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The US China trade war: Endgame

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Over the weekend, financial markets were confronted with 2 pieces of news. The first, a tweet from President Donald Trump as follows.

 

 

The second, a headline from WSJ sounded very different.

 

 

So, is there a deal or not? Will President Trump meet with President Xi in less than a month’s time and sign over a couple of papers and signal the US China Trade War to be over?

Let us make it clear who thinks that there is going to be deal. Bloomberg. Reuters. CNBC. CNN. TIME Magazine. FORBES. Virtually every single major news network as well as your local mamak tea stall operator says that the “US and China are very close to signing a deal.” By the way, they were close last week, and they are very close this week.

To be honest, every indication was that this particular deal was considered to be “in the bag” on Friday. That is of course the opinion of many fund managers and short term traders. But I believe a careful reading of the news actually reveals that there is no deal, tariffs are going back up to 25% and we will not only see a trade war, but a military conflict between the US and China within the next 2 years.

The reason is that President Trump’s tweet carries more weight that the Wall Street Journal’s article. The WSJ article is considered a defensive leak by US trade negotiators – meaning that it is intended to protect the progress made so far in the negotiations.  The US trade negotiators knew fully well that there was no way China was going to agree to remove agricultural tariff’s immediately so they wanted to “front run” the President by giving the idea that the deal is almost done. This is to make it difficult for President Trump to suddenly flip and declare that there is no deal between the US and China.

Now, why would the President suddenly flip? There are two reasons.

The first is that this was created by the Chinese themselves which wanted to make Trump look very weak by agreeing only to a watered down deal by dragging out negotiations. This is because I doubt Vice Premier Liu He has the necessary clout in China to actually get everything across the board. By the way, Prime Minister Li Keqiang asked the Chinese citizens to brace themselves for tough times during yesterday’s Central Assembly Meeting of the Chinese Communist party.

The second deals with the Trump flip. If recent history is used to gauge the probability of Trump changing tract in mid air, it is as not being as remote as being priced in the financial markets. For example, President Trump walked out on the North Korean delegation during their summit in Vietnam, citing disagreements with Kim Jong Un’s position, even though his chief intelligence officer had warned him prior to the summit not to expect the North Koreans to drop their nuclear arms program.

Another more sinister motive is that the President thrives on chaos and removing the US – China threat so early in the run-up to the Presidential re-elections will remove a major campaign point. Also, there is the spectre of a new Congressional investigations led by the Democratic controlled House Judiciary Committee that could make it more likely for President Trump to face impeachment. The issue that bothers President Trump is not really the stock market, but Mueller, the FBI, the Russia probe and with that, not only the possibility that the President may be impeached, but that he will spend the rest of his life behind bars.

So the President has one of two alternatives. Play nice, go along with the China deal, and perhaps adding a 1,000 points to the Dow Jones Industrial or, put in place the elements that would lead to an open clash between the US and China in 10 – 12 months down the road.

If you consider his latest Tweet on the matter, it is clear that the President is not intending to go through the motions and sign whatever is front of him.  In fact, his stated demand is in contradiction with China’s position as reported in the Wall Street Journal article. President Trump asked/demanded the Chinese to drop all tariffs on US agriculture exports in consideration of his decision not to impose an additional 25% tariffs on Chinese exports on March 01, 2019, when the Journal’s article revealed that China has agreed to reduce the tariffs on US imports once Washington removes the tariffs on Chinese imports, and that as part of the trade deal and not a gesture of goodwill.

So where does this leave us?

At the time of writing, Dow Jones Futures are strongly in the green, indicating an open of 26,135 as market participants ignored the Tweet and reacted to the WSJ article. We expect the index to be down 1,000 points by mid-March, as Trump will make clear that he is not going to sign the deal that is in front of him and instead directs additional tariffs to be employed.

UPDATED 8 MAR  2019

Rembau  Times  is spot on. Dow Jones Futures as of 8 Mar 2019 @ 1030 pm was 25,200 almost 1,000 points lower than Monday  when we made the call. US Ambassador to China warns that no date has been set for US China meeting. This was the toughest call we made but currently we are proven correct.

