It Was A Very 'Bad Month'

On early september,
It was a very bad month,
A very bad month for KMC,
Our college is derecognised,
by Indian Medical Council,
Our future is uncertain,
It was a very bad month.

On late Spetember,
It was a very bad month,
A very bad month for local Christians,
Churches being robbed and destroyed,
Christians became refugees,
Our faith is being tested,
It was a very bad month.

On early October,
It was a very bad month,
A very bad month for Adriana,
She got a car accident,
Her boyfriend drank and drove,
She had head injuries,
Being treated in ICU,
It was a very bad month.

On early October,
It was a very bad month,
A very bad month for Alok John,
Our dear hostel mate and dear friend,
Who died in his room,
Actual cause still unknown,
Who'll be missed always,
It was a very bad month.

p/s: sing this according to Frank Sinatra's 'It Was A Very Good Year', in a solemn and sober tone..

Money For Nothing

All of us (i mean those who are constantly updated with world news and scenarios, not referring to book-worms or idle or self contained people), knows the world economic is under crisis, a very very big crisis.. However, the news are always full of financial terms and digital digits, making most of the Tom, Dick and Harry scratching their head and then turn away from reading and understand further. It's quite difficult to understand the whole situation in US economic, as i myself thought almost impossible to, but for the sake of my friends, i will make up a story very easy to digest and getting to know the whole picture.

Imagine, in 1998, Kelvin, in US, a newly graduate from college, just started to step into the working world, wants a personal car, a nice private apartments, many high tech gadgets and in a period of dating a girl. So he went to the housing departments and saw that the houses are very cheap, and it's rumored to rise in price in the future, so he went to a local bank A and also saw that the newly set loan deal is very loose, plus the interest rate is really low(due to faulty government policies), so he borrowed a large amount of money to buy a big bungalow, a sport car, and also applied a credit card to buy whatever gadgets he wants and spend all he wish with his girlfriend.

10 years down the line, in 2008, the interest rate which was very low in the first few years, started to became higher. Unable to clear his debt, he just kept dragging and do not pay back the money he borrowed, still owing the bank a large amount of money. Besides, the house prices which was rising all these while, suddenly dropped (due to too many sales of cheap houses in the past 10 years), making him impossible to alternatively to sell off his house to earn some money eventually pay off his debt. At the same time, oil prices had increased, making everything that were on his wish-list became too expensive to buy due to inflation. So, he was declared bankruptcy.

Imagine 5,000 Kelvins are there, 1 Kelvin borrowed 1 million, it will come up to 5 billion borrowed from the same local bank A. So bank A is in trouble, with all their lent money not coming back, so in order to continue their business and maintain liquidity, bank A borrowed from a bigger bank B. 10 banks similar to bank A borrowed from bank B, so bank B in trouble also, so B borrowed from Federal bank C, then C borrowed from D of another rich country, and this trait continues, and so, the whole world are in what we call a "credit crisis". The whole world is 'owing money' to one another in a big circle. We refer Kelvin as "subprime mortgage", a risky and lowly paid money borrower. So, as the credits of banks increases to a very large magnitude, some big companies are bankrupt (eg Lehman Brothers, one of the biggest investment bank in US); AIG (a super big insurance company) is in big crisis and have to sought loans from Federal Reserves; Meryll Lynch (another top 5 investment banks) have to be purchased by Bank of America; mortgage lenders Fannie Mae and Freddy Mac were placed into conservatorship. So, the stock of US plummeted like hell, and as US stock (which consist of 21% of world stock) is in a Bear Market, the whole world economy suffered greatly too and get pawned by the same bear's paw.

Oil price is tremendously high, making food prices increase as well, and inflation went on to record a new high. Currently, 63,000 US citizens had lost their job. A man without a job, his/her buying power will drop. As demand is low, and importation from other countries decreased, and so the economic of the other countries dropped together.

What are the US government planning now? A 700 billion bailout. Bailout means the government taking out their own national treasury money to buy up all the rubbish assets of big banks and big companies, helping them to lessen their credit burden so that they'll have more liquidity to resolve their financial issue. However, is it a sure success? Very unlikely. We shall see how it turns out. It might help to strengthen the economics, and at the same time might also lead to a recession. Recession means the output gross of a country is 0 or negative, means no productivity at all, the country doesn't grow but fall, and many more citizens, investors will die

Personally, my Public Mutual Fund in Malaysia became few cents left; my ICICI-Prudential Mutual Fund in India lost quite an amount already; Indian rupee's value dropped like hell (1 USD=47INR now); ICICI Bank (the biggest private bank in India) is under crisis still holding all of our JPA money inside.

So, how we, as timid consumers, can do to prevent ourselves from being sucked up by the crisis?

1. Do not invest on stock market or mutual fund or warrant or debt fund right now.
2. Save, save, save on everything. Do not buy unnecessary items.
3. Never ever use a credit card in your life, you'll regret later.
4. Buy things through eBay, save transportation, save money, save environment as well.
5. Do not withdraw your money from banks in crisis, so that the bank will be able to resolve their problem with the money.
6. Spend most money here in India while you're still here, because it would be stupid to bring such low Indian Rupee back to Malaysia and loss on currency exchange.
7. Read Rich Dad Poor Dad, learn more about how money works.
8. Manage your own money-- spend, save, record at your own will, do not let other people control your money, do not even simply leave the money in Saving Accounts to rot.

p/s: all these writings were totally unprofessional, and were all based on a lame man's shallow thoughts. Personal opinions and feedbacks are most welcomed..