Friday, February 5, 2010

THE CURRENCY CRISIS PAST AND PRESENT

As posted by Dr. Mahathir Mohamad at Che Det on January 29, 2010 9:45 AM

1. It is now more than 10 years since the currency crisis struck Malaysia. Much has been written about the crisis and the controls imposed by the Malaysian Government to stop the devaluation of the Ringgit.

2. A few of the articles tried to defend the Malaysian Government's action but mostly the blame for the crisis was attributed to the alleged failure of the financial and economic management of Malaysia. Practically no one has implicated the currency traders for the devaluation and the crisis. Even the writers who are friendly towards the Malaysian Government refuse to blame the currency traders.

3. Many are the reasons put forward by the writers to explain the crisis. It is alleged that the stock market boom contributed to the loss of confidence in the Malaysian economy and the Ringgit. Some blame the failure to rationalise and consolidate the banking systems. Others suggested that too much money had been channeled to the property sector. The other causes identified were the total loan-to-GDP ratio had increased; the rapid expansion of credit leading to deteriorating loan quality. Then the blame was put on companies assuming that the economy would forever be on the growth path. The two-tier regulatory system on banking introduced by Bank Negara and the failure to use the interest rate as a policy tool were also cited. Contagion i.e. infection from the financial disease which had affected Thailand was regarded as a major cause.

4. Some even blame a lack of democracy which triggered the financial crisis. And many more. But as mentioned above, no one placed the blame on the manipulation of the currency, by currency traders.

5. The fact that the chairman of the IMF, Michel Camdessus had enthusiastically praised Malaysia's management of its economy and finances, had praised the Central Bank (Bank Negara), for the healthy state of the Malaysian economy and finances just a few months before the crisis struck Malaysia which run counter to the negative remarks about Malaysia's economic management seem to be disregarded. The fact that after praising Malaysia for good management Michel Camdessus himself had about-faced and condemned Malaysia for bad management after the crisis occurred did not seem to strike these writers that the IMF was faulty in assessing the performance of a country's economy. And if the IMF is incapable than is it not likely that others too, including the rating agencies may not be capable of making good assessments and that they too are not the experts that they claim to be; and that in refusing to implicate the currency traders, these experts and the writers and analysts were themselves "in denial".

6. In the light of the meltdown and the collapse of the financial bubble which had struck the great democracies like the U.S., Britain, Germany and others, should not these analysts and writers realise how ridiculous it is to attribute the Asian Crisis to a lack of democracy.

7. The present crisis which is far more serious than the Asian crisis began in the great democracies of the world. One can almost say that it is democracy which caused the crisis and one can actually prove that elements of democracy are indeed to be blamed for the crisis.

8. This is because of the idea of less Government of Ronald Reagan and the advocacy of the free market, meaning free of Government regulation and oversight, a part of the concept of liberal democracy, which precipitated the current crisis.

9. Malaysia's democracy does not accept that the absence of Government supervision in a free market is a part of democracy. It is therefore free from the effects of the sub-prime loans by banks which gave the first indication that the economies of the great democracies were not as healthy as they make it out to be.

10. Democracy, particularly liberal democracy must therefore be a cause of the present crisis, and not the lack of democracy. If further proof is needed that a lack of democracy was not the cause of the Asian crisis, one only has to look at China. It hardly suffered from the Asian crisis and today it is economically and financially much more healthy than all the democracies of the world.

11. There may be some weaknesses in the administration and policies of the East Asian countries which contributed to the crisis of 1997 - 1998. But it is time that the role of the currency traders be thoroughly exposed so as to understand the true causes of the devaluation of the currencies and the serious crisis which followed.

The Situation Prior To The Crisis

12. The whole world acknowledged that in the decade before the crisis, i.e. in the period between 1987 and 1997, East Asia was booming. Certainly Malaysia was doing extremely well growing at an average rate of 8% p.a. continuously during that ten year period.

13. The Malaysian growth was not accidental. It was a result of the policies of the Government and the management of the economy and finances. National savings at 40% plus was the highest in the world and the reserves could sustain 4½ months of retained imports. The Ringgit was strong and steady - being valued at about 2.5 to 1 USD for most of the time.

14. Foreign borrowings were insignificant and the deficits in the budget and the trading accounts were small and manageable.

