Tuesday, August 30, 2011

The Incredible Growth In Malaysian CEO Pay

  • It’s ALL about the money, money, money
    We just need your money, money, money
    We just wanna make our world dance
    It's all about the Price Tag
That's my modified version of the song sang by Jessie J. Love that song.

Now here's an article published on Aug 2004 by Bernama news.
  • August 02, 2004 21:28 PM
    Malaysia's Directors Paid More Money In 2003

    KUALA LUMPUR, Aug 2 (Bernama) -- Directors of Malaysian public-listed companies are generally paid more money in 2003, given the improving economy and rising profits, according to a survey on directors' remuneration carried out by Malaysian Business magazine.

    The survey finds that there were more millionaire directors last year compared with 2002 as more top executives earned bigger bucks, Malaysian Business said.

    Top executive directors of companies such as Safeguards Corporation, IJM Corporation, Malaysia Airlines and Choo Bee Metal saw their pay packages hitting seven-digit figures.

    Meanwhile, their counterparts in IOI Corporation, Star Publications, Hwang DBS and Maxis Communications also enjoyed hefty hikes, as these companies enjoyed increasing profits, Malaysian Business said.

    The survey, which entered its third year, studied 548 companies which paid RM300,000 and more per annum to their highest paid directors.

    In total, these companies paid out a whopping RM1.13 billion to their directors in 2003.

    Malaysian Business said that Corporate Malaysia's highest-paid director is from Genting Bhd (Genting's chairman/president and chief executive officer (CEO), Tan Sri Lim Kok Thay who gets between RM40.15 million-RM40.20 million).

    "His remuneration package within the RM40.15 million-RM40.20 million band makes him possibly one of the very few, if not the only Malaysian director, to take home an eight-digit figure compensation," it said.

    The second highest paid director is from Resorts World, a subsidiary of Genting Bhd, whose compensation is in the RM16.65 million-RM16.70 million band. (Resorts World chairman, president cum CEO, Tan Sri Lim Koy Thay (RM16.65 million and RM16.70 million),

    These payouts, however, might have been paid to the same person taking into consideration the possibility of double counting.

    Ranking third is an executive from Berjaya Sports Toto, who earned a compensation package in the RM8.15 million-RM8.20 million band (Berjaya Sports Toto CEO, Tan Sri Vincent Tan gets between RM8.15 million-RM8.2 million).

    IOI Corporation dished out between RM6.90 million-RM6.95 million to its top executive putting him in fourth place (IOI Corporation executive chairman, Tan Sri Lee Shin Cheng (RM6.90 million-RM6.95 million).

    The fifth spot is taken by a director of IOI Properties, a subsidiary of IOI Corporation, with a remuneration of RM6.90 million-RM6.95 million (IOI Properties' executive chairman Tan Sri Lee Shin Cheng (RM6.90 million-RM6.95 million).

    Again this payout may have been paid to the same person, the magazine said.

    Malaysian Business also said that while the mountain of wealth got larger for some, there were also directors who took sizeable pay cuts in 2003.

    But more peculiar were the instances of directors being paid top dollar although the companies they helm fell further into the red or are in the Practice Note 4 category, which groups companies with negative shareholder funds, it said.

    The magazine said this phenomenon highlights a troubling issue about directors' remuneration in Malaysia -- that there is generally an absence of a link between company performance and directors' remuneration --.

    Nevertheless, it said that more companies have displayed good transparency standards by going beyond the minimum requirement to disclose the exact amount paid to each of their directors last year, but these companies still remain in the minority.

    "Strangely a handful of companies, which took that extra disclosure step in 2002, regressed to the minimum requirement of `band-width' disclosure in 2003," Malaysian Business said.

    Others in the list are:

    Star Publications (Malaysia), group managing director and CEO, Datuk Steven Tan Kok Hiang (RM6.35 million-RM6.4 million), Hwang-DBS (Malaysia), executive chairman and managing director Datuk Seri Hwang Sing Lue (RM4.42 million) Rashid Hussain executive chairman, Datuk Sri Sulaiman Abdul Rahman Taib (RM4.3 million- RM4.35 million).

    RHB Capital executive chairman, Datuk Sri Sulaiman Abdul Rahman Taib (RM4.3 million-RM4.35 million), MK Land executive chairman, Tan Sri Mustapha Kamal (RM3.652 million), Public Bank non-executive chairman Tan Sri Teh Hong Piow (RM3.65 million-RM3.7 million).

    Yu Neh Huat executive chairman, Datuk Dr Yu Kuan Chon (RM3.6 million-RM3.65 million), Landmarks managing director, Mohamad Abdul Halim Ahmad (RM3.1 million- RM3.15 million), PPB Group executive chairman, Ong Le Cheong (RM3.1 million- RM3.2 million), Edaran Digital Systems executive director, Mohd Shu'aib Ishak (RM3.05 million-RM3.1 million), Malayan United Industries chairman cum CEO, Tan Sri Khoo Kay Peng (RM2.9 million-RM2.95 million).

