Still Have to Becarefull although "Let The Market Rule"........

Can someone use a suitable animal to describe what is a "Equity Market"? For me I prefer to describe it as Crocodile/ Buaya. Why ? Because when the crocodile want to hunt for victim they usually will pretent stagnent and open up their Big Mouth, then what if a bird fly into it's mouth...... "KAP" the crocodile will straigth away swallow the pitty bird..

So in this crucial crocodile world, we need to be smart as mousedeer, we must well understand the whole trend and do not ever "Bang" against the train (Trend). If today the whole world is talking about the "Shanghai Bubble" then do u dare to say NO ? My bos told me before we can only "die" one time. If in this case I would like to wait rather to react because our upside (profit) is limited meanwhile expose to an unlimited downside risk...

For Malaysian, there are plentty of good stocks like SAAG perform much much greater return than you buy China Food or others foreign share. Foreign share for the moment is not so encouraging due to the whole regional market sentiment is volatile and the higher currency exposure. Again the " Far Water could not safe Near Fire " theory have to be consider in our judgement whether to invest overseas or not for the current moment.....

Berhati-hati di Bursa Saham...

Malaysia's Economy Expanded Faster Than Expected on Spending....??

Malaysia's economy expanded faster than economists expected in the first quarter as rising government spending and investment countered weaker overseas demand.The $147 billion economy added 5.3 percent from a year earlier after gaining 5.7 percent in the fourth quarter, the central bank said in a statement in Kuala Lumpur. While the pace was the slowest since a revised 5.2 percent in the third quarter of 2005.

Malaysia, among the world's top 20 trading nations, is counting on higher public spending and private investment this year to lift growth to 6 percent as a faltering U.S. economy threatens demand for goods such as Intel Corp. semiconductors and Dell Inc. notebook computers that are produced in Southeast Asia's third-largest economy.The U.S. is Malaysia largest overseas market, accounting for about a fifth of export sales. The world's largest economy grew at a 1.3 percent annual rate in the first quarter, the slowest pace in four years, after a slump in home building and a bigger trade deficit reduced growth, the Commerce Department said April 27.

Spending

The government will spend an additional 8 billion ringgit a year on the higher salaries and a doubling of cost of living allowances, helping boost growth by as much as 0.5 percentage point this year, Second Finance Minister Nor Mohamed Yakcop said May 22. He declined to say if the measures would help economic growth meet or exceed the 6 percent forecast this year.Easing inflation and higher investment approvals will help Malaysia's economy this year, the Malaysian Institute of Economic Research said April 17, when it raised Malaysia's 2007 growth forecast to 5.6 percent.The institute's consumer sentiment index rose to 124.1 in the first quarter from 110.9 in the previous three months, helped by rising stocks, higher wages and stable jobs. The business conditions index dropped to 105.5 from 107.2.

China Triples Stock-Trading Tax; Shares Fall in Everywhere.......

China tripled the tax on securities trading to cool demand for equities, sending China Life Insurance Co. and other U.S.-traded mainland shares lower.
The government raised the stamp tax to 0.3 percent from 0.1 percent, effective May 30, the official Xinhua News Agency reported, citing the Ministry of Finance. China Life, the nation's biggest insurer, slid $1.33 to $46.51 and PetroChina Co., the top energy company, fell 80 cents to $128.15 in U.S. trading.
The higher tax is aimed at promoting a ``healthy'' stock market, Xinhua said. The CSI 300 Index surged threefold in the past year, prompting central bank officials, former U.S. Federal Reserve Chairman Alan Greenspan and Li Ka-shing, Asia's richest man, to warn of the market's imminent collapse. The CSI 300, which tracks yuan-denominated A shares, today rallied to all-time high, its 11th record this month.
``It's a great way to massage the market down,'' said Don Elefson, who manages $1.2 billion in emerging market stocks at U.S. Trust Co. of New York. For the Chinese government, ``this is merely a way of saying, `Fine, if you want to invest in a market at crazy levels, go crazy. But we're going to make it more expensive for you.'''
The Bank of New York China ADR index slid to its low of the day following the Xinhua report. It finished with a 1 percent drop. The Morgan Stanley Capital International Emerging Market Index erased its gains, losing 0.3 percent.
China Telecom Corp., the country's biggest fixed-line phone operator, slipped 59 cents to $52.76. Brilliance China Automotive Holdings Ltd., an automaker, fell 72 cents to $23.48.
Opening Brokerage Accounts
China's brokerage accounts topped 100 million for the first time as investors yesterday opened a record 455,111 accounts to trade mainland shares and mutual funds, according to the China Securities Depository & Clearing Corp.
More than 20 million accounts have been opened at brokerages so far this year, four times the amount in all of 2006, according to the clearing house.

