I received this article in my inbox (author/source: Indian Economist), it is considered spam to certain people but I read it and I feel it is very interesting and useful to share with everyone. Enjoy!!!!!!!!!!
Japanese save a lot. They do not spend much. Also Japan
exports far more than it imports. Has an annual trade
surplus of over 100 billions. Yet Japanese economy is
considered weak, even collapsing.
Americans spend, save little. Also US imports more than
it exports. Has an annual trade deficit of over $400
billion. Yet, the American economy is considered strong
and trusted to get stronger.
But where from do Americans get money to spend?
They borrow from Japan, China and even India.
Virtually others save for the US to spend. Global
savings are mostly invested in US, in dollars.
India itself keeps its foreign currency assets of over
$50 billions in US securities. China has sunk over $160
billion in US securities. Japan's stakes in US
securities is in trillions.
Result:
The US has taken over $5 trillion from the world. So, as
the world saves for the US, Americans spend freely.
Today, to keep the US consumption going, that is for the
US economy to work, other countries have to remit $180
billion every quarter, which is $2 billion a day, to the
US!
A Chinese economist asked a neat question. Who has
invested more, US in China, or China in US? The US has
invested in China less than half of what China has
invested in US.
The same is the case with India. We have invested in US
over $50 billion.. But the US has invested less than $20
billion in India..
Why the world is after US?
The secret lies in the American spending, that they
hardly save. In fact they use their credit cards to
spend their future income. That the US spends is what
makes it attractive to export to the US. So US imports
more than what it exports year after year.
The result:
The world is dependent on US consumption for its growth.
By its deepening culture of consumption, the US has
habituated the world to feed on US consumption. But as
the US needs money to finance its consumption, the world
provides the money.
It's like a shopkeeper providing the money to a customer
so that the customer keeps buying from the shop. If the
customer will not buy, the shop won't have business,
unless the shopkeeper funds him. The US is like the
lucky customer. And the world is like the helpless
shopkeeper financier.
Who is America's biggest shopkeeper financier? Japan of
course. Yet it's Japan which is regarded as weak. Modern
economists complain that Japanese do not spend, so they
do not grow. To force the Japanese to spend, the
Japanese government exerted itself, reduced the savings
rates, even charged the savers.
Even then the Japanese did not spend (habits don't
change, even with taxes, do they?). Their traditional
postal savings alone is over $1.2 trillions, about three
times the Indian GDP. Thus, savings, far from being the
strength of Japan, has become its pain.
Hence, what is the lesson?
That is, a nation cannot grow unless the people spend,
not save. Not just spend, but borrow and spend.
Dr. Jagdish Bhagwati, the famous Indian-born economist
in the US, told Manmohan Singh that Indians wastefully
save. Ask them to spend, on imported cars and,
seriously, even on cosmetics! This will put India on a
growth curve. This is one of the reason for MNC's coming
down to India, seeing the consumer spending.
"Saving is sin, and spending is virtue."
But before you follow this neo economics, get some fools
to save so that you can borrow from them and spend!!!
Friday, May 30, 2008
Monday, May 26, 2008
New Caluclation of EPF Withdrawal - For Malaysian
Over lunch, we talked about investment in Unit Trust, some of my colleagues are not comfortable investing with cash, I then gave them another option - provident fund (EPF in Malaysia).
One of the colleagues told me her EPF account has no more money as she has withdrawn all for the new house. I was surprised that some of us, despite working for many years, still are unclear about the money we have in our provident fund.
What she withdrew, was from EPF Account #2, which consists of 30% of your entire provident fund, another 70% is with EPF Account #1 which you cannot withdraw unless for certain purposes:
#1 Attaining retirement age
#2 Leaving the country
#3 Investment - certain approved investment instruments only
etc, please refer to http://www.kwsp.gov.my for more information.
There is a new method to calculate EPF Account#1 withdrawal for Unit Trust investment - the younger you are, the more amount you can withdraw (i.e. you are required to keep less "Basic Savings" in Account #1). However, the minimum amount you should have in Account #1 is MYR 5000.
Example #1: Wong is 27 years old and he has MYR 50,000 in his EPF Account #1, referring to the table below, he is required to have the "Basic Savings required" of MYR 12,000. Wong is allowed to withdraw 20% of the balance.
