Pak Lah – Waiting for Bottoming?

Even if he wins to turnaround current adversity, you and me still have to pay a heavy price for it – something that we are definitely cannot afford to have. If this political uncertainty continues past September, effectively we can say ‘God Bless Us’ at least until 1Q09. The scale has tipped, in favour of Pakatan Rakyat while the core of ruling party, UMNO still doing much needed soul-searching at expense of every one.

Even if Pakatan Rakyat fails to entice the required number of cross-over, the Sabah and Perlis saga are more than enough for UMNO to chew off. The upcoming UMNO branch meeting, 17 July to 24 August and Division meeting of 9 October to 9 November, and the planned 1 million protesters on the road on 15 July and Anwar Ibrahim going to the Federal Court to get his September 1998 sacking declared illegal are not events to be taken lightly, both politically and socio-economically.

If that is not enough to screw you, let us take a review what happened when interest rates up in 2006. Mind you – when a 20% fuel price hike in March 2006, of which resultant in a 80 basis points rise in overnight policy rate then, the private consumption clowed down from 9.1% in 2005 to just 6.5% in 2006. I doubt this time to be much different, even though some smart brains think that cash rebates and rising commodity prices could make a different – Dream on! Remember this – our household debt to GDP ratio now stands at almost 60% - one of the most highly leveraged in the region.

The price to be paid is already reflected in our stock market. Blind man can even testify that. Someone advises me to position myself for a ‘traditional’ year-end uptrend now, but I think as situation pans-out, I still do not want to be the one who is catching a falling knife. Instead of collecting the year-bonus, the bull might be slaughtered for offering.

Bottomline – I don’t know if Pak Lah resigns, would that help to reverse our fortune or not but now I pretty sure that the current situation is pretty much like the case in Thailand then.

It is could be anyone, but definitely not Pak Lah.