Ben S. Bernanke's assertion that interest rates may need to increase to curb inflation is WRONG ..?

Federal Reserve Chairman Ben S. Bernanke's assertion that interest rates may need to increase to curb inflation is wrong. That's what Goldman Sachs Group Inc., Merrill Lynch & Co. and UBS AG are saying.

While Bernanke warned last month that the odds of worsening inflation have increased, chief economists at the three firms say the worst housing slump in a decade may drive the U.S. economy into a recession and stifle consumer prices. Their chief economists say the Fed will cut its target for overnight loans between banks at least three times this year.

The conflict boils down to opposing views about real estate. Central bank governors found no evidence that the housing market had affected the broader economy, according to notes of their March policy meeting, released April 11. The National Association of Realtors said last week existing home sales fell 8.4 percent in March, the steepest drop since 1989.
Bernanke is missing ``the linkage between residential housing investment and the broader economy,'' Jan Hatzius, chief economist at New York-based Goldman, the world's most profitable securities firm, said in an interview. ``The housing downturn is of the first order of importance.'' Hatzius says the Fed will cut rates three times this year, to 4.5 percent from 5.25 percent.

That should be bullish for bonds, says David Rosenberg, chief economist at New York-based Merrill, the world's biggest brokerage firm. He expects 10-year Treasuries to produce the best returns since 2002.

Trade Idea: ..... Again Sell on May and wait for October ........

Dollar Drops to All-Time Low Against Euro as U.S. Growth Slows

The dollar declined to a record low against the euro as a slowdown in the world's largest economy reduces the allure of U.S. assets among global investors.

A Federal Reserve index measuring the dollar against other major currencies sank this week to the weakest level in the index's 36-year history. The yen fell to an all-time low against the euro as falling consumer prices in Japan damped bets on increased borrowing costs.

``We're continuing to see weak macroeconomic numbers in the U.S. pan out,'' said Paresh Upadhyaya, who helps manage $29 billion in currency assets at Putnam Investments in Boston. ``That is clearly weighing on the dollar.''
The dollar fell 0.45 percent this week to $1.3652 per euro. It reached $1.3681 yesterday, eclipsing the previous record low of $1.3666, which was touched April 25 and first set Dec. 30, 2004. The euro debuted in January 1999 at about $1.17.
The U.S. currency slumped yesterday after the Commerce Department reported that gross domestic product grew at an annual rate of 1.3 percent in January through March, after a 2.5 percent fourth-quarter gain.

``The market is negative for the dollar now, and this report pushed people to jump to sell the dollar,'' said Robert Fullem, vice president of U.S. corporate currency sales in New York at Bank of Tokyo-Mitsubishi UFJ Ltd.
Fullem predicted the dollar will fall to $1.3750 per euro over the next month.

Dollar's Decline
The dollar has fallen 16 percent against the euro since it began trading in 1999. The U.S. currency has declined 20 percent versus the pound, 36 percent against the Australian currency, 40 percent versus the New Zealand currency and 38 percent against its Canadian counterpart over the same period.

The Federal Reserve's U.S. Trade Weighted Major Currency Index weakened to an all-time low of 78.99 on April 25 and is down 1.8 percent this year.
``We are in a dollar bear market,'' said Brian Garvey, senior currency strategist in Boston at State Street Global Markets.

The current account, a broad definition of trade that includes investment income and transfers, posted a record deficit of $856.7 billion last year.

``The main trend is averse to the dollar,'' said Paul A. Samuelson, professor emeritus of economics at the Massachusetts Institute of Technology and a Nobel Prize winner in economics. ``With the U.S. in moderate slowdown, that's not encouraging foreign savers at the old dollar exchange rate.''

The May Factor. To sell in May and return after October is a good rule of the thumb, especially for "long only" players( Futures & Options). In a revealing study: an investor who placed US$10,000 in the Dow average at the end of April each year since 1950 and sold at the end of October would have a net loss of US$272, while someone doing the opposite would have gained an astounding US$534,323.There is a familiar saying in capital markets "Sell in May and go away", made popular by author Jeffrey Hirsch who publishes the Stock Trader's Almanac. It doesn't help that most of the major corrections have taken place between May and October.