Anwar is PH best bet now

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Breaking news: As predicted by The Rembau Times as early as Jan, BN has retaken DUN Semenyih with style. They have managed to overturn ab 8,000 vote deficit to win with 2,061 votes.

The result is nothing short of a disaster. PH even lost the postal vote, with members of the police voting for in a  BN 3:1 ratio. As it stands, PH is in deep political mess.

Tok Mat has turned BN around in a matter of months.

For BN, Tok Mat’s formula of winning over the older Malay vote with Najib winning over the youth vote is proving a winner. Tok Mat is extremely pragmatic, speaks very well and has executed a perfect strategy to sew up the Malay support as early as possible. Judging by the current progress, BN can win the vote outright in Peninsula Malaysia and form a Government with either Warisan or PBB.

For PH, the writing is firmly on the wall : A one term Government that may be deposed within the next few months if there is no peaceful transition to Dato Sri Anwar Ibrahim.

Dato Seri Anwar is PH last hope to remain in power.

There is no guarantee that things will improve under Dato Sri Anwar but there is certainty that things will continue to deteriorate politically if Tun Dr Mahathir remains in power. Given the candidate is from Bersatu and Tun campaigned hard for this byelection, the result can only be intepreted as a vote of no confidence by the Malays on Tun Dr Mahathir. What makes this loss even worse is that Pas President Dato Sri Hj Hadi Awang had actually stayed away from campaigning and indirectly thrown his support behind Dr Mahathir.

Even Dato Seri Hadi’s support was not enough to save Bersatu in a PH stronghold.

So will things improve under Dato Seri Anwar? Well, hopefully he can stop the bleeding by sacking Waythamoorthy , Kula Segaran and the flying car Minister from the Cabinet. There are also other things that can be done quickly to halt the decline.  And he could enforce some discipline among Ministers with respect to their relationship with the civil service. Until that change happens, PH will continue to bleed support and be confirmed to a premature exit.

 

What will Trump do with China?

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The US – China trade negotiations are right now at a very critical point. If things go well, markets may rally a little bit more, if things go bad, expect a 1,200 point sell off on the Dow Jones Industrial average.

For those trading with China, the impact of an increase in tariffs to 25% could be much more damaging. This is because international trade is conducted based on a set of conventions called Incoterms. If a US buyer bought goods based on any other term either than Delivery Duty Paid (DDP), they risk having to pay 25% more for their goods as the responsibility to pay the custom duties falls on the buyer. If a Chinese seller sold their goods based on DDP, they may not even clear the goods through customs as it would have cost 25%.

That is why there is currently unprecedented port congestion in the at the Los Angeles-Long Beach port complex, having bled into intermodal rail operations and drayage to regional warehouses. Every logistic firm shipping goods from China to US is under pressure to get the goods cleared by customs before March 01.  Interestingly, since the voyage from China to US takes approximately 20 days, all these goods which are clogging up the US ports would have been shipped out of China in January.

Thus, those claiming that China’s economy is not in bad shape are kidding themselves, export growths of 10% was skewed higher due to the Chinese New Year holidays as well as the potential impact of President Trump raising tariffs to 25%. Next month’s trade data from China should show what The Rembau Times has called – a marked slowdown in Chinese industrial production.

While logistics supply chains are currently treating the risk of tariff increase with some degree of seriousness, financial markets are currently treating March 02, 2019 as a non-issue. Of course, financial markets have the additional benefit of being able to react to the expected probability of the final outcome closer to the deadline date. We question why financial markets are not taking President Trump’s threats seriously when those in the real economy had actually done so.

We reviewed 7 pronouncements, including President Trump himself and let’s see how they stack up:-

Analyst and personality calls. Click here for full document

Of the sample, Kenneth Rapoza from Forbes seems to be the outlier as he predicts that tariffs will increase to 25% come Mar 02, 2019 or in about 14 days time. As fate has conspired, Mar 02, 2019 falls on a Saturday.

From a financial perspective, this creates unprecedented volatility around options expiring on Friday March 01, 2019. Now imagine if there is no deal by then? I would certainly be buying as much portfolio insurance as required, called puts, as these contracts are rather cheap at the moment.