    Berjaya Group chairman cum CEO, Tan Sri Vincent Tan Chee Yioun (RM2.85 million-RM2.9 million), British American Tobacco (M) executive director, Russell Scott Cameron (RM2.812 milion), Berjaya Land CEO, Datuk Robin Tan Yeong Ching (RM2.8 million-RM2.85 million) and DRB-HICOM group chairman, Tan Sri Mohd Saleh Sulong (RM2.60 milllion-RM2.65 million).

    Malaysian Business, the country's premier business magazine published by Berita Publishing Sdn Bhd, also features every year the country's 40 Richest Malaysians and the MB100 list, comprising the choicest companies on Bursa Malaysia.
Early this month, the following article was published on Business Times. ( Would you care to compare some of the figures then and now? )
  • Top ringgit for head honchos

    By Roziana Hamsawi Published: 2011/08/17

    The top 20 companies on Bursa Malaysia forked out RM455.6 million to directors last year in terms of total payout, up 22 per cent from 2009.

    KUALA LUMPUR: Directors in public-listed companies got paid more last year compared to the year before.

    Malaysian Business, in an annual survey of the "highest paid directors" published in its August 16 issue, said the top 20 companies on Bursa Malaysia forked out RM455.6 million last year in terms of total payout, up 22 per cent from 2009.

    Out of more than 600 companies surveyed, close to 270 directors raked in more than RM1 million in remuneration in 2010.

    The survey lists a total of 630 companies with remuneration band of RM300,000 and above as stated in their respective annual reports.

    Malaysian Business noted that only a handful of the companies were transparent in stating the exact remuneration of their top executives.

    "Interestingly, several companies with huge losses still rewarded their directors with huge payouts," it said in a press release yesterday.

    Genting Bhd topped the list with a big payout of RM111.48 million to its board, 21 per cent higher from the previous year.

    IOI Corp Bhd came in second with a total payout of RM56.29 million, 71 per cent more from the year before.

    Genting also had the highest remuneration band of RM106.65 million to RM106.7 million for a single director but did not name who the director was. The top executive listed is its executive chairman/chief executive officer Tan Sri Lim Kok Thay.

    Other companies with the highest remuneration band for a single director were IOI Corp, which paid out a remuneration band of RM53.05 million to RM53.1 million to its highest ranking director. This was higher compared to RM25 million to RM30 million it paid out in 2009, presumably to its director and founder Tan Sri Lee Shin Cheng.

    Genting's subsidiary, Genting Malaysia Bhd, which paid out more than RM42 million to its top executive, took the third spot.


Sunday, August 28, 2011

And PMI Minorities Are Rewarded So Handsomely With This Privatisation Offer

Remember:

  • "Pan Malaysian Industries Bhd (PMI) yesterday told Bursa Malaysia that it had received an unconditional takeover offer from a consortium of three companies at a cash offer price of 4.5 sen for each offer share."
Remember:
  1.  18 May 1993. A 4 for 1 rights issue at 80 sen.
  2.  31 Jul 1998. A 1 for 1 rights issue at 50 sen.
  3.  19 Jun 2000. A 1 for 1 rights issue at 55 sen.
  4. And lastly it had a 2 into 1 share consolidation.
Here's a simple question.

Has the minority shareholder being rewarded handomely by this 4.5 sen offer?

Let's look at a simple study where I assume a minority shareholder, named Ah See, owns 1000 shares of PMI at 0.50.

Ah See initial investment is rm 500.00

Let's see what happens to Ah See if Ah See held on as a minority shareholder till this very day.
1. 1993: 4 for 1 rights issue at 80 sen.

So Ah See's 1000 shares becomes 5000 shares.

Ah See tops up 3200.00

2. 1998: 1 for 1 rights at 50 sen.

So Ah See's 5000 shares becomes 10000 shares.

Ah see tops up another 2500.00

3. 2000. 1 for 1 rights issue at 55 sen.

Ah See's 10000 shares becomes 20000.

Ah See tops up 5500.00

Shares are then consolidated. 2 into 1.

So Ah See's number of shares shinks to 10000.00

Total top up 11,200.00

Initial cost 500.00.

Total investment: 11,700.00

PMI now gets privatisation offer at 4.5 sen.

Ah See own's 10000 shares. That means he will get 4500.00  450.00 ( oops! One zero too much! ) back if he accepts this privatisation offer.

Gulp!

Errrrr...... errrr...... errrrrrr...... do you think Ah See got rewarded handomely or do you think Ah See got screwed?

And What About The Shambolical Effort To Take PMI Private?

Posted on CGMalaysia.blogspot : PMI: a sad story for Minority Shareholders

  • "Pan Malaysian Industries Bhd (PMI) yesterday told Bursa Malaysia that it had received an unconditional takeover offer from a consortium of three companies at a cash offer price of 4.5 sen for each offer share."
  • The "infamous" GO (General Offer) with "delisting threat" against which Minority Investors hardly have any chance to fight unless they don't mind ending up with shares in an unlisted company (and even then their shares could be Mandatory Acquired). The price is only 4.5 sen, that sounds like a bloody shame, the share traded routinely higher than that, even in 2011:




    In the past 10 years several right issues which equal to negative dividend payments (from the investors to the company, if people don't subscribe they get further diluted at a low price). It booked routinely losses but due to the tight control through its Majority Shareholder it could not change its management, hoping for a new team to restructure the company.
I would like to highlight the rights issue.
 