Asia's Most Expensive

Investors opened 362,719 accounts at brokerages on May 24, the fifth straight day the tally has exceeded 300,000, according to figures on the China Depository & Clearing Corp.'s Web site. So far this year, 20.9 million accounts have been opened, four times the amount in 2006, the clearing house's data shows.
The CSI 300 is now valued at 46 times earnings, making the mainland market the most expensive in the Asia-Pacific region.
Greenspan last week joined central bank Governor Zhaou Xiaochuan and Asia's richest man Li Ka-shing in warning of a bubble on China's stock market. The index fell 0.5 percent the day after Greenspan's comment. It resumed its gains the next day, closing 1.7 percent higher.
The CSI 300 has climbed 15 percent since May 6, when the central bank's Zhou said he was concerned about stock valuations. It also rose to a record after billionaire Li on May 17 said the market ``must be a bubble.'

China Stock Index Breaches 4,000 Points, After Doubling in 2007

China's CSI 300 Index rose above 4000 for the first time, driven by a surge in new investors who are ignoring warnings of a bubble to enter a market that's doubled this year. China Merchants Bank Co. paced the gain.

The benchmark CSI 300, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 105.32, or 2.6 percent, to 4090.57 as of 1:23 p.m. local time. Investors opened more than 300,000 accounts a day last week, even as former Federal Reserve Chairman Alan Greenspan called the rally unsustainable and said the market may undergo a ``dramatic contraction''.
Merchants Bank, the nation's third-biggest publicly traded lender, rose 0.41 yuan, or 1.9 percent, to 21.53. China Petroleum & Chemical Corp., Asia's biggest oil refiner, also known as Sinopec, jumped 0.59 yuan, or 4.8 percent, to 12.99. China International Marine Containers Co., the world's largest maker of freight containers, gained 3.17 yuan, or the 10 percent daily cap, to 34.82
Households are shifting funds into the stock market, seeking better returns than they can get on their bank deposits. The central bank's benchmark one-year deposit rate, a ceiling for deposit rates commercial banks can offer, is 3.06 percent, little more than the nation's 3 percent inflation rate. The CSI 300 has risen 198 percent in the past year.

Hong Kong Export Growth May Accelerate on China Trade

Hong Kong's exports probably grew at a faster pace in April as the city shipped more goods to and from China. Overseas sales rose 8.7 percent from a year earlier, after gaining 6.9 percent in March. The government will release trade figures at 4:15 p.m. today. Surging Chinese exports and growing demand for foreign goods in the mainland boosted shipments through Hong Kong. The city, located at the mouth of the Pearl River, serves as a trading hub for China, the world's fastest-growing major economy.

In addition, a slowing U.S. economy may curb demand for goods shipped through Hong Kong. Gross domestic product in the world's largest economy grew 1.3 percent in the first quarter, the smallest increase in four years. The U.S. was the second- biggest buyer of Hong Kong's exports last year after China. Hong Kong's imports probably grew 11.3 percent in April from a year earlier.

Large Yuan Appreciation Would Hurt China

A ``large'' appreciation of the yuan would hurt China's economy, Vice Premier Wu Yi said, signaling the nation won't cave in to U.S. demands for faster gains to ease the U.S. trade deficit.

