FCPO - The Bull Rammed Through The Wilmar Story - 2/24/2014

The market reacted to the Wilmar news and had a knee jerk. Price went below last Friday low and that effectively closed off  my long position. I went in and buy again on last Tuesday when price went higher than 2684. Stochastic stays inside the 80's level and MACD is rising strongly. Please take note the space between the MACD and its moving average is getting wider, a sign that the bull is strong.  This is also been confirmed by the fast rising ADX which has now reached 27's and the D+ is way above 30's level. I will place my stop at the top band to try to ride further on the current trend.

I have been talking about the all important 2692 resistance as it has been the high reached by the prior cycle. This level has been comfortably broken up now. So this level will now become an important support for this rally.

 
The weekly chart confirmed last week's buy signal by going to a higher high. As in the daily chart, price has now managed to close above its all important resistance level which is also the final fractal high of the current cycle. The MACD has also finally turned positive. As the MACD has never gone below its zero level recently, so I would take this as a continuation of the prior bull trend after a 3 months long consolidation. The D+ continues to spike higher to 31's , confirming the strong strength of the buyers. Last week I mentioned the flat ADX may be hinting for a possible new cycle and it turned into a fact now. The ADX has begun to rise which mean the beginning of a new cycle and also the strength.

Wilmar story was strange as they denied that they ever send the notice to the Sarawak government on their intention to stop buying palm oil. I wonder who would want to play such a plank ? This is especially the news were carried by some usually highly reliable sources. But that should teach us another lesson - "fundamental" news are not tradable in the futures market. Anyway coming back to the futures market, I last wrote 2,900 should be the upside target, but secretly I have been thinking some higher targets, but right now I just want to see 2,900's area hit first. Next week I should be exploring the higher possibilities.

FKLI - Is A Top In ? Or Will Struggling Bull Fights On ? - 2/24/2014

Another new buy signal came along on last Monday as price went above recent high of 1827.50 as it is complimented by a positive MACD and Stochastic. But price hardly go far after that. Only on last Friday when price suddenly gapped up but again failed to hold on to the massive gain but closed back low which ended with a moderate 9.5 points gain. Take note that the Japanese Candlestick is now a big black body candlestick. This is also flashing another sign of subtle warning as it went up to test the 1841 fractal high resistance level but failed and came back down. So unless in the coming week price can manage to close above that level, I would think this could be the end of this smallish reversal cycle.

The Stochastic is obviously overbought at 87's as the ADX is below 20's. The MACD and DMI remain positive and rising. The ADX has begun to rise reacting to the Friday's spike. So we would have to watch how it goes the next few days in order to determine whether the continuation of the reversal or this is merely another false break.

I would place my stop at the prior day low from now onward.

 
The weekly chart Japanese Candlestick did something similar of that of the day chart. It went up to test the top band but failed to close above it. Meanwhile both the Stochastic and MACD remain negative but the DMI stays positive. The ADX remains flat at 18's again, so there is no new trend to talk about here.

I remain staying on my toes watching the bearish divergences in the chart. My current trading thinking is that to take new sell signals with more gusto and with new buy signal with less conviction.

瑞士信贷： 大马乖离紧缩政策 涨路U费‧ 

评级或下调

  瑞士信贷（Credit Suisse）提醒，马来西亚政府不批准大道公司在今年调涨收费的决定，料将导致评估机构调降对大马经济展望的评级。

这家著名国际投资银行瑞士信贷在题为《红旗：市场在险溢价评估》报告中指出，首相拿督斯里纳吉任何乖离紧缩政策的决策，都将影响外国投资 者的 情绪。

将影响外资情绪

“评估机构密切关注首相纳吉在降低财政赤字时，如何推动不受欢迎，但极为关键的措施。大道收费‘U转’的情况，可说犹如‘一面红旗’。”

本月5日，副首相丹斯里慕尤丁宣布，为避免加重人民的生活负担，内阁议决今年不批准私营化大道公司调涨过路费。大道公司不获得调涨过路费 后， 政府须赔偿逾4亿令吉予有关大道公司。

国际信评机构标准普尔及惠誉去年暂维持大马国债评等和展望不变，但表示预算管理不当，仍将面临国债评等下调的结果，而政府就大道过路费课 题的 决定，除可能影响今年的预算，也会直接评级。

外资恐抛售债券

瑞士信贷的报告说：“一个关键的‘U转’足以造成评级下降。在利率提升环境下，外国投资者可能售出手中的巨额债券。”

瑞士信贷分析员史蒂芬黑格说，为避免外国投资者争着脱售手中债券，大马政府已经不能承受再一次的信用评级下调，反而应该着眼于如何提 升评 级。

黑格认为，若纳吉能够展示出，我国有应对所有紧缩问题的解决方案，则可以解除这方面的威胁。

须设良好预算案管理纪录

去年7月将大马国债展望下调至“负面”的惠誉（FITCH）就曾表示，大马政府需要建立良 好预 算案管理纪录，才能避免国债评等继续下调。

根据惠誉去年7月下调大马经济展望评级的经验，一旦我国评级遭下调，将会影响投资者情绪。

大马兴业金融去年公布的一项报告中显示，全球资金连续三周买入马股后，在去年7月底的一周 内疯 狂抛售11亿2000万令吉的马股；右起惠誉宣布下调展望后，外资在一天内从马股撤走4亿3650万令吉。

外资大举撤出大马市场，也间接拖累马币汇率大幅贬值，并在8月中旬跌至3.27令吉的三年最低水平。

马币股市可能崩盘

瑞士信贷机构分析员史蒂芬黑格认为，国内资金或能够吸纳外国投资者脱售的巨额债券，但必须付出包括经济评级和马币汇率下调的代价。

他说，此情况下最好的情况是原用于购买其他股权的国内资金会被转移，最坏的情况则是需要抛售股权或产业。

目前，44.9%政府债券掌握在外国投资家手中，总值430 亿美 元（约1435亿令吉）。

“公积金局的总资产为1710亿美元（约5708亿令吉），每年的毛资金流入量接近165亿美元（约550亿令吉）。即使在最极端的情况 下， 公积金局本身将能够吸纳外资抛售的债券。”

国内资金能吸纳

尽管如此，黑格相信我国金融领域及国行不会让公积金局独自吸收这些外资持有的债券，包括金融领域目前有800亿美元（约2670亿令吉） 额外 流动性资金，而国行也有1400亿美元左右（约4673亿令吉）外汇储备。

“无论是哪个结果，大马历史上所享受的评级将与马币将一起，逐渐被削弱。”

黑格认为，最坏的情况将会是马币及大马股市崩盘，惟他强调这并非瑞士信贷本身研究所得的观点。

尽管认为国内评级有下调风险，他也提出较有希望的是经营业务不符合回教教义的股种，包括云顶、万能、多多博彩、健力士及皇帽等。

他认为，这类业务的股种比平均市场有更好的表现。

Last of the Automakers to Leave Australia

Australia faces a future without domestic auto production after Toyota says it will leave.

