A Good Day to Die [in The Crisis]

Die.... no man! seriously, that's just a bombastic title to distract you [honestly, honour yours and others life]. Now i want to talk something about Indonesian economy again. This time about indonesian company profit.

Well as you my fellow analyst may aware 2007-2008 truly is a golden period for Indonesia, after recovered from a monetary crisis started at 1998, Indonesian firm finally could move on and focus on expansion once again [rather than trying to fix the 1998 mistake], banks credit growth achieve its peak at this period, And it is very lucky for us that the US crisis got it's final breakout on the 4th quarter of this financial year. Assuming the growth was good in the previous quarter, i bet you that there will be a nice amount of shiny golden -great growth- financial statement for this financial year. This could be a good boost to stock market [however the final statement usually out at March].

Look at the fact i gather from detikfinance.com [you can search for the ticker abreviation in Yahoo! Finance [add .jk suffix]] :
- CMNP gain IDR 92 bn for it's 3rd quarter profit [76% from target]
- Lippo Karawaci had a y-o-y profit growth of 14%
- UNTR book profit of IDR 2 tn for it's 3rd quarter [y-o-y rise for 89%]
- Astra International profit is IDR 9 bn higher that it was on the previous year

Just hope guys!!! this crisis period is not long enough to crush those achievement. I hope in 2009 companies have enough time to fix things destroyed in the current crisis before the annual financial report made [for 2009 financial year].

Remember there is placeto call home

market crash ?! lost saving for big bucks bet in stocks market ?! you short stocks which freezed for weeks?

that's all been bugging many of us lately. With the volatility of market, everything can be happening in the next few second. That's definitely something not good for your health. Tell me if i'm wrong, but just like the common understanding high risk high gain, those high gain stock broker jobs you live in daily life DOES give you a high risk for a heart attack. Do gain that much problem for you? Do gain is everything in your life? (same happen to cut loss ^_^). Maybe, just maybe we should try to relax back, give a second to our rusty brain to understand, at last we all gonna go to our home when EOD is coming.

if home is websites, which sites will you called home? in my sparetime during this rushour i find this http://www.raptureddreams.com , well she's from canada you know! i wonder if canada hit by this global financial turmoil. Read her blog make me feel much more relaxed, that someone is still live her life out there. Doing reading books, watching movie, go to vacation site (she talks about Niagara Falls too ^_^).

these days I've been read more than enough about how market's going down and how it can down DEEPER, god help, have mercy on us trader and broker, is this punishment for us capitalist or is this your mercy giving us chance to look beyond our cramped cubicle, that's life out there.

fellow analyst, broker and trader..........remember, we still alive

Bliss and Bless: Indonesian Economy vs US Subprime crisis

Saving by Moslem's Holiday indonesian market did not experience any massive volatility caused by crisis in US. last night (05-10-2008 approx. 11 PM) I watch press release by Indonesian ministry of finance, ministry of economy and central bank. It's kinda to state that government has perfect insight of the crisis and fully aware of it's impact possibility upon indonesian economy.

Central Bank Governor Mr. Boediono stated that the crucial part of surviving the crisis was :

1. maintain a positive current account (by expanding export and limit import)
2. maintain a sustainable credit growth (current credit growth was 36% y-o-y, central bank sees that it needs to slow down to approx. 6% y-o-y, this policy most likely to anticipate liquidity squish caused by market conservatism upon the crisis).

as far i can understand, i'm fully agree with government about the current condition, we're still good to go but we should anticipate for contagion effect, in this case by fighting liquidity squish both for domestic currency (by limit credit expansion) and foreign currency (by promote export).

If you ask me what next, to be honest i do not know. Since that's all depends on the market now. Depends on the result of maintaining current account we will see up and down in rupiah's exchange rate that's for sure. And depends on the credit growth reform we will see (in my opinion) slowdown in economic growth. But how the swing up and down is completely up to the market to decide. Yes, please play safe these days, there are panic people out there, and it is a bliss and bless for us not to be panic (now).

:: sub prime mortgage and Indonesia

Sid H. Kusuma as published by detikFinance write a comprehensive resume on Sub prime Mortgage in US economy.

For the rest of you who didn't familiar with the topics, let's start with the linguistic terms. To put it simple, Sub prime Mortgage is a mortgage given to a sub prime debtor. in US, mortgage debtor was also rated (that's not happen in Indonesia). The credit firm heavily depend on 3rd party scoring company to classify the fitness of any mortgage application. there is FICO method for example, it give mortgage score of 300 to 850 on account of [1] Payment history 35% [2] Amount Owed 30% [3] Length of Credit History 15% [4] New credit 10% and [5] Type of Credit Used. Sub prime debtor is a debtor with FICO rate less than 620.

Sub prime debtor is a high risk debtor, to overcome this matter credit firm then compensates the high risk profile with higher interest rate as insurance of credit stream in accordance to higher risk higher return philosophy. High interest rate however is hard to sell, since people within sub prime area had less money to pay the interest rate, to overcome this, then credit company develop a product that is affordable by sub prime debtor at least in the earlier year of debtor payment period. The most famous scheme for sub prime mortgage in US is 2/28 ARM scheme in which 75% of Sub prime Mortgage originated, it has 2 years of lower (read: teaser) rate then after 2 years it become adjustable rate.