The yuan's value isn't the cause of the deficit, Wu said today at a dinner in Washington attended by U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke. About 85 percent of the trade surplus is generated by foreign companies exporting products from China that are no longer made in the U.S., such as shoes, she added. Vice Premier Wu concluded two days of talks with Paulson yesterday aimed at easing U.S.-China tensions exacerbated by last year's record $232.5 billion U.S. trade deficit with China. U.S. legislators have pledged to proceed with sanctions against Chinese imports unless the yuan climbs faster.
``China will definitely not drop its policy of letting the yuan rise gradually,'' said Xiao Minjie, a senior economist at Daiwa Institute of Research in Shanghai. ``A big yuan appreciation would affect China's exports,'' Xiao said, citing the textile industry. China is concerned faster appreciation of the yuan would hurt company profit and jobs. The textile industry, which accounted for 72 percent of China's trade surplus last year, loses 8.2 billion yuan ($1.1 billion) for every percentage point of currency appreciation, the China National Textile and Apparel Council estimates.

what will happen if 100 idiots and 1 genius met together...?

Former Federal Reserve Chairman Alan Greenspan said he was concerned Chinese stocks might undergo a ``dramatic contraction'' after its main stock index jumped more than 90 percent this year. The benchmark CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, rose to a record 3938.95 today. The index more than doubled last year as investors bet corporate profits would be boosted by the world's fastest-growing major economy. ``It is clearly unsustainable,'' Greenspan told a conference in Madrid today by satellite. ``There is going to be a dramatic contraction at some point.'' China last week increased the amount it lets the yuan move against the dollar and raised interest rates to restrain economic growth and a swelling trade surplus. The changes came ahead of two days of meetings in Washington between Treasury Secretary Henry Paulson and his Chinese counterpart, Vice Premier Wu Yi, aimed at smoothing trade frictions.

Greenspan's comments contributed to the first decline in U.S. stocks in four days. The Dow Jones Industrial Average dropped 14.30, or 0.1 percent, to 13,525.65 after earlier reaching a record. Chinese stocks also declined in U.S. trading. ``The strength of the Chinese market has kind of spilled over into the positive sentiment here in the U.S.,'' said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. ``To have someone like Chairman Greenspan calling for a dramatic contraction in the Chinese markets might have made a few people a little nervous.''

What if u holding alots of overseas' Shares and met with market crash ?

1. Panic and fainted
2. Still steady and buy more to average your cost
3. follow the majority to cut loss

any others idea...?


Conclusion:

When 1 people said the market is toppish then it might be not true, but what if everybody said the same again and again to you ?

Consumer Spending Boost.....?

The details of salary revision for civil servants were announced yesterday and were broadly in line with our earlier expectation. While the Government did not approve the Cuepacs’ request wholesale, the total amount of additional expenditure of the Government is higher than the original proposal. Consequently, we see a bigger impact on consumer spending by 1.1ppts and 2ppts respectively in 2007 and 2008, resulting in higher GDP growth of 0.5ppts and 1ppt respectively. However, we also see fiscal deficit of the Federal Government rising significantly. Although financing of the deficit is not an issue, the country may subject to downgrades by international rating agencies due to its lack of commitment in bringing down the deficit level.

Cuepacs’ proposal not accepted wholesale … As highlighted in our report dated 8 May, we had already expected some discount to the Cuepacs’ proposal due to financial constraint at the Federal Government level. To re-cap, the Cuepacs had proposed a broad-based salary revision ranging from 10% for higher ranking officers to 40% for lower income employees. Instead, the Government announced that the approved salary revision is between 7.5% and 35% as the following:

(i) 35% increase for Support Group II (Grades 1 to 16), the lowest category of public
employees;
(ii) 25% increase for Support Group I (Grades 17 to 40);
(iii) 15% increase for the Management and Professional Group (Grades 41 to 54); and
(iv) 7.5% increase for the Premier Grade of the Public Sector (Jusa).