Economists have warned of a new recession in Australia after Toyota Motor joined its U.S. rivals in announcing it would quit domestic car manufacturing by 2017. With potentially 100,000 jobs at risk in the nation’s southern states, can the “Lucky Country” survive the industry’s departure?
On Monday, Toyota Australia confirmed rumors by announcing its “heartbreaking” decision to cease local manufacturing by the end of 2017 to become a national sales and distribution company, axing 2,500 directly employed workers in the process.
In a statement, Toyota Australia president and chief executive Max Yasuda said: “This is devastating news for all of our employees who have dedicated their lives to the company during the past 50 years…We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia.”
Toyota blamed its decision on a range of “market and economic factors” including “the unfavorable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base.” It said it was operating in “one of the most open and fragmented automotive markets in the world” with increased competitiveness due to “current and future Free Trade Agreements.”
The writing had been on the wall for Australia’s long sheltered auto industry after similar announcements last year by Ford and General Motors Holden, with Ford to cease production by October 2016 and Holden in 2017. Mitsubishi closed its assembly plant in 2008 while Nissan departed in 1992, leaving Toyota as the last man standing.
Recession Fears
The Australian Council of Trade Unions warned Toyota’s decision could cost the economy A$21 billion ($18.9 billion) and 50,000 jobs, due to the impact on associated supply industries.
Automotive employee union AMWU was even blunter, saying the decision could spark “a potential recession all along the south-eastern seaboard.”
The University of Adelaide’s John Spoehr agreed, claiming the pullout by Ford, Holden and Toyota could push the southern states of South Australia and Victoria into recession.
‘‘This is the collapse of an entire industry, not just Ford, Toyota and General Motors Holden,’’ Spoehr said.
‘‘Those companies are the tip of the automotive industry – underneath them is a massive components industry and thousands of other suppliers…With Holden alone we were looking at 50,000 jobs . . . [now] you are looking at hundreds of thousands,” he told the Melbourne Age.
Shadow Industry Minister Kim Carr echoed the comments, warning of the nation’s worst crisis since the Great Depression and blaming the Abbott government for failing to offer more support.
“Toyota is very diplomatic, but there is just no doubt what Toyota told the Productivity Commission as recently as December, and I quote directly from their submission: they were looking for a long-term, consistent, globally competitive policy suitable for the Australian context to attract future investment,” he told Sky News.
“Governments around the world support their automotive industry because of its importance to their domestic economies. There’s not a car on Australian roads that does not enjoy the support of a government somewhere, and this is what Toyota was asking for.”
New Industries?
Despite the industry’s pending end, other analysts pointed to the cost of government assistance and the potential for new job creation elsewhere. According to a recent Productivity Commission paper, automotive manufacturing “remains one of the most heavily assisted industries in Australia” with the equivalent of A$30 billion in government assistance provided between 1997 and 2012 in the form of tariffs and other subsidies.
According to the Commission, vehicle production in Australia declined from 300,000 in 2006 to 200,000 last year, with employment dropping by 40 percent over the same period to 44,000 workers. Various government handouts including the Automotive Transformation Scheme, Green Car Innovation Fund and Automotive New Markets Initiative have been scheduled to deliver billions more dollars in assistance, causing further “economy-wide distortions.”
Commenting on Toyota’s departure, Australian Prime Minister Tony Abbott invoked the theory of “creative destruction,” saying “while some businesses close, other businesses open, while some jobs end, other jobs start.”
The Australian Financial Review’s economics editor, Alan Mitchell, said the closure of automotive manufacturing would be a “plus” for the economy in the long run.
“The loss of Toyota will be a blow to its employees and its suppliers, but there are other things we can make. Toyota will release skilled labor and other scarce resources for use by industries more suited to the Australian economic environment. That includes innovative start-ups that have been among the invisible victims of past protectionist policies.”
The business newspaper’s Greg Earl cited recent Australian investments by Japanese companies including Dai-ichi Life, Kirin, Sekisui House and Uniqlo as evidence that Toyota’s departure would not mean the end of Japan’s corporate interests Down Under.
Earl quoted a PwC report which said, “While the rapid depreciation of the yen may have chilled the merger and acquisition market for now, expectations are that Japanese firms will soon be looking abroad for acquisitions and partnerships again, including in Australia.”
Australia’s manufacturing sector has shrunk to 7 percent of gross domestic product, down from the 25 percent levels seen in the 1960s and below the double-digit rates of even Britain and the United States. However, the nation’s comparative advantage in agriculture, mining and tourism and the expanding services sector are seen as more promising sources of future growth.
New Zealand offers a possible guide for Australia given the closure of its automotive manufacturing industry in the 1990s on the back of reduced tariff protection. From producing 63,000 cars a year in 1988, the nation’s industry has shrunk to a handful of boutique firms with the bulk of its vehicles now imported from Asia.
New Zealand’s second-hand cars are considerably cheaper than those across the Tasman, largely due to Australia’s prohibitive A$12,000 tariff on used-car imports.
Australians are already voting with their wallets, with the share of locally made new vehicle sales falling to a record low 10.4 percent in 2013, despite all-time high vehicle sales of 1.1 million.
Toyota aims to sell a record 10 million vehicles globally in 2014, of which domestic sales are expected to comprise 2.3 million units. After starting production in Australia in 1963, the Japanese giant’s exit marks the end of an Australian industry founded on government support that is no longer considered viable.