1. 18 May 1993. A 4 for 1 rights issue at 80 sen.
2. 31 Jul 1998. A 1 for 1 rights issue at 50 sen.
3. 19 Jun 2000. A 1 for 1 rights issue at 55 sen.
 
And lastly it had a 2 into 1 share consolidation.
 
How?
 
You think minority shareholders are laughing all the way to the bank with this generous offer of 4.5 sen?
 
Ps; Try reading this posting dated 18 Dec 2007: PMI's rescue package
 
And also this posting dated 19 Dec 2007: What about MUI Ind?

Saturday, August 27, 2011

Should JCY Be Worth 22 Sen Or Lower Now?

So JCY announced its earnings and it was really poor.


Remember the posting Is RHB's Downgrade Of JCY And Fair Value Call Of Only 22 sen Too Harsh?

Let me produce the screen shot again:



RHB, back in Feb 2011, felt that JCY should be downgraded to 22 sen based on the earnings estimate of 44.9 million.

And yes based on its share base of 2,044,860,000 shares an earnings estimate of 44.9 million would translate to an eps of 2.2 sen only. 

I know RHB then made a FUNKY Change Its Fair Value On JCY! shortly after that incredible downgrade!

Anyway, I find it so ironic now.

RHB downgrade on Feb 2011 was shocking. It was the only research house that said JCY could earn as low as 44.9 million for this fiscal year.

Now let's compare to what JCY is doing..



TTM stands for trailing twelve months earnings and JCY's TTM says that JCY is losing some 34.443 million!

Which means..... JCY is very unlikely to even earn 44.9 million this fiscal year!

Think about it....

RHB said that if JCY could earn some 44.9 million, JCY should be valued as low as 22 sen.

Now? JCY it's very likely that JCY could not earn 10 million this fiscal year!!!

Yeah... and so how much do you reckon that JCY should be worth???

22 sen?

Or lower?
Some other comments.

1. What a shame! Such a performance from a billion dollar company. And this billion dollar company was listed only on Feb 2010. Yet another quality listing on Bursa Malaysia eh?

2. From the first posting on JCY: Regarding JCY International :  "JCY earned some 207 million for its fy 2009. CIMB says times are good in 2010, so JCY should earn some 359 million! And 2011, JCY earnings will be even more super. JCY should earn some 441 million by then!" -- Yes! CIMB had predicted that JCY could earn some 441 million for this fiscal year! .. currently JCY's TTM is a loss of 34.4 million!! How's this for being way off?

3. Same posting: Regarding JCY International.

peng01 said:
  • How much money do JCY raise in their IPO ?

    The total amount due to shareholder is 173mil, and they hav settle it in 9 months.
    Total loan 360mil, where 280mil is short term loan.

    But still able to give 80mil as dividen and buy equipment for 200mil last quater.

    Otak boss JCY rosak ke ?

    ............ you should wrote this article when jcy hit the high of 1.90, 阿弥陀佛。

    So, IPO rm750mil, all masuk pocket YKY investment,

    And jcy shareholder get rm80mil dividen angpow only, and this 80mil angpow paid is borrow from bank.

Putting this issue into current perspective.... how?

My reply back then.

Well, JCY had 'hoped' to raise some USD 350 million from its IPO.


See : So Many Cash Calls In Our Market

But JCY was not lucky. :P

It had to scaled back its IPO. ( I wonder why. :P )

JCY only managed to raise some 750 million.


JCY to slash IPO size on weak pricing

And to put your issue in an even better perspective, do refer this news clip  JCY set to be Southeast Asia’s largest tech IPO


Quote: "Interestingly, the IPO is expected to give a payout to major shareholder YKY Investment Ltd up to RM1.25bil based on the maximum retail price of RM2.00 per share, assuming it is at 5% discount to the placement price and the full over-allotment option is exercised.

The question floating around is: Why is the IPO an ‘offer for sale’ by 74.1% sole shareholder YKY Investments Ltd?"

Ahem!

And yeah... to make it more 'interesting'

For fy ending 30 Sep 2008, amount owing to shareholder is only 5.8 million. The following year, this amount balloons to 173.20 million! ( see page 75 of the JCY's pdf attachment posted on Bursa Malaysia. )

Wednesday, August 24, 2011

So How Now?

Exactly.

:)

Let me try something new.

This is an open post. Got an idea or stock tip to share?

Everyone who is willing to share their ideas and opinions please do post here.... :)


ps: 13845454760825339051 and 08674531928566826301 ... don't bother la.

Perisai And CIMB's Target Price Of 1.60

They keep telling the market the stock is good and the stock should be worth some 1.60.

But the stock is trading at  70.5 sen only.

Is this the big one? Is this the big 'value' stock to bet on?

Ah.. I am talking about Perisai, a stock blogged several times before


And here's the performance of Perisai since Mar 2011. ( Arrow indicates 31 Mar 2011 )


And this is how Perisai is doing on a one year time frame.


So they (CIMB Research) have been telling the market that Perisai is worth 1.60.