A factor which has not been cited for the May-October effect is bonuses/holidays. In order to put in the good figures for year end purposes, there has always been a covergence of interests for players involved to have a solid last quarter so that bonuses in the new year will be good. Plus, you have extended holidays with the last 2 weeks of December and the first week of January - hence you need the cash and peace of mind to have some fun. Generally nothing untoward will happen during end-December / early-January because of that.... a kind of financial detente. (Sources : http://malaysiafinance.blogspot.com/)

Trade Idea: .... we must be flexible along the market trend, if the market insist trending upward to 1350 then.... Never bang against the TRAIN...

Sell on May ? Buy on October ....?

U.S. Economy: Growth Slows to Least in Four Years



"The U.S. economy grew last quarter at the slowest pace in four years because of the housing slump and a bigger trade deficit, leaving consumer spending to keep the expansion alive.
The 1.3 percent annual growth rate was less than forecast and followed a 2.5 percent fourth-quarter pace, the Commerce Department reported today in Washington. A measure of inflation watched by the Federal Reserve rose at a faster pace.
Accelerating inflation will probably prevent the Fed from cutting interest rates to spur growth, economists said. This keeps the expansion in the hands of consumers whose confidence has been buffeted by higher fuel prices and the decline in housing. The University of Michigan said today its index of optimism fell this month.
``A lot of the drivers in the economy, with the exception of consumer spending, are slowing and holding back growth,'' said Kevin Logan, senior market economist at Dresdner Kleinwort in New York. ``Given the Fed's focus on inflation right now, they're not in a position to stimulate growth. The Fed is on hold in the near term.''
The dollar fell to a record low against the euro, extending a slide that's being driven by rising interest rates in Europe and faster economic growth than in America. Treasury notes rallied in the minutes after the GDP report was released, before surrendering their gains"


So, does the above statement do already proof the global market is overheating? Or do really the history is always repeat ?



Trade Idea: .............??? How about try to switch portion of your capital to Bond fund or in Futures and options.....( High risk High Return )

Jatropha Oil

The whole world is concerned about the state of the global environment, especially about global warming. We have already seen the effects of global warming in some of these killer storms, like Huricane Katrina in USA and Tsunami in Asia; desertification and the change of the pattern of weather and climatic condition. So these are some of the reasons why there has been this general call by environmental experts to nations to cut down their emission of green house gasses; because fossil oil, nuclear and deforestation contribute more than 50% of the gasses that causes global warming.

So, every country is trying to get an alternative, clean and environmental friendly energy to be used for the generation of electricity, industrial heating and then for transportation. And that is what brought us to this renewable energy.

Jatropha oil is an important product from the plant for meeting the cooking and lighting needs of the rural population, boiler fuel for industrial purposes or as a viable substitute for diesel. Substitution of firewood by plant oil for household cooking in rural areas will not only alleviate the problems of deforestation but also improve the health of rural women who are subjected to the indoor smoke pollution from cooking by inefficient fuel and stoves in poorly ventilated space. Jatropha oil performs very satisfactorily when burnt using a conventional (paraffin) wick after some simple design changes in the physical configuration of the lamp.

About one-third of the energy in the fruit of Jatropha can be extracted as an oil that has a similar energy value to diesel fuel. Jatropha oil can be used directly in diesel engines added to diesel fuel as an extender or trans-esterification to a bio-diesel fuel. In theory, a diesel substitute can be produced from locally grown Jatropha plants, thus providing these areas with the possibility of becoming self sufficient.

Considering the high and ever increasing demand for oil and other petroleum products, do you think that Nigeria has a large deposit of this tree to be processed to meet the demand for oil?