FCPO - Would Wilmar's Action Dampen The Bulls ? - 2/17/2014

The market cleared the 2604 resistance level swiftly and continued to proceed to the upside. The MACD is now above its zero signal line which is good news for the bull. The Stochastic remains positive but it is now inside the overbought zone. The DMI is also positive and the D+ is above 30's , this is signifying the buyers have been strong. As the ADX has just begun to rise, I would still keep an eye on the overbought Stochastic before switching over to the MACD. This is especially so as last Friday's Japanese Candlestick was a Spinning Top. Since this appears at a recent high level (it failed to close above another recent fractal high of 2669 which is also its weekly fractal high), this could mean the current bull rally could come to an end (even though it may just be a temporary one) So I would suggest you should place a stop at last Friday low of 2654.

 
The weekly changes a bit as the Stochastic has turned positive but the MACD remains negative - a pair of contradicting indicators here. The DMI stays positive and the D+ rises which mean the buyers are back. The ADX has just gone flat, this could mean the market may be getting ready for a new cycle. Of course the most important development would be price has closed above the top band and the most recent black candlestick high of 2629. This is something new here that some traders call it as the 3 Candlesticks Reversal Formation, but I do not want to place too much emphasis here as I do not want to have too many tools in a trading system. All you need to know is that it represents a buy signal. But the regret is that price has failed to close above the important fractal high of 2669 as price went up and tested the high but fell back and closed at 2667. But we still have a new buy signal here as price closed above the top band with a positive Stochastic, so if I am trading the weekly chart, I would buy if price can go above 2688 in the coming week .

Summary - the weekly chart just flashed a new buy signal that is waiting to be cleared by the filter in the coming week. The daily chart may be overbought so I expect some kind of retracement or consolidation. But overall there is no new evidence to worry bout the bear yet. Last week towards the market ending, there was a news about Singapore Wilmar will stop buying palm oil from Sarawak. Wilmar's action is most probably due to increasing pressure from their EU customers who in turn are bowing to the Tree Hugging Hippies' Green Earth agenda. Would this news pour some cold water on the bull ?

FKLI - The Market May Possibly Reverse Again - 2/17/2014

 



I went in and bought on last Monday when the signal day high filter was met. But the trade turned out to be a dud because after price went above the top band, I had placed my stop below the top band and it was immediately taken out on the next day when the market lost 17.5 points. Of course I am not going to offer any excuse here except to say it is just one of those things in life. As at last Friday, there is no new buy signal as price is still below the top band. I should buy again when price is to go above the top band again, but I am a bit cautious as the Stochastic has already reached into the overbought zone. This is becoming vital as the ADX has now fallen below the 20's line. This is telling us there is no trend in the market. The Stochastic and MACD stay positive. The DMI went back and become negative again and it has been wriggling like a worm the past 2 days. This is another sign that the market may be caught in another sideway mode.

With the overbought Stochastic and listless ADX, I would suggest you would only buy if price can close above its recent high of 1827.50 and if that is done, you should place your stop at the signal day low.

 
All the 3  weekly chart's indicators stay negative. After the previous week's encouraging Japanese Candlestick, last week Candlestick was a Spinning Top. This could spell trouble for the mild recovery we had recently.  I would monitor the coming week's Candlestick closely as if we get a big body black Candlestick, then it may bring back the bear.  Meanwhile the ADX stays flat at 18's , so this may mean we are getting stuck in another listless situation.

The foreigners' money continue to pour out of the emerging markets which include Malaysia, so my market mentality has been more inclined to the sell side. Argentine and Venezuela already started to collapse in pieces, South Africa may be next and China's megaload of shadow banking defaults have already started to burst out of the seam. And again I hear "experts" telling us how we are "different this time" and "we are strong" as if a marginal country like Malaysia has the ability to stay out of the approaching storm.

普京重建帝国之梦注定破灭

 

根据俄罗斯总统弗拉基米尔•普京 (Vladimir Putin)的说法，俄罗斯政府希望与俄罗斯两个西南邻国打造“欧亚联盟(Eurasian Union)”，是一件志同道合国家间相互吸引的“家务事”。对此其他人不是这么肯定，他们担心这位俄罗斯总统有关手足之情的审慎说辞掩饰了一个更为险恶 的真相。在欧洲许多地区，普京提出的这一协定被视为企图复活苏联(Soviet Union)并重启冷战的举动。

如果这真的是普京的目标， 人们只能猜测他的动机。作为苏联分裂者鲍里斯•叶利钦(Boris Yeltsin)的继任者，也许他的目标是想确立自己的历史地位，成为再次统一苏联的领导人。但对这位俄罗斯总统来说，他必须这么做还有一个更平淡无奇的 理由。由于克里姆林宫赖以维持其权力的支持力量正在减弱，普京已开始把帝国主义当做维持俄罗斯威权政府的“顶梁柱”。
起初，将俄罗斯、哈萨 克斯坦和白俄罗斯捆绑在一起的是一个关税同盟。不过那仅仅是个开始。去年平安夜，在莫斯科的一次峰会上，这一同盟的三个创始国再次重申，他们 打算到 2015年前建立一个欧亚经济联盟(Eurasian Economic Union)。这个新的机构将照搬欧盟(EU)的一体化口号，还会照抄欧盟的组织结构框架。该机构旨在成为欧亚之间的桥梁。当时，亚美尼亚、吉尔吉斯斯坦 和乌克兰也派代表参加了这次莫斯科峰会，这几个国家可能会在今后加入这一联盟。

有关这一新联盟的形态，还有许多有待解决的问题。俄罗斯政府 提出了超国家政治机构的思路，这种想法可能会导致成员国失去部分独立性。白俄罗斯总统亚历山大•卢卡申科(Alexander Lukashenko)曾若有所思地说“主权并不是用来顶礼膜拜的神像”。而其他人对此似乎并不认同。哈萨克斯坦总统努尔苏丹•纳扎尔巴耶夫 (Nursultan Nazarbayev)似乎担心受到俄罗斯的控制，他争辩说，只要经济一体化就足够了。