So where do we go from here?

From a negotiation analysis point of view, China is projecting strength and Dr. Michael Ivanovitch, an independent analyst, figures that President Trump overplayed his hand because he reached for something that China was not willing to accede to. He feels that President Trump will want to settle for any deal, no matter how rotten it is just so that he can claim a victory. The President’s tweets on 16-Feb seems to confirm this view as he was talking enthusiastically about the “China trade deal.” If there is a deal done before March 02, then President Xi wins and President Trump loses.

Currently, at the time of writing, President Trump is railing against Andrew McCabe, the ex-FBI Deputy Director and trade does not seem to be on his mind.

The entire premise of this is that President Trump will be unwilling to do anything to cause the stock market to sell-off. With the Dow Jones at 25,900, President Trump may be tempted to see how far he can juice the market to go past its all time high of 26,900.

Conversely, what if Trump figures out that markets go up and markets go down and the only time it will actually matter will be come November 2020, which is still 20 months away. Settling for an empty deal at such an early stage will make him look weak politically since the US public sentiment, both among Democrats and Republicans is to sock it to China.

That leaves us with two alternatives, either take the deal or go for the kill and raise tariffs to 25%?

So how will President Trump react?

President Trump’s decision making is nothing like President Obama. President Obama was easily read from a mile, but President Trump keeps his detractors guessing on what is his next move.

We know from the Apprentice that Trump’s decision making is largely influenced by on the spur arguments. He can be persuaded to make tough calls, after all he has just declared a national emergency in order to build the border wall.  We believe that there are only two viable options on the table – either Trump takes the deal or Trump calls China’s bluff and raise tariffs to 25%.

Given that China is now only offering a crap deal, what would you do if you were President?

The answer is obvious, you will kick China in the teeth, raise tariffs to 25% and keep the issue alive so that you can get a better deal towards the end of December 2019. China will then have two options – continue to negotiate with the US or break off negotiations.

China will probably break off negotiations to save face for President Xi. However, he will face a huge problem on his hand as rural workers who migrated to the coastal city centers may be laid off, leading to social instability in China.  This will force President Xi to do one of two things. Either re-enter negotiations with the US or divert the issue by making claims on Taiwan. We think it is more likely for China to make a military play, but President Xi himself may come under increased pressure within the Chinese ruling establishment who would be angry that President Xi overplayed his hands.

So we are then left with two scenarios.

Scenario 1 – China Re-enters negotiation.

At that point the US markets will have sold off and reached a bottom since earnings expectations for 2019 are very low. The only way to secure re-election is to time a deal in 2020. That will give the markets plenty of juice to rally into 2020 with expectations of corporate earnings to increase in 2021.

Scenario 2 – China prepares to take over Taiwan?

This scenario is probable as well, and then President Trump enters 2020 election cycle on the back of a potential military conflict with one of the world’s largest superpowers.

Updates: Feb 19 , 2019

Ok there is a big change on our call based on Trump’s latest tweet. It is obvious that he is a slave to the market and is going to accept whatever President Xi is throwing at him. Our modified call is Xi Jinping wins, tarrifs are off. We hate to this but the tweet is the tweet!

 

US – China negotiation reality TV show

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President Xi briefing the US negotiators on the importance of a win-win solution aka. don't lose face.

Financial market participants interpreted the headlines which came out when the latest round of negotiations between the United States and China which concluded on Friday to mean that the gap between the two world superpowers was narrowing, or at  least not widening. The Wall Street Journal screamed “Chinese, U.S. Trade Negotiators Inch Toward a Broad Agreement” when the South China Morning Post had only a day earlier likened the negotiations to “pulling teeth.”

The markets had gone into the negotiations hoping for a breakthrough but in the end was happy to settle for anything that appeared vaguely positive. Surprisingly, the markets looked the other way when two crucial economic data points which were released over the week was decidedly bearish: the collapse in US Retail sales in December, which was the largest on record since the great recession in December 2008 and the contraction in US Industrial production. Last week was all about trade and the markets decided that a deal was in the offering and tariffs will not increase to 25% come March 01st.