(50,000 - 12,000) * 20%
=38,000 * 20%
=7,600
Example #2: Joe is 22 years old and he has MYR 15,000 in this EPF Account #1. His "Basic Savings required" is MYR 5,000. He can therefore withdraw:
(15,000 - 5,000) * 20%
=10,000 * 20%
=2,000
Example #3: Gerald is 35 years old and he has MYR 80,000 in his EPF Account #1. His "Basic Savings required" is MYR 29,000 (much more than Wong as Gerald is older). Therefore Gerald is allowed to withdraw:
(80,000 - 29,000) * 20%
=51,000 * 20%
=10,200
Let me know if you need more information on this, I am more than happy to share what I know with you!
One of the colleagues told me her EPF account has no more money as she has withdrawn all for the new house. I was surprised that some of us, despite working for many years, still are unclear about the money we have in our provident fund.
What she withdrew, was from EPF Account #2, which consists of 30% of your entire provident fund, another 70% is with EPF Account #1 which you cannot withdraw unless for certain purposes:
#1 Attaining retirement age
#2 Leaving the country
#3 Investment - certain approved investment instruments only
etc, please refer to http://www.kwsp.gov.my for more information.
There is a new method to calculate EPF Account#1 withdrawal for Unit Trust investment - the younger you are, the more amount you can withdraw (i.e. you are required to keep less "Basic Savings" in Account #1). However, the minimum amount you should have in Account #1 is MYR 5000.
Example #1: Wong is 27 years old and he has MYR 50,000 in his EPF Account #1, referring to the table below, he is required to have the "Basic Savings required" of MYR 12,000. Wong is allowed to withdraw 20% of the balance.
(50,000 - 12,000) * 20%
=38,000 * 20%
=7,600
Example #2: Joe is 22 years old and he has MYR 15,000 in this EPF Account #1. His "Basic Savings required" is MYR 5,000. He can therefore withdraw:
(15,000 - 5,000) * 20%
=10,000 * 20%
=2,000
Example #3: Gerald is 35 years old and he has MYR 80,000 in his EPF Account #1. His "Basic Savings required" is MYR 29,000 (much more than Wong as Gerald is older). Therefore Gerald is allowed to withdraw:
(80,000 - 29,000) * 20%
=51,000 * 20%
=10,200
Let me know if you need more information on this, I am more than happy to share what I know with you!
Buffett sees U.S. in recession (CNN news)
Read this in CNN this afternoon, the news is short but the message is very important, hope to share with everyone.
Berkshire Hathaway CEO tells German magazine he believes country is now in recession.
BERLIN (AP) -- Warren Buffett, whose business and investment acumen has made him one of the world's wealthiest men, was quoted in an interview published Sunday as saying the U.S. economy is already in a recession.
(http://money.cnn.com/2008/05/25/news/economy/buffett_recession.ap
/index.htm?cnn=yes)
Berkshire Hathaway CEO tells German magazine he believes country is now in recession.
BERLIN (AP) -- Warren Buffett, whose business and investment acumen has made him one of the world's wealthiest men, was quoted in an interview published Sunday as saying the U.S. economy is already in a recession.
Asked by Germany's Der Spiegel weekly whether he thinks the U.S. could still avoid a recession, he said that as far as the average person is concerned, it is already here.
"I believe that we are already in a recession," Buffet was quoted as saying. "Perhaps not in the sense as defined by economists. ... But people are already feeling the effects of a recession."
"It will be deeper and longer than what many think," he added.
The 77-year-old chairman and chief executive of Berkshire Hathaway Inc. (BRKB) gave the interview while he was in Europe for what he called a "deferred shopping tour," looking for possible acquisitions.
Omaha-based Berkshire has about $35 billion in cash and is looking to invest. Berkshire's subsidiaries include insurance, clothing, furniture, natural gas, corporate jet and candy companies. Berkshire also has major investments in such companies as Coca-Cola Co. and Anheuser-Busch Cos.(http://money.cnn.com/2008/05/25/news/economy/buffett_recession.ap
/index.htm?cnn=yes)
Thursday, May 22, 2008
Trade Merck - in 20 days
Why I bought?It dropped 10% on 30Apr as FDA rejected one of its cholesterol control drugs, this is not a big issue as Merck so many other best selling drugs in the market. I am taking a ride of the recent roller coaster in stock market. Another reason: I am also practicing “Buy the good stocks when most people are selling.”
Why I sold?
Markets worldwide can still feel the aftermath of sub-prime crisis, crude oil price is not giving up the strong uptrend, inflation worries are getting worse. Even though holding Merck for long will return me with higher return, however I do see further downside of this stock, even though pharma stocks are usually viewed as “defensive stocks”, which will not have dramatic ups and downs. I love pharma stocks, am also keeping an eye on Schering Plough (NYSE SGP) and Pfizer (NYSE PFE).