Does this price of 1.60 gets anchored into you??

Think about it.

When you look at Perisai the stock, does it becomes automatic for you that Perisai should be worth 1.60?

But... but .... butttttttttttttttt........ what about the reasoning behind the buy call?

What about how CIMB got the Target Price of 1.60?

Think about it...

On 23 June 2011, CIMB released the following report.



Target price raised to 1.60.


The numbers ...........


See the numbers???

Perisai had 10.3 million profit in fy 2010.

Perisai's earnings is then PROJECTED to grow to 46.9 Million in FY 2011, 90.4 Million in fy 2012 and 95.1 Million in fy 2013.

See the massive growth projected for Perisai?

Remember the hefty Target Price of 1.60 is based on the ability of Perisai to deliver such earnings.

Perisai reported its earnings last night. It made some 7.843 million, which represented an increase of 26% when compared against the fy 2010 numbers.

Of course it look impressive...

But.... but.... butttttttttttt...... as impressive as it is.... its current half year fy 2011 net earnings is only some 15.063 million.

Half year net earnings is only 15.063 million??!!!

And CIMB profjection for Perisai's fy 2011 is ................ 46.9 million!

Errr... how?

Isn't Perisai performing well below CIMB's expectation?

Or is CIMB's expectations of Perisai's earnings simply wild?

Well? Take your poison.

And for the record, here's Perisai most recent 4 quarters or trailing twelve months earnings.


How?

Do you think Perisai even make 95.3 million profit projected by CIMB come fy 2013???

Oh as it is... you can see the current half year EPS for Perisai is only some 2.23 sen.

Yes current half year EPS is only 2.23 sen.

And Perisai last traded at 70.5 sen.

But don't you worry, according to CIMB numbers game, they say Perisai is worth some 1.60.

Tuesday, August 23, 2011

KNM: Of Profit Guidance And Corporate Governance

From the posting: And So KNM Reported Its Earnings ..

  • K C said...
    KNM's ebitda for the half year 2011 is 78 m, and if annualized, 156 m. That EBITda amounts to less than half of the management guidance. KNM is a "big head devil". If you look at its earnings, 6 month pretax earnings is 8 m, or just 0.8% of the turnover. What is its ROE? 0.5%! Having more than a billion total debt, it just needs the interest rate to go up by 100 basis points to wipe out any profit! Some more the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price. Do you want to invest in this type of company? KNM is too expensive at 50 sen is one of the most outrages investment understatements of the year
Some more the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price

Flashback March 2008: Some Musings on KNM Reports

In that posting, I pointed out that in RHB's report, RHB mentioned the following:
  • Management is giving guidance that FY08-09 net earnings to be around rm450million and rm700 million respectively.
Let's compare KNM's guidance versus actual performance.
  • fy 2008, KNM made 336.175 million. (KNM guided 450 million)
  • fy 2009, KNM made 257.847 million. (KMM guided 700 million)
And judging from this set of quarterly earnings it looks like KNM will come up very short against its own guidance.

And like K C said..."the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price "

I totally agree!

Its simply shambolic that the management makes empty promises to the investing public!

 And this is not the first time KNM had done this!

So let me ask the gatekeepers a simple question : "Does this represent good corporate governance that a company management makes empty promises to deliver profits to the investing public?"

Think about it..... seriously.

Do you want every single company to make bold statements that they will make XYZ profit but only to fall terribly, terribly short?

Company X will say in their profit guidance 'I will make 20 million' in a briefing to the investing public.. What do you expect the analysts in the briefing to do? Do you expect to come out and say... 'Nah, company X is totally BS!' or 'In your dreams! Those profits are not achievable!'

No you don't!

The analysts would be obliged to value company X based on that 20 million.

And since the 20 million is already a very extremely optimistic guidance, the share price of Company X will have to be upgraded!

But then ... when.... fiscal year comes... that 20 million is no where to be seen!

Now let me ask... has company X made a mockery of the market?

Isn't K C spot on by saying "the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price "



Just to boost up the share price... the company management give the investing public false hope.

And so I ask... does this represent good corporate governance?

Or do you think KNM should be censored for making such wild profit guidance?

How?

I wonder if the gatekeepers are aware of what's happening.


And yeah the earnings again...


Can you see that the pretax profit is less than the after tax profit?

Why? KNM's got a nice fat tax benefit!!! ( Do read past postings )

And if we minus out the tax benefit, can we see how ridiculously small KNM's profits are????

( ps: K C, yeah the balance sheet is actually even weaker compared to its previous quarters. Loans increased, receivables increased a lot.... ) 

Monday, August 22, 2011

And So KNM Reported Its Earnings ..

KNM reported its earnings.


A 6 months net earnings of just '29.8 million'?

Remember this posting on March 2011? What I Think Of KNM's Earnings Guidance

Let me highlight again:
  • KNM’s management had met with analysts earlier in the week and guided earnings before interest, tax, depreciation and amortisation (Ebitda) of RM363 million for its FY11 (ending Dec 31, 2011), while the Ebitda for FY12 is targeted at RM564 million.
Yup, direct from the management own mouth...

KNM would have an EBITDA of rm 363 million for fy 2011.