另一个争论焦点，是普京这一协定的签约国能否随意接纳其他伙伴。梦想建立一个中亚联盟的纳扎 尔巴耶夫对此就一直持肯定态度。而卢卡申科与他类似，也将欧亚联盟视为“欧洲一体化的一部分”。

 

俄 罗斯政府对此的看法却与他们不同。对于与欧盟的合作，俄罗斯政府坚持在正式场合采取十分谨慎的措辞。然而，克里姆林宫下定决心阻止乌克兰与欧 盟签订贸易协 定，这表明普京将欧亚联盟视为欧洲一体化的替代品。这一点并不让人奇怪，俄罗斯欧亚主义最早可以上溯到20世纪初，它对于欧洲和西方始终是充 满敌意的。如 今，在俄罗斯高层人士眼中，欧亚主义想法是在俄罗斯主持下重建苏联的理由，尽管这是一种不受共产主义教条影响的有限重建。

没错，这一关税同 盟为俄罗斯的小伙伴们带来了经济上的好处。该同盟建立后的头六个月，三国间的贸易往来增长了三分之一。然而，进一步整合并不是现代化的必经之 路。威权政府 对透明度或法治并不感兴趣，而这两者是经济发展的先决条件。另外，坚持此类改革也不符合克里姆林宫的目标——他们的目标主要考虑的是地缘政治 因素，而不是 经济因素。

欧盟是世界上最雄心勃勃的国际同盟之一，可能也是世界上最成功的国际同盟之一。它建立在民主国家间的互惠协议之上。然而，对于普 京的欧亚一体化企图来说，欧盟模式却不是一个值得模仿的模式。威权国家间的关系建立在压迫和服从、而不是妥协的基础上。协调此类政府的政策的 任何努力都可 能会遇到困难。

俄罗斯政府正在用发放给欧亚联盟成员国的金融、经济和军事红利，来换取这些国家对其大国梦的支持。如果莫斯科想要其邻国对它自我扩张的企图 采取合作态度，它就必须付出经济代价。

事 实上，如果没有俄罗斯举国财政实力做后盾，普京的计划不会走得这么远。据部分分析人士的说法，俄罗斯每年花在支持卢卡申科政权上的开销在70 亿美元到 120亿美元之间。这位白俄罗斯总统时不时地威胁要退出欧亚联盟，通常会换来俄罗斯进一步的慷慨解囊。比如，俄罗斯政府已承诺向白俄罗斯发放 20亿美元低 息贷款，这似乎是对卢卡申科软化其主权要求的奖励。与此类似，乌克兰总统维克多•亚努科维奇(Viktor Yanukovich)愿意选择与俄结盟，使俄罗斯政府为此花费了150亿美元，并承诺以折扣价向乌克兰出口天然气。此外，事实证明，吉尔吉斯斯坦总统阿 尔马兹别克•阿坦巴耶夫(Almazbek Atambeyev)也想动用勒索手段，要求俄罗斯政府提供2亿美元贷款及贸易和经济上的优惠待遇。当这一要求未得到满足时，阿坦巴耶夫推迟了该国进入欧 亚联盟的时间。
然而，俄罗斯预算所能支持收买活动的次数是有限的。另外，资金并不是普金面临的唯一限制。在乌克兰和白俄罗斯，对俄罗斯的依赖与那里广泛怀 有的民族主义情绪相抵触。而在不久以后，俄罗斯人可能也不会再愿为高层的帝国情结买单。
欧亚联盟是苏联解体后几个前加盟共和国的幻想。在这种幻想下，这些威权国家领导人希望通过彼此利用来维护他们的权力。这种幻想也许会持续一 段时间。然而要不了多久，普京的帝国野心就会幻灭。

Alarm on China - How Hitler Bullied

 Czechoslovakia

MANILA — President Benigno S. Aquino III called on Tuesday for nations around the world to do more to support the Philippines in resisting China’s assertive claims to the seas near his country, drawing a comparison to the West’s failure to support Czechoslovakia against Hitler’s demands for Czech land in 1938.

Like Czechoslovakia, the Philippines faces demands to surrender territory piecemeal to a much stronger foreign power and needs more robust foreign support for the rule of international law if it is to resist, President Aquino said in a 90-minute interview in the wood-paneled music room of the presidential palace. 

“If we say yes to something we believe is wrong now, what guarantee is there that the wrong will not be further exacerbated down the line?” he said. He later added, “At what point do you say, ‘Enough is enough’? Well, the world has to say it — remember that the Sudetenland was given in an attempt to appease Hitler to prevent World War II.”

Related Coverage

Mr. Aquino’s remarks are among the strongest indications yet of alarm among Asian heads of state about China’s military buildup and territorial ambitions, and the second time in recent weeks that an Asian leader has volunteered a comparison to the prelude to world wars.
Prime Minister Shinzo Abe of Japan caused a stir in Davos, Switzerland, when he noted last month that Britain and Germany went to war in 1914 even though they had close economic ties — much as China and Japan have now.

Japan has been locked in an increasingly tense standoff with China over uninhabited islands in the East China Sea, and even South Korea, which has been quieter about Chinese claims, expressed alarm last year when Beijing announced that it had the right to police the skies above a vast area of ocean, including areas claimed by Japan and South Korea. 

While China’s efforts to claim rocks, shoals and fishing grounds off the coast of the Philippines in the South China Sea have been less high-profile, the Chinese have moved faster there.

The Philippines already appears to have lost effective control of one of the best-known places of contention, a reef called Scarborough Shoal, after Philippine forces withdrew during a standoff with China in 2012. The Philippine forces left as part of an American-mediated deal in which both sides were to pull back while the dispute was negotiated. Chinese forces remained, however, and gained control.

In his nearly four years as president, Mr. Aquino, 53, has exceeded expectations in his country and the region for what he would be able to accomplish in a nation once known as the “sick man of Asia.” He was a fairly low-key senator when he was propelled into the presidency in 2010 by a wave of national sympathy after his mother, former President Corazon C. Aquino, died the year before.