Nevertheless, civil servants should welcome the announcement that the new salary scheme will become effective on 1 July, in line with our earlier expectation. Again, the Government may still opt to stagger the implementation in 2007 (i.e. back-dating the revision in lump sum payments) but the actual impact could begin to filter through the economy as soon as the confirmation of new salary scheme due to “announcement effect” (i.e. households factoring in higher future income) … but total spending turns out to be higher. Even though the Government did not adjust the salary scheme for civil servants as per Cuepacs’ request, the total amount of additional expenditure of the Federal Government is higher than the original proposal. The higher amount of expenditure is due mainly to an additional 20% increment for police and army workforce, a 100% increase in the Cost of Living Allowance (COLA) and a revision to pension payments for retired civil servants. The Prime Minister said the salary revision will cost the Government additional RM3.4bn in 2007 and RM6.8bn in 2008, while the COLA payments will result in additional spending of RM0.6bn in 2007 and RM1.2bn in 2008. All in all, the Government will need to bear an additional operating expenditure of RM4bn this year and RM8bn from the year 2008 onwards. This is significantly higher than the earlier sum of RM5bn estimated by the Cuepacs.

Bigger impact seen on economic growth.
With the higher amount of spending on emoluments, pensions and COLA payments, we can expect bigger impact on the Malaysian economy arising from multiplier effect of the collective monetary adjustments for civil servants. Using the Marginal Propensity to Consume (MPC) ratio 0.45 in 2006 and an import leakage assumption of 10%, the entire salary revision (RM8bn per annum) could generate an additional RM5.4bn of consumer spending per annum. The additional consumption could lift private consumption growth by 1.1ppts and 2ppts respectively in 2007 and 2008. After applying the respective deflators, the entire salary revision scheme will contribute an additional 0.5ppts and 1ppt respectively to real GDP growth in 2007 and 2008

Conclusions

A higher Deficit may occur for Malaysia in futures....

China Growth, Not Paulson, May Force Yuan Revaluation

The world's fastest-growing economy is so hot that the government is considering a currency revaluation prompted by uncontrollable money supply growth, inflation, a runaway stock market and ballooning foreign exchange reserves.

Paulson, whose mandate as U.S. Treasury Secretary amounts to pleas for a stronger yuan, will be only too happy to give credit for the Chinese policy shift to the laws of economics. The People's Bank of China allowed its currency to trade in a wider range, raised interest rates and curbed bank lending on May 18, four days ahead of a meeting between Vice Premier Wu Yi and Paulson in Washington.

``This is a modest and methodical act and very much in keeping with China's own interest,'' said Charlene Barshefsky, the chief U.S. trade negotiator from 1997 to 2001 and now a senior international partner at the law firm WilmerHale in Washington. ``It needs greater control over its economy and it needs to do that now.''

The central bank said the yuan will be allowed to move as much as 0.5 percent on either side of the daily rate it sets against the dollar, up from the current 0.3 percent. The government also raised its one-year benchmark lending rate for the fourth time since April, to 6.57 percent, and boosted bank reserve requirements for the eighth time, by half a percentage point to 11.5 percent.

China Factory, Property Spending May Grow 25 %

China's spending on factories and real estate probably grew 25.3 percent in the first four months of 2007 from a year earlier, suggesting the central bank may need to raise interest rates to cool investment.

That's the median estimate of 19 economists surveyed by Bloomberg News and compares with a 29.6 percent increase in urban fixed-asset investment a year earlier. The statistics bureau releases the figures at 10 a.m. on May 17.

The pace of investment increases the risk that the world's fastest-growing major economy will be saddled with idle factories and bad loans if demand unexpectedly slows. Central bank Governor Zhou Xiaochuan is also concerned a bubble is growing in the stock market as booming exports pump cash into the economy.

``Liquidity and too much credit are again fueling a cycle of poor-quality investment and industrial overcapacity,'' said Michael Kurtz, an economist at Bear Stearns Asia Ltd. in Hong Kong. ``Three more interest rate hikes are likely before the end of the year -- at a minimum.''

The full-year increase in fixed-asset investment in 2006 was 24.5 percent.

Industrial production likely climbed 17.5 percent in April from a year earlier, little changed from 17.6 percent growth in March, the Bloomberg News survey showed. That figure is due at 10 a.m. tomorrow.

The People's Bank of China has raised borrowing costs three times since April 2006 and ordered banks to set aside larger reserves seven times. The one-year benchmark interest rate is 6.39 percent.

Widening Trade Surplus

China's trade surplus for the first four months widened to $63.3 billion, 88 percent more than a year earlier.