And looks like the management is 'pretty good with its guidance' once more!

Yup! Strikes again!


Last posting on KNM was on May 2011: KNM: Are you IN it to win IT? Or are you IN it to LOSE IT???

Update On JCY's Earnings

JCY posted its earnings.


That about say it all, yes?

Past postings:
  1. RHB Now Downgrades JCY Again - Fair Value 46 sen
  2. A Quick Look at JCY's Latest Earnings  
  3. Yes, RHB DID Change Its Fair Value On JCY!  
  4. What Do You Look For In A Research Report? Part II  
  5. Good news for JCY?  
  6. Is RHB's Downgrade Of JCY And Fair Value Call Of Only 22 sen Too Harsh? 
  7. How Was JCY's Earnings? 
  8. Quick Update on JCY's Earnings  
  9. Regarding JCY International


How Are The Chinese Listed Stocks In Malaysia Doing?

And here's the performance of Chinese listed stocks in Malaysia since their listing.

China Ouha Winery ( CNOUHA)



K-Star Sports ( see


Maxwell. International: ( see



Multi Sport Holdings (MSports)


Sinotop


Sinotop is messy because it did a RTO (reverse takeover of JMI) and it had a profit guarantee too:
http://www.theedgemalaysia.com/in-the-financial-daily/168636-be-top-gives-rm59m-guarantee-in-sinotop-rto.html.  However, Sinotop failed to perform. See their fy 2010 Q4 earnings link: Quarterly rpt on consolidated results for the financial period ended 31/12/2010. Do read their explanation given.

Sino-Huann ( see


Sozo Global










Sunday, August 21, 2011

Bursa Malaysia Needs To Be Privatised

On Star Bizweek: When the smoke signals are right

  • ...Bursa Malaysia, has an obligation to ensure orderly and fair trading but its officials have said in the past that healthy speculation is good for the market.

    In fact, since Bursa Malaysia is a listed company with a profit imperative, one may be forgiven for thinking that it may be a little reluctant to curb activities that increase trading turnover to which its profits are directly correlated
Healthy speculation is good for the market? Bah!

And yeah... 'Bursa Malaysia is a listed company with profit imperative'..

This issue has been mentioned many times before.

Bursa Malayaisa is a listed entity, a business and sadly for the stock market, this business is there to make money.

And so I ask again, how could Bursa perform as a regulator when its company objective is to make money?

Now Star Biz, Managing editor P Gunasegaram, is questioning this very same issue.

And fellow blogger, M.A. Wind is also addressing this very same issue, http://cgmalaysia.blogspot.com/2011/08/when-smoke-signals-are-right.html
  • Although I admit that investigating these kind of suspicious trading patterns is not that simple, Bursa Malaysia (BM) has a huge pool of employees and a database full with information regarding account holders and trades done. It always stunned me why there was never any enforcement whatsoever on the issue of insider trading. Recently I did notice some rare activity on this area, but the alleged perpetrators only had to pay back their ill gotten gains. A one in a thousand chance to get caught and then only having to pay back the gains? I don't see the rationale for these kind of low punishments at all.
Seriously, the root of the problem lies in the whole structure of Bursa Malaysia.

It should, never been allowed to be a listed entity. It's ludicrous. How could the investing public expect Bursa Malaysia to perform adequately as a regulator when the company focus is to make money?

How could it?

Star Biz, Managing editor P Gunasegaram, questions the issue of insider trading.

Yeah, have we heard Bursa swinging the rotan on insider trading? Have we? Me? I am not aware of any.

Yes, zero. Zilo.

Huh?

That's what I said too. No insider trading here? Seriously?

Take the recent issue on Ranhill where a Ranhill's director bought shares of the company a week BEFORE Ranhill announced that there is a takeover bid of the company. And what do we call such an activity?

My suggestion?

The very first thing that needs to be done is to privatise Bursa Malaysia!

Yes. That's my recommendation.

Bursa Malaysia needs to be privatised.

Take it private!

It has to be removed as a listed entity. It has to be removed as a business.

If that does not happen, there's no chance to see Bursa Malaysia perform as a regulator!!!!

Friday, August 19, 2011

A Quick Look At Smartag's Earnings.

Posted in June 2011.

Smartag announced its earnings last night. It announced it had losses of 1.209 million.

And Smartag is still a fairly new stock in the ACE Market and yes it is trading below its IPO retail price of 31 sen.

For the record again. On 13th April Smartag made 2 earnings announcements!
Q1 - a loss of 386 thousand

Q2 - made 653 thousand.
Q3 - a loss of 1.2 million

And as mentioned in the posting Is Smartag Worth A Bet? , KN had expected earnings for fy 2011 to be 10.4 million! Judging on last night's earnings performance, the chances are great that a net profit of 10.4 million will not be achievable this fiscal year. And this will put the fair vale price of 42 sen given by KN in doubt.


The worrying sign is that Smartag only posted a sales revenue of 14 thousand.

Let's think about it.

Obviously, Smartag is focusing only on the Royal Malaysian Customs project, which makes it a one customer business. If the project is passed and if the project is successful, then perhaps the company will do good.

