Back to 97/98, we know that there is no US recession but actually is our Asia’s biggest hit on recession. US recession only comes in 2001 due to the sub prime mortgage issue and it slows down our economy also.
How will it affect Malaysia in terms of:
– Stock Market
Generally, the toughest part in recession is out of job as production doesn’t need to sustain the additional cost in maintaining job progress. It’s because demands will become lesser and minimizing the burden is a wise choice for companies to sustain.
Btw, the top of management is usually the first to go during bad times. Why? Because it’s cheaper to hire 2 or 3 people than to sustain. So meaning to say that you’re good than you’re safe in this hard cruel world since potential employee can bring good progress to the organization.
Micro electronic sector is the most affected since that is what we export to the US markets the most. It would definitely affect internationally as you know if US stops or reduce importing, its’ trading partners will suffers. Thus, anything happen in US is reflective in other country.
US economy is in unstable currently. It may not a good news for those people making money from internet (like me) since exchange rates of USD quite low. We should stop quarrelling about recession since nobody knows when it’s going to happen. The important is work hard and smart to make yourself indispensable to your employer. Switch company if you don’t see much prospect in your current career.
It’s a good news for DAP since they win certain state of in Peninsular Malaysia in this election 2008, So, there may have strong opposition party to voice out and at least there may not have much money to be wasted again in mega project or heavy corruption or some sort like Indonesia Massacre to be happened.
It’s a well-known fact that oil loyalty is 30-40% of government source of income, which is heavily used to subsidize petrol, toll and some mega projects.
I was thinking that with those price hike, consumer purchasing power would drop significantly since everyone who is clever enough will always make a better choice. For instant, they may think that car is a luxury, not necessity. So, they can always opt for motorbike or use public transportation. With all those people mindset, it will eventually lead to retrenchment. This directly will cause the retail market to layoff too.
During the economy crash, those that held cash or has a lot of liquidity should take this opportunity to exercise their buying power by downing every sellers price since this is the time that u can pickup cheap stuff when everyone is selling.
Anyway, try don put all your money into investment scheme but sometimes need to keep your money as spare bullet for future use since the economy will continue to erode if there is no stabilization of US housing prices.
There’s 2 type of main investment strategy:
– buying low and wait for the rebound than sell high. Most would wait for the US market to crash than go in.
– taking risk by riding the bull which you are more confident with based on your prediction. But it is advised for an investor who has optimistic market skills and expects prices to rise in future.