15. There was political stability, a factor that was appreciated by foreign investors who came in droves.

16. As I said no less a person than the head of the IMF, Michel Camdessus publicly stated in a speech on 17th June 1997 that "Malaysia is a good example of a country where the authorities are well aware of the challenges of managing the pressures that result from high growth and of maintaining a sound financial system amidst substantial capital flows and the booming property market......... The Malaysian authorities have also emphasized maintaining high standards of bank soundness".

17. Although Paul Krugman had commented that Malaysia faced the possibility of the growth rate slowing down in the mid-90s, there was no mention of any possibility of currency devaluation or of a crisis in the offing. Neither did the great rating agencies.

18. The situation in Malaysia was certainly not like that in Thailand where foreign debts were incurred by the business community due to the low interest rates as compared to the Thai rates. There was much money expanded on development of highrise buildings in Bangkok. A lot of new property development was taking place all over the country, financed by foreign loans.

The Thai Situation

19. The situation in Thailand could not but lead to a devaluation of the Thai baht. When it happened the Central Bank stepped in to shore up the exchange rate. But very quickly the bank found that it was unable to halt the decline in the value of the baht. It decided to stop intervention and to allow the baht to float. As soon as the baht was floated, speculators and those fearing devaluation sold the baht for USD. This caused the baht to devalue faster. As the baht continued to devalue foreign investors started to sell off their shares denominated in baht to avoid further devaluation. This caused another round of devaluation. It would seem that the devaluation of the baht would go on forever.

The Malaysian Situation

20. The Malaysian situation was not like that of Thailand. Growth in 1997 was still expected to remain high. There were few Malaysian borrowers of foreign currencies and there was no fear that servicing and repayment of the loans would require more Ringgit than was budgeted for.

21. Foreign direct investments were still coming in both for new industries and for the shares in the Kuala Lumpur Stock Exchange. All the other financial indicators remained healthy.

22. The Malaysian Government did not therefore anticipate any devaluation of the Ringgit. There was no reason why it should.

23. Then the press began to talk about contagion. It seems that the devaluation of the Baht would infect and drag down the Ringgit. This was worrisome as Thailand was a competitor in the export of various manufactured products. If a devalued Baht lowered the cost of production in Thailand, then to remain competitive, Malaysia may have to devalue the Ringgit.

24. But this was thought to be manageable. The Central Bank would go into the market to sell the Ringgit and keep its exchange rates down. The Malaysian industries would have to improve efficiency in order to remain competitive.

25. So confident was Malaysia that its finances would not be affected that it lent to Thailand one billion U.S. dollars to help it out. Even when the Ringgit started to depreciate a little Malaysia lent another billion U.S. dollars to Indonesia.

26. We believed that the financial problems of Thailand and Indonesia would be temporary. They would recover and there would be no problem for them to repay the loans.

The Financial Markets

27. The rich countries of the West had grown and prospered because of their industries i.e. the production of goods and the supply of services to their domestic market and to the world. Their cost was going up rapidly as the labour unions kept demanding for higher wages and expensive perks. But for as long as they remain the principal producers of the high-value goods and services, they could still sustain their production of goods and supply of services.

28. Then they discovered the poor countries with their cheap labour. Whenever they could they transferred their industries to these low labour cost countries in order to reduce cost and compete with the newly industrializing countries of East Asia. If whole industries could not be moved because of protest from their labour unions they would invest in the low labour cost countries for the production of simple parts and components. This way the European and American countries could compete with Japan and Korea.

29. But then the Japanese also did the same and they were able to remain highly competitive producing the same manufactured goods that were once monopolized by the Western countries. It was clear that the Japanese were going to displace most of the American and European manufactured goods in the world market.

30. Famous brands of American and European goods disappeared from the market altogether. The British gave up manufacturing cars, cameras, radios and televisions and other modern consumer products.

31. In America (the U.S.) well-known car makes were also disappearing. Well-known makes of radios, television, cameras, motorcycles and a whole range of branded goods also disappeared from the shelves.

32. In their places, including in Europe and America, all kinds of Japanese goods had made their appearance. Initially the Japanese goods were considered of inferior quality but soon it became clear that the quality had improved so much that they were superior to those of European and American make. In fact they exceeded the standards set by the west.

33. Thus when Japan started to export cars to the US, the US Government insisted that repair shops be set up everywhere. To their surprise these repair shops had hardly any business as the Japanese cars very seldom broke down.