Industrial companies' profits jumped 44 percent in the first two months, swelling investment coffers since state businesses retain their profits. Baosteel Group Corp., China's biggest steelmaker, and Handan Iron & Steel Group plan to build a 19 billion yuan ($2.5 billion) plant in the northern city of Handan to boost production.

``China should mandate a dividend policy so that parts of those incomes go back to the central government, who should allocate the resources to social services, helping to boost consumption as well,'' said Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong.

Manufacturing overcapacity may lead to deflation and turn investment growth into a ``curse,'' the Asian Development Bank said in March. The nation's steelmaking capacity of 462 million metric tons at the end of 2006 was 10 percent more than production.

`Extraordinary' Investment Level

China's average of a 43 percent investment to gross domestic product ratio over the past three years was the highest in the world, according to HSBC Holdings' economist Qu Hongbin in Hong Kong.

``Such an extraordinary investment ratio has already caused some concerns among the Chinese policymakers about the efficiency of investment,'' Qu said in a May 7 report. ``Indeed, when China is investing more than 40 percent of its GDP every year, it is inevitable that some low-return and white elephant construction projects have emerged, particularly when local governments are heavily involved in investment.''

M2, the broadest measure of money supply, grew 17.1 percent in April, exceeding the central bank's target for a third month. Banks extended 1.8 trillion yuan of new loans in the first four months, more than half the total for the whole of last year.

The benchmark CSI 300 Index of stocks has soared more than 80 percent this year as Chinese households flock to the market.


Besides monetary policy, the central bank is using administrative measures to try to cool fixed-asset investment, such as minimum prices for land for industrial developments from Jan. 1. New investment projects fell by 2,294 to 31,117 in the first quarter from a year earlier, according to the statistics bureau.

China's government has raised minimum wages and expanded the welfare system to try to tilt economic growth towards consumption instead of relying so heavily on exports and investment.

Retail sales probably gained 15.1 percent in April from a year earlier, little changed from the previous month's 15.3 percent gain, the Bloomberg News survey showed. The statistics bureau will release the figures at 10 a.m. today.

China's economy, the world's fourth-largest, grew 11.1 percent in the first quarter, accelerating from 10.4 percent in the previous three months.

The following tables show economists' estimates for percentage changes in China's urban fixed-asset investment in the first four months from a year earlier, followed by growth in industrial production and retail sales in April.

Story from my..........

"My grandfather took me to the fish pond on the farm when I was about seven, and he told me to throw a stone into the water. He told me to watch the circles created by the stone. Then he asked me to think of myself as that stone person.

"You may create lots of splashes in your life but the waves that come from those splashes will disturb the peace of all your fellow creatures," he said.

"Remember that you are responsible for what you put in your circle and that circle will also touch many other circles. You will need to live in a way that allows the good that comes from your circle to send the peace of that goodness to others. The splash that comes from anger or jealousy will send those feelings to other circles. You are responsible for both."

That was the first time I realized each person creates the inner peace or discord that flows out into the world. We cannot create world peace if we are riddled with inner conflict, hatred, doubt, or anger. We radiate the feelings and thoughts that we hold inside, whether we speak them or not. Whatever is splashing around inside of us is spilling out into the world, creating beauty or discord with all other circles of life.

CPO Inventory Getting Dangerously Low

Inventory level continued to make new multi-year low, falling to its lowest since May ’04 as seasonal increase in production could not keep up with demand. With Indonesia’s production still yet to recover from last year’s draught, we believe inventory level will fall further albeit at a less drastic pace. This will continue to be supportive of CPO prices which in turn will lead to the Plantation Sector maintaining its outperformance over the KLCI. Maintain Overweight on the Plantation Sector with CY07 average CPO price assumption of RM2,150/t.

Production picking up. April production increased by 4.1% m-o-m to 1.125m tonnes, bringing total production to-date to 4.311m tonnes. Compared to April last year, production was down by 14.2%. On cumulative basis, production was 5.1% lower. The lower production was due to slower Peninsular Malaysia production, which was 264k tonnes less than the first 4 months of last year. Sabah’s cumulative production was 1.3% higher but still, output has been down on y-o-y basis for the past 2 months. We believe production will pick up more significantly in the 2H to make up for the current slow production.