Commodities Trounce Stocks, Bonds on Oil, Soy Revival

Commodities are beating stocks and bonds for the first time in nine months, and the quarterly rebound is likely to continue on China's increasing imports of raw materials. Oil, gold, soybeans and sugar for delivery at the end of the year on the New York Mercantile Exchange and the Boards of Trade in Chicago and New York show at least a 3.7 percent appreciation, beyond the 5.7 percent gain in the UBS Bloomberg CMCI index of 28 commodities through March.
``When we look at the supply and demand'' of most commodities, there's a lot ``to be very bullish about,'' said Larry Kantor, co-head of research in New York at Barclays Capital Inc., which told customers last week to buy tin, gold and corn. China has ``a voracious demand for raw materials.'' Imports of copper jumped 12 percent in February from a month earlier and were almost triple the level of a year ago, according to the Customs General Administration in Beijing. Crude oil purchases rose by 8 percent in the month and palm oil by 20 percent, the administration reported. Copper rallied 8.4 percent in the quarter to $6,860 a metric ton on the London Metal Exchange, crude oil advanced 7.9 percent to $65.87 a barrel in New York and palm oil gained 3.5 percent to 2,064 ringgit ($597) a ton on the Malaysia Derivatives Exchange.

KNM .....

KNM’s new proposed yard in Saudi and new higher value contracts convince us that the future remains bright for this O&G favourite. We accordingly revise up its Average Selling Price per tonne which boosts our 2008 earnings estimates although this is slightly offset due to KNM aborting its proposed acquisition of Vickers Hoskins. The glowing prospects for both the Malaysian onshore O&G sector as well as Global process equipment market means that this stock should be key in any O&G portfolio.

James Roger .........

I.m going to take you all around the world again, but this time we.re going to talk about
some of the things I.ve learned from these travels around the world, how I.m living my life
as an investor, as a parent, as a citizen of the world. We.re going to talk specifically about
some of the things going on in Asia and we.re going to talk specifically about the energy
and then afterwards we can take questions, we.ll talk about anything you want.
But the first thing we have to understand . and I know I.m in Hong Kong, but it is amazing
to me how many people do not understand the significance of the rise of China. Many
people in China do not understand the full significance of what.s going on.
China is the next great country in the world, whether we like it or not, and there are a lot of
people in America who do not like the fact that China is the next great country of the world.
I know that they call themselves communists in China, I know that they say they.re
communists, but I will tell you they are among the best capitalists in the world right now. I
know many people will tell you that they are the best capitalists in the world as we speak in
2007.
In China, they save and invest over 35 per cent of their income. In the United States, we
save and invest 1 per cent of our income. In China, when they come to work, they don.t
say how many days. holiday they would like to have, they say, .How many days can I
come to work?. They know how you live in Hong Kong, they know how we live in America,
they know how you live in Switzerland, and they want to live the same way too. They.re
Asian Investment Conference 2007
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willing to work as hard as they have to, they.re willing to save and invest as much as they
have to, because they want to be where we are.
You all know, many of you know there have been some horrible periods in Chinese history
that go back to several thousand years. Some of you know that there have been some
unbelievably successful periods in China.s history. For 300 years they were on a sort of
down trend, until about 1978, Deng Xiaoping says, .We.ve got to try something different..
They started trying something different and you know the rest of the story. They have been
the fastest-growing country in the world since then, but let me tell you this has a long way
to go.
There will certainly be setbacks along the way. Every country, every company, every
family, every person has setbacks. They will have setbacks. You know, in America we had
some horrible setbacks as we grew to our power and glory. The 19th century was the
century of the UK, the 20th century was the century of the US. The 21st century is going to
be the century of China, despite setbacks.
There will certainly be perhaps some real estate speculators going broke in the next year
or two. The Chinese government is trying to cut back on some sectors of the economy, as
they should. But if you see problems in China, I urge you to pick up the phone and buy as
much of China as you can or get more involved in China. Because this, what.s happening
in China, is already changing the world as we know it, but it.s really going to change the
world in the next 10, 15, 30, 35 years.
The single best word of advice I can give you, the single best word of advice I can give
you is to teach your children and grandchildren Chinese. I know many of you already do,
but for those of you who don.t, you must understand . I showed you a picture of my baby
girl. My baby girl is three, but my baby girl is completely fluent in Mandarin and in English.
When she came along, I got her a Chinese nanny who lives with us and I instructed the
nanny to only speak Mandarin to the baby girl, because I think that the best skill that I can
give someone born in 2003 is to be completely fluent in Chinese and in things Chinese. So
I.m not just standing up here babbling about this, I.m spending a lot of time, energy and
money making sure that my little girl is prepared for the 21st century, which is going to be
the century of China.