34. When Honda exhibited their motorcycles in England, the British engineers were shocked to find that Honda engines were like the precision motors of high quality Swiss watches.

35. When later the South Koreans got into the act and they practically monopolised the construction industry in the world, the West saw the writings on the wall. There was no way for them to compete in the manufacture of goods, or to bid for the huge construction projects worldwide.

36. The financial market which had started in the 60s and 70s were not very attractive at first. But gradually the potentials were recognized and developed. New products were invented which gave ever increasing returns on investments.

37. Beginning with the sale of shares in order to raise money for capital, the smart players discovered that the buying and selling of shares could yield a lot of profits. The value of the shares were initially based on the profitability of the business.

38. But it became clear that the value would appreciate if there was demand. From then on the value of the shares became decoupled from the profitability of the enterprise. Demand or lack of demand determined the value of shares irrespective of the performance of the enterprise.

39. This led to the smart ones moving the share prices up and down by buying and selling. From this a short step led to the big players developing short selling.

Short selling

40. The actual shares became irrelevant. Simply by offering to buy or to sell shares not in the possession of the party who offered was enough to move share prices. So large numbers of shares (non-existent) would be sold to depress the price. Then when the price reached a sufficiently low level, they would be bought at the low price to deliver to buyers who had bought earlier when the prices were higher. A tidy profit was sure to be made this way, now termed short selling.

41. It was realised that the bigger the funds available the easier it was to move prices up and down. Individuals would not have enough funds and they run the risk of being countered by those with bigger funds. Nor could individuals borrow much in order to be a substantial player in the market.

42. And so companies were formed to manage funds invested by individuals or companies. With funds running into hundreds of millions, there was a greater capacity to manipulate share price.

43. But to be even bigger the fund managers borrowed from the banks. This is called leveraging on the invested funds.

44. The banks agreed to lend as much as 20 to 30 times the funds held by the investment companies or hedge funds so that their capacity to play the market would be greater.

45. With this an investor would benefit from the 20-30 times bigger funds borrowed by the hedge funds. Besides the huge investments by the fund managers almost guaranteed that they would make profits through actually influencing the price of the shares.

46. The investments by the hedge funds and their leveraging (borrowings) are mysterious. It seems that they need not report to the Government on their activities. Besides, by operating from offshore tax-free havens, they needed to submit reports to no one. Investors in hedge funds were thus able to make huge profits.

47. Once the idea of leveraging became known, the fund managers began to look into other possibilities of investing the huge loans they had access to.

48. The currency traders designed their operations in the same way. Leveraging by between 20-30 times the investors' money held by them, they were able to invest and make huge profits. Again they need not report to anyone. Again, by operating out of tax havens they found themselves free from oversight of their operations by any Government.

Western Banking System and Practices

49. The banks were able to lend huge amounts of money for these operations simply because in the Western banking system, banks are allowed to lend more money than they have by way of capital and other assets and the deposits held by them. Normally they would be prudent and lend only certain multiples of the money held by them. But because Governments often bail out banks when there is a run by the depositors, the banks were emboldened to lend as much as 30 times their assets. This means that very much more money could be lent by the banks than they actually have. The banks are in fact creating money out of thin air to lend to the funds.

50. With huge loans available from the banks, billions of dollars could be lent for mergers and acquisitions. Consultants and experts appeared who were able to advise on mergers and acquisitions, getting huge commissions from their services. Not having the billions of dollars to purchase the businesses was not a problem as banks could lend the money they had created.

51. Now mergers and acquisitions became a business in itself. Rumors of impending mergers or acquisitions were enough to push share prices up or down. No matter whether the shares appreciate or get devalued, speculators would make money. The actual businesses done by the companies involved were not important. The purchase price of the companies bear little reflection of their profitability.

52. Then a couple of crooks invented junk bonds. The shares of poorly performing companies were bought and all kinds of manipulations were made to make them look good. Mike Milken and Ivan Boesky were eventually jailed.

53. Another scheme was to buy up companies to dispose off their assets. Slater Walker Securities developed this scheme.

54. Given the power to literally create money out of thin air, the banks were on the lookout for more ways to lend money. The returns for the banks were based on prospects of a return on the loans given out. The bigger the loans, the better.