Exports up on India and Pakistan. Exports rose to 1.118m tonnes (+5.9% m-o-m) despite slower exports to China (-99.1k tonnes) as this was more than made up by increase in exports to India (+82.1k tonnes) and Pakistan (+48.8k tonnes). On cumulative basis, exports were down by 9.0% to 3.941m tonnes on lower production and higher local usage. The dip in Indonesian production plus the recent imposition of higher exports duty in Indonesia as an attempt to manage cooking oil prices will boost Malaysia’s exports.

Stock level hit another multi-year low. With exports taking up 99.4% of April’s production, stock level fell by 11.7% m-o-m to just 1.181m tonnes, the lowest since May ’04. We believe exports will continue to be robust on the back of strong demand plus supply shortfall from Indonesia. This will help push inventory to below 1.0m tonnes in the not too distant future even without the biodiesel factor.

Strong CPO price performance y-t-d. CPO prices averaged RM2,045 y-t-d based on MPOB prices, which was up by RM622/t or 43.7% from the same period last year. If prices sustain at this level, our average CPO price assumption of RM2,150/t for CY07 will be met by July. We maintain that the ceiling price will be RM2,600/t, which is the price for rapeseed oil. Substitution effect will help close the pricing gap.

7th trading weeks from 27th Feb

Discussion : Today is the 7th full trading week (49 trading days) from the "Huge Correction" of 27th Feb. Meaning that, according to Gann method it would be a REVERSAL day for today against the trend from previous day. Moreover, until 12.05am Dow index had drop 131.46 points at the momment. So,dear all, pls becarefull and never panic sell for today because overall the market is need a healthy correction in order to allow it to continue the uptrend.


Trade Idea: Short with cautious....


The U.S. trade deficit widened more than forecast in March as higher oil shipments drove the biggest increase in imports in more than four years.

The deficit rose 10.4 percent to $63.9 billion, the Commerce Department said today in Washington. Imports and exports were the second highest on record. Climbing fuel costs also pushed the price of foreign goods higher for a third month in April, the Labor Department reported separately.

Americans buy two-thirds of their oil from abroad and the biggest rise in crude prices since June offset the benefit to U.S. exports from a weaker dollar. A more competitive exchange rate and expanding economies in Europe and Asia have trimmed the deficit from a record $68.9 billion in August.

``We were paying sharply more in March for imported oil, and frankly that's only going to contribute to a lot more red ink in April,'' said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.

The trade shortfall with China narrowed to $17.2 billion in March from $18.4 billion a month earlier. Imports from China were the lowest since May 2006 while exports were a record.

The wider shortfall will probably lead the government to revise down its estimate of first quarter economic growth. Economists at Morgan Stanley forecast revised figures will show the economy grew 0.9 percent in the first three months of the year, compared with the government's advance estimate of 1.3 percent issued last month.

Export Demand

``We saw a big increase in oil imports, but in general growth in the U.S. is slowing and we should see import growth moderating,'' said Jay Bryson, global economist at Wachovia Corp. in Charlotte, North Carolina. ``As we look forward, trade should be less of a drag because of global demand for U.S. exports.''

A further report today from the Labor Department showed the number of first-time claims for jobless benefits dropped 9,000 to 297,000, the fewest in almost four months. The figures suggest firms are firing fewer workers even as the economy slows.

Economists had forecast the trade deficit would widen to $60 billion, from an originally reported $58.4 billion in February, according to the median of 78 estimates in a Bloomberg News survey. Estimates ranged from $56.8 billion to $62 billion.

Imports of goods and services rose 4.5 percent in March, the biggest increase since November 2002, to $190.1 billion. Imports of industrial supplies, which include petroleum, rose to $49.1 billion from $44.1 billion.

Petroleum Imports

Imports of petroleum products rose to a seasonally adjusted $24.6 billion from $20.9 billion a month earlier. Crude oil futures traded on the New York Mercantile Exchange climbed above $66 a barrel in March for the first time since early September. Crude futures averaged $60.74 a barrel in March, compared with $59.39 in February.