However, some investors might get edgy with such a business. The business risk is much higher. If anything goes wrong with this project (for example, costing/pricing issues, software/technical issues or change of governmental fiscal policies) the company could be hit badly for it has only one customer. That's the potential business risk.

And to compound the matters worse, the custom project is still not officially announced.

This left me thinking.

Is the investing public aware of this 'one customer' issue?

This made me wonder about the 2 earlier quarterly announcements made in April 2011.

Q1 - Quarterly rpt on consolidated results for the financial period ended 31/12/2010 - Smartag has sales revenue of 1.774 million.

Q2 - Quarterly rpt on consolidated results for the financial period ended 31/3/2011 - Smartag has sales revenue of 3.914 million.

Now those two quarterly earnings painted a totally different picture, yes? There's some business activities going on. It didn't look like a one customer business model.

How?

Before listing, company did not look like a one customer business model and now, after listing, the company turned into a one customer business model.

The perception of the company has changed isn't it?

And if one HAD invested based on the EARLIER set of data, how?

Anyway, from the Q2 earnings, Smartag carried a rather large set of receivables in its books. It had receivables of 11.956 million.

According to its earnings notes, there is MUCH improvement in its collection. Receivables trimmed down to just 2.054 million. It's good that the company manage to collect the debts owed to them. And as a result, the company's cash balance showed a very healthy increase.

Dedicated to  Jollybee .

Wednesday, August 17, 2011

About Gatekeepers And Authorities

Posted on Corporate Governance in Malaysia ( have you bookmark this brand new exciting blog? ) : Step up, gatekeepers and authorities

  • I have myself contacted the Bursa Malaysia (BM) & Securities Commission (SC) several times, and each time was stonewalled. It took literally three years (!) for complaints to get settled, nobody can convince me that that is an efficient way of dealing with these matter. There was no communication at all from the side of the authorities, although the SC promises to give an update every 3 months, they simply don't do that. And lastly, the SC & BM are "hiding" behind the confidentiality rule, a rule that in itself is good, but can not be used as an excuse in each instance not to give out any information. When I submitted a detailed report of many pages with appendices to the SC I received a letter back with one line stating that no rule had been broken, no explanation whatsoever.
That's absolutely disappointing to read to say the least.

I, for one, asks Where's The Enforcement Dude?

Sigh.

Take the latest trading debacle where DRB Went Into A Meltdown During Trading At Close.. Guess Who Came For Dinner. That mighty strange close caused the call warrant, DRBHicom-CE, issued by OSK to go from 'in-the-money' into 'junk'. Of course OSK tried to explain that it has nothing to do with the fat fingers that caused the trading error which crushed the call warrant to bits.

So what's going to be done?

And what about the future? Abolish all these call warrants which does nothing but help seduce the investing public to gamble and not invest in the market? Well if the Gatekeepers and Authorities are not going to do anything about it, how about preventing bankers from issuing call warrants whose settlement price is based on CLOSING DAY prices?

Think about it!

Isn't it insanely ludicrous that a settlement price of a call warrant could be severely impacted by ONE trading error?

And when such a trading error occurs, who does it benefit?

And if the call warrant has such a MASSIVE loophole in it, where does this leads us? More fat fingers trading errors?

Or how about the recent issue on Ranhill, where Ranhill's director bought shares of the company a week BEFORE Ranhill announced that there is a takeover bid of the company???

Is this allowed?

If I complain to the Gatekeepers, would I get the no rule is broken reply?

And what about company doing share buybacks the same period the company major shareholder is selling?

Won't it make a mockery to the stock exchange if such an incident did happen?

Well... sadly... it did happen.

16 Oct 2008: Changes in Director's Interest (S135) - Lee Swee Eng. Two transactions mentioned in that announcement.
  • Acquired 23/10/2008 11,376,000
    Disposed 16/10/2008 72,271,600
Now look at this: Notice of Shares Buy Back by a Company pursuant to Form 28A

Date of buy back from : 16/10/2008

Date of buy back to : 22/10/2008
Total number of shares purchased (units) : 22,190,200
Minimum price paid for each share purchased (RM) : 0.415
Maximum price paid for each share purchased (RM) : 0.690
Total amount paid for shares purchased (RM) : 13,544,216.1

How?

Share buyback took place on the very same day, the boss sold some 72,271,600 shares.

What's your conclusion?

Is this allowed?

Think about it.

......

Anyway,

Tuesday, August 16, 2011

That's 14th Consecutive Quarters Of Losses For Green Packet!!

I wasn't going to blog about Green Packet, despite me glancing thru its quarterly earnings losses last night. It's gonna be a bore because I was so sure that the company would be saying that 'Oh, we recorded less losses... we be E**** positive by this date... blah.. blah.. blah...' ( E**** ? That stands for the EBITDA )

This morning I read the Business Times article...

  • The company, which posted its 10th consecutive quarters of net losses, remained bullish that it will be a "ebitda positive" company by year-end

That was simply appalling and disgusting.

No, not on the ebitda thingy but on the 10th consecutive quarters of net losses.

Why?

That's simply a false statement!

Gee! And to think that we constantly read that internet blogs are of no good and they are not accurate but what about our mainstream media? Are they accurate?