In the wide-ranging interview on Tuesday, Mr. Aquino said he thought the Philippines and the United States were close to a long-delayed deal that would allow more American troops to rotate through the Philippines, enhancing his country’s security. But the subject remains controversial among the political elite in the Philippines, with memories of the country’s past as an American possession making them wary of closer military ties. 

The United States is pushing for the deal to aid in its rebalance to Asia, where it hopes to retain a strong influence despite China’s rise.

Speaking of the Philippines’ own tensions with the Chinese, Mr. Aquino said his country would not renounce any of its possessions in the sea between it and China. 

China contends that centuries-old maps show that it had an early claim to the South China Sea almost to Borneo. It is trying to use its large and growing fleet to exercise effective control over reefs and islands in the sea, a strategy that could strengthen its legal position.

At the same time, China has strongly resisted applying the procedures and numerical formulas of the United Nations Convention on the Law of the Sea to the many reefs and islands that lie much closer to countries like the Philippines than to China. Officials in Beijing also oppose multilateral discussions, preferring bilateral talks with individual countries in Southeast Asia, an approach that allows Chinese leaders to apply greater pressure.

While China has been improving its military, Mr. Aquino noted that the last flight by a Philippine fighter jet was in 2005 and that the plane dated from before the Vietnam War. Most of the country’s tiny naval and coast guard fleet dates from World War II.
The difficulties with China extend beyond the arguments over the South China Sea. The Hong Kong government, with enthusiastic backing from the Chinese Foreign Ministry in Beijing, plans to stop allowing 14-day visa-free visits by Filipino diplomats and officials starting Wednesday. The sanctions are part of a long-running demand by Hong Kong that the national government of the Philippines apologize over a violent episode in 2010 in which a hostage rescue attempt in Manila failed, leaving eight Hong Kong citizens dead.

In his first public response to the sanctions, Mr. Aquino said he had no plans to apologize, saying that doing so could create a legal liability and noting that China had not paid compensation to the families of Filipinos who have died in episodes there.

Mr. Aquino, who is not married, lives in a small cottage behind the presidential palace instead of in the luxurious palace itself. He said he tries to relax before going to sleep each night either by listening to music — often jazz — or pursuing his passion as an amateur historian, reading military journals, some about World War II.
While recently reading about the predicament of Czechoslovakia’s leaders in the late 1930s, he said, he saw a parallel “in a sense” to his own problems now in facing challenges from China. 

Appeasement did not work in 1938, he noted; within six months of the surrender of the Sudetenland, Germany occupied most of the rest of Czechoslovakia. 

The Philippines, he said, is determined not to make similar concessions. “You may have the might,” he said of China, “but that does not necessarily make you right.”

Marvin Gaye's 1964 Passport Discovered in Record Bought at Garage Sale

Detroit man's rare find could be worth at least $20,000 according to 'Antiques Roadshow'

Here's hoping he gets insurance on it fast, before Ro

bin Thicke and Pharrell steal it.

Marvin Gaye's 1964 passport, which was found in an album bought for 50 centsAn avid Motown memorabilia collector from Detroit made the find of a lifetime after buying some records at a garage sale. Appearing on the February 3 episode of PBS' Antiques Roadshow, the guest — who previously worked at the legendary label's museum — brought along Marvin Gaye's passport from 1964, the year the soul legend released "How Sweet It Is (to Be Loved by You)."

The man and his colleagues from the museum went to collect memorabilia donated by the family of a late Motown musician. He later returned to the musician's estate sale to buy a collection of LPs and singles, priced at 50 cents and a quarter, respectively. "When I got home, I was going through them and out of an album fell this passport," the man said on the show. "And so it literally fell into my hands."

"The thing I'm in love with is how young he is here," appraiser Laura Woolley said. "This is dated 1964, which is great, and it is after he added the 'E' to the end of his name, because when he was signed as a solo artist with Motown, he decided to add that 'E,' and there's a lot of different theories: People say it's because he wanted to separate himself from his father or because he actually liked Sam Cooke so much, who had an 'E' at the end of his name, that he wanted to imitate his idol."

After Wooley told the man to put nothing less than $20,000 worth of insurance on the passport, he reacted accordingly: "Are you kidding me?" he asked. Said Woolley, "I'm not kidding you. Nothing comes up for Marvin Gaye. It's not a really common thing to see Marvin Gaye memorabilia."

Rather than say "ka-CHING," the stunned guest respectfully said, "Wow. I never would have thought. I mean, I'm just shocked. I mean... wow. Oh gosh, thank you."

Here's hoping he gets insurance on it fast, before Robin Thicke and
 Pharrell steal it.

Can China Fight A Modern War ? -China’s Deceptively Weak (and Dangerous) Military

In many ways, the PLA is weaker than it looks – and more dangerous.

In April 2003, the Chinese Navy decided to put a large group of its best submarine talent on the same boat as part of an experiment to synergize its naval elite. The result? Within hours of leaving port, the Type 035 Ming III class submarine sank with all hands lost. Never having fully recovered from this maritime disaster, the People’s Republic of China (PRC) is still the only permanent member of the United Nations Security Council never to have conducted an operational patrol with a nuclear missile submarine.
China is also the only member of the UN’s “Big Five” never to have built and operated an aircraft carrier. While it launched a refurbished Ukrainian built carrier amidst much fanfare in September 2012 – then-President Hu Jintao and all the top brass showed up – soon afterward the big ship had to return to the docks for extensive overhauls because of suspected engine failure; not the most auspicious of starts for China’s fledgling “blue water” navy, and not the least example of a modernizing military that has yet to master last century’s technology.

Indeed, today the People’s Liberation Army (PLA) still conducts long-distance maneuver training at speeds measured by how fast the next available cargo train can transport its tanks and guns forward. And if mobilizing and moving armies around on railway tracks sounds a bit antiquated in an era of global airlift, it should – that was how it was done in the First World War.

