On the US economic problems, life in New York and Malaysian politics
Apr 13th, 2008 by shihjern
It has been a while since I wrote anything here. Ah well, life has been interesting.
The US credit crisis has finally metamorphized into a recession. The whole of Wall Street knew and expected this; it was only the White House and Federal Reserve Bank which were trying to be in denial for a while. But in contrast to a bygone era whereby the whole world would have been dragged down into a global economic depression, the strength and independence of the international economy is now clear. We see sovereign funds from the Middle East, China and Singapore snapping up good deals in the US (buying nice chunks of troubled American financial institutions for a good price). We also see the emerging markets still holding their ground. We hear whispers of ditching the US dollar for oil trading, in view of the spiralling fall of the US dollar and the corresponding crescending rise in oil prices. Interesting times indeed.
As to its effect on me personally, well, work somewhat slowed down in my last days doing credit work. However, after much consideration and discussion, I have now permanently joined the Capital Markets group at my firm, having completed my three 6-month rotations (in Capital Markets, Mergers & Acquisitions and Credit). Convertible debt is definitely one of the popular ways to raise capital now. PIPEs, RDs and rights offerings are also resurfacing. Cash-rich strategic acquirers are stepping up their buying again, after being sidelined in the last few years by private equity firms with their huge leveraged buyouts.
So I am still busy in Capital Markets. Now that I am no longer a rotating junior associate, I am expected to take up more substantive and challenging work. This has a bit of a learning curve, but I definitely prefer it and welcome the challenge. My friend suggested that this is also inspired by a psychological shift in my mindset. I think he is right. My mark-ups of documents drafted by opposing counsel have suddenly become a lot heavier and supposedly a bit more meaningful (or so I have been told). I am more confident in addressing incessant technical questions from clients. It is all good.
Also, I am now better able to manage my time. I try to make time to properly enjoy all that New York has to offer. Sipping milkshakes in a park, spending hours in a dusty second-hand bookstore and trying Tibetan cuisine – all in one weekend! A flamenco dance performance by the masterful Pilar Rioja, a hitherto unpublished play by Mark Twain (Is He Dead?) and a splendid concert by the very talented students of the celebrated Juilliard School are some of the performances that I have attended recently. This is the life. If only income taxes were lower … sigh.
How could I write on without touching on my beloved homeland, Malaysia? My friends do not believe me when I say I read Utusan Melayu everyday. It is very interesting to see their views on things, especially the editorials, opinion pieces, choice of emphasis in news and selection of published letters. I read Malaysiakini to know what is really going on.
Malaysia recently completed its general election. The hitherto unchallenged dominance of the ruling coalition (Barisan Nasional) has been broken for the first time. They retained control of the federal government (only with the support of East Malaysia, which they take for granted all the time!), but lost five states (including two key economic centers and essentially the federal capital). Much has been written about this, and I certainly do not wish to offer my personal analysis. I would make only two observations.
First, I believe that many analysts are correct in saying that this was more of a protest vote against the ruling coalition, than a vote of support for the Opposition. A few major national issues like the rising cost of living, increasing crime rates and the perceived rise in corruption have really hurt everyone. The untempered racism and wanton arrogance of UMNO (the backbone party of the ruling coalition) has clearly gotten out of hand and are alienating all non-Malays and many educated and moderate Malays.
Second, I would nonetheless argue that the Opposition has a chance to transform this “protest vote” into a vote of support. They need to run those states really well. They need to show everyone clearly that they are different and would do things differently from the ruling coalition. Equally importantly, they need to stop or at least hide their politically damaging inter-party bickering. It has become increasingly obvious that the ruling coalition’s greatest fear and nightmare at this point is the Opposition governing really well and impressing all Malaysians. This is not to say that I am an Opposition supporter – I certainly have not made up my mind on that issue. However, I strongly believe that this move towards a two-party political culture in Malaysia is good and necessary for us in the long run. The concepts of checks and balances, the separation of power and transparency are crucial to a functioning and meaningful democracy.