Now I wonder who gave that piece of fact (10th consecutive quarters of net losses)? Was it Green Packet? Or was it the reporter?

Let's have a look.

First its last quarter of 'profit' was announced on 28 Feb 2008: Quarterly rpt on consolidated results for the financial period ended 31/12/2007

Then came the losses!

1. May 21st 2008: Quarterly rpt on consolidated results for the financial period ended 31/3/2008 - loss of 3.354 million

2. Aug 20th 2008: Quarterly rpt on consolidated results for the financial period ended 30/6/2008 - loss of 6.579 million.

3. Nov 14th 2008: Quarterly rpt on consolidated results for the financial period ended 30/9/2008 - loss of 10.894 million

4. Feb 16th 2009: Quarterly rpt on consolidated results for the financial period ended 31/12/2008 - loss of 38.660 million

5. May 22nd 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009 - loss of 22.550 million

6. Aug 13th 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009 - loss of 28.167 million

7. Nov 12th 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009 - loss of 32.869 million

8. Feb 11th 2010: Quarterly rpt on consolidated results for the financial period ended 31/12/2009 - loss of 95.612 million

9. May 13th 2010: Quarterly rpt on consolidated results for the financial period ended 31/3/2010 - loss of 44.753 million

10. Aug 16th 2010: Quarterly rpt on consolidated results for the financial period ended 30/6/2010 - loss of 35.900 million

11.Nov 15th 2010: Quarterly rpt on consolidated results for the financial period ended 30/9/2010 - loss of 28.912 million

12. Feb 16th 2011: Quarterly rpt on consolidated results for the financial period ended 31/12/2010 - loss of 100.112 million

13. May 24th 2011: Quarterly rpt on consolidated results for the financial period ended 31/3/2011 - loss of 37.893 million.

14. And.......................last night's earnings......Aug 15th 2011: Loss of 37.069 million!

There you have it!

That's 14th consecutive quarters of losses!

How did BTimes report 10 consecutive quarters of losses?

Total losses for the period 523.324 million!

Towards the end of the Btimes article:
  • Meanwhile, P1 chief executive officer Michael Lai said that it takes a while for companies in the telecommunications industry to break even its investments and to start making profits.

    "At the end of the day, bear in mind that we are just a three-year-old company. Telecommunications business is about long haul, you can't make profits overnight," said Lai. - By Goh Thean Eu
Yes, of course telco business is about long haul and you probably can't make money overnight. I agree. I fully agree.

But the problem here is...... try to listen back to what Green Packet had been boldly telling the local media all this while.

Just listen to the never ending record....

  • Feb 2008: we expect the WiMAX business to be ebitda (earnings before interest, taxes, depreciation and amortisation ) break-even this year,"
  • May 2008: we are targeting EBITDA positive by end of next year.
  • May 2009: P1 will be EBITDA will break-even from next year.
  • Feb 2010: concurred that will be EBITDA positive in the second half of this year.
  • May 10: the company remained optimistic that it will be able to achieve an Ebitda break even
  • June 2010: Green Packet Bhd’s target to turn earnings before interest, tax, depreciation and amortisation (Ebitda) positive by year-end may be delayed to next year
  • Sep 2010: Puan added that Green Packet is maintaining that its Ebitda (earnings before interest, tax, depreciation and amortisation) will break even by the end of this year.
  • Nov 2010: "We're confident of breaking even no later than the first quarter. Ebitda (earnings before interest, tax depreciation and amortisation) turnaround is really at the corner," chief executive officer C.C. Puan said at a press conference in Petaling Jaya, Selangor, yesterday.
  • Feb 2011: defers its target of being EBITDA (earnings before interest, taxation, depreciation and amortisation) positive to end-2011.
  • May 2011: Green Packet Bhd is on track to achieve its EBITDA (earnings before interest, taxes, depreciation and amortisation) break-even target by this year-end, according to the group's managing director and chief executive officer Puan Chan Cheong.
  • Aug 2011: ... remained bullish that it will be a "ebitda positive" company by year-end
See my point?

If your company understand and know that the telco business is about long haul and you probably can't make money overnight, why keep telling the investing public you will be ebitda positive since Feb 2008?

Isn't this misleading the investing public???

Saturday, August 13, 2011

And Who Is Ruling Wall Street?

Remember this two old postings?

Morningstar Reckons Fund Flows Due To Flash Crash and They Just Don't Trust Wall Street. The video from the first posting again.





Yup that was the day that "More On The Day The Markets Went Nuts". (Do read) and 8 Points And More On Yesterday Plunge

Today on CNN: Computers rule Wall Street

  • Computers rule Wall Street

    By Ken Sweet, contributing writer August 12, 2011: 7:08 PM ET

    Traders said they've seen high-frequency trading volumes jump sharply since the beginning of the month, which may have ampilfied the recent volatility.

    NEW YORK (CNNMoney) -- The computers have taken over Wall Street, and they're taking investors on a wild ride.
    This week, the Dow swung back and forth more than 400 points on four straight days. Trading volume is at or near record levels.

