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“I am prepared to go under the draconian ISA (Internal Security Act) detention to expose this crime … ”

October 27, 2008

When Matthias Chang gets mad, he pulls no punches. (He does not usually, anyway, if you noticed.) :-)

Read why he’s so incensed this time round and what was it that really pissed him off to categorically declare that he is prepared, in a way, to join RPK in Kamunting for telling off the-powers-that-be who continue to mislead the rakyat about the true financial and economic situation that have befallen us.

Matthias contends that should the truth be withheld further this may “cause the people to be unprepared for the crisis, (and) thereby suffer immense losses….”

Missing the Big Picture – It is the US Sovereign Default and the Unilateral Substitution of the US Dollar with Another Currency that is The Impending Crisis Which Will Devastate The Global Economy

–  By Matthias Chang
Sunday, 26 October 2008 04:25

Badawi – Off Tangent

Badawi in Beijing still cannot get it right. No doubt that the leaders in Beijing at the ASEM meeting did discuss the global food crisis as a consequence of the total bankruptcy of the US based financial system. However, the main thrust of the ASEM meeting was, and the Washington Summit in November 15, 2008 will be, the decision (already made by the US ruling elites) that the US will go into default and the US dollar will be replaced with another currency. This decision will be imposed either by the Bush regime in its remaining months or by the victor of the Presidential elections in November, 2008 when he assumes office in January, 2009.

Even when in Beijing, the idiotic Badawi still maintained the position that Malaysia somehow will not be affected much by the global financial tsunami because of Malaysia’s strong fundamentals and there will be no recession. Malaysia the mighty will be the lone survivor!

This idiotic and deceitful statement was echoed by the Deputy Prime Minister, who is also now the Finance Minister. If the “heir apparent” does not change his tack and confront reality, he is not fit to succeed and he should be booted out together with Badawi. This is his last chance. This is the final warning – stop the nonsense and tell the truth. Prepare the country for the devastation. The people are mature and resilient enough to face the truth as they had done in the 1997/1998 financial crisis.  Don’t you dare insult our intelligence.

How utterly idiotic can Malaysia get – two political buffoons dancing to the same tune when even local (now just awakening) newspapers blasted in their pages, the grave and impending disaster?

NST – 25th October, 2008 states in the front page:

“Spectre of Recession rings alarm bells around the world.”

The Star – Business Section in the front page:

“World markets take a tumble – Weak economic data and recession fears fuel selling.”

And at page W37:

“RM286 Billion to save currencies. ASEAN plus 3 agrees to set up ‘war chest’ to tackle financial crisis.”

At page B5:

“Malaysia unlikely to escape backlash of financial crisis …”

Malaysia Will Have A Banking Crisis

The Ministry of Finance and the Central Bank have been denying that there will be a banking crisis in Malaysia, harping that Malaysian banks are adequately capitalised for banking operations. Additionally, the banks are not exposed to the fraudulent investment instruments marketed by the US and European global banks.

I had exposed this “half truth” repeatedly in my sms and e-mails to friends all over the world and in my two books, The Shadow Money-Lenders and the Global Financial Tsunami and Will Barisan Nasional Survive Beyond 2010?

It is half-truth because the banks are not directly (i.e. on balance sheet) involved in such fraudulent marketing of the toxic wastes. They have been doing it via Structured Investment Vehicles – off balance sheet.

Thus, technically speaking, such transactions will not show up in the balance sheets of the Malaysian banks until and unless they have exploded into losses. Even then, they can delay somewhat in transferring the losses and will even find ways and means to hide these losses when they do transfer them to the banks’ balance sheet.

Fundamental rule in business, and more importantly in banking (by banking regulations) is that all assets must be marked-to-market (a requirement of Basel II i.e. international banking requirements) – in accordance with true values and or of prices, and not some fictitious values or prices.

However, when these assets were in the books of the fraudulent off-balance sheet investment vehicles, they were all marked-to-model. That is to say, they were given fictitious values or prices. These values were created by the trader subjectively by the simple and fraudulent method of typing the value in the computer screen which is then reflected in the balance sheet of these fraudulent investment vehicles.

Warren Buffet has referred to the method of marking-to-model as “marking-to- myths”, because all the values are myths – self-created values not reflective of reality and real time market values!

Following the collapse and bankruptcy of Bear Stearns and Lehman Bros, the world at large discovered that all these fraudulent investment instruments were worth (when marked-to-market) no more than ten cents to the dollar. In the case of Bear Stearns, it was zero! All worthless!

How do these crooked bankers avoid the exposure of this ongoing scam?

The FED under Bernanke and Treasury Secretary Henry Paulson (hired guns of the bankers) devised the fraudulent method of accounting when they allowed the banks (who must transfer the losses back to their balance sheet) to mark these fraudulent assets in the banks’ balance sheet in accordance to the fraudulent mark-to-model/myth method and even allow them to differ the declaration of such losses by posting such “assets” as “long term assets” i.e. their values to be taken in account only on maturity. They think we are all stupid. If the toilet papers are now worth less than ten cents how could the same toilet papers be worth more at maturity – in three or five years time – when there is no underlying security to back-up these fraudulent papers?

Caught Them By Their Dumbells Telling Lies

No one can carry on telling lies indefinitely. Truth will finally catch up because in business, losses and bankruptcy cannot be hidden.