Not to be outdone by the conventional army, China’s powerful strategic rocket troops, the Second Artillery Force, still uses cavalry units to patrol its sprawling missile bases deep within China’s vast interior. Why? Because it doesn’t have any helicopters. Equally scarce in China are modern fixed-wing military aircraft. So the Air Force continues to use a 1950s Soviet designed airframe, the Tupolev Tu-16, as a bomber (its original intended mission), a battlefield reconnaissance aircraft, an electronic warfare aircraft, a target spotting aircraft, and an aerial refueling tanker. Likewise, the PLA uses the Soviet designed Antonov An-12 military cargo aircraft for ELINT (electronic intelligence) missions, ASW (anti-submarine warfare) missions, geological survey missions, and airborne early warning missions. It also has an An-12 variant specially modified for transporting livestock, allowing sheep and goats access to remote seasonal pastures.

But if China’s lack of decent hardware is somewhat surprising given all the hype surrounding Beijing’s massive military modernization program, the state of “software” (military training and readiness) is truly astounding. At one military exercise in the summer of 2012, a strategic PLA unit, stressed out by the hard work of handling warheads in an underground bunker complex, actually had to take time out of a 15-day wartime simulation for movie nights and karaoke parties. In fact, by day nine of the exercise, a “cultural performance troupe” (common PLA euphemism for song-and-dance girls) had to be brought into the otherwise sealed facility to entertain the homesick soldiers.
Apparently becoming suspicious that men might not have the emotional fortitude to hack it in high-pressure situations, an experimental all-female unit was then brought in for the 2013 iteration of the war games, held in May, for an abbreviated 72-hour trial run. Unfortunately for the PLA, the results were even worse. By the end of the second day of the exercise, the hardened tunnel facility’s psychological counseling office was overrun with patients, many reportedly too upset to eat and one even suffering with severe nausea because of the unpleasant conditions.
While recent years have witnessed a tremendous Chinese propaganda effort aimed at convincing the world that the PRC is a serious military player that is owed respect, outsiders often forget that China does not even have a professional military. The PLA, unlike the armed forces of the United States, Japan, South Korea, Taiwan and other regional heavyweights, is by definition not a professional fighting force. Rather, it is a “party army,” the armed wing of the Chinese Communist Party (CCP). Indeed, all career officers in the PLA are members of the CCP and all units at the company level and above have political officers assigned to enforce party control. Likewise, all important decisions in the PLA are made by Communist Party committees that are dominated by political officers, not by operators. This system ensures that the interests of the party’s civilian and military leaders are merged, and for this reason new Chinese soldiers entering into the PLA swear their allegiance to the CCP, not to the PRC constitution or the people of China.

This may be one reason why China’s marines (or “naval infantry” in PLA parlance) and other  amphibious warfare units train by landing on big white sandy beaches that look nothing like the west coast of Taiwan (or for that matter anyplace else they could conceivably be sent in the East China Sea or South China Sea). It could also be why PLA Air Force pilots still typically get less than ten hours of flight time a month (well below regional standards), and only in 2012 began to have the ability to submit their own flight plans (previously, overbearing staff officers assigned pilots their flight plans and would not even allow them to taxi and take-off on the runways by themselves).

Intense and realistic training is dangerous business, and the American maxim that the more you bleed during training the less you bleed during combat doesn’t translate well in a Leninist military system. Just the opposite. China’s military is intentionally organized to bureaucratically enforce risk-averse behavior, because an army that spends too much time training is an army that is not engaging in enough political indoctrination. Beijing’s worst nightmare is that the PLA could one day forget that its number one mission is protecting the Communist Party’s civilian leaders against all its enemies – especially when the CCP’s “enemies” are domestic student or religious groups campaigning for democratic rights, as happened in 1989 and 1999, respectively.

For that reason, the PLA has to engage in constant “political work” at the expense of training for combat. This means that 30 to 40 percent of an officer’s career (or roughly 15 hours per 40-hour work week) is wasted studying CCP propaganda, singing patriotic songs, and conducting small group discussions on Marxist-Leninist theory. And when PLA officers do train, it is almost always a cautious affair that rarely involves risky (i.e., realistic) training scenarios.

Abraham Lincoln once observed that if he had six hours to chop down a tree he would spend the first four hours sharpening his axe. Clearly the PLA is not sharpening its proverbial axe. Nor can it. Rather, it has opted to invest in a bigger axe, albeit one that is still dull. Ironically, this undermines Beijing’s own aspirations for building a truly powerful 21st century military.

Yet none of this should be comforting to China’s potential military adversaries. It is precisely China’s military weakness that makes it so dangerous. Take the PLA’s lack of combat experience, for example. A few minor border scraps aside, the PLA hasn’t seen real combat since the Korean War. This appears to be a major factor leading it to act so brazenly in the East and South China Seas. Indeed, China’s navy now appears to be itching for a fight anywhere it can find one. Experienced combat veterans almost never act this way. Indeed, history shows that military commanders that have gone to war are significantly less hawkish than their inexperienced counterparts. Lacking the somber wisdom that comes from combat experience, today’s PLA is all hawk and no dove.

The Chinese military is dangerous in another way as well. Recognizing that it will never be able to compete with the U.S. and its allies using traditional methods of war fighting, the PLA has turned to unconventional “asymmetric” first-strike weapons and capabilities to make up for its lack of conventional firepower, professionalism and experience. These weapons include more than 1,600 offensive ballistic and cruise missiles, whose very nature is so strategically destabilizing that the U.S. and Russia decided to outlaw them with the INF Treaty some 25 years ago.

In concert with its strategic missile forces, China has also developed a broad array of space weapons designed to destroy satellites used to verify arms control treaties, provide military communications, and warn of enemy attacks. China has also built the world’s largest army of cyber warriors, and the planet’s second largest fleet of drones, to exploit areas where the U.S. and its allies are under-defended. All of these capabilities make it more likely that China could one day be tempted to start a war, and none come with any built in escalation control.

Yet while there is ample and growing evidence to suggest China could, through malice or mistake, start a devastating war in the Pacific, it is highly improbable that the PLA’s strategy could actually win a war. Take a Taiwan invasion scenario, which is the PLA’s top operational planning priority. While much hand-wringing has been done in recent years about the shifting military balance in the Taiwan Strait, so far no one has been able to explain how any invading PLA force would be able to cross over 100 nautical miles of exceedingly rough water and successfully land on the world’s most inhospitable beaches, let alone capture the capital and pacify the rest of the rugged island.