On Friday, President Trump himself gave the markets too much optimism when he gave an upbeat assessment at the conclusion of the latest round of trade negotiations. Speaking at a Rose Garden news conference about his national emergency declaration, he mentioned “We’re a lot closer than we ever were in this country with having a real trade deal.”  He also conceded that the current proposed deal was very limited and far below what he had hoped for.

The obvious question is whether market participants were correct in their understanding? After all, the President himself seemed to hold out some hope of a negotiated settlement. Going into the latest round of negotiations, he seemed to give every indication that this was the final round and he wanted to see a settlement.

Judging by the speed asset prices rose since the start of this year, it is not wrong to suggest that hundreds of billions are at stake. Not only in asset prices but in supply chains and logistics as well. If the US goes ahead to escalate tariffs on Chinese imports to 25% on March 1st, it will disrupt global supply chains and the globalists will argue it will cause a collapse in the stock market.

However there is a risk to those who trade on Trump’s state of mind today risk being disappointed tomorrow because as Malaysian Prime Minister, Tun Dr Mahathir Mohamed, famously said of Trump that he changes his views even in a manner of hours.”

And true enough, President Trump’s off the cuff remarks over the outcome of the trade negotiations was followed by the only authoritative source of US National Policy: The Presidential Tweet.

Official US Foreign Policy as of Feb 17, 2019 @ 8:17 am (New York Time) was …..

Official US Foreign Economic Policy as of Feb 17, 2019 @ 8:17 am, followed by:

 

So what the official US Foreign Economic Policy as of Feb 17, 2019? The Presidential tweet gives market bulls optimism because he characterized the talks as “very productive.” But the Presidential tweet was silent on whether or not he has decided to extend the Mar 01st deadline. And the Presidential tweet was supportive of tarriffs.

This was followed later on with a change in language – from Trade negotiations to trade deal.

So now we are at a crucial point with three options, with only 13 days left before Trump’s 25% tariffs are set to be imposed :

a) Will the US agree to a deal in principle and cancel all tariffs?
b) Will the US leave tariffs as it is and give the negotiations a bit more time? or
c) Will the US increase tariffs on Chinese imports to 25% come March 1, 2019 ?

Currently, this is what the market is pricing. The market thinks option a) is possible and option b) is probable. Trump tweets recent announcements do strongly hint at option b) so there is rational expectation of that.

Rembau Times however thinks going by our propietary Trump model option c) is possible to happen closer to the deadeline because Trump may change his mind again, we call it the STARCH ( Simplified Trump Autoregressive Conditional Heteroscedatic model) aka Trump changes his mind . With Vice Premier Liu He due to visit Washington Trump may hardened his stance this week. For example, Trump could issue a Presidential order banning Huawei’s 5G network infrastructure from US followed by renewned threats to escalate the duties on Chinese imports to 25%. That should catch China by surprise!

This is because China has offered virtually nothing substantive to the United States. It is perhaps a bit good to understand the context of this negotiation so as to understand what will be ultimate outcome.

China’s approach to Trump dealing

The Chinese approach is governed by traditional Chinese philosophies of Confucianism, Taoism, and war stratagem. In this case, China views the tariffs as an act of aggression and has taken a purely defensive stance. So far China has been very careful not to escalate the situation and has been playing a game of strategic patience thinking that President Trump’s fervor for a fight is merely for political theater and that he will have to settle as the Presidential elections are only 20 months away. For China is all about not losing face to Trump by agreeing to anything that gives the impression that China was pressured into making concessions.

President Xi for his part has always stressed on a “win-win solution” and so far has offered nothing in light of the US tariffs. For China, it is all about saving face. If President Xi gives the impression that he had caved in to US demands then he will have lost face among China’s elite. China, which was initially taken back by President Trump’s aggressive style of negotiations may have figured that Trump’s Achilles heel was the financial markets. If tariffs rise to 25% then the US Stock Market crashes, public disapproval with President Trump increases so there is no point in conceding anything and losing face because Trump will weaken his stance as he is afraid that markets will crash. Alternatively, if Trump does increase tariffs to 25%, the Chinese reason thar US markets will crash and then Trump will weaken his stance and settle for a face saving agreement. In the meanwhile Chinese consumers are helping the cause by boycotting US made goods, leading to disappointing sales by Coca-Cola and Apple.

