2014年4月1日星期二
i write this in English, is beacuse i know some of the people may not understand chinese word.
recently, i smell the market is going into last boost siuation. it just like 1997, even the fundemental is bad(Febuary), but the share market is still continue(until july only burst). This is the so call the last boost. The purpose last boost is to make sure eveybody is joing the game, whoever not join everyday will be sad and see everything going up.
malaysia economy is already near the end of bubble. Everything is ready and set, just need a very very small sprak to burn and cause domino effect to happen. And this small tiny spark is coming very soon.
poeple may wondering, how come, everything just look very very good now. even myself also cannot believe bad things will happen based on the market,economy and capital situation. Everything just look so nice my feeling tell me is not possible goes wrong, everything will be just fine and good.
however, my worries is come from my experience and logic thinking, not from my feeling. This why i sense big problems is coming. let me explain how all this goes:
How the good economy happen?
1. asset value is expanding(property, stock market, anything that can be mortgage)
2. bank get better valuation on asset and having more capital to loan. (bank balance sheet best of the best). Note: is very very hard to see bank got bad loan increase while share market and property is booming.so, now malaysian bank is perfect and helathy cause bad loan is very terrible low.
3. bank more loan issue out to everybody (if interest rate low, then this will boost), many people like to get loan.
4. more loan = more capital in the market. money is everywhere, people are rich, they are spending. so economy is boost
5. the cycle is continue, expand asset, people rich, spend more, bank better and more capital.GDP growth.
theory is, in todays economy, debt normally goes with GDP, more debt growth = more economy growth. but of cause it wont expand in same ratio. the situation normally is growth of debt slowly pull less GDP now on day(the effect of loan growth will growth GDP is decreacsing)
ok, good. i think now everybody understand how economy can growth by more debt and loan.
question and problems coming now. let me show 2 data first
malaysia govt 10 years bond rate (higer rate means more difficult to get money, need to pay more intrest, so is very very hard for goverment to expand their debt and loan)
http://www.tradingeconomics.com/charts/malaysia-government-bond-yield.png?s=mgiy10y
http://www.thestar.com.my/Business/Business-News/2014/03/20/Rising-household-debt-It-hits-new-record-of-868-of-GDP-on-loans-for-properties-and-motor-vehicles/
another news for Malaysian Boleh land record.
ok, what all this problems? economy still looking good, money is all around even all this happen, doesnt?
so, no big deal?
the big deal is here. all this data will not create a burst for anything, it just create a VERY WEAK fundamental of an economy. it just like even you had HIV virus in your body, you still looking good. But someday another very tiny virus entering your body(said flu virus), it will instanly destroy your immune system and cause all bad things (other sickness) happen all together. while your body is weak(fundamental not good), you will not able to fight all sick together, and more sick is happening while your body fighting flu virus, so, you are collapse and waiting to finish (if without medicine help).
ok, now let us see why fundamental are bad? as below summary
1. economy now is boost by increasing of loan and debt with low intrest rate(worst is because all focus on property)
2. all investment of capital in mainly focus on property (this is the worst investment in any economy term because there will not be any GDP after it had completed build- while contrsuction period it will generate high GDP- it also means for short term GDP this is good, property is good to boost shorthen GDP, not long term)
3. Intrest rate are going to sky rocket in near term (1-3) years
ok, all this is still no big deal, right? things maybe just some small effect and we are controlling now, right?
ok, below are the step how domino effect are happening. and also the spark coming from.
2014-2016 is the peak for the house owner to paid their debt(housing loan).how this small spark can cause a financial melt down, let me show you.
1. most of the bank now having the rules that if you cant pay your installement 3 months, your intrest rate will be double means from 4.25% go to 8.5% per month!!
2. when this happen,house will be going to bidding for public (let said market very less uncapable people, only 20% of house owner is goreng house, thus house owner had to go bankrupt)
3. well, that just effect one person or just 20% of that right? what so big deal? Wrong, that will effect the whole market property evaluation for price and mortgage value.
4. let said now house owner loan 400k, house value now 500k value by bank. When 2014-2016, intrest rate slowy climb up, loan is limit, supply is many (20%). When bidding time, nobody want to buy at 400K, people waiting for cheaper price. Then no choice, if bidding nobody buy, bank had to lower price even said go to 300K.
5. tiny small spark is happening when this so call 300K SOLD case deal. when the first deal happen, others will judge all the balance 20% only WORTH THAT MUCH. what will happen? no house can sell high again, all become lower and lower.
NOTE: i think you all know the goreng percentage is not 20%, you can put whatever % in your mind, i will put 20% for this domino effect.