The PLA simply does not have enough transport ships to make the crossing, and those it does have are remarkably vulnerable to Taiwanese anti-ship cruise missiles, guided rockets, smart cluster munitions, mobile artillery and advanced sea mines – not to mention its elite corps of American-trained fighter and helicopter pilots. Even if some lucky PLA units could survive the trip (not at all a safe assumption), they would be rapidly overwhelmed by a small but professional Taiwan military that has been thinking about and preparing for this fight for decades.

Going forward it will be important for the U.S. and its allies to recognize that China’s military is in many ways much weaker than it looks. However, it is also growing more capable of inflicting destruction on its enemies through the use of first-strike weapons. To mitigate the destabilizing effects of the PLA’s strategy, the U.S. and its allies should try harder to maintain their current (if eroding) leads in military hardware. But more importantly, they must continue investing in the training that makes them true professionals. While manpower numbers are likely to come down in the years ahead due to defense budget cuts, regional democracies will have less to fear from China’s weak but dangerous military if their axes stay sharp.

By Ian Easton

共军超7成士兵 是独生子女 易吃败仗

在钓鱼岛争议导致紧张局势升级之际，中国独生子女政策也引发日韩媒体讨论。《韩国时报》去年12月称，由于大多数中国士兵是被宠坏的小皇帝、 小公主，一旦钓鱼岛爆发冲突，解放军将被日本自卫队击败。

中共国防大学教授刘明福曾表示，解放军7成士兵来自独生子女家庭，在战斗部队中这一比例高达8成。他在2012年给中央政府的公开报告中表 示，自古以来，将一个中国家庭的独子派上战场就是大忌。澳门军事专家黄东说，自1993年以来，许多大陆军官和军事观察家就独生子女政策对中 国长期安全的影响提出关切。

刘明福称，过去几年，军队针对“被宠坏的孩子”制定特殊训练措施以加强战力，但独生子女兵员比例高仍给中国长远军事发展带来“战略性忧惧”。 中国军队面临合格兵源不足的严峻问题至少已有10年时间。

FCPO -  Most Probably Another Smallish Cycle - 2/10/2014

 
A new buy signal came last Thursday when price closed above the middle band with the Stochastic turning positive. I bought in on the next day when price went above the signal day high. The immediate overhead resistance is at 2604 which is its recent fractal high. But price would need to close above the top band first. Both the Stochastic and MACD are positive and rising. The Stochastic is above its 50's signal line which is even more bullish. The DMI has gone neutral (both are at 22's) and the ADX has begun to fall and it has gone below 20's. This is confirming a lack of trend in this market.

If a new buy position is in, I would place an initial stop at below the middle band and move it to below the top band.

 
The weekly chart's Stochastic and MACD stay negative and continue to fall. But the DMI remains positive with the ADX continues to fall. The falling ADX is telling us there is no trend in this market. The Japanese Candlestick is a smallish body Candle that got sandwiched between the top and middle band. This is pointing at more evidence the market is stuck in a sideway mode. As same as last week, I would need to see a breakup above the top band for a new bullish move or a breakdown below the middle band to get the bear moving. The weekly fractal high of 2669 remains important.

As the US Dollar continues to get stuck in a range bound mode, I doubt we would see FCPO goes very far as at the moment.

FKLI - Bull flex muscle But Is It Real ? - 2/10/2014

 
The market got back after the long holiday and took clue from the Dow Jones. It lost another 16 points but recovered half of it on the next day. At this point, it is either you continue to place the stop at the bottom band or you can take profit when price went above the prior day high. In both case, the stop was hit on the next day when price gapped up and went above both the stop levels.  A new signal came in when price closed above the bottom band with the Stochastic went positive. If you are one of the more adventurous type of trader, you would take this as a signal day. Or if you are of the lesser adventurous type, last Friday provided the more solid buy signal as price continued to go above the middle band with the Stochastic crossing above its 20's signal line and also the MACD has turned positive. So you would buy on the coming Monday if price goes above the signal day high of 1812.

The DMI improves as the D+ is fast rising while the D- is falling. We may see this indicator turning positive by the coming week. The ADX has begun to fall confirming an end to the prior cycle. As the ADX is falling and the MACD is relatively "far" from its zero signal line, so I would continue to pay more attention to the Stochastic for the current trade. If price continues to go further up , I would place my stop initially at below the middle band and then the top band. Otherwise if price begins to go sideway, I would place my stop at the prior day low. Meanwhile watchout for the overhead resistance at 1841 which is the recent fractal high.

 
The weekly chart indicators do not switch sides from the bears as the Stochastic and MACD stay negative and continue to fall. The DMI is fighting back as the D+ pulled back upward which is indicating the buyers are making another effort to fight off the sellers. The ADX has gone flat as this may mean something new may be around the corner. The only big bullish happening here would be the Japanese Candlestick which is a big white body which closed above both the bottom and middle bands in one go. But as far as the weekly chart goes, I do not have any new buy signal yet as the indicators are not complimenting the price bar. One thing to pay attention to would be the recent fractal low of 1775 has been holding.

As far as Malaysia market is concerned, I would not be too surprised if the market "refuses" to die as some people are constantly in a denial mode and refuse to accept that our economy is not as good as they would want themselves to believe. But never mind that, we as a trader, would just read and react to any new signal that comes along.

Malaysia's Bubble Economy Will Pop Soon

I recently wrote about how Indonesia’s economy has devolved into a classic credit and asset bubble-driven growth story, and its neighbor Malaysia is on the same path along with most other Southeast Asian economies, which are part of the overall emerging markets bubble that I have been warning about in the last couple of years.
The emerging markets bubble began in 2009 after China pursued an aggressive credit-driven infrastructure-based growth strategy to bolster their economy during the global financial crisis. China’s economy quickly rebounded as construction activity flourished, which drove a global raw materials boom that greatly benefited commodities exporting countries such as Australia and emerging markets. Emerging markets’ improving fortunes began to attract the attention of global investors who were seeking to diversify away from Western nations that were at the epicenter of the financial crisis.

