Just yesterday on 20th january 2015,Malaysia Prime Minister,Dato Seri Najib Tun Razak giving a special adress on The Current Economic Developments and Governments Financial Position for this year and this special adressed was to explain that the government has been vigilantly monitoring the situation and also announce several proactive measures to realign Malaysia policies in line with the changing global economic scenario which is beyond the control. The Government are undertaking this to ensure that the country continue to achieve creditable growth. . I believe many of us really concerns over the economics and the country financial situation especially a drop on crude oil prices globally and also the performance of the ringgit.. so hope that with the adressed will explain well and providing the info we need.Please find the link if you havent read the speech from website. One of the economic and financial situation that bring up a global concern is the absolutely stunning decision by the Swiss National Bank to decouple from the euro has triggered billions of dollars worth of losses all over the globe. Citigroup and Deutsche Bank both say that their losses were somewhere in the neighborhood of 150 million dollars, a major hedge fund that had 830 million dollars in assets at the end of December has been forced to shut down, and several major global currency trading firms have announced that they are now insolvent. And these are just the losses that we know about so far. It will be many months before the full scope of the financial devastation caused by the Swiss National Bank is fully revealed. But of course the same thing could be said about the crash in the price of oil that we have witnessed in recent weeks. These two black swan events have set financial dominoes in motion all over the globe. At this point we can only guess how bad the financial devastation will ultimately be. Citigroup, the world’s biggest currencies dealer, lost more than $150 million at its trading desks, a person with knowledge of the matter said last week. Deutsche Bank lost $150 million and Barclays less than $100 million, people familiar with the events said, after the Swiss National Bank scrapped a three-year-old policy of capping its currency against the euro and the franc soared as much as 41 percent that day versus the euro. Spokesmen for the three banks declined to comment... Marko Dimitrijevic, the hedge fund manager who survived at least five emerging market debt crises, is closing his largest hedge fund after losing virtually all its money this week when the Swiss National Bank unexpectedly let the franc trade freely against the euro, according to a person familiar with the firm.Everest Capital’s Global Fund had about $830 million in assets as of the end of December, according to a client report. The Miami-based firm, which specializes in emerging markets, still manages seven funds with about $2.2 billion in assets. This is how fast things can move in the financial marketplace when things start getting crazy.It can seem like you are on top of the world one day, but just a short while later you can be filing for bankruptcy.Consider what just happened to FXCM. It is one of the largest retail currency trading firms on the entire planet, and the decision by the Swiss National Bank instantly created a 200 million dollar hole in the company that desperately needed to be filled.The magnitude of the crisis for U.S. currency traders became clear Friday when New York-based FXCM, a publicly traded U.S. currency broker, and the largest so far to announce it was in financial trouble after suffering a 90-percent drop in the firm’s stock price, reported the firm would need a $200-$300 million bailout to prevent capital requirements from being breached. Highly leveraged currency traders, including retail customers, were unable to come up with sufficient capital to cover the losses suffered in their currency trading accounts when the Swiss franc surged. Currency traders worldwide allowed to leverage their accounts 100:1, meaning the customer can bet $100 in the currency exchange markets for every $1.00 the customer has on deposit in its account, can result in huge gains from unexpected currency price fluctuations or massive and devastating losses, should the customer bet wrong.Fortunately for FXCM, another company called Leucadia came riding to the rescue with a 300 million dollar loan but other currency trading firms were not so lucky.For example, Alpari UK has already announced that it is going into insolvency and Alpari is far from alone. Quite a few other smaller currency trading firms all over the world are in the exact same boat.Unfortunately, this could potentially just be the beginning of the currency chaos.All eyes are on the European Central Bank right now. If a major round of quantitative easing is announced, that could unleash yet another wave of crippling losses for financial institutions. And this is not just happening in the United States. Just check out what happened in China on last Monday,Chinese shares plunged about 8% Monday after the country’s securities regulator imposed margin trading curbs on several major brokerages, a sign that authorities are trying to rein in the market’s big gains. It was China’s largest drop in six years... This is came from one of the interesting point of what our PM adressing and many more from the speech.. As I have explained earlier, there are several issues which will impact the domestic economy significantly. In the light of this, the Government will take measures to ensure economic growth remains on a strong trajectory. We are confident of achieving GDP growth in the range of 4.5% –5.5% this year with the implementation of the following strategies: • First: Ensure balanced, inclusive and sustainable economic growth; • Second: Continue fiscal reforms and consolidation; and • Third: Provide assistance to the rakyat and business community to rebuild infrastructure damaged by floods. To me,the special adress by PM was a guarantee by a government that they will look and monitoring and what important is to make sure that we are not go down to the ground like what some predicted,please have a time and read from the adressing text,so here we go,just stand side by side to face what ahead.. pretty much that we see the only bright side waiting. Thanks -jesse-
Posted on: Tue, 20 Jan 2015 20:50:14 +0000
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