Agenda-clarified and personified

Back to issues of dunya.

1. I need to place my unconditional support towards reinforcing the “real” productive economy, rooted in engineering, sciences and technology.

2.  I need to also understand that it cannot happen without the understanding of the financial and capital impact and movements to the underlying economy, and that the financial markets can only be efficient by undergoing a rigorous structural change to align with human values and reduce the impact and effects of unbridled greed. The dimunition of gambling in complexity of speculative financial products, driven by materialism which feeds “growth” outlook is an absolute necessity – and hence an unconditional support for the asset-based transactions of Islamic finance.

3.  This understanding should also lead to the view that while a viable alternative, it has not met its platform on par with conventional finances which utterly dominates the landscape despite being an inferior, defective mechanism lubricating the international trade between nations and firms. The strategy forward to elevate Islamic finance to its rightful level should be formulated and cadres of proponents, respected and strong figures, cultivated and reinforced continually.

4.  And, while advocating all of the above, what remains to be seen is whether we will have the right quantity of quality human capital to carry out the above. Malaysians are talented, listening to Idris Jala, Andrew Sheng and Danny Quah inter alia, people who have reached a certain level of confidence and competence to stand in front of an intenational audience and speak their minds and knowledge. But do we have the quality among the Malay-muslims?

5. What stands out is that Malay-muslims are few and far in between due to this notion of the need to have approval from their audience. Yes, there are people who have bucked this tendency – NGO leaders for instance have been fearless in voicing out the “third view”, Abu Urwah, Zaid Kamaruddin, SIS women leaders, watsisname of Just International, and by no means am I giving credence to the opinions of the latter two by equating them with the first two, but the mere fact that they state their ground in voicing their opinions make them a beacon in the dark icons for frankness and forthright opinion-sharing, if not outright opinion-making- yet the fact that their opinions get amplified if resonance is found with the ruling elite emphasizes my point of needing approval.

6. Others are more willing to stay in the background, let others take the limelight, have the opinion of who-are-we-to-say-anything.. misplaced humility every bit as damaging as misplaced arrogance.

7. To ensure a proper democratisation of voices, and to place meritocracy on the pedestal, and to make the malays more confident and more competitive instead of this internal bickering and shameful jostling for positions as evidenced in the ongoing UMNO elections, there is a need to put in place a system where crutches are removed.

8. The crutches have been a bane for the Malays. It is a right – as argued by certain quarters. Why should it be when it hinders us from progress, not as a support to aid our convalescence. It needs reform, a change in implementation – shouts others. Agree, but how can we dismantle a mechanism so intertwined with the system that unraveling it will be so vexative, so difficult and ultimately political suicide for those attempting it. The realists realize this, so those who are on firmer footing among the Malays will always find DSAI’s bold clarion call fitting.

9. Those from the opposite end will always regard this call as traitorous, and hence the increasing polarization of these two ends of implementation approaches towards the same objective – that of improving the lot of the malay-muslims.

10. The “third view” has to find its footing. The need to return to Islam’s emphasis on equality, and also on the meritocracy objectives. The need to ensure that Islam reigns supreme. The risk here is that this call is being hijacked by the Teresa Kok’s of Malaysia, the zealous Christain missionaries, the other races opting for a short-cut to equality. This risk can only be mitigated once the simmering antagonism aka the ‘rotting fishes’ is brought to the table, thrashed over and over with, all disputes, suspicions clarified and overcome, and then we can sit and move forward together as one. Otherwise, the risk is that the lingering goodwill is all used up, and at the end of it the ‘we were here first’ brigade will win. And all others, collectively as Malaysians, primarily Malays, will lose.

 

turmoil, tsunami and armageddon? - causes

Well - I could spend some time to really understand and try to predict the right way of overcoming this, but the sheer complexity of the whole issue means it'll take time to comprehend, let alone undertake the necessary structural changes.

For a start, this is a brilliant encapsulation of the effects of greed, not a technical description of the mechanics of the failure, that I presume will be well covered in other areas - but also fittingly describes the failure of ribaa'...