In the front page of the Business Section of the STAR newspaper on the 25th October, 2008, Yap Leng Kuen inadvertently or otherwise let the cat out of the bag when Yap reported:

“Mark-to-market rule for banks relaxed”

“Mark-to-market rule no longer applies to the trading portfolios of banks in the country once they move these trading accounts to their long-term books…”

Here is an outright confession that Malaysian authorities have carbon-copied the fraudulent valuation con-games of the discredited Federal Reserve and the US Treasury!

Adding insult to injury, the news report went on to say that because Singapore (the puppet of US financial institutions) is doing it, we should follow them as well. We are thought to believe that one should only learn from good examples but not bad and or fraudulent practices. This is so typical of assholes in Malaysia who are now running the country under the leadership of the bodoh Badawi.

I shall quote at length the news report:

“The relaxation of the mark-to-market rules in Malaysia followed a similar relaxation in Singapore sometime in the middle of this week according to sources. Mark-to-market practices require banks to regularly adjust the value of their assets based on the actual transacted prices.

“In the current credit turmoil, the rule required banks to book huge losses on assets, depleting their capital even though some of their assets have yet to default.”

What is the reason for this relaxation?

When losses are booked in the accounts, capital will be depleted and unless the banks inject additional capital (shareholder funds), they will be insolvent and will not be able to maintain current banking operations which stipulate that they must have certain amount of capital in relation to the amount of loans extended etc.

The Ministry of Finance and Bank Negara was only telling half-truths when they said that Malaysian banks are adequately capitalized for normal banking operations. However, when these losses are taken into account, the capital reserves will plummet and the banks will not be able to maintain the capital requirements under the existing banking regulations. Under the Banking and Financial Institutions Act 1986 (BAFIA), it is an offence if this requirement is infringed!

If, as alleged, the banks are adequately capitalized, there is no reason for the relaxation of the mark-to-market rules. The banks’ capital would be more than enough to cover these losses. It must therefore be otherwise. Our banks are in fact under-capitalised if such assets are marked-to-market.

One would have thought that these losses should be written off, so that the bank’s balance sheet would remain clean and stable and if need be additional capital injected to bolster the confidence of the public in the bank’s integrity.

Additionally, if Malaysian banks are not exposed to these toxic waste and have not suffered losses, why is there a need to bring these “trading accounts” (i.e. derivative toxic wastes) back onto the banks’ balance sheet?

Is this not another confession that our banks did indulge in these fraudulent activities and got burn as did the banks in Singapore?

Central banks the world over are now complicit in this fraudulent scheme.

A crime is being committed by central bankers.

We do not have to commit this crime. There are other legitimate ways to resolve this issue albeit with economic pains.

Surely, our morals demand that we do not commit a crime to solve a problem for to do so is to condone the thief or murderer who rob and or murder because he needs to feed his poor family. Robbing and murdering is the easy way out in solving one’s poverty. But it is still a crime.

Looking for a job and maybe the need to work double shift may be painful, but it is an honest living!

Malaysians must decide whether to allow crimes to be committed to solve the banking problems, thereby allowing greedy bankers to get away with their frauds and cheating ways or to resolve the problems with legitimate means and bring to justice the crooks and charlatans in the banking industry.

God forbid that we choose the easy way out and commit a crime.

Let me say this here and now. I am prepared to go under the draconian ISA (Internal Security Act) detention to expose this crime which has already being committed. I will not compromise my principles as a lawyer and as a citizen.

It is utmost hypocrisy for all of us to talk about war crimes etc. and not condemn this global financial crime that has caused millions to die of hunger and malnutrition.

This is also war – economic warfare on a global scale to save the rich global bankers and elites at the expense of the poor and downtrodden.

I take it as a signal honour to speak and fight on their behalf.

We must all expose this insidious and heinous global crime!

To Badawi, Najib, and all the leaders of Barisan Nasional – tell the people the truth and prepare them for the crisis, and you might just win the next election, as we have to unite the entire nation to survive.

Continue to lie and cover up the crisis, and cause the people to be unprepared for the crisis, thereby to suffer immense losses – I shall do everything and rally the country to ensure Barisan Nasional’s defeat in the next election.

From → Malaysia Upclose

  1. oneworldmaybenot permalink

    Such a long entry just to make one point ie halting mark to market…..oh my! So emotional. MC must be foaming in his mouth. Relax lah. FYI this mark to market abandonment was started by the Europeans in recent days. It is considered by the Europeans to short circuit this nasty feedback loop hitting the banks. Whether this is a necessary evil remains to be seen. I with hold my judgement because sometimes the end justifies the means and at times people may have hold their noses to put aside their ideology be it free market or not. Btw I’m convinced MC is a nutter, he’s still at it encouraging a bank run. I don’t think anyone should glorify or encourage MC’s effort to fuel a bank run especially when it involves people’s hard earn money. These are tough times and bloggers should be more responsible

  2. Global financial crisis… well there are two different standings from where i see it. The DPM and PM should at least inform the rakyat to prepare for the crisis. BUT not tell them the whole thing coz it will cause a widespread panic among the rakyat. why? MC said that the people are intelligent enough and matured enough to deal with this. ARE WE? Do you think everyone is prepared? This will spark a massive price hike in food and groceries. The panic will somehow prompt people to rush into hypermarkets and markets to stock up for the massive attack hence spending more money when it is unnecessary!

    But MC got his point also for pouring out his concern. He has his knowledge of our country’s financial situation too…

    Truth be hold… we need to slow down on spending and try to save our money in…. biscuit tins!!!


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