Following on the poor trade numbers, industrial production for July didn’t offer much better comfort (log annual and monthly changes; seasonally adjusted; 2000=100):
Monday, September 12, 2011
Vocational Education in Malaysia: It’s Alive!
From today’s Utusan (excerpt):
Vocational foundation programme at 15 selected day schools beginning 2013
IPOH Sept 11 — The Vocational Foundation Programme (VFP) for Form 1 to Form 3 students would be implemented from 2013 to make vocational studies mainstream education, said Deputy Education Minister Dr Mohd Puad Zarkashi.
He said the VFP would replace the vocational subject currently being taught in the day schools and this move was in line with the transformation of technical and vocational studies.
Friday, September 9, 2011
July 2011 External Trade: No Green Shoots
July’s trade report shows realisation almost exactly hitting last month’s forecasts. None of its good news though (log annual and monthly changes; seasonally adjusted):
BNM Watch: No Change
Unlike the last time, the Monetary Policy Committee’s statement yesterday was an anticlimax (excerpt):
At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent.
Global growth has moderated in the recent months as growth in the advanced economies slowed by more than expected following the greater policy uncertainties, worsening of confidence and heightened financial market volatilities, amidst continued weaknesses in labour market conditions. Going forward, the advanced economies are expected to register a slower pace of growth than earlier anticipated...
...In the domestic economy, recent indicators point to slower growth in external demand following the weaker global economic environment. Domestic growth prospects, however, continue to remain positive, underpinned by the expansion in private consumption and private investment. Employment conditions remain favourable amid sustained business and consumer confidence. The public sector will also continue to support economic growth. Moving forward, the more challenging external environment has, however, increased the downside risks to the domestic economy...
...Going forward, inflation is expected to remain relatively stable for the rest of the year. While cost-push inflation continues to remain, the pace of increase is expected to be more gradual. The upside risks to inflation will also be contingent on whether the strength of domestic demand will be sustained, in the event of further deterioration in the external conditions...
There was also no mention or separate statement on the SRR, which remains at 4%. Given the data coming out lately, the chance of an interest hike at the next meeting on November 11 (also the last for the year) is also vanishing – though that outlook may change if, as they say, conditions change in the next couple of months.
Thursday, September 8, 2011
Johnny Come Lately
*Sigh* You would think that a ministry dedicated to fostering higher education – in fact, set up recently to provide better more focused guidance to the sector – would have thought of doing this from the get-go (excerpt):
Study on total universities required
PUTRAJAYA (Sept 6, 2011): The government is conducting a study to find out the total number of universities – public and private – needed by the country in order to produce the desired number of graduates.
Higher Education Minister Datuk Seri Khaled Nordin said the purpose of the study is to maintain the quality of Malaysian universities and strengthen the position of the higher education sector.
At the same time, any decision to build new universities or foreign university branch campuses here should benefit the country in producing human capital and contributing towards economic growth.
BNM Watch: OPR To Stay On Hold
I’ve said what I wanted to say on this subject yesterday, but in case anyone missed it, I agree with the consensus – the Monetary Policy Committee won’t increase interest rates at today’s meeting. Also this time, the Stat Reserve Ratio is likely to stay on hold too, though for a different reason – seasonally adjusted growth in M2 crashed in July on a month on month basis:
A lot may change between now and the next meeting on November 11, but if I had to bet I’d put my money on BNM staying pat in that meeting too.
Dynamics and Economic Analysis
Hands up everyone who thought that the S&P downgrade of the US would raise the Federal government’s borrowing costs. A funny thing happened on the way from theory to reality – the markets aren’t cooperating (excerpt):
Treasury yields plunge as stock markets swoon
WASHINGTON: Fears about the weakness in the U.S. economy and Europe's financial crisis caused Treasury prices to rally on Tuesday, sending long-term interest rates lower. Traders dumped stocks in search of lower-risk investments.
The yield on the 10-year Treasury note traded below 2 percent, near the lowest point on record, as strong demand for U.S. government debt boosted Treasury prices...
...Treasurys were plenty attractive on Tuesday as global stock markets fell. The Dow Jones industrial average lost as many as 307 points in morning trading, but recouped much of those losses and closed down 100 points. European markets had plunged on Monday, sending the Stoxx 600 index 4.1 percent lower. U.S. markets were closed Monday for the Labor Day holiday...
...The yield on the 10-year note was 1.97 percent at 4:30 p.m. EST, compared with 2 percent late Friday. Its price rose 12.5 cents for every $100 invested.
The yield fell as low as 1.91 percent late Monday, the lowest yield on record since the Federal Reserve Bank of St. Louis began keeping daily records in 1962.
Wednesday, September 7, 2011
July 2011 Consumer Price Index Report
Again late, though this time there’s more meat to get into. The July numbers don’t make comfortable viewing (log annual and monthly changes):
Quantitative Easing, ECB Style
From yesterday’s The Star (excerpt):
ECB spent US$18.8 billion on bond buys last week
FRANKFURT, Germany (AP) - The European Central Bank stepped up its emergency bond purchases last week to keep the eurozone debt crisis from infecting Italy and Spain. The move, however, was accompanied by a warning to governments that the support is temporary.
The 13.3 billion ($18.7 billion) purchases announced on the bank's Twitter feed Monday were double the 6.65 billion spent the previous week.
The bank has been buying Italian and Spanish government bonds since Aug. 8. The purchases hold down the interest yields on the bonds, and have kept bond market turmoil from pushing those countries over the edge while European political leaders struggle to come up with more permanent fixes…
If you’re not clear what this means here’s a primer. In essence, the ECB is printing money – “temporarily” to use their term – to provide short term support to Euro area countries having trouble refinancing their government debt. The ECB is also claiming that they’re “sterilising” their bond purchases, indicating that they’re also issuing their own debt to pull back the implied liquidity injection from the bond purchases into the Euro banking system. In short, if you net off the transactions, the ECB is providing it’s own more credible debt in exchange for the troubled debt of the PIGS.
June 2011 Employment Report
This report came out near two weeks ago, but I haven’t covered it yet. Not that we’re missing very much – hardly any “real” changes have occurred since May:
Tuesday, September 6, 2011
Back From Break…
I’ve been taking it reeaalll easy the last two weeks, so much so that I haven’t even touched my laptop (or even a newspaper) since before the holidays started. Not intentionally mind you…it just happened that way, and I’ve had a heck of a good and enjoyable break.
Beginning today, I’ll be in catch-up mode, so expect posts to accelerate from now on. There’s quite a bit of data to post on, which will have to be slotted in along with my “official” work, but hopefully from now until the end of the year holidays, I’ll be posting more regularly.
Stay tuned…
Monday, August 22, 2011
2Q 2011 GDP: Better Than Expected
While disappointing, the results weren’t totally unexpected. In fact, the y-o-y number of 4.0% came in somewhat higher than the consensus estimate of around 3.6% (and well above that implied by net trade or industrial production output).
In point of fact, apart from the external side, the numbers don’t look half bad (log quarterly changes; seasonally adjusted; annualised):
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