Tuesday, February 20, 2007

Economists expect January 2007 CPI to ease

Economists expect January CPI to ease, REALLY ???
By Rupa Damodaran
February 20 2007

INFLATION in Malaysia, trending downwards as the effects of last year's fuel price hike wear off, is expected to grow at 3.03 per cent year-on-year for January. A Business Times poll of 14 economists expects the consumer price index (CPI), the barometer of inflation, to trend downwards as global crude oil prices ease.

The Statistics Department is expected to release the data tomorrow. The CPI grew at its slowest pace in 16 months in December on reduced impact from a fuel hike imposed in March last year. The 3.1 per cent growth figure for the CPI in December brought full year 2006's inflation to 3.6 per cent.

Kenanga Investment Bank economist Wan Suhaimi Saidi expects inflationary pressures to taper off further to below 2 per cent come March. This is because of the base effect from the 30-sen-per-litre fuel hike at pump stations in March, which affected the transport basket and the CPI to leap to a six-year high of 4.8 per cent before easing back to 4.6 per cent in April.
Wan Suhaimi said inflationary pressures this year may further ease to below his 2.7 per cent year-on-year forecast for 2007.

The CPI for the whole of 2006 increased by 3.6 per cent to 103.6 from 100 in 2005, while the CPI for December increased to 104.6 from 101.5 in the same period in 2005.

The inflation growth for 2006 was brought about by increases in main groups with high weights namely transport (11 per cent), food and non-alcoholic beverages (3.4 per cent) and housing, water, electricity, gas and other fuels (1.5 per cent). The fuel hike last year, which caught most off guard, has forced many to be cautious in their spending and lock in their profits.

Citigroup economist Sim Moh Siong, in a recent report, described consumer spending Malaysia as stronger with consumer spending slowdown past the danger point. In comparison, six months ago, consumer spending had slowed following the three hikes in interest rates, fuel price hikes and sluggish job growth, he commented.

Saturday, February 17, 2007

Gong Xi Fa Cai

I would like to take this opportunity to wish all Malaysian a Very Happay Chinese New Year!
May you & your family a Healthier + Prosperous Year in 2007.

Your presence is worth more than a lifetime of ang pows

Knowledge is the greatest gift we can give our children. Let us also teach the value of learning from each other

Sharing good fortune from generation to generation.

Tradition kept value by passing it down from one generation to another. It is the same with knowledge and skills. It keeps a nation moving toward.

Friday, February 9, 2007

Anna Nicole Smith Deceased

Feb 9, 2007, 12:20 GMT
Oh NO another case Again! I encountered this month. This news is surely sad to global fans of Anna, is another lost of lendary of bombshell, sexiest and vicious woman of the world.

The 39-year-old former Playboy model was pronounced dead in Florida's Memorial Regional Hospital at around 2.45pm yesterday (08.02.07).
Anna Nicole was rushed to hospital after a private nurse found her unconscious in her room at Hollywood's Seminole Hard Rock Hotel and Casino.
Hotel president Michael Brown said Anna Nicole was "not breathing and unresponsive" when paramedics arrived.
US TV show Access Hollywood claim Anna Nicole choked on her own vomit and was found under a sheet by one of her employees. They also allege Anna Nicole had taken a "child's sedative" and kept "passing out" before her death.
Anna Nicole's lawyer Ronald Rale said her lover Howard K Stern had been left shocked by her sudden death.
Rale said: "I can confirm that she is deceased. It's as shocking to me as to you guys. I don't know anything further. Howard obviously is speechless and grieving.
"Anna did have some flu symptoms. I believe the last couple of days she was not feeling well." Police said the cause of death was unknown and have scheduled an autopsy for today (09.02.07).

Anna Nicole's death came during a time of personal grief and a bitter paternity battle.
Her 20-year-old son Daniel, died in the Bahamas five months ago - just three days after Anna Nicole gave birth to her daughter Dannielynn. Toxicology reports determined Daniel had taken a lethal combination of antidepressants and methadone.
Anna Nicole was ordered to have her daughter undergo a paternity test, after former lover photographer Larry Birkheard filed a lawsuit claiming he was Dannielynn's father.