http://timesbusiness.typepad.com/money_weblog/2008/10/10-people-who-p.html#more
Minsky:Dr. Michael Hudson - global research dot ca wrote:"A generation ago, for instance, Hyman Minsky gained a following by describing what he aptly called the Ponzi stage of the business cycle. It was the phase in which debtors no longer were able to pay off their loans out of current income (as in Stage #1, where they earned enough to cover their interest and amortization charges), and indeed did not even earn enough to pay the interest charges (as in Stage #2), but had to borrow the money to pay the interest owed to their bankers and other creditors. In this Stage #3 the interest was simply added onto the debt, growing at a compound rate. It ends in a crash.This was the flip side of the magic of compound interest – the belief that people can get rich by "putting money to work." Money doesn’t really work, of course. When lent out, it extracts interest from the "real" production and consumption economy, that is, from the labor and industry that actually do the work. It is much like a tax, a monopoly rent levied by the financial sector. Yet this quasi-tax, this extractive financial rent (as Alfred Marshall explained over a century ago) is the dynamic that is supposed to enable corporate, state and local pension funds to pay for retirement simply out of stock market gains and bond investments – purely financially and hence at the expense of the economy at large whose employees are supposed to be gainers. This is the essence of "pension-fund capitalism," a Ponzi-scheme variant of finance capitalism. Unfortunately, it is grounded in purely mathematical relationships that have little grounding in the "real" economy in which families and companies produce and consume.Mr. Paulson’s bailout plan reflects a state of denial with regard to this dynamic. The debt overhead is self-aggravating, becoming less and less "solvable" and hence more of a quandary, that is, a problem with no visible solution. At least, no solution acceptable to Wall Street, and hence to Mr. Paulson and the Democratic and Republican congressional leaders. The banks and large swaths of the financial sector are broke from having made bad gambles in the belief that money could be made to "work" under conditions that shrink the underlying industrial economy and stifle wage gains, eroding the market for consumer goods. Debt deflation reduces sales and business activity in general, and hence corporate earnings. This depresses stock market and real estate prices, and hence the value of collateral pledged to back the economy’s debt overhead. Negative equity leads to bankruptcy and foreclosures."He also states:The main impact will be to reinforce the concentration of wealth in the hands of creditors (the wealthiest 10 percent of the population) rather than wiping out financial assets (and debts) through the bankruptcies that were occurring as a result of "market forces". Is it too much to say that we are seeing the end of economic democracy and the emergence of a financial oligarchy ­ a self-serving class whose actions threaten to polarize society and, in the process, stifle economic growth and lead to the very bankruptcy that the bailout was supposed to prevent?Everything that I have read in economic history leads me to believe that we are entering a nightmare transition era. The business cycle is essentially a financial cycle. Upswings tend to become economy-wide Ponzi schemes as banks and other creditors, savers and investors receive interest and plow it back into new loans, accruing yet more interest as debt levels rise. This is the "magic of compound interest" in a nutshell. No "real" economy in history has grown at a rate able to keep up with this financial dynamic. Indeed, payment of this interest by households and businesses leaves less to spend on goods and services, causing markets to shrink and investment and employment to be cut back."
We all should be organizing to take our democracies back.

Post-raya stocktaking

Lots of stock-taking still to be done.
1. Am still in hot standby mode - for the new guy to make his entrance. My prayers that mother and child will make it safely.
2. Post-ramadhan blues - my prayers too that Ramadhan's lessons linger as long as possible. It is part of my rehabilitation of my soul. And, yeah my writing is taking on a more personal angle instead of an onlooker angle. Slight change there, and all reforms begin from the small changes.
3. SWF work - finalising a paper on an approach which focuses both advocacy and repository building simultaneously. I need to angle this right, otherwise potential ramifications, mainly negative will arise.
4. Primaya - small updates required.
5. Personal angst - did a mini-PA, and am taking on initiatives designed to make me more at ease with myself, to create a better environment - bi'ah solehah, overcome feeligns of betrayal by being true to self and finally, to better understand basis of decisions and be firm in my stand. The beautiful ayat of "Intansurullah wan yansur lakum" comes to mind.
Translated by 3 contemporary mufassirin as below:
047.007
YUSUFALI: O ye who believe! If ye will aid (the cause of) Allah, He will aid you, and plant your feet firmly. PICKTHAL: O ye who believe! If ye help Allah, He will help you and will make your foothold firm.
SHAKIR: O you who believe ! if you help (the cause of) Allah, He will help you and make firm your feet.
btw, PA definition centred upon -the feeling of insecurity, low self-esteem and vulnerability, arising out of uncertainty, lack of guidance and feeling of unmet aspirations, resulting in unease and feeling of betrayal with and to self.

US Financial Market Meltdown!

It’s been a strange week and a half- quite apart from the no-show of party hopping MPs and getting portfolio hopping / swapping instead – the threat of the US financial meltdown, and the consequences of a potential US economy freefall on the global economy is a horrific idea to contemplate. Let’s see if I can make sense of what’s happening – though all I may have at the end of it is to show how ignorant I am at the ways of the world.

