A followed by the 15th floor. Can we recover from this fourth slump like we did the first three in mid-1970, mid-1980 and mid-1990? Or will it be like the drowning man who can surface just three times, and the fourth time he goes under he will go down for good and never come up again?

I do not want to sound like the Prophet of Doom but the writings on the wall are certainly not good signs. Investment managers tell me that we are not due for a recession yet. The recession will come, they say, but it will only come in 2009. And before that there will be a short Bull Run before the great crash sets in. Watch the stock market, say the experts. It is only about 1,100 points. Considering the height in 1993 was 1,300 and the Ringgit then was 2.4 to the USD, this means -- taking into consideration the Ringgit is now 3.7-3.8 to the US dollar -- this would make the 1,100 index only about 900 in comparison. Therefore, we still have a lot more to go to break the 1993 record, they argue.

Great news! But then why aren’t I elated? How come this does not make me feel like rushing out to buy up all the ‘undervalued’ shares? Why instead do I feel like cashing out so that I can feel the hard cash in my pocket (figure of speech of course)? I really don’t know. Maybe gut feel? Or educated guess? Whatever it may be, something tells me that the silence is deafening and the quietness may just be that lull before the storm. And I have been in three ‘storms’ over the last 30 years since mid-1970 to know that whenever everyone tells me to buy, then that would most certainly be the time to sell -- because those who are asking me to buy are actually selling and they want me to buy to facilitate them selling. (If no one is buying then how can they sell?).

I admit that I am not an economist (some say I am also not a religionist so I should stop talking about Islam). I am certainly not an investment manager either. And gut feel has no place in making economic decisions. You need to use fundamentals and you must make your decisions based on sound research. So, before anyone starts phoning their stock broker to issue a sell order, maybe they should first seek expert advice. After all, would you not consult a heart specialist if you want to know whether you should have open heart surgery?

Nevertheless, I have my reasons for feeling uneasy about the state of the economy. For starters, as I have mentioned, would be the ten-year cycle and the ‘schedule’ for the next downturn -- though this would be as sound as using the RAHMAN ‘theory’ in forecasting who is going to be the next Prime Minister of Malaysia. Next, and maybe equally unsound, is the ‘fiddling while Rome burns’ theory. I feel that any country that is ruled by an ‘emperor’ who is constantly fiddling (or sleeping) is a strong recipe for disaster.

Just look at the recent Umno General Assembly. With all the ‘endorsed-by-the-top’ anti-Chinese rabble rousing, I can only label this as fiddling while Rome burns. And what about the RM3 billion Second Penang Bridge that they are building, the RM600 million ‘Christmas present’ to the 191 Umno divisions, the RM11 billion bailout of badly-run state agencies, the RM1 billion donation to Cambridge plus the UK Sports Complex, the RM1 billion a year White Elephants and ‘Taj Mahals’ in Terengganu which includes the RM300 million a year Monsoon Cup....sigh....the list is just too long. Maybe it would be easier for me to list down what they are not spending rather than what they are spending.

Then we have the media and plantation company mergers. The size is one thing, more than RM30 billion, but the fees to the ‘lucky’ consultant would be in the region of RM100 million to RM200 million -- again our hard earned money. What about the disposal of the RM700 million motorcycle company investment to an unknown ‘two dollar’ company for just one Euro? And then we have the losses in Proton and MAS. Okay, Petronas is going great guns. But then aren’t all oil companies the world over as well? So there is nothing to shout about here. What we want to hear about is the performance of thousands of other state and national agencies. They are bleeding profusely and even with all the ‘creative accounting’ they still can’t hide the disaster. And this is not just about bad business decisions and poor judgement but about corruption down to the core.

Malaysia is ripe for a ‘correction’. And when it comes it is not going to be pleasant. Blood will be drawn and it will be our blood, the rakyat’s hard-earned money taken from us by the government by way of taxes. We now pay more for petrol and it will be going up again pretty soon. We also pay more for water, electricity, and toll charges -- which are going up again by more than 50% in a few days’ time. There is nothing that we touch which is not taxable. In the case of petrol, the tax is three times or so the actual cost of petrol -- so when we fill up with a full tank of RM100, the tax is about RM70-80. The same goes for cigarettes and all the other ‘sins’ that we indulge in (and don’t we all have many sins?).

Over the last two or three years, investors have been slowly moving to other countries like Thailand, China and Vietnam. Malaysia is no longer the favoured investment destination. And I am not just talking about foreign investors but Malaysians as well who no longer have confidence in this country. Even those who are staying put are not increasing their investments but would rather set up new businesses overseas while keeping their Malaysian operations as they are without pumping in any more money.

The exodus of Malaysians seeking greener pastures has increased many-fold. Malaysian students who are already overseas prefer to seek employment in their adopted countries rather than return to their motherland to a bleak and uncertain future. We are presently seeing a brain drain of proportions never seen before. No longer is it hujan emas di negeri orang, hujan batu di negeri sendiri, negeri sendiri is far better, but a case of the grass is greener on the other side.

Yes, the emperor is fiddling while Rome is burning. And the predators are moving in for the kill. They are seeing Malaysia about to burst at the seams and they want to be around to pick up the pieces. And one such predator is Soros who is like a shark circling its prey when it smells blood. Why did Soros come to Malaysia last week? It was certainly not to laze in the sun while feasting his eyes on the sailboat race during the recent Terengganu Monsoon Cup. It was to case the joint. He wanted to see how strong or weak Malaysia’s defences are. If he did another raid on Malaysia like he did a decade ago, would he be able to get away with it?