Banking Prudence Discarded

55. And so instead of prudently ensuring that the borrowers could pay the loans extended, the banks began to lend even to very high-risk people - the so-called sub-prime loans. The assumption was that even if a percentage of the loans turn bad, the earnings on the rest would cover the losses.

56. But in order to make sure, the banks insured the loans with insurance companies or sold them to secondary mortgage companies. The banks believed that they were well covered for the loans. The risks were being taken care of by the insurance and secondary mortgage companies. But when huge numbers of the loan became non-performing, the bubble burst.

57. Then came the credit cards. Devised in order to make spending money more convenient, the credit card industry grew tremendously. The cards very quickly displaced cash and cheques.

58. Individuals may carry numerous credit cards so that they would not know really whether they have enough in the banks to cover the cost of the purchases they make. This led to a consumer boom as more goods and services are paid with credit cards irrespective of the money in the banks owned by the comsumers.

59. For the banks, any expenditure above what the customer had with the banks would be regarded as loans. Unlike ordinary loans, the interest rates are very high - as much as 18% to 20%.

60. Such are the calculated earnings of the banks from the credit card loans that even if a percentage of the loans became non-performing the banks were confident that the earnings from the rest of the credit cards would cover up the losses.

61. From all these activities, from hedge funds to mergers and acquisitions, sub-prime loans, financing insurance and secondary mortgages, credit card loans, currency trading, huge wealth seems to have been made. The Western countries appeared to be growing as shown by their per capita incomes and GDP growth. It would seem that their abdication from the real business of producing goods and services had paid off rather handsomely. Certainly their people seem to be enjoying very high standards of living.

62. The failures in the financial market here and there were ignored or covered up. No one thought there was anything wrong with the systems and the financial products they had created.

63. Then came the sub-prime crisis. Apparently the non-performing loans to the housing sector were too many to be compensated by the successes. First the banks and then the insurance and mortgage companies were pulled down. The economy went into a state of crisis as bank failures affected the share markets. Share prices plunged and the hedge funds sustained huge losses. It should be remembered that just as the profits would be much bigger with the 20-30 times the investors' funds invested, the losses too would be that much greater. There was no way for the losses to be covered or the huge loans from the banks to be repaid. The hedge funds therefore collapsed, pulling down the lending banks with them.

64. Attempts by the Governments to bail out the financial institutions and companies have not really succeeded. If the economy was doing well then the banks and companies bailed out by the Government would be able to make some recovery. But it would take time because they would have to do prudent business and such business would be slow in giving a return. They can only recover quickly if they were allowed the abuses they had indulged in before. But obviously they shouldn't although there are some who believe they should be allowed to. As for the companies, the general contraction of the purchasing power of the people must reduce sales of their products and therefore their profits. Even if they recover they would not be as financially healthy as before.

65. The recent talk of recovery is therefore not based on reality. Actually it is to justify not doing anything with systems which in the past had been so lucrative. It would take another worldwide crisis before the west would consider dismantling their banking, monetary and financial systems.

66. The leaders of the West are still in a state of denial. What is more likely is that they are aware of how the financial market operations have brought about the crisis but are unwilling to do away with them because they have made so many of their investors rich and have contributed much to per capita and GDP growth in their countries.

67. And so we may see the crisis continue, albeit de-emphasised so as to sustain the financial market.

68. The real solution would be a return to real business i.e. the production of goods and services. But then the developed countries of the West would have to accept being somewhat poorer than the good old days.

9/11 AND REACTIONS

As posted by Dr. Mahathir Mohamad at Che Det on January 26, 2010 6:03 PM

1. I am surprised when there are people who consider that I was not sensitive when I questioned the truth about Sept 11, 2001. That incident had nothing to do with the present debate on the use of the word Allah. As to not being sensitive to the feelings of those who lost their loved ones on Sept 11, I believe they should know the truth as to the culprit and not go on hating the Muslims for something they may not be responsible for.

2. This is not a case of Muslims making wild accusations against the Government of the United States of America. This accusation is being made by Americans, white Americans against their own Government. And they have reasons for making this accusation. So many fellow Americans died a horrible death when fire broke out in the upper floors of the two towers. They died in the fire or when they flung themselves down from the towers to escape a fiery death.

3. These Americans who investigated thoroughly the collapsing towers because they were suspicious of their Government's action were not deliberately or politically trying to blacken the US Administration. They were concerned and horrified at the enormity of the act i.e. killing fellow Americans in order to justify their subsequent War on Terror.