 

Bubbles are created when the value markets put on underlying assets are inflated, possible through the use of ‘sophisticated / exotic’ financial instruments under the guise of financial engineering such as hedging, leveraging, arbitraging etc ie closing a transaction with a money that you don’t have in order to make profits of large magnitudes in the shortest space of time. It started with the dot com bubble, where the IPOs are subscribed like mad, creating companies that IPO like mad with the flimsiest of business plans – tailing onto the potential of a clicks and the possibilities of the Internet economy. When the companies started to announce losses upon losses and failures of their business model, the people who took out their money left those who didn’t with their fingers, hands and shirts burned. Then that shifted to other sectors as well.

 

The unlikeliest of candidates would have been property and housing, appreciating assets if ever there was one (hey, I should know, I bought a house from Talam) due to inflation on land and generally scarcity of physical networks and others. But the bubble struck again, this time hitting the securitization of mortgage. This in turn hit the biggest mortgage houses and as this normally is related to the bigger national financial agencies, the worry was always that it wasn’t just the houseowners but also the gamut of the US financial system. Bear Stearns was the first to fall. Consequently, after denials and allaying of fears, it struck the IBs, Lehman and Merrill Lynch finally fell to its knees only to be bailed out by the US Fed.

 

Where this leads to is anyone’s guess. The speed at which Fed mitigated the bailouts, and then revoking the IB license for GS and Morgan Stanley, although they used the word converting IBs to bank-holding license, suggests that its far worse than anticipated. All the same in this crazy world, it’s a zero sum game in the US- a country whose laws are formulated to create an environment of lawlessness- so in all these tragic events, the thing is someone has just made tons, heaps, gazillions, and untold amount of profits, at everyone else’s expense.

 

Care to guess who makes all these money? Remember crude oil prices going up so steeply, and the expectations that it’ll hit USD200 per barrel on expectations of increased demand and constrained supply when the physical trade of oil remains pretty much BAU? The steps of these seemingly uncontrollable events are pretty much similar for us to say that there are some pretty stupid, greedy people out there unable to learn their lessons, but would you believe this is the work of an invisible hand, where the independent actions of individuals on aggregate create these steps, or do you believe, there is a small group of either very stupid or very clever people manipulating the markets to work to their benefit?

 

One sad thing about this is that Islamic finance, after starting off on a steady, slow step as an alternative to the global financial system, instead of merely an alternative to Muslims, now seem to want to replicate all the excesses of the conventional finances incorporating all the gharar (uncertainties), maysir (gambling) and riba’, utilising hilah (legal device) and forgetting the ‘illah of its existence.

 

The Dinar is an option, but without the political push for it to be considered as a currency, and there is a concern that in the worst case, the dollar will weaken, and the US economy stagnates, China’s, and Malaysia’s exports dry up, our revenues even more so, inflation goes up as the oil price recovers its upward mobility, and without adequate savings on a personal level, lifestyle change will be enforced on most of us. Politicians, including our new MK1, are too keen now to say our fundamentals are strong – is it? Can we anticipate the extent of the US financial problems?

Take me to your leader!

Friday, September 19, 2008; 10:26:51 AM

 

The horror of events unfolding is that there really is no one leading events here. Think of it. Anwar has been threatening to take over the government on the 16th of Sept, and to all accounts it has been said by the Government and impartial commentators, with conviction levels above “syak” that it was virtually impossible to get that magic 31 number of defections. And what if he did? DSAI would just have a bunch of inexperienced administrators taking over the Cabinet and leaving the whole country unstable while trying to keep the economy on an even keel in the wake of an unfolding economic crisis globally, emanating from the US financial meltdown – most of which commentators assume to be only the beginning of a painful consolidation phase likely to grind the world’s largest economy to a slowdown. Bearing in mind the occasion, if DSAI wants to take over the economy and demonstrate its incompetence now, what’s the issue? Cant AAB even convince his backbenchers that there’s no point defecting? Cant he look at this issue from a national perspective? Cant he deal with the Anwar problem without resorting to ISA on bloggers, and bit-part politicians – hey come on Theresa Kok can talk about local authority issues and all that – but to discuss national issues now she needs to step up the plate in a big way – and potential ISA on Anwar would bring about social unrest too in addition to his, our political and economic issues! As if he hasn’t enough on his plate as to invite further irreversible repercussions.

 

DSAI should stop this “buat gempaq”. Just damn bloody focus on keeping the Pakatan Rakyat to be a suitable governance alternative. Stop appearing to be a tong kosong, and why risk taking over and then demonstating there really is nothing in the tank. Leave a legacy, not just a historical footnote as the 6th PM but 1st coming from outside BN. What use is it if it’s not sustainable, and having a wak minority government where decisions could be painful. In times of economic crisis, you would want a strong Cabinet – where is it going to come from in the PR ranks? Where are the people you would want to incorporate to present to Malaysia a better model for unity amidst diversity? Where are the major reform areas that requires such an excessive change to take place? If these issues are not addresses, then the only thing we can see is greater polarization instead. Do we then, in our haste to get small victories, lose out in the medium term before we can adjust towards the long-term benefits of greater justice, openness, transparency and meritocracy?