Shipments to the U.S. of consumer goods rose to a record $40.1 billion from $39.4 billion. U.S. consumer spending stayed strong enough in March to sustain demand for goods imported from China and other countries, economists said. Retail sales in the U.S. rose in March by the most in three months, driven by rising incomes and mild weather.

Exports rose 1.8 percent to $126.2 billion in March from $124 billion a month earlier, led by record sales of industrial supplies and autos.

China Surplus

China, the second-largest U.S. trading partner, says it is trying to curb its trade surplus by easing import restrictions and reducing export incentives.

Some U.S. lawmakers say an undervalued Chinese currency is to blame for a trade gap between the two nations that widened to a record in 2006 for a fifth straight year. U.S. Treasury Secretary Henry Paulson on May 2 said he was concerned that the yuan's value is rising ``very slowly.'' Paulson also said it will take more than a stronger Chinese currency to reduce the record trade deficit between the two countries.

A weaker dollar may chip away at America's total trade gap by making U.S. goods cheaper abroad. During the 12 months ended in April, the dollar fell 3.1 percent against a trade-weighted basket of currencies of its biggest trading partners. It reached a record low of $1.3681 against the euro on April 27.

A slowing U.S. economy and faster growth among U.S. trading partners also point to a stabilizing trade gap, economists said.

Consumer spending may rise at an annual rate of 2.3 percent this quarter, and will grow 2.5 percent in the next three months, based on the median estimate economists surveyed by Bloomberg April 30 through May 8. Such spending grew 3.7 percent the past decade.

Zhou Says China Has Room to Raise Reserve Requirements Further

People's Bank of China Governor Zhou Xiaochuan said there's room to raise commercial banks' reserve requirements further after seven increases in 11 months failed to slow lending and inflation.

``There surely is still room'' to raise the reserve requirements, Zhou said in an interview on a flight from Beijing to Frankfurt yesterday. Zhou, on his way to a meeting at the Bank for International Settlements in Basel, Switzerland, also said an acceleration in inflation to the fastest pace in two years is ``normal'' and ``not very unexpected.''

Premier Wen Jiabao is trying to prevent excess cash from a record trade surplus from stoking inflation, fueling wasteful investment and creating more bad loans. Economic growth accelerated to 11.1 percent in the first quarter from 10.4 percent in the previous three months, driven by a trade surplus that almost doubled to $46.4 billion.

Zhou has raised interest rates three times since April last year and sold bills to soak up liquidity in the banking system and stem price increases. Still, inflation accelerated to 3.3 percent in March, the highest rate in more than two years, and banks made 1.4 trillion yuan ($180 billion) of new loans in the first quarter alone, nearly half the total for last year.

``The recent acceleration in inflation is normal'' because prices of primary goods have increased substantially and labor costs have risen, Zhou said. ``We can't say there is no inflationary pressure, but it was not very unexpected.''


Zhou admitted that the psychological impact of reserve- ratio increases on the market is weakening. ``A weaker psychological impact can actually be a good thing,'' he said. ``People no longer have to feel so nervous.''

Each 0.5 percentage point increase in the reserve requirement removes about 170 billion yuan from the financial system. ``The quantitative effect is fixed,'' Zhou said. ``And this is objective.''

Local-currency deposits stood at 35.42 trillion yuan at March 31. Foreign exchange reserves, the world's largest, grew 37 percent from a year earlier, the fastest pace since November 2005.

While China isn't pursuing ``rapid'' growth in currency reserves, the economic adjustments that can slow the pace of growth ``take time,'' Zhou said.

The reserves grew by $1 million a minute in the first quarter, double the previous year's pace, on the export boom, foreign-currency swaps, and companies bringing home the proceeds of initial public offerings.

What if tonight Dow closed in negative territorry..?

What if the Dow Jones Index closed at negative territory tonight after a series of pro-long result from the productivity growth....( but in a slower trend ) ???



U.S. Economy: Productivity Growth Exceeds Forecasts

U.S. productivity growth was greater than forecast last quarter and labor costs moderated, easing concern that a tight job market will fuel inflation. Productivity, a measure of how much an employee produces for each hour of work, rose at an annual rate of 1.7 percent, the Labor Department said today in Washington, more than twice the pace projected by economists. The price of labor rose 0.6 percent pace after jumping 6.2 percent in the prior three months.
Employers responded to a slowdown in economic growth by shortening the workweek, squeezing out a gain in productivity. The slowdown in labor costs may ease concern companies will have to increase prices and gives credence to the Federal Reserve's forecast that inflation will gradually retreat.