4. We may think this is absurd. How can responsible leaders destroy such iconic buildings and kill 3,000 of their own people simply to justify a war. But then we must remember that the accusations of Saddam's possession of Weapons of Mass Destruction capable of being launched against Britain in 45-minutes is also a fabrication. In fact we have now learnt that the intelligence services of America and Britain did not make such reports. Bush and Blair lied. They lied in order to attack Iraq, in order to kill Iraqis and 6,000 American and British soldiers died unnecessarily. The blood of these people are on their hands.

5. When it was proven that they lied, they now claim that they wanted to remove Saddam Hussein because he was a dictator. That is frivolous. Must 300,000 Iraqis be killed because you don't like Saddam's Government?

6. Going to war is a serious thing. You are really deciding to sacrifice the lives of your own people, not just the enemy. The killing of enemy personnel may be acceptable to your people. But killing your own people so as to have an excuse to go to war cannot be acceptable to the people. That is why the group of concerned Americans made their investigation so thoroughly. But then their Government, with the collusion of their media have ensured that they would not be able to tell of their findings to the American people.

7. But there is no reason why the Malaysian public should not know about the findings of these concerned American citizens.

8. I believe many people in Malaysia have seen this report but none have given it the publicity it deserves. Not reporting this means covering up what can be a heinous crime. When you do that you would be encouraging leaders to commit similar crimes again and again.

9. That is why I took the initiative to publicise the report of the American citizens.

10. The Government of the United States should institute a proper open enquiry.

MAKASSAR

As posted by Dr. Mahathir Mohamad at Che Det on January 25, 2010 10:59 AM

1. I visited Makassar in Indonesia recently to give a talk on democracy. It is where the forebears of Tun Razak and Dato Seri Najib came from. You cannot blame them for once again feeling proud that a descendant of a Bugis as the people of the Celebes are known, is once again the Prime Minister of Malaysia.

2. I felt much welcomed there although torrents of rain pured down on the city for hours. The sun came out the morning I went to the Universitas Hasanuddin for the talk. It was a coincidence of course.

3. The reception was heart warming. There were 2,000 faculty members and students in the audience. The Governor of Southern Sulawesi opened the proceedings after the introduction by the Rector of the university.

4. A choir made up of students sang beautifully. After the Question and Answer session following my speech the event was brought to an end by a recitation of the sajak "Perjuangan Yang Belum Selesai" by one of the senior professors. The choir then sang "Semalam Di Malaysia".

5. What a difference from the recent attempts to sour up relations between our two countries. There is really much goodwill towards Malaysia in Indonesia.

6. Air Asia flies there four times a week. There are great beaches, sparkling clear waters, abundant seafood and beautiful resorts. And friendly people. Things are cheaper than here. Malaysians should find Makassar a welcome change from the frenetic life in Jakarta.

SEPTEMBER 11, 2001

As posted by Dr. Mahathir Mohamad at Che Det on January 22, 2010 12:05 PM

1. In my speech at the conference on the support for Palestine (Al Quds) on Jan 20, 2010, I said that if they can make the film Avatar, they can stage the attack and collapse of the World Trade Centre in New York.

2. The press report seems to suggest that there was no real destruction of the two towers but it was just some kind of theatrical trick. It is of course a fact that the two towers were destroyed after two aircrafts crashed into them.

3. A lot of people in America (the apologists will dismiss them as conspiracy theorists) questioned whether the towers collapsed because the planes crashed into them or that something else caused them to come down. These people have reproduced videos taken by media people showing the attack and the collapse of the towers, pointing out certain peculiar features. I have seen the three-hour long video which is widely distributed.

4. Those people who watched the live telecast of the attack and the collapse of the towers will remember as I remember, that both towers collapsed straight down, floor upon floor. They did not lean to their sides as they collapse. The manner of their collapse was like the pictures we see of multi-storied buildings being demolished by demolition experts. When demolishing a skyscraper in a built-up area the experts ensure that as the towers collapse they would not lean to the side and strike neighbouring buildings.

5. The collapse of the two towers was typical of demolition of skyscrapers by experts in America. It was too clean, each tower collapsing upon itself, not touching each other or the buildings surrounding them.