How Trump actually works

However, currently it is possible for US to impose the 25% tariffs rather than agree to a big negotiated settlement. This is also contemplated by China as being possible but not probable. However, the financial markets view this as not conceivable given that prices are so high with the deadline only 2 weeks away.

This is perhaps possible as Trump works on the principle of who speaks to him last will likely influence his views. Until Friday morning, Trump was talking to the negotiation team, namely Robert Lighthizer and Steve Mnuchin, so they had a chance to influence the President’s views.

The US Trade Negotiators may appear to be weak in the eyes of the US economic nationalists like Wilbur Ross and Peter Navarro.

Both individuals had a vested interest to show some progress and to strike a deal as that is what negotiations are all about. If not they will look bad because President Trump had dispatched them with orders to win a deal, or any sort of deal to sell to the stock market.

In this regard, they accomplished their mission as the Dow Jones Industrial index, which is the only index which matters to President Trump, rallied a massive 777 points this week, from 25,106 at the close on Friday 8th Feb, 2018 to 25,883 on Friday 15th Feb, 2019.

However President Trump does not work in a reflexive way with respect to market expectations. The financial markets expect President Trump to not escalate tariffs to 25%, but will he play along?

The counter view goes like this: When markets are strong, it gives him optimism to pursue a hawkish trade policy. When markets are weak, it gives him the fear to pursue a negotiated settlement.  President Trump is a made for TV President and settling too early before the March 01st deadlines takes trade away from the national consciousness and thus TV ratings.

Moreover, The Economic Policy team advising the US President consists mostly of avowed economic nationalists like Peter Navarro. Since China has offered the US nothing, and since the markets have been doing well recently and the Federal Reserve is under control, this gives Trump all the support he needs to accomplish the above objectives.

The objectives of the hawks at the US economic team at the is

  • a) do as much economic damage to China as possible and
  • b) make Trump look good by winning as much concessions as possible, and
  • c) repeat a) and b) as much as possible to the US public.

And one of the few benefits the US President can do without having to get support from Congress is the ability to unilaterally impose tariffs.  After all, the US has a further fight with the EU on vehicle imports and defense spending, so right now it will be way too easy to give in without accomplishing any of the above objectives. That is why President Trump could at least give the impression that the 25% tariff increase is still on the table and will be imposed. Perhaps markets reacted too early to Trump’s mood on Feb 15th, which could change dramatically by Feb 23rd.

By the way, the US official policy on the media was as of Feb 17, 2018 was

 

 

Umno di Mersing tergendala buat sementara waktu

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Rakyat hari ini dikejutkan dengan berita sedih bahawa Ahli Parlimen bagi P154 Mersing, Datuk Dr Abd Latiff Ahmad hari ini menyertai Bersatu dan dengan itu kerusi Parlimen Mersing telah jatuh kepada gerombolan Pakatan Harap(an).

Walaupun ini bukan kali pertamanya kerusi UMNO dilarikan oleh wakilnya, tetapi Mersing ini bukan calang-calang tempatnya. Daerah Mersing ini seluas 2,838 km persegi , malah hampir 5 kali lebih besar dari Singapura. Tempat ini terkenal sebagai kawasan memancing udang galah dan jeti untuk pelancong ke Pulau Tioman. Pengaruh UMNO di tempat ini amat kuat dan jikalau kita berlalu di jalan – jalan kampong, seperti Kg Air Papan, Kg Tenglu Besar dan Kg Tanjong Genting, pastilah kita akan melihat bendera UMNO berkibar dengan megahnya di kediaman ketua-ketua cawangan UMNO di sana. Lainlah kalau ianya kerusi seperti di Jeli yang berada di negeri Kelanatan yang telah lama dijajah oleh PAS, tetapi kerusi Mersing ini unik sedikit.

Mersing terkenal sebagai kawasan untuk nemancing udang galah yang besar. Ianya telah kekal sebagai kubu BN sejak zaman kemerdekaan.