 

The inclusion of TDM into the fray clouds the issue further. Malaysia is well and truly done for.

916 and my stand.

Personally, I doubt the defections will happen. However, the over-reaction of a government uncertain of its position, long undermined by hesitancy over its capability and influence over the electorate, yet given too much power and authority at its disposal seems to create the environment for extremism, racial sentiments and anxiety to flourish in this multi-racial society of ours in Malaysia.

 

Politicians of both divide seems to fail to see the many similarities with the conditions in 1969 – and the crass racial comments being made currently seem to heighten the pressure – and disturbingly, someone I hailed as the Malay warrior has upped the ante by what I think are rather fictitiously exaggerated engineered comments that would raise the temperature even more. Mahathir absolutely revels in this kind of environment – the crisis felt by everyone, the feeling of loss and helplessness - and he has overseen many of these situations during his time and expertly used it to his advantage. Pak Lah should lock him up for uttering these statements alone – and then resign and retire in peace.

 

DSAI too should desist. These three as I mentioned elsewhere, should be left on an isolated island somewhere and let them beat each other up – although I have a funny feeling TDM would still emerge the winner as DSAI has a bad back and AAB is just too nice to throw a punch at others. DSAI has been irresponsible in espousing the defections and for what? A coalition government with the smallest of simple majority – where the three coalition partners are at par yet with widely differing views on many important issues and the only common concensus is that of forming a government, a coalition without concensus on the way forward for Malaysia, and hoping to govern on the fly –with so many first time parliamentarians in PKR with different voices, grouses and perjuangan for NGOs – it all adds up to so many uncertainties without conviction that this is the way forward. I saw some bloggers hailing a new government implies a new improved judiciary as a major win – but is it? Which judiciary is not tainted?

 

I would say a major win of a new government is the commitment against corruption and fair administration, best captured in the philosophies of both PAS and DAP. But certainly not PKR, and much less DSAI. His machinations may have enabled the rakyat to stand up and be counted on 8th of March to deny the 2/3rds majority, but to form the government it’s a different issue altogether. And to do it by engineering defections, and I suspect engineered with more machinations (I hesitate to use the much stronger c-word) then I would really hold back my support for these efforts.

 

Does this mean I should stay on the sidelines? Seeing as it were that the “battle” is about to begin, then I should pitch up on one side. With the BN’s political pitch of Malay nationalism as the core of its ‘perjuangan’, and of which they have so far been unable to see how the continued throwing of scraps for lower and middle class Malays while reserving fat contracts for UMNO-connected businesses has been a dismal failure in creating a strong and confident Malay “race”, and being unable to see that the Malays are only strong and confident when they have strong religious basis to help out their fellow beings, perhaps being a little more confident in seeking help for their fellow Malay-muslims as requiring a little bit more emphasis, then I would be throwing my lot and support for a new government. AAB has tried and failed because UMNO just plainly rejected any means to improve. My support for the new government is only to ensure that UMNO wakes up and aligns itself to its new reality. Until then, I would reserve my support for PR with unmitigated support to strengthen further PAS and what it intends to do within the coalition.

 

Conviction from going back to fundamentals

Wednesday, September 10, 2008; 9:27:28 AM

 

Dr Hayei’s tafseer session in the kuliah subuh never fails to illuminate – today he was speaking on the different levels of conviction – yaqeen – the absolute conviction, syak- the belief tempered with a degree of doubt, he mentioned about 60% would fall into syak, the dzann – where it’ll be 50-50, and wahm – the doubtful thomases and cynics of the world reside.. my words obviously, not his.

 

So, in the overall scheme of things, the conviction accorded to Muslims through the Quran and the Sunnah of the Prophet is a god-send (but of course!) and is a beautiful gift to be appreciated, not to be taken for granted.

 

As it is one of my current angst, the uncertainty of my position, the lack of conviction in taking position, the doubts that I have in making decisions, purportedly stemming from my ever-changing frames of reference in my job scope, it makes for a proper sense of perspective. The doubts were not introduced because of the changing environment, it stemmed from my own ignorance, and the desertion of relevant knowledge, faith and belief in basic iman after staying away from the jamaah. It requires a great amount of effort to reconstruct this frame of reference now, but I should begin immediately – towards understanding Islamic perspectives on the ideas and options available in everyday concerns. KT with an Islamic heart.. that’s the relevancy of the situation now.

 

On a side-note, I need to take cognisance of the increased responsibility with the land title change – and if I do need to start something, then I really should begin with identifying the crop and the person best suited to help, and not to desert this effort at the slightest problem.