6. One thing that is never mentioned almost is the collapse of a third building which was neither hit by aircraft or by the two towers. This building, described as building number 7, is slightly more than half the height of the WTC towers.

7. This building also collapsed down upon itself. Again it looked like a demolition job. Why did it collapse? Nothing struck it. It did not catch fire. Yet it collapsed straight down without touching any other building or the towers.

8. The American investigators also showed pictures of the Pentagon where the third aircraft was supposed to have crashed into. There was no aircraft or debris. I have never seen the picture of the crashed aircraft.

9. Nor have I seen pictures of the fourth aircraft which crashed somewhere. Maybe others have seen pictures of these two crashed aircrafts. I would like to see them.

10. The American media work very fast. They are usually on the crash scenes minutes after the accident. Yet I do not remember seeing pictures of the crashed aircrafts which were supposed to hit the Pentagon and the one which crashed somewhere.

11. In the video structural engineers and other experts were asked to comment. They doubted that the twin towers collapsed because the aircrafts crashed into the upper stories.

12. I met a janitor who worked on the staff of the two towers. He helped to rescue a lot of people before the building came down. He was proclaimed a national hero. However, the official report did not carry his statement that there were explosions in the building which appeared to be quite unrelated to the plane crash.

13. As I said in my speech I am not so certain now that the Arab "terrorists" hijacked four commercial aircrafts simultaneously and flew them into the twin towers, the Pentagon and somewhere unknown (farm).

14. Some people have condemned me for doubting that the attack was mounted by Arab Muslim terrorists.

15. Perhaps one of the television stations would care to air the videos mentioned without censorship.

16. I really feel sorry for the consultant who profusely apologised for the Americans and the Jews. He should learn to be honest to himself. I pray that his services would be recognised and appreciated by his principals.

SAND FOR SINGAPORE

As posted by Dr. Mahathir Mohamad at Che Det on January 18, 2010 4:16 PM

1. Works Minister Datuk Shaziman Abu Mansor remarked that everyday 500 trucks carry sand from Johor to Singapore. A friend told me that it is not 500. It is 700. That's a lot of sand.

2. I thought we had stopped selling lorry loads of our land to Singapore. But my friend explained that the sand is not sand. It is silica sand.

3. Singapore needs it to make microchips. I don't know how much sand goes into those tiny microchips. Must be a lot if they need 700 truck loads of sand a day.

4. Selling raw materials gives the least return. Better to add value by processing the raw material.

5. Cannot be that difficult to produce silica from silica sand. Glass factories do that (I think) all the time. And we do have glass factories in Malaysia. Why not produce the silicon wafers and sell them to Singapore?

6. I think someone is not telling the truth.

THE HEDGE FUNDS

As posted by Dr. Mahathir Mohamad at Che Det on January 15, 2010 4:54 PM

1. One commenter on my blog does not think the hedge funds are doing anything wrong. That depends on what one considers to be wrong.

2. Hedge funds works on borrowed money. That is quite normal and acceptable. But they borrow anything up to thirty times the funds held by them. Ordinary investors cannot do this.

3. Investors therefore have to invest in hedge funds in order to take advantage of the borrowing capacity of the funds.

4. If an investor invests 1 million dollars, the hedge fund can borrow 30 million dollars. With this 30 million the hedge funds can invest in a variety of shares etc.

5. Obviously when the shares yield returns they will be 30 times the return on the 1 million invested with the funds.

6. After paying interest on the loans and subtracting the commission due to the managers of the funds there would still be a lot of profits left to pay to the original 1 million dollar investor. Paying this investor a 20% - 30% return on his 1 million investments would be well within the amount earned from the 30 million investments.

7. I am simplifying the example a little but essentially this is what happens. The savvy fund managers, very knowledgeable about the market can also guarantee the return on the 30 million and certainly the high return on the 1 million.

8. But supposing the investments by the fund result in a loss, the amount lost would also be 30 times more than the losses to be sustained by 1 million investment.

9. Assuming that the loss is 5%. On 30 million it would amount to 1.5 million. The loss cannot be met by the original 1 million investment. If the interest and other charges on the 30 million is added, there is no way for the hedge fund managers to cover the losses. That is when the 1 million investment would be lost. Orange County in California was bankrupted in this way by the investment in the hedge funds.

10. The operation by this hedge fund is legitimate. It can result in huge returns for the investors. It can also result in the investor becoming bankrupt. In America it has contributed to the financial crisis plaguing it today.