Anna Nicole insisted Stern, who was also her lawyer, was the father of the child.
The actress-and-model was ordered to complete the test before February 21 by a Los Angeles judge on Wednesday (07.02.07).
Dannielynn was not with her mother when she died. She is in the Bahamas - where she was born - in the care of a family friend.
Anna Nicole was born Vickie Lynn Hogan and raised in Texas by her mother and aunt.
After dropping out of high school aged 17, she met her first husband Billy Smith, but later split from him and moved to Houston to become a stripper. It was here that she met elderly oil billionaire J. Howard Marshall.
Anna Nicole, 26, married Marshall, 89, in 1994, before he died the following year. She spent the next decade battling his family for his estate.
In May 2006 the US Supreme Court ruled Anna Nicole could pursue her case in federal court.
The blonde got her big break in 1991 when Playboy boss Hugh Hefner personally chose her to appear on the cover of the magazine.
She was named Playboy magazine's Playmate of the Year in 1993 and appeared in 'The Hudsucker Proxy' and 'Naked Gun 33 1/3: The Final Insult'.
She also had her own outrageous reality TV series 'The Anna Nicole Smith show' from 2002 to 2004.
(C) BANG Media International

Monday, February 5, 2007

Honoring Peter F. Drucker - Management Guru

GOSH!.... I didn't know my most respected management book author "Peter F. Drucker" has departed a year plus, I regret only by knowing it tonight, when searching drucker's writings on google. I felt shock and sad to the news. In memory of the Drucker, I summerise his story from webs.

Drucker's story:

A tip of the hat and a note of thanks to Peter Ferdinand. Drucker, who passed away on Nov 11, 2005 at age 95. Drucker was considered by many to be the father of modern management, and was most certainly among the more persistent voices bringing a human and social perspective to the profit-making world. Beyond that, he was an early and active proponent of the nonprofit sector, as both an essential engine of society and a complex management challenge.

Drucker was born in a suburb of Vienna in a small village named Kaasgraben in November 19, 1909. Drucker was the son of a high level civil servant in the Habsburg empire. Following the defeat of Austria-Hungary in World War I, there were few opportunities for employment in Vienna so he went to Germany after finishing school, first working in banking and then in journalism. He also earned a doctorate in International Law while he was there.

The rise of Nazism forced him to leave Germany in 1933 and after four years in London he moved for good to the United States in 1937, where he became a professor as well as a freelance writer. He taught at New York University as Professor of Management from 1950 to 1971. From 1971 to his death he was the Clarke Professor of Social Science and Management at Claremont Graduate University. He also unwittingly ushered in the knowledge economy and made famous the term knowledge worker, which effectively challenges Karl Marx's world-view of the political-economic landscape.

His career as a business thinker took off in 1945, when his initial writings on politics and society won him access to the internal workings of General Motors, which was one of the largest companies in the world at that time. His experiences in Europe had left him fascinated with the problem of authority. He shared his fascination with Donaldson Brown, the mastermind behind the administrative controls at GM. Brown invited him in to conduct what might be called a political audit. The resulting Concept of the Corporation popularized GM's multidivisional structure and led to numerous articles, consulting engagements, and additional books.

Drucker was interested in the growing importance of people who worked with their minds rather than their hands. He was intrigued by employees who know more about certain subjects than their bosses or colleagues and yet had to cooperate with others in a large organization. Rather than simply glorify the phenomenon as the epitome of human progress, Drucker analyzed it and explained how it challenged the common thinking about how organizations should be run.

His approach worked well in the increasingly mature business world of the second half of the twentieth century. By that time, large corporations had developed the basic manufacturing efficiencies and managerial hierarchies of mass production. Executives thought they knew how to run companies, and Drucker took it upon himself to poke holes in their beliefs, lest organizations become stale. But he did so in a sympathetic way. He assumed that his readers were intelligent, rational, hardworking people of goodwill. If their organizations struggled, he believed it was usually because of outdated ideas, a narrow conception of problem, or internal misunderstandings.

Drucker is the author of thirty-nine books, which have been translated into more than twenty languages. Two of his books are novels, one an autobiography. He is the co-author of a book on Japanese painting, and has made four series of educational films on management topics. His first book was written in 1939, and from 1975 to 1995 was an editorial columnist for The Wall Street Journal, and was a frequent contributor to the Harvard Business Review. He continued to act as a consultant to businesses and non-profit organizations when he was in his nineties. Drucker died November 11, 2005 in Claremont, California of natural causes. He was 95.

Drucker's Philosophy and Teachings

As business schools and management gurus were pushing technical excellence, technology innovation, and ''command and control,'' Drucker focused on the human qualities of leadership and the need for clear and compelling goals. Both elements are evident in this excerpt from his essay on ''Management as Social Function and Liberal Art,'' which defines both for-profit and nonprofit management as essentially human endeavors.

  • Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant. This is what organization is all about, and it is the reason that management is the critical, determining factor....
  • Because management deals with the integration of people in a common venture, it
    is deeply embedded in culture. What managers do in West Germany, in the United
    Kingdom, in the United States, in Japan, or in Brazil is exactly the same. How
    they do it may be quite different....

  • Every enterprise requires commitment to common goals and shared values. Without such commitment there is not enterprise; there is only a mob. The enterprise must have simple, clear, and unifying objectives. The mission of the organization has to be clear enough and big enough to provide common vision. The goals that embody it have to be clear, public, and constantly reaffirmed. Management's first job is to think through, set, and exemplify those objectives, values, and goals.

  • Management must also enable the enterprise and each of its members to grow and develop as needs and opportunities change. Every enterprise is a learning and teaching institution. Training and development must be built into it on all levels -- training and development that never stop.
    Every enterprise is composed of people with different skills and knowledge doing many different kinds of work. It must be built on communication and on individual responsibility....

  • Neither the quantity of output nor the ''bottom line'' is by itself an adequate measure of the performance of management and enterprise. Market standing, innovation, productivity, development of people, quality, financial results -- all are crucial to an organization's performance and to its survival. ...

Finally, the single most important thing to remember about any enterprise is that results exist only on the outside. The result of a business is a satisfied customer. The result of a hospital is a healed patient. The result of a school is a student who has learned something and puts it to work ten years later. Inside an enterprise, there are only costs.

The L.A. Times article announcing his death also references his fondness for the orchestra as a modern management metaphor:

''Each institution has to do its own work the way each instrument in an orchestra plays only its own part. But there is also the score, the community. And only if each individual instrument contributes to the score, there is music.''

-Adopted from theArtfulmanager.com and wikipedia.com

Sunday, February 4, 2007

Modern vs Classical Economic Theory

George Soros – Market Disequilibrium thoery

The Speculator extraordinaire-turned-philanthropist – George Soros who is estimated has a fortune of over US$7 billion with his creation of wealth was underpinned by three key concepts of dynamic disequilibrium based on philosophies which he developed from the work of economist – Karl Popper, (his teacher at the London School of Economics).

Soros' writings focus heavily on the concept of reflexivity, where the biases of individuals are seen as entering into market transactions, potentially changing the fundamentals of the economy. He argued that such transitions in the fundamentals of the economy are typically marked by disequilibrium rather than equilibrium in the economy, and that the conventional economic theory of the market (the 'efficient market hypothesis') does not apply in these situations.

Whether Soros is theoretically right or wrong on this issue, Soros certainly has the market credentials and proven track record to effectively maintain that his theory of reflexivity is practically relevant in the marketplace — at least for him. Soros has popularized the concepts of dynamic disequilibrium, static disequilibrium, and near-equilibrium conditions.

Reflexivity, financial markets, and economic theory
1. Fallibility – the idea that one cannot act on the basis of knowledge because events depends on the decisions of participants which are unpredictable. That led to unconventional thought that financial market do not tend tends towards equilibrium, as what economists claimed.
2. Reflexivity – which refers to how you own experience colors the way you perceive things. That he personally saw and experienced oppression under the Nazis and communists in Hungary, his birthplace, must have shaped a lot of his birthplace, must have shaped a lot of his opinions about the world.
3. Open Society – which he thinks the best fosters diversity of thought and systems, and which caused him to eventually move to the US.

Adam Smith – Free market equilibrium theory

In most interpretations, classical economists such as Adam Smith (1723-1790) maintained that the free market would tend towards economic equilibrium through the price mechanism, Smith stated that, “Price is like an invisible hand that allocates resources in the most efficient and effective manners.”

That is, any excess supply (market surplus or glut) will lead to price cuts, which decrease the quantity supplied (by reducing the incentive to produce and sell the product) and increase the quantity demanded (by offering consumers bargains). This automatically abolishes the glut.

Similarly, in an unfettered market, any excess demand (or shortage) will lead to price increases, which lead to cuts in the quantity demanded (as customers are priced out of the market) and increases in the quantity supplied (as the incentive to produce and sell a product rises).

As before, the disequilibrium (here, the shortage) disappears. This automatic abolition of market non-clearing situations distinguishes markets from central planning schemes, which often have a difficult time getting prices right and suffer from persistent shortages of goods and services.


Free market or controlled market is this what makes different between these two theories? Soros preaches that, markets are led by certain groups interests and decisions, as such markets are tends towards unequilibrium. While Smith suggested that, should there be no intervention in the market, equilibrium is likely to achieve.

Is this explains why economists often disagree with each other? …. or maybe, because the world is complex, and so no issues can be settled beyond any doubt, economists are never in unanimous agreement on any issue.