Malah semangat pro UMNO begitu menebal di tempat ini dan UMNO boleh menang walaupun kayu, batu atau selipar diturunkan sebagai calon. Akan tetapi, UMNO tersalah pilih calon dan dari memilih kayu, batu ataupun selipar, UMNO telah memilih seorang yang akhirnya menikam UMNO dari belakang,

Tetapi apa yang begitu memeranjatkan kami ialah keputusan Datuk Dr Abd Latiff ini bukannya keputusan mementingkan diri sendiri tetapi keputusan yang kurang siuman. Undi UMNO – PAS di Mersing ini lebih 2.5x ganda lebih besar dari undi yang diterima oleh Bersatu. Itupun diperolehi oleh UMNO versi lama, bukannya UMNO 3.0 yang begitu kuat menonjol sejak kebelakangan ini.  Lagipun, The Rembau Times telah memberi ramalan bahawa kerajaan yang ada sekarang ini hanya dapat bertahan sehingga bulan Ogos 2019 sebelum ianya jatuh. Maka kenapakah YB Mersing ini sanggup mengorbankan nama baik beliau khususnya dikalangan penyokong UMNO dan melompat masuk ke dalam sebuah bot yang sudah mula kelihatan tandan-tanda retak menuggu belah.

Apakah beliau tidak membaca ramalan The Rembau Times ataupun menghiraukan sahaja pendapat kami?

Maka itulah hak masing-masing. Hak untuk menikam UMNO dari depan ataupun dari belakang. Tetapi, janganlah terperanjat nanti parti UMNO yang kini ditikam, ditendang dan dipandang enteng oleh golongan-golongan tertentu tidak rebah tetapi membuka langkahnya di peti undi tidak lama lagi.

China’s floodgates of bad debt bursts open

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Mersing terkenal sebagai kawasan memancing udang galah yang hebat dan besar .

In the case of 1MDB, most of the headlines concerned the allegations of embezzlement and the cover up. Few actually considered the actual business model i.e. is it possible for a sovereign debt fund to function in the first place.

Surprisingly, this concept of a debt funded investment is quite common in China. In fact, the amount of debt in China, as reported as ““Total Social Financing” an appropriately Communist sounding title, was RMB 200.75 trillion as of end Dec ’18 (USD $29.7 trillion).  That is a lot of debt!

For years, economists have predicted that the great day of reckoning will one day come and China will find itself in a banking crisis the likes the world has never seen. And this year certainly looks like a year where this prediction could come true.

Already, the default rate tripled in 2018, with 119 corporate bond defaults versus 35 in 2017. If 2019 was going to be any better, the market has been severely disappointed as one of the most famous private investment vehicles, China Minsheng Investment Corp, has defaulted on a bond that was due to be paid on Feb 1. Currently, China Minsheng Investment has RMB 232 billion in debt or USD$ 34.19 billion. Another borrower, Wintime Energy is unable to pay up 20% of principal on its debt, and it has RMB 63.2 billion or US$ 9.3 billion in debt.

So what happens now?

To give you some perspective, things can go very bad, very quick. This is because retail investors may be tempted to pull money away from the debt market, which makes it difficult for other debt zombie companies to find financing. So then these companies start to default, which makes more people pull money away from the debt market. Quite quickly, you can see how things can go out of control.

For China, the corporate bond market is about RM 20.13 trillion (US $2.97 trillion). The GDP of the country is $12.24 trillion. So is this bad? Is this comparable to the sub-prime crisis in the US?

In 2008 , the total CDO (“toxic debt”) outstanding in the US market was $1.04 Trillion. US GDP was $14.72 trillion at that point, so in a like-for-like comparison, China is in a much worse state as it has a smaller GDP base and a larger potential debt problem. This is because we have not even included the other elephant in the room – bank loans of RMB 134.69 Trillion (or USD $19.9 Trillion) or the other shadow banking loans – trust loans and entrusted loans of RMB 20.21 trillion (US $2.98 trillion).