Productivity growth is still slowing. In the fourth quarter, the gain was 2.1 percent. In the 12 months ended in March, productivity rose 1.1 percent, down from a 1.6 percent year-over-year gain the previous quarter. A separate report from the Institute for Supply Management showed service industries expanded faster than anticipated last month. Additional Labor Department numbers showed that the number of people filing claims for unemployment benefits fell to a three-month low of 305,000 last week.

Trend Slowing

Productivity grew just 1.6 percent last year after expanding 2.1 percent in 2005. Efficiency rose an average 3.2 percent per year from 2000 through 2005. This is ``the reason why the Fed is worried about inflation,'' Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. Lower productivity ``means unit labor costs are facing more upward pressure and perhaps a little inflationary bias. The Fed is going to be sitting on its hands for a while.'' San Francisco Fed President Janet Yellen said last week that she was concerned the long-term trend in productivity growth may have dropped to a range of 2 percent to 2.5 percent. ``A lower trend rate of productivity growth would help explain the sluggishness in business investment and put upward pressure on inflation for a time,'' Yellen said. Fed policy makers are scheduled to next vote on the direction of interest rates on May 9. They held the benchmark overnight lending rate between banks at 5.25 percent for a sixth consecutive time at their last meeting on March 21.

Johor Land the next Kulim ........?

Johor Land one of the largest Johor Landlords.....

• Largest landowner/ developer in Johor with 3044 acres undeveloped landbank and outstanding GDV> RM 6.6bn to last for the next 20 years
  

• Recent venture into Bandar Dato' Onn with Focus to develop high-end properties and the development of JB's largest commercial centre spanning over 118 acres with > 1.0m sq m commercial floor space will be one of the strongest growth drivers going forward

• Still trading at 27% discount to fully-dilluted RNAV of RM2.59

Recommendation: Recent venture into Tebrau Corridor to develop high-end residential properties and to develop the largest commercial centre in JB a very positive and a bold one as it will create a stronger value for the Group in longer term. Moreover, there is rumours that ......

Haihz..... How will be in tomorrow..?

U.S. Economy: Factory Orders Jump, Signaling Investment Rebound

Orders placed with American factories rose the most in a year in March, reinforcing signs that corporate spending is recovering from a slump.
Bookings increased 3.1 percent, exceeding economists' predictions, after gaining 1.4 percent in the prior month, the Commerce Department said today in Washington. Excluding transportation equipment, demand rose 1.9 percent after no change in February.
The Federal Reserve, forecasting improved second-half growth, is counting on a bigger contribution from business spending while housing remains in recession. Today's numbers come a day after the Institute for Supply Management said manufacturing expanded more than forecast last month.
``Investment looks like it picked up at the end of the first quarter, leaving good momentum,'' said Jonathan Basile, an economist at Credit Suisse in New York. ``The Fed will be encouraged by the improvement, given that business spending has been a concern.''
Earlier today, a report showed U.S. companies added the fewest jobs in almost four years in April. The 64,000 increase in payrolls was the least since July 2003 and followed a revised gain of 98,000 in March, ADP Employer Services said. The report is based on data from 364,000 businesses with about 22 million workers on their payrolls.

Discussios: Why 1 week ago there are bundles of NEGATIVE news arrousing the Dow Jones such as Growth Concern, CPI, etc... But now seem turn the others way. It seem the Bubble in Dow Jones is automatically release pressure and the market continue to pump up again. A 59 points corrections is there enough for the 'Elephant' to move further upward in short term ?
All in all, the most idiot are the others markets , why they willing to be cheated all this while by keep using their country asset to buy up the USD? why must they all peg with USD but not gold or Euro? Why not we follow back the Bretton wood system? All this while is NOT the gold' price hiking but is the USD depreciating since .....

Trade Idea: Never Short the market if the Elephant refuse to come down ........