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State governments are drowning for two reasons: 1) obligations to public employees; 2) the state share of medicare and medicaid spending. Most states are now beginning to confront the public employee problem by reigning in the some of the worst abuses of overly lavish pay and benefits (teachers top the list, by the way). Only Republican Governor Bob McDonnell of Virginia has opted to pour on more lavish benefits for public employees and leave the taxpayer to pick up the tab, but he is an outlier. Governor Christie of New Jersey has led the charge to begin to curb the enormous pay and benefits of public employees. Other Governors, Democratic and Republican, are following Christie's lead. Even President Obama has entered the fray by freezing public employee pay for two years in a symbolic gesture toward sanity. But, there is much to be done. California's off-balance sheet pension liabilities are estimated to exceed $ 1.5 Trillion (those numbers are not in the budget, which ...

First Greece, then Ireland. Now all eyes turn to Portugal, Spain, and Italy. Little noticed is that neither and France and Germany are likely to survive some type of default on their own sovereign debt. A combination of bad economics, a bad economy, and the tide of demographics will sink both France and Germany in time. The idea that you can paper over the problems in the PIIGS (the new name for Portugal, Ireland, Italy, Greece and Spain) is ludicrous. Much of the PIIGS sovereign debt is held in German and French banks. Merkel and Sarcozy think no one knows this, I suppose. But, in fact, the world markets know everything. Just watch bond yields on European sovereign debt. The are beginning the slow, inevitable surge toward infinity. (You reach infinity when the bonds are completely worthless. Europe has no real shot other than defaulting and the sooner the better. Ireland will probably be the first. They will renounce their guarantee of bank bondholders and that will begin a ...

The government has endorsed a new plan of tax incentives proposed by Petronas which will be incorporated in the Petroleum Income Tax Act , Prime Minister said today. “By lowering risks and increasing the rewards for investment, this initiative will potentially lead to additional petroleum-generated revenue of more than RM 50 billion for Malaysia over the next 20 years” he said when announcing 9 new developments and Entry Point Projects of the Economic Transformation Program. Najib said there would be a notional trade-off of about RM 8 billion in the form of revenue foregone from investment tax allowances, reduced tax and the export duty waiver for marginal fields. The 5 new incentives are:- Investment tax allowance of capital expenditure. Reducing tax rate from 38% to 25% for marginal oil field development Accelerated capital allowance of up to 5 years from 10 years. Qualifying exploration expenditure transfer between non-contiguous petroleum agreements with...

Yet, another lesson could be learned in Bursa Malaysia last week. In the midst of series of corporate activities happening, how could you left out QSR Brands Bhd and its jewel KFC Holdings (M) Bhd (QSR holds 50.6% of KFCH)? Below is the important date and announcements made:- 19th Nov : QSR received a take-over proposal, but in preliminary stage (closing at RM5.76 ) 20th Nov : Halim Saad was said proposed to take-over QSR at RM5.60 per share only 21th Nov : QSR shares dive 6.4% to RM5.39 25th Nov : US private equity fund Carlyle Group make an RM6.20 offer for QSR shares For me, there are some very strange things happening, especially on the timing of announcements. Halim's real announcement was made on Saturday (20th Nov) on Bursa Malaysia website. Saturday? Halim's offer price is lower than the previous closing price. Another offer came few days later, which commands a much higher premium . QSR's recent share price movements What does this reflect? Would someone tryi...

Beware, especially KL people. There is a famous " Ipoh bean sprout chicken rice " which do business in its own way - unethical . And, for your information, this restaurant have many outlets in KL. I am wondering how it can expand so rapid with the experience of mine as below:- The story... Last night, I went for dinner at this outlet in Puchong. Here is my order: One white chicken rice. And, I stressed that I want the " normal " one. One Ipoh chicken Hor Fun. However, it turned out as following: One famous " farm chicken " which cost RM1 more. One Ipoh chicken Hor Fun with beef balls (sure more expensive la...). When I confront with the waitress, who took my order. She said: "Oh... We have changed the menu , and we only have Ipoh chicken Hor Fun with beef-balls or fish-balls. Since we do not have fish balls already, I just give you beef-balls today." Picture by Rasa Malaysia After charging the bill, I complain to the manager. Because, this is not...

Public Islamic Infrastructure Bond Fund is an Islamic bond fund that seeks to provide annual income to investors through investments in sukuk of companies in the infrastructure sector. The fund allows investors to access the sukuk market, which is usually inaccessible to the average investor as it is a market for institutions where the standard transaction lot is RM 5 million. Sukuk issued by companies in the infrastructure sector are generally underpinned by predictable cash flows and stable income stream over the respective issuer's concession period. Example, companies with power plant concessionaires, telecommunication service providers, toll-road concessionaires and port operators. The fund invests up to 98% of its NAV in a portfolio of sukuk of companies involved in the infrastructure sector and the balance of its assets in Islamic money market instruments. To achieve increased diversification , the fund may invest up to 25% of its NAV in foreign sukuk, which includes Si...

Public Islamic Alpha-40 Growth Fund is an Islamic equity fund that seeks to achieve capital growth by investing up to a maximum of 40 selected Shariah-compliant blue chip stocks, index stocks and growth stocks listed primarily on Bursa Securities and regional markets. The fund adopts a more focused investment strategy and is able to achieve potentially higher returns over the mid to long term as it concentrates its investment in a portfolio of not more than 40 stocks. Currently, 88% of securities listed on local bourse are Shariah-compliant representing about two-thirds of Bursa Malaysia's market capitalization. The equity exposure will generally range from 75% to 98% of its NAV. To achieve increased diversification , the fund may invest up to 30% of its NAV in selected foreign markets, which include Singapore, Taiwan, South Korea, Japan, Australia, New Zealand, Hong Kong, China, Thailand, Indonesia, Philippines and other markets. Source: Public Mutual