Soros wanted to meet Abdullah Ahmad Badawi but Khairy Jamaluddin, his son-in-law, advised against it. So he met Tun Dr Mahathir Mohamad instead, his one-time nemesis. Surprisingly, Mahathir not only agreed to meet Soros but even absolved him of the 1997 disaster. Has Mahathir gone bonkers? Every man and his dog know who Soros is and what he did. Soros himself has never denied it. He just justified it but he never denied it. And he justified it the way Edmund Hillary justified climbing Mount Everest -- because it was there. The Asian currencies were ripe for picking and whenever anything is ripe for picking then any picker worth his salt just goes ahead and picks it.

No, Mahathir is far from bonkers. He knows who Soros is. After all, was it not Soros who created a dent in his legacy and almost brought his government down? Malaysia has never been the same since. Malaysia would have been very different from the Malaysia today if not because of Soros. So what is Mahathir really up to?

Mahathir is just being a good strategist. Mahathir is just being a good general. He knows that Malaysia is ripe to be brought down, yet again. And he knows who is most capable of doing this. Is it not a good strategist and general one who knows his enemy? Soros is a Trojan Horse. And one must beware of Trojan Horses. Sure, he talks about world peace and he shares Mahathir’s aspiration for world peace. But Soros wants to see world peace in the American model.

Malaysia is but a small canoe amongst a sea of super tankers. Just the wake alone is enough to sink this canoe called Malaysia. China and the US are currently eyeballing each other and are engaged in some serious sabre rattling. Is our Finance Minister cum Prime Minister aware of this? Read what the two reports in the ADDENDUM below have to say about this matter:

“In an unusual move, the Bush administration is sending virtually the entire economic ‘A-team’ to visit China for a ‘strategic economic dialogue’ in Beijing Thursday and Friday (two weekends ago). Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are leading the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation will be Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.”

China is the largest ‘hoarder’ of American dollars. It is estimated that China holds about USD1 trillion and if it releases it onto the market the US economy would collapse -- followed by the world of course, in particular countries like Malaysia which depend on exports to the US. The US knows this and it is not sitting still. So it sent a team to China to talk to them but the Chinese told the Americans to go fly kites. The US knows what it must do if China makes its move. It will just abandon the USD and create a new currency called the AMERO. That will catch the Chinese with their pants down.

When these two economic giants eventually clash, and it may be a matter of time before they do, Malaysia would be pushed back into the beginning of the last century.

Abdullah Badawi is fiddling. He is not fiddling metaphorically speaking like Nero did as Rome burned. He is fiddling with our money. The bottom is about to fall out of our economy and they are still enjoying Monsoon Cup pestas in Terengganu and spending billions -- of money which we do not have -- on all and sundry. Don’t say I didn’t warn you. And remember, you heard it here first. The party will soon be over. As Rome burned to the ground so will Malaysia unless Abdullah stops fiddling and starts running this country. We are about to crash and the pilot is having a snooze while the country flies on autopilot. But it will soon be time to land the plane and you can’t do that on autopilot. You have to take control of the plane and land it in one piece. But the problem is: you do not even know where the hell we are and where the airport is. All you can see is the sea below and we may not have enough fuel to fly around in circles looking for the runaway.

What happens if the US attacks Iran? The US has sent a delegation to the pro-American Middle Eastern countries to discuss this and to get their support. President Bush has personally phoned Abdullah Badawi, the Chairman of the OIC, to also get his support. What happens if China unloads its USD1 trillion or even part of it? What happens if the US abandons the USD and creates a new currency? What happens if the investors cash out and the Kuala Lumpur stock market comes crashing down? How is Abdullah Badawi going to handle all this? Does he know what to do? In the first place, does he even know that an economic Tsunami is about to hit us?

Do you know the extent of Malaysia’s non-performing loans problem? The unsold properties, unsold cars, overdue car instalments, repossessed cars, overdue credit card payments, and much more are colossal and Bank Negara is keeping everything very quiet lest there is a run on the banks -- which is how recessions start. If they were to classify anything above 60 days as non-performing loans and place them under the bad and doubtful debts column that would be the end of the Malaysian financial market.

Things are getting very critical and those who walk through the corridors of power are sleeping; not figure of speech but literally. There are many unanswered questions such as in the Razak Baginda murder trial. Why has Umno taken charge of the trial and why was Razak’s defence counsel sacked? Isn’t this most bizarre? And why did the Attorney-General make a statement saying that only three people and no one else are involved in the murder? Isn’t this most irregular and can only be because there is talk that more than three people are involved? All these shenanigans only add to the crisis of confidence factor and convince foreign investors that there is something fundamentally wrong with this country.

In his presidential address during the recent Umno General Assembly, Abdullah Badawi said that the investors are waiting to hear his speech. He then drew our attention to the fact that the stock market went up resulting from his speech. Dear Sir, the stock market went up because at the end of every year they push the market up just before they dump their shares. This is the only way to make money and service the dividends due at the end of the year. It has nothing to do with your speech, Mr Prime Minister. Now, after going up 15% over two months, the market is going down again amidst profit taking. Do you want to know what the investors are really talking about? They are talking about the RM30 million yacht under construction in Turkey, the five million dollar mansion in Perth, the stable of luxury cars in the UK, the private jet in Australia, and much more. And they are asking how a Prime Minister who is clean could afford all this.

Yes, the emperor fiddles while Rome burns. Well, do they not say that history always repeats itself? They tell me that 2009 will be the year that the bottom falls out of the economy. The next recession will be in 2009, say the experts. Others swear it will be in 2008, after Globalisation and after we sign the FTA with the US. I would put my money (pun intended) on next year. Yes, 2007, that will be when we will all know what it feels like to live in Indonesia a few years back. I always like to say “I told you so”. But I hope this time, I really do, that come Christmas 2007, you will tell me, “Ha! You were wrong!”