6. what happen to bank? a big problems will happen to bank, many people start deafulting their loan, and market value of property held by bank decrease. BANK START SHIRNK ALL PROPERTY LOAN- meaning nobody can buy property with higer price. Property price go lower and lower (even you want buy high price also cannot, because bank wont loan to you. according to our data above, you know not much people can buy with cash)
7. When domino effect happening, it is backward of economy boost (to shrink). bank starting more slowing to loan, and capital of bank lesser, profit lesser. everybody hard to get the loan. property market goes another down turn and prolong effect continue.
8. while this time, more housing supply is coming out (2014-2016), every month there is new supply coming out the market and immediate everyody want to sell.(you wont see buyer as 2009-2013, cause all in market you will only haer one word. SELL, SELL, SELL, nobody want to keep the house)
9. while this is not the only bad things happen. share market also start collapse, money in peoples hand everyday lesser and lesser (paper value all gone), more people poorer, no more money to buy things. everybody became stingy on everything.
10. because of all above effect, GDP is lesser and maybe slightly decrease said -1%
11. -1% what so big deal?? this is very serious. because things will happen like this
12. all USA europe capital that is inside our baking system(deposit) and share market will immediate one shot left Malaysia, banking sector almost collapse(bank negara will help). and this will make bank never ever give any loan to property market (except you only loan for 30% and you had perfect record, because bank no money to loan you, had to select customer)
13. the worst case, USA are continue their rising intrest rate, they wont stop because of your Malaysia economy problems. So, not to said USA and europe capital gone, even Malaysia Capital are going USA, because no capital want to stay in a economy that having problems(it doesnt care are you Malaysian or you love your country or not)
14. the another worst case, because GDP shrink 1%, your household loan %GDP sky rocketing high(said 100%, because your GDP lesser, even your housefold debt not increase, your % will still increase). Note: your debt will never be shrink at economy downturn, because you are harder to get money to paid your debt. However some rich person can pay of their debt to reduce the debt.
15. because of GDP shrink, goverment debt at the limit cannot expand anymore and goverment facing massive budget cutting (or raise everything to people), this again shirnk the GDP and capital in market, also lower the economy of Malsyaia.
16. and this domino effect continues, and continues, just like what happen to Spain and irish. until one day, all bubble had been cleared, economy back to normal. then malaysia will be growth and strong again.
who will be the survivor this time? we dont know. i only know bad things will happen, and it may be very very bad. hopefully my logic is wrong and feeling is correct. feeling at least tell us things wont go so bad, goverment will do something like capital control. if my logic is correct, things will go very very bad beyond our imagination, i wont wish that happen, i will hope feeling is correct rather than logic is correct.
NOTE: and this happen to WHOLE ASIA including china and singapore. The only problems is who will be the worst hit and who is just minor hit. In my logic, China will be the last to going down.
http://8yearsblog.blogspot.com/2014/04/the-final-countdown-of-market-burst-is.html
Created by Tan KW | Jul 08, 2024
Created by Tan KW | Jul 08, 2024
Created by Tan KW | Jul 08, 2024
Created by Tan KW | Jul 08, 2024
no one can time the market unless you are ....
Best strategy is to invest in valuegrowth stock for long term
2014-04-02 12:37
i think this man is not buying stocks, n he is so negative on equities.. maybe he had some past negative experiences with equities..so much FEAR
2014-04-02 13:28
this author has been talking market going to crash since many years ago.... whenever he mentioned it, market always turn to be bullish...
I think he talk 10 times, should be a least one time really chance to be true once time.
2014-04-02 13:33
Market is a place for investment & nobody can predict what happen in the future, it's just about investor behaviour towards a news that make market up & down nothing more than that.
2014-04-02 13:36
In 20 years, we will witness 1 or 2 market crashes! In a year we will enjoy 1 or 2 mega sales in bursa! And like always, doomers will come too early, I tell you, now is the best time to make money! This one month is just not to be missed!
2014-04-02 13:36
In the last 50 years, you see how many times stock market crashed ? Not more than your 10 fingers ? I will say less than 5 times. So the probability is < 10%.
It is the last thing I want to think about. I will focus on the stocks can perform rather than thinking of stock market crashes.
I better focus on Properties, Construction and Plantation stocks to buy tomorrow so that I can make fast money.
Thank you.
2014-04-02 13:43
one of the reason the author not writting in chinese is not because of he want to share to those who can't read chinese. I think it is just because he has been mentioned so many time of market going to crash in chinese forum, I think he is just malu to talk again in chinese forum.
2014-04-02 13:44
The market now is a lttle stretch....some counters are over priced like dksh, yinson, datasonic, klk, fimacorp, presta, there will be a big correction coming....keep half and throw half....beware and keep more cash....cash is king.....
2014-04-02 13:46
If he wrote the above article in 2007, he is right in 2008. Since he wrote in 2014, have to wait for the years he's is right...maybe 2014 or 2015 or 2018 or 2020. He's sure to hit the jackpot and then declare "I told you so in 2014". Anyway this is market...it will be up, down or burst. Make full use of the opportunity available and standby your running shoes...you surely will need it sometime in the future.