Problem with sub prime mortgage happen after the teaser period or the 'helping part' is over. Since the idea of teaser period was giving debtor opportunity to increase the quality of their financial performance so they could coup with the interest rate of their mortgage. But, what will happen if their financial strength didn’t get any better? This is the cause of Sub prime Mortgage crisis in US. After certain period of time, the credit quality plummeted, because debtor cannot pay their increasing installment.

The complexity of US economic allows this crisis to be delivered through contagion effect to overall country’s economic condition.

Indonesia not directly affected by this crisis since no Indonesian firm have significant investment on this sub prime mortgage and no Indonesian firm have significant investment on any company affected by the crisis.

But however, the crisis affect Indonesia too, the extraordinary volatility of exchange rate and stock market showing that Indonesian market not immune from the crisis’ contagious effect. Notably, Drajad Wibowo, a legislator at DPR (Indonesian parliament) have comment on sub prime crisis effect upon Indonesian economy that Indonesian economic growth would be lower than it is as predicted by Indonesian government. He said that government prediction of 6,8% of economic growth seems to be impossible, it is appropriate to say that Indonesian economic growth in 2008 only on 6,1% figure.

It is very reasonable for Dradjat Wibowo to say such opinion, since US as world largest consumer basis also consume Indonesian product. By the crisis, inflation are high, rates increase will slow people consumption in US, and if consumption is slow, demand for Indonesian product will be slower too.

:: For fun - Bear Stearns Rhapsody

It's not something about Indonesia,but still this post is something interesting to be shared. I found this post on Ahli Keuangan mailing list. For my introduction,it is about Bear Sterns having bought at cheap price by JP Morgan.

Bear Stearns Rhapsody
(using Queen's Bohemian Rhapsody tune)

Is this the real price?
Is this just fantasy?
Financial landslide
No escape from reality

Open your eyes
And look at your buys and see.
I'm now a poor boy (poor boy)
High-yielding casualty
Because I bought it high, watched it blow
Rating high, value low
Any way the Fed goes
Doesn't really matter to me, to me

Mama - just killed my fund
Quoted CDO's instead
Pulled the trigger, now it's dead
Mama - I had just begun
These CDO's have blown it all away
Mama - oooh-hoo-ooo
I still wanna buy
I sometimes wish I'd never left Goldman at all.

(guitar solo)

~~~

I see a little silhouette of a Fed
Bernanke! Bernanke! Can you save the whole market?
Monolines and munis - very very frightening me!
Super senior, super senior
Super senior CDO - magnifico

I'm long of subprime, nobody loves me
He's long of subprime CDO fantasy
Spare the margin call you monstrous PB!
Easy come easy go, will you let me go?
Peloton! No - we will not let you go - let him go
Peloton! We will not let you go
(let him go !)
Peloton! We will not let you go - let me go
Will not let you go
let me go (never) Never let you go - let me go Never let me go - ooo
No, no, no, no, No, NO, NO ! -
Oh mama mia, mama mia, mama mia let me go
S&P had the devil put aside
for me
For me, for me, for me

~~~

So you think you can fund me and spit in my eye?
And then margin call me and leave me to die Oh PB - can't do this to me
Just gotta get out - just gotta get right outta here

Ooh yeah, ooh yeah
No price really matters
No liquidity
Nothing really matters - no price really matters to me
Any way the Fed goes.....

:: the closing of Adam Air

To be frank, i hate Adam Air,the management to be precise. It's misconduct for flight safety (search Google for PPRuNe forum then look for Adam Air topics), the infamous ground handling, and foremost it's conspiracy that i presumed there is.

Being a mid-level income people, yes i do thank for the presence of LCC in Indonesia. Garuda, the full-serviced airline price surely will kill my saving account. But it is not like that i will gave my life upon the price (these point is debatable for Indonesian LOL). Now for Adam Air topics, there is some point's i'd like to strengthen about it's closing.

[analyst mode : on]
1st of all, i'd like to say that, my feeling gave me the chill that there is some ill purpose on Adam Air closing. To put is simple it was :

1. First Lie, in it's management press release. AA Management gave a statement that this closing was due to bhakti investama (50% shareholder) went out of Adam. This is in my opinion was truly a lie. Being a 50% shareholder mean that bhakti does not own majority in stock ownership, mean that bhakti could not easily take it's investment out of a running company like a finger snap, bhakti could sell it's ownership (which is not happen) to claim it's money. The proper statement to be announce should be bhakti did not agree to inject fresh money into the company. Bhakti said, this was due to AA lack of financial disclosure, that is suspicious (bhakti said that they have evidence some cash missing from the cash account).
2. Second conspiracy, is there anyone notice why AA choose to announce its closing around tha peak hour (there is 4 days holiday near its closing). I presume they want to cash out as many as they can from pre-order, pre-payment ticket. And do we notice that they have some unpaid liability about insurance, airport payment and plane fuel, which sum up to be near IDR 200 Bill (about $20 Mill), is this figure a 5 fivedays liability or this airline has plan this closing (read:cashout) carefully?
   

This topics is truly interesting that it is giving me some desire to do analysis on its financial statement. pity then, since it is not a public company then it's financial statement not release to public. But.......is there anyone out there able to giving me the fun (read : financial statement), please contact me in person.