As of 2018, China’s Commercial bank NPL ratio climbed to a 10 year high of 1.89% and total bad debts was RMB 2 trillion (USD $296.5 B). We can expect this ratio to double to 3.90% by end of 2019, meaning that total bad debts on commercial banks would have doubled to RMB 4 trillion, corporate bond default rate would have gone up three to five times, with over RMB 2 – 3 trillion of corporate debts in the bankruptcy court and another RMB 2 – 3 trillion of entrusted loans / trust loans blowing up.

Add all these together and the problem credit is of the order of RMB 6 – RMB 10 trillion (USD $0.9 Trillion – USD $1.9 Trillion).

This is sufficient to send China to a severe recession, perhaps similar in intensity to what the US experienced in 2008.

Najib’s humanitarian mission

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This week will mark an important chapter in Dato Seri Najib’s journey as a politician as his court case concerning 1MDB goes to trial. But rather than moan, Dato Seri Najib continues to perform his duty as a “man of the people” and visited an old friend who was suffering from diabetes. The Rembau Times is not afraid to say that we are not so secretly rooting for Najib’s acquital as Najib is a moden day Robin Hood, has been a strong personality in social media and has even sung songs that made fun of PH, complete with backup singers. (Remember the GST song anyone)

Najib’s remix of a blues 1970s song making fun of Pakatan’s unfulfilled promises should see BN prevail in Semenyih.

Politically however though Umno benefits tremendously from Najib’s role as King of Troll, the Umno ship is now begining to consolidate around the Acting President and Umno Youth Chief. Together, they are begining to forge stronger ties with Pas and so lock up the Malay vote as early as possible. With Najib grabbing all the headlines, Tok Mat and Asyraf are quite free to perform their work.

However this cooperation between Umno and PAS will be face some scrutiny. The MACC has identified 9 PAS leaders who will be subject to investigation as they had bought new cars and bungalows during Najib’s time in power. It will not be difficult to trace the transactions and source of wealth – and if it came from  accounts linked to 1MDB then  individually they may fall, but PAS will be strong enough to still maintain their vote share and mind share. Nik Abduh political career could be reduced to dust if he is entangled in this affair, though it is probably not likely.

Of course, the missing piece in this is the Government : Pakatan Harap(an).  Well, for the first time in 8 months the Government seems to be trying to address the key issues we raised months ago. Mazlan Aliman recently announced a pilot scheme for Felda settlers to switch to cultivation of vegetables and fruits. The Minister of Agro-Industries, Datuk Sallehudin Ayub also came out with a programme to help B-40 segment. And there are bits and pieces here and there.

Of course all of this increased activity is with a view towards the Semenyih by election, which The Rembau Times has predicted will be won by Umno. These activities are a bit too little too late to affect Semenyih as the issues in that by election is the Number One issue facing Pakatan Harapan : A referendum on Prime Minister Tun Dr Mahathir and the failure to deliver key promises, esp when it comes to the status of the Prime Minister(in waiting) Dato Seri Anwar Ibrahim.

This wil also be a key test for Tun’s chosen protege, Dato Seri Azmin Ali to see whether or not he can help Bersatu win in a small state constituency in Selangor, something that should be considered a walk in the park as Selangor is firmly under Pakatan rule. But we maintain our call that Semenyih will fall not because of weakness in Selangor, such as water problems (which coincidentally has all but disappeared since the Federal Government fell) but because even Pakatan voters want to send a clear signal to Tun Dr Mahathir:

*(Please) Resign and make way for Anwar Ibrahim.

Long live Anwar Ibrahim!

*Added out of polity

See UMNO is so humble now

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A roundup of all the news making headlines yesterday and today.

The news of the past few days has to do with Deputy Minister Marzuki’s mis-education at University Cambridge (Antarabangsa).  This has been picked on by members of Pakatan Harapan as well as being turned into jokes in the media, both locally and overseas. Surprisingly, Umno is rather quiet about this, as perhaps many Ketua Bahagians are fellow alumni from this prestigious sounding university.

However, Deputy Minister Marzuki’s educational qualifications are the least of his undoing. The bigger self inflicted goal will have to do with the decision for Bersatu to expand its wings to Sabah. That is the suicidal move as it will surely anger Dato Seri Shafee Apdal. The electoral map has been redrawn post GE14 and Sabah is Shafee Apdal country. We will wait to see this explode. UMNO President Zahid Hamidi himself has said something big is currently brewing.