11. Whether we consider the investment through the hedge fund is good or bad depends on us. If we don't mind the collapse of the financial institutions then it is good. But most people regard the current financial meltdown as bad.

GAZA - PGPO/VIVA PALESTINA AID CONVOY

As posted by Dr. Mahathir Mohamad at Che Det on January 11, 2010 12:45 PM

1. The Perdana Global Peace Organiation's team of five which drove an ambulance and three trucks across Europe to Gaza returned yesterday. It was a truly Malaysian team with a Chinese Malaysian, an Indian Malaysian and three Malays. They went through some tough times, having to sleep in the open in cold winter weather, no facilities for washing or bathing, no toilets.

2. With them went a Bernama team of four made up of three girl reporters and a cameraman. They too went through harrowing experiences. The journey from United Kingdom to Gaza took a month. The convoy carrying food medicine and construction materials was made up of more than 200 vehicles with nationals from seventeen countries driving.

3. I cannot describe their journey adequately. Perhaps they should give talks where they would be more free to give a full account.

4. The people of Gaza welcomed them. Seems that they all know Malaysia well. According to the team the Gazans were in good spirit and were determined not to give in.

5. And here is something that we all do not know. We think that the Israelis had stopped attacking Gaza one year ago. But no. The team tells of the daily bombings which are still going on.

6. The targets are the civilian installations - the university, the hospitals, the administrative buildings. The precision with which the attacks are made leaves no doubt as to the intention of the Israelis. Yet the Gazans cleaned up the rubble very quickly. They try to ensure good sanitation also. They are determined to live a normal life.

7. There is an illegal Israeli blockade of Gaza. Very little is allowed to go through as most things are regarded as having double usage i.e. can be made into bombs etc.

8. The promised support by the various Governments is not forthcoming. Whatever have been sent have to be stored for checking in Egypt to ensure they are harmless. Of course most countries have sent nothing.

9. The Israelis do not approve helping the Gazans. You run the risk of being labeled anti-Semitic if you do or if you reveal the things that the Israelis have done and are doing. One example is the locking up of a whole family in their house. When a child went out to fetch water, he was shot. Another child escaped but when she returned she found the family brutally murdered, including a baby in her mother's arms.

10. This is what is happening in Gaza today. They world doesn't want to know about it. The fate of a Chinese dissident who is arrested is of far greater concern, worthy of worldwide coverage. But the sufferings of the million people in Gaza, their homes destroyed, living in tents in the cold winter, being bombed daily - these are normal, deserving of no sympathy or attention.

THE ROYAL COMMISSION

As posted by Dr. Mahathir Mohamad at Che Det on January 8, 2010 6:01 PM

1. The Government has announced that it will not set up a Royal Commission to investigate my losing 100 billion Ringgit of Government money and what happened to the RM270 billion received by the previous Government from Petronas.

2. Now I cannot clear my name nor can Abdullah clear his name. Barry Wain must be very happy. He can go on libelling everyone he likes and nothing will happen to him.

3. Yet when I repeated to the Press the judgement made by the court on Anwar's case I got sued by Anwar for 100 million Ringgit. It is now more than three years and the case is still not settled.

4. Up till now the Government has not released Barry Wain's book. I have read a proof copy and I think it is good for the public to read it. In fact it should be translated into Malay. It would be good to know what he thinks of Malaysia, the Malays, UMNO and of course the great dictator i.e. me.

5. There is no country more rotten, no race more racist, no party more corrupt than Malaysia, the Malays and UMNO. And of course there is no PM more abusive of his authority than the PM of Malaysia of 22 years. Really Malaysia should revert to being a British colony again.

CHINESE MATHEMATICS 2

As posted by Dr. Mahathir Mohamad at Che Det on January 7, 2010 4:57 PM

I had written on Chinese Mathematics on January 1st. Many showed interest in wanting to contact Prefessor Xu Si Zhong. Here is his contact detail;

Beijing Xusizhong Abacus & Mental Arithmetic Education Science Co. Ltd Plaza Cheng Jian, 3rd Floor, Room No.B307 & 308 No.18 Beitaipingzhuang Road, Haidian District, Beijing, China

Tel: 0086.10.82255948

Email: xusizhong@xsz.net.cn or xusizhong@sina.com.cn

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