2014-04-02 13:49
The cycle carry on and on. Bubble become bigger and bigger, follow by burst, no bubble, then, start the bubble blowing again. At this moment, the risk level is much higher than a year ago or two years ago. That could mean nearer to burst stage as well. Good Luck but watch out !!
2014-04-02 16:38
Author: Tan KW - This man is right. I am 56 years old. The tale-tale signs is everywhere....Overpriced assets... more than double their book values! Low Interest rate.... low wages but high household debts. It will happen within the next 15 months. I am ready to gallop under value blue chips.
2014-04-02 16:52
Any further explanation for 6), why people will start to default their loans after number 5)?
2014-04-02 20:45
remember when most of the people don't think the burst is around the corner, we should beware, personally i think this wave will be the last bullish wave and of course the most aggressive one, for how long and how strong the wave we will never know. Recently don't you think almost everyone is making money? easy money?
Right now, the priority concern should be how much we can afford to lose? rather than how much i can earn. Risk management always come first especially at current stage. just my 2 cents.
2014-04-03 00:20
if everyone earn money, who losing it? lolz...well....just prepare for the worst, set your limit and u will be safe regardless of market crash etc..lolz..
2014-04-03 00:38
So powerful the England. If the author can predict the bust, surely he can predict the boom also and make something from it no?
2014-04-03 10:48
To share some signal that burst is getting near : Interest Rate move up, Debt too high, more people proud of making money from speculation. Once the housewife also proud of making money from speculation, it is time to let go all your share and waiting for the fall soon.
2014-04-03 12:23
when everyone is talking/fear about bust, it means enter the market. Buffett once say in normal market,profits is minimal. only when market is volatile and everyone has fear that he can make big profits. it is still a long way before it bust.take this opportunity to make some retirement fund.
2014-04-03 14:18
the best of times & the worst of times. we have seen ( experience first hand )the asian financial crisis,US sub-prime crisis, the lehmen bros "kaput ", the euro zone debt crisis but the market recover and somehow moved even higher.
we cannot predict the future even we have a magic crystal ball. nonetheless he is so bearish that at times he believed a meltdown is forth coming.But i sincerely hope we do not lived thru to see (witness) a world financial melt down.
the IMF, the world bank and all the central banks certainly will ensured such a scenario will not happen. this is why we have the QE easing and the printing of fiat money. Nobody wants a repeat of the financial meltdown. it's will hurt them more than it hurt us.
cheers. have a great day
2014-04-03 14:31
he's trying his best.
he usually have good articles to share.
I rather he try to explain in English than Chinese. Cant understand most of the Chinese characters.
Anyways, the end wont come when people are wary of it la. It's always when we are complacent...
2014-04-03 14:39
A broken clock tells the right time twice a day. Doomsday pollyannas dont add much value to a debate.
2014-04-03 15:22
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way. . . .
2014-04-03 15:44
Nice article,even though it is a direct translation, I suppose. Anyway we do not know when is the final countdown. Be wary n cautious, cause there are time to cheer and be happy; there are also time for sadness.
2014-04-03 17:37
I made my little millions from the stocks.....I have gone thru 4 bust cycles and two best all time period......esp the 1993 super bull......now 2013 is already closed after a 10_10 bull run...if aunties and apexs are entering the msrket ....its time to cabuttttt......
2014-04-04 13:34
Tang Michael...totally agree..if the assohs' and the pakciks' are talking abt shares everwhere;...... better chow....Learn a lesson from 1997 collapse! Dont be too greedy.
2014-04-04 14:54
I had 2/3 of my net worth in cash. If crisis come I will go shopping
No worry
2014-04-04 15:23
Icon8888 better keep your 2/3 money to cure your small brother. He is sick , don't spread the disease ok
2014-04-04 15:26
Step 1: Money Supply
Step 2: Low/Negative Interest Rate
Step 3: Inflation
Step 4: Positive Interest Rate
Step 5: Back to Money Supply or Credit Crunch
So the cycle starts all over again. In Malaysia sense, we should be in Step 3 now. And looking at BNM latest mulling on interest rate hike, we should be moving to Step 4 real soon. By then, the debts and risk exposure would affect whether we are going back to Money Supply or Credit Crunch.
2014-04-04 15:29
Be fearful when people become greedy n think they can get rich very fast in d stock market. When d Market crashes, many people become fearful then u Must be Greedy. U need a lots of guts n bullets!, like u are in honeymoon. So be prepared, maybe hold only few businesses that survived d recession, in d past 50 years. Ask your grandmother! Good luck!
2014-04-04 21:57
if it happens,like bjoy said, then first thing will come into my mind is milo. Haha, lol.
2014-04-04 23:28
Walao! Please kindly do something about your English expression. It's painful to read lar. TQ
2016-01-22 11:16
fortunebullz
Hahaha! You going to miss super bull then!
2014-04-02 12:08