Rock-bottom interest rates in the U.S., Europe, and Japan, combined with the Federal Reserve’s multi-trillion dollar quantitative easing programs encouraged a $4 trillion torrent of speculative “hot money” to flow into emerging market investments over the past four years. A global carry trade arose in which investors borrowed at low interest rates from the U.S. and Japan, invested the funds in high-yielding emerging market assets, and pocketed the interest rate differential or “spread.” Soaring demand for EM assets led to a bond bubble and ultra-low borrowing costs, which resulted in government-driven infrastructure booms, alarmingly fast credit growth, and property bubbles in numerous developing nations.
Surging capital inflows into Malaysia after the Crash of 2008 caused the ringgit currency to rise 25 percent against the U.S. dollar in just two years:

Foreign holdings of ringgit-denominated bonds hit an all time high:

Foreign direct investment (net inflows, current dollars) immediately recovered from its crisis-induced plunge to dramatically surge to new highs:

Source: IndexMundi.com
The Kuala Lumpur Composite stock index rose 120 percent, aided by growing interest from foreign investors:
Malaysia Is A Classic Credit Bubble Story
Malaysia’s $303 billion economy has been growing at an average 6 percent rate in recent years due in large part to a growing government and household credit bubble.
Since 2010, Malaysia’s public debt-to-GDP ratio has been hovering at all time highs of over 50 percent thanks to large fiscal deficits that were incurred when an aggressive stimulus package was launched to bolster the country’s economy during the Global Financial Crisis. After Sri Lanka, Malaysia now has the second highest public debt-to-GDP ratio among 13 emerging Asian countries according to a Bloomberg study. Malaysia’s high public debt burden led to a sovereign credit rating outlook downgrade by Fitch in July.
Malaysia’s government has been running a budget deficit since 1999:

Like their government, Malaysian households are also binging on debt, which has caused the county’s ratio of household debt to GDP to hit a record 83 percent – Southeast Asia’s highest household debt load – which is up from 70 percent in 2009, and up greatly from the 39 percent ratio at the start of the Asian Financial Crisis in 1997. Malaysian household debt has grown at around 12 percent annually each year since 2008.
It’s no surprise to see an inflating household debt bubble when Malaysia’s bank lending rate is at record lows:

Ultra-low interest rates have caused Malaysia’s private sector loans to increase by over 80 percent since 2008:
Malaysia’s M3 money supply, a broad measure of total money and credit in the economy, shows a similar worrisome trend:
Malaysia’s high level of household debt led the country’s central bank, Bank Negara, to recently impose lending rules that cap maximum terms of personal loans to 10 years and mortgages to 35 years – a decrease from the common 45 year mortgages.
Datuk Paul Selva Raj, CEO of the Federation of Malaysian Consumers Associations (FOMCA), said 47 percent of young Malaysians are currently in “serious debt” (debt payments amount to 30 percent or more of their gross income), something that could catch up with them very quickly.
“Car purchases and credit card debts are among the main reasons for bankruptcy in Malaysia,” said Paul. “It’s the culture we live in. There’s a lot of emphasis on status and being ‘cool’ – but being cool costs money.”
Malaysia’s household credit bubble is helping to fuel a consumer spending boom:
Malaysian car registrations are up by 50 percent since 2008:
Malaysian corporate leverage, which includes corporate bonds and bank loans, is also rising at an alarming rate, reaching 95.8 percent of GDP in 2013 from 79.9 percent in 2007.
Malaysia Also Has A Property Bubble
Like most other countries that are part of the emerging markets bubble, Malaysia has a property bubble in addition to its credit bubble.
The charts below show the parabolic rise of overall Malaysian property prices:

Source: GlobalPropertyGuide.com
Accounting for nearly half of all household debt, soaring mortgage loan growth is a primary reason why Malaysia’s household debt is increasing at such a rapid rate.
Plans to build the tallest building in Southeast Asia, the 118-story Warisan Merdeka Tower, are a major Skyscraper Index red flag.
How Malaysia’s Bubble Economy Will Pop
While Malaysia has fared better than Indonesia, India and Brazil during this summer’s emerging markets rout, the country still has an extremely dangerous economic bubble that will pop when the overall emerging markets bubble pops in earnest. Malaysia’s bubble will most likely pop when China’s economic bubble pops and/or as global and local interest rates continue to rise, which are what caused the country’s credit and asset bubble in the first place. The resumption of the U.S. Federal Reserve’s QE taper plans may put pressure on Malaysia’s financial markets in the near future. Malaysia’s rapidly deteriorating current account surplus due to weaker exports is another worrisome development.
As I’ve been saying even before this summer’s EM panic, I expect the ultimate popping of the emerging markets bubble to cause another crisis that is similar to the 1997 Asian Financial Crisis, and there is a strong chance that it will be even worse this time due to the fact that more countries are involved (Latin America, China, and Africa), and because the global economy is in a far weaker state now than it was during the heady days of the late-1990s.

China Is More Dangerous Than Russia

The astounding statistics of the Japanese Air Defense


According to the Japanese Ministry of Self-Defense, the Japanese Air Self Defense Force (JASDF) has scrambled its jets 138 times throughout the last quarter of 2013.

All that happened due to the alleged provocative behaviour of China’s Air Force.

The number is pretty high, second highest during 2013. Only first quarter of last year was more intense with 146 scrambles; in Q2 (second quarter of the year) there were 69 interventions with 80 in Q3.

Obviously, much of the activity is related to crisis around Senkaku/Diaoyu islands.

In the period of 1945 and 1972 it was governed by the USA. Had it not been for this period the archipelago has been under the Japanese jurisdiction since 1895.

After 1972 the ownership was disputed by China, that claimed the islands, as well as Taiwan. The strategic location of the islands, fish density and probable oil reserves make this area highly desirable.

Japanese stance, on the flipside, is that the islands were found terra nullius by Japan late in the 19th century. Chinese argue that there is evidence that the islands were posessed by China before the first Sino-Japanese war in 1894-1895. The argument Chinese state is that the islands, being a part of territories conquered by the Imperial Japan, should be henceforth returned.

Anyway, regardless of the validity of the claims by both sides, what is clear is that the amount of scrambles by the Japanese QRA (Quick Reaction Alert) cells can be used to measure the status of the (difficult) diplomatic relationships on the Beijing-Tokyo line.