Tuesday, May 13, 2008
Coca-Cola (part 2)
I came across this article today and found out The Coca-Cola Company has bought MORE companies and it is seeking MORE... http://biz.yahoo.com/rb/080513/cocacola.html?.v=1
Coca-Cola seeks more acquisitions to grow business
Tuesday May 13, 3:27 am ET
TOKYO (Reuters) - Coca-Cola Co (NYSE:KO - News), the world's biggest drinks maker, is seeking more acquisition opportunities in the fast-growing soft drinks market to expand its revenue sources, the company's CEO-in-waiting said on Tuesday.
Sales of established soft drinks are declining in the United States as people opt for the likes of bottled water and tea, which they see as healthier.
"You will see us grow organically as well as through targeted acquisitions," said Coca-Cola Chief Operating Officer Muhtar Kent, who is due to become chief executive officer on July 1.
Kent told reporters at the Foreign Correspondents' Club of Japan that such acquisitions would not be large, and the company was looking from country to country for opportunities, though he didn't specify where.
Coca-Cola, whose rivals include PepsiCo Inc (NYSE:PEP - News) and Dr Pepper Snapple Group Inc (NYSE:DPS - News), has benefited from its recent acquisition of FUZE teas and Glaceau vitamin water, which have helped boost the company's sales.
***Picture above: I came across Glaceau vitamin water in Manila last week, selling at PHP 125 (approx. USD 3.10), this is not available in Malaysia, so I removed the label to keep as memory, which I did not know The Coca-Cola Company has already bought it...***
The Atlanta-based company, which gets 78 percent of its sales abroad, also bought Russian juice maker Multon in 2005 for $500 million.
"There is no better industry, truly we believe, to be in than the non-alcohol beverage business," said Kent.
He added that the soft drinks market was growing faster than most other categories of consumer products such as cosmetics, toiletries and beers.
"We see huge opportunities in every category (of soft drinks)," he said.
Kent also reiterated Coke's long-term targets of increasing annual sales volume by 3 to 4 percent, operating income by 6 to 8 percent and earnings-per-share by a high single-digit percentage rate.
On April 16, Coca-Cola reported a higher-than-expected quarterly profit as strong international growth offset the effects of a weak U.S. economy and flat sales volume at home.
Coke's international business, especially in places like China, India, Brazil and Turkey, has grown more important to investors in recent years as growth slows in mature markets like North America.
On Monday, Coke shares closed up 25 cents, or 0.5 percent, at $56.40 on the New York Stock Exchange.
(Reporting by Mariko Katsumura, Editing by Brent Kininmont)
Coca-Cola seeks more acquisitions to grow business
Tuesday May 13, 3:27 am ET
TOKYO (Reuters) - Coca-Cola Co (NYSE:KO - News), the world's biggest drinks maker, is seeking more acquisition opportunities in the fast-growing soft drinks market to expand its revenue sources, the company's CEO-in-waiting said on Tuesday.
Sales of established soft drinks are declining in the United States as people opt for the likes of bottled water and tea, which they see as healthier.
"You will see us grow organically as well as through targeted acquisitions," said Coca-Cola Chief Operating Officer Muhtar Kent, who is due to become chief executive officer on July 1.
Kent told reporters at the Foreign Correspondents' Club of Japan that such acquisitions would not be large, and the company was looking from country to country for opportunities, though he didn't specify where.
Coca-Cola, whose rivals include PepsiCo Inc (NYSE:PEP - News) and Dr Pepper Snapple Group Inc (NYSE:DPS - News), has benefited from its recent acquisition of FUZE teas and Glaceau vitamin water, which have helped boost the company's sales.
***Picture above: I came across Glaceau vitamin water in Manila last week, selling at PHP 125 (approx. USD 3.10), this is not available in Malaysia, so I removed the label to keep as memory, which I did not know The Coca-Cola Company has already bought it...***
The Atlanta-based company, which gets 78 percent of its sales abroad, also bought Russian juice maker Multon in 2005 for $500 million.
"There is no better industry, truly we believe, to be in than the non-alcohol beverage business," said Kent.
He added that the soft drinks market was growing faster than most other categories of consumer products such as cosmetics, toiletries and beers.
"We see huge opportunities in every category (of soft drinks)," he said.
Kent also reiterated Coke's long-term targets of increasing annual sales volume by 3 to 4 percent, operating income by 6 to 8 percent and earnings-per-share by a high single-digit percentage rate.
On April 16, Coca-Cola reported a higher-than-expected quarterly profit as strong international growth offset the effects of a weak U.S. economy and flat sales volume at home.