The second point to discuss was Acting UMNO President Dato Seri Mohamed Hassan’s use of the term “bodoh sombong” (foolish arrogance) to describe the attitude certain Umno leaders possessed in abundance prior to GE14; an attitude he felt led subsequently to UMNO’s downfall. Interestingly only a few days earlier, the Raja Troll Malaysia @ BOSSKU aka. ex Prime Minister of Malaysia aka #MO1, Dato Seri Najik Razak revealed that he was personally very confident that UMNO would win big at the GE 14 elections because of the 3 way contests. It is presently not clear whether these two statements are related.

However credit must be given to Tok Mat for using such a strong term to describe UMNO leaders, but at the same time Tok Mat needs to make clear which leaders he is referring to so that he does not hurt the feelings of non-foolish arrogant leaders.

To me, most of those who were clearly less than intelligent and more than proud at the same time were found in the ex-PM’s inner circle, especially those who ran the GE14 campaign. Not all of them were politicians, some where members of think tanks, others were mysterious businessmen, with initiala sharing the two of the three letters in the honorific “His Royal Highness.” Some of the politicians who were in charge of Information and Communication at that material time have , whose arguments defending that scandal were sprouting arguments that were so intelectually repulsive that they were defeated in their own hamlet and to add insult to injury, have already abandoned UMNO’s ship after helping to run it aground. There were also those involved in other bovine related (aka lembu) scandals which weakened the party’s wing, especially Wanita Umno to such an extent that it could no longer function. Those are some of the culprits behind UMNO’s historic loss but if Tok Mat continues on his “Ole Gunnar Solskajer” revival,  UMNO will be back in power in no time and can perhaps form a white paper committee to look into the issue.

 

Berita baik bagi UMNO

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Lembaga Pengarah The Rembau Times yang telah bersidang petang tadi mengumumkan tarikh UMNO dijangka akan kembali berkuasa di Putrajaya telah dipercepatkan dari May 2020 ke Ogos 2019.

Ini bermakna The Rembau Times menganggap kerajaan Pakatan Harapan yang sedia ada hanya akan dapat bertahan selama 6 bulan lagi sebelum retak dan terus berpecah.

Mengulas berkenaan ramalan tersebut, Ketua Pengarah Rembau Times, Sir Wenger Kheri berkata:” Isu – isu yang melanda gerombolan Pakatan Harapan ini sudah menarik perhatiaan agensi antarabangsa seperti Fitch Solutions. Mereka menganggap kemungkinan besar PH akan menghadapi masalah dalaman dan kami juga berkongsi pandangan tersebut. Masalah dalaman inilah yang mungkin akan membawa kepada undi tidak percaya dan akhirnya keputusan ditentukan oleh rakyat. Jikalu rakyat diberi peluang mengundi buat kali kedua PH akan kalah teruk di Semenanjung Malaysia. Najib jugalah yang mengenal Maniam.

Najib jugalah yang rajin turun bawah ke padang sambil menyebabkan kerajaan PH kepanasan kerana tidak tahu cara melawan Najibnoma.

Beliau juga menambah bahawa pucuk pimpinan yang ada dalam UMNO amat berkaliber dan membuat perbandingan dengan kelab Manchester United. “Dahulu bawah pengurus sebelum ini, United asyik kalah ataupun seri sehingga pernah ketinggalan jauh dari menempah tempat dalam kejohanan  Liga Juara Juara Eropah.  Solskajer  yang sebelum ini tidak banyak menunjul dibawa masuk dan disitulah kita lihat kebangkitan Manchester United. Sama seperti UMNO – kebangkitan UMNO dibawah Tok Mat ini sudah pun bermula. Ahli UMNO perlu menyahut tren ini dan sama-sama mula menggerakan usaha kerana UMNO bakal kembali berkuasa dalam masa yang amat singkat sekali. Jangan terlewat kerana selepas pekara ini termakbul, pastinya orang  akan bertanya dimanakah engkau ketika UMNO nazak tidak lama dahulu.