Coke's international business, especially in places like China, India, Brazil and Turkey, has grown more important to investors in recent years as growth slows in mature markets like North America.
On Monday, Coke shares closed up 25 cents, or 0.5 percent, at $56.40 on the New York Stock Exchange.
(Reporting by Mariko Katsumura, Editing by Brent Kininmont)
Monday, May 12, 2008
Coca-Cola (part 1)
Does anyone do not know Coca-Cola, or its nick name/short name of COKE? I think this is a very famous household name that will come to your mind naturally when you want a soft drink (especially when you are thirsty!)Some facts about this great company The Coca-Cola Company, from the website: www.thecoca-colacompany.com
- Established: 1886
- Ranking: We own 4 of the world's top 5 nonalcoholic sparkling beverage brands
- Associates: 90,500 worldwide
- Operational Reach: 200+ countries
- Consumer Servings (per day): 1.5 billion
- Beverage Variety: more than 2,800 products
Can you AFFORD not to add Coca-Cola: one of the top quality blue chips (NYSE ticker: KO) in your investment portfolio?
If The Coca Cola Company only produces Coke, Diet Coke and Zero Coke, maybe you can ignore - this is how ignorant I was few years back. Not until after a few business trips abroad, I realized The Coca Cola Company is offering more than soft drinks in the market - The Coca-Cola Company has more than 450 brands in more then 200 countries!
- Energy Drinks
- Juice / Juice Drinks
- Sports Drinks
- Soft Drinks
- Tea and Coffee
- Water
- others...
#1 Viva - Mineral Water
#2 Wilkins - Distilled Drinking Water
Do you still want to be a customer only?Or you are interested in becoming the shareholder now? THINK!!!
Friday, May 2, 2008
US - Federal Reserve's Interest Rate Cut
Lower Interest Rate means:
#1 Consumers pay less for monthly loan repayment (for those non-fixed rate mortgage, personal loan, etc)
#2 Consumers will not put the money in bank's savings accounts to earn such low interest, instead, they will put the money in other investments, or spend it!
Fed has cut interest rate for 7 times in 8 months, from 5.25% to 2%!!!
Let's hope US will not go into recession and the economy and stock market will pick up soon! Good luck to everyone!
What makes a person rich? [article sharing]
One day a father of a very wealthy family took his son on a trip to the country with the firm purpose of showing his son how poor people live.
They spent a couple of days and nights on the farm of what would be considered a very poor family.
On their return from their trip, the father asked his son, "How was the trip?"
"It was great, Dad."
"Did you see how poor people live?" the father asked.
"Oh yeah," said the son.
"So, tell me, what did you learn from the trip?" asked the father.
The son answered: "I saw that we have one dog and they had four.
We have a pool that reaches to the middle of our garden and they have a creek that has no end.
We have imported lanterns in our garden and they have the stars at night.
Our patio reaches to the front yard and they have the whole horizon.
We have a small piece of land to live on and they have fields that go beyond our sight.
We have servants who serve us, but they serve others.
We buy our food, but they grow theirs.
We have walls around our property to protect us, they have friends to protect them."
The boy's father was speechless.
Then his son added, "Thanks, Dad, for showing me how poor we are."
Isn't perspective a wonderful thing? Makes you wonder what would happen if we all gave thanks for everything we have, instead of worrying about what we don't have.
Appreciate every single thing you have, especially your friends!
p/s: thanks Lydia for sharing this wonderful article!
They spent a couple of days and nights on the farm of what would be considered a very poor family.
On their return from their trip, the father asked his son, "How was the trip?"
"It was great, Dad."
"Did you see how poor people live?" the father asked.
"Oh yeah," said the son.
"So, tell me, what did you learn from the trip?" asked the father.
The son answered: "I saw that we have one dog and they had four.
We have a pool that reaches to the middle of our garden and they have a creek that has no end.
We have imported lanterns in our garden and they have the stars at night.
Our patio reaches to the front yard and they have the whole horizon.
We have a small piece of land to live on and they have fields that go beyond our sight.
We have servants who serve us, but they serve others.
We buy our food, but they grow theirs.
We have walls around our property to protect us, they have friends to protect them."
The boy's father was speechless.
Then his son added, "Thanks, Dad, for showing me how poor we are."
Isn't perspective a wonderful thing? Makes you wonder what would happen if we all gave thanks for everything we have, instead of worrying about what we don't have.
Appreciate every single thing you have, especially your friends!
p/s: thanks Lydia for sharing this wonderful article!
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