    It's not fast-talking traders on the New York Stock Exchange behind the action. The majority of trading is done on large server farms based in New Jersey and elsewhere.
    "These types of moves are certainly greater than anything we've seen in the last 10 years, and it's absolutely because now the majority of the orders are being done by these high-frequency trading robots," said Sal Arnuk, co-founder of Themis Trading, an independent brokerage firm.

    High-frequency trading, also known as algorithmic or programmed trading, relies on software to determine when to buy and sell shares, usually based on a particular pattern or technical level in the market. These trades can happen several times a minute.

    High-frequency trading makes up 53% of all trading in U.S. stock markets, up from 21% in 2005, said Larry Tabb, president and CEO of market research firm Tabb Group. Other estimates put it even higher, at around 65%.

    Gary Wedbush, executive vice president and head of capital markets at Wedbush Securities, told Bloomberg News on Friday that more than 80% of the firm's orders since Aug. 1 have come from high-frequency trading clients, at five times the typical volume.

    Nearly everyone on Wall Street is involved in algorithmic trading in some form, Tabb said, including large banks, hedge funds and mutual funds.
    "These firms often piggyback on large orders, so it can amplify a stock's movement," Arnuk said.

    Experts don't blame high-frequency trading entirely for the market's nauseating moves, but they say it certainly exacerbates them.

    The Securities and Exchange Commission in a report blamed high-frequency trading in part for the May 6, 2010 "flash crash," when the Dow fell nearly 1,000 points in minutes.
For those interested, do check this one out: http://www.zerohedge.com/news/presenting-todays-21-least-mini-flash-crashes

Friday, August 12, 2011

What About Guan Chong's Earnings

I just read the following clip on


That article was of interest since I had blogged on this company several times before.

And despite what was written, the stock had done remarkably well.








As mentioned in the posting


  • .. gain from commodity future contracts and net fair value gains on foreign exchange derivatives.
Yeah, and if you refer to the previous screen shot http://4.bp.blogspot.com/ we saw that Guan Chong made a lot of money from its commodity future contracts.


This is Guan Chong's latest.


Here's Guan Chong latest info on its derivative contracts.


Some 168 million on forward forex contracts? Err..... wow!

(ps: the commodity futures contracts... its shows a minus.... compare to the previous earnings screenshot here: http://1.bp.blogspot.com/ )

Then I decided to check out the balance sheet.


Piggy bank cash only totals some 15 million.

And mind you Guan Chong owes a bit to its bankers!









errr...... frankly.... for a company that is said to be enjoying its best earnings ever.... I lost total interest and I think you know what I mean.

BTW there's a set of comments that I like to highlight from the posting Update On Guan Chong's Earnings
  • K C said...   Is Guan Chong (GC) an upstream coco processor or a derivatives speculator?

    Looking at Moola's breakdown on GC's profit, it appears that almost all of GC's profit is from coco future (and stocking up of inventory of coco) and currency derivative. A business is wise to hedge against price fluctuation or currency risk in order to have smooth and predictable profit, not for the purpose of an extraordinary gain. In GC's case, when coco price goes up, its coco processing operation will suffer (unless it can pass all cost increase to its client). This loss position will be approximately offset by the gain from its long position in coco, and vice versa. How did GC manage to do so well in this aspect? Pure speculation of course. It was lucky that lady luck was with GC. It could well be the other way around. In short, this type of speculative gain, is no doubt, unsustainable. GC should concentrate on how to improve its efficiency in coco processing business and hence increase its extremely meager profit margin in this operation, rather than embarking on speculation on derivatives.

Wednesday, August 10, 2011

And Baswell Is To Be Delisted on 19 Aug

Here's a short clip on Business Times:

  • Baswell to be delisted on Aug 19
    Published: 2011/08/10

    BURSA Malaysia said trading in shares of Baswell Resources Bhd will be suspended on August 17 and its stock will be delisted on August 19.

    The company, which failed to submit its accounts on time, still has time to make an appeal on or before August 16, Bursa said.
Baswell is now trading at 2.5 sen down 3 sen!

But there's an interesting issue that needs to be highlighted once more.

Exactly a year ago, 10 Aug 2010, the following was posted: Jose Barrock And Baswell Resources

Here's the posting reposted here once more.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Blogged yesterday, Should Our FInancial Media Continue To Spin News To Drive A Stock Up? and blogged the prvious day, Should Media Continue To Spin News To Drive A Stock Up?

And I think the following comment was spot on!

  • tklaw said...
    Spinning story is an extremely profitable business. People would profit million bucks by putting out a few pages of marvellous research within few days. There is no reason not to continue such a lucrative business...
Today I want to show a consequence of such reporting.

On March 15th I wrote the following: Baswell Resources. Now I am going to paste everything from that posting here.

>>>>>>>>>>>>

Yeah, they say news and speculation could drive a stock up but sometimes it makes you wonder when a stock moves before some negative news is released.

Take this stock called Baswell Resources.

Here is the daily stock chart.




Quite hard to make any conclusion from the above chart except that there was one massive surge in January.


Which of course was driven by 'news'... can you say power to the mighty sword from our so-called financial journalist?
  • Takeover on the cards at Baswell?
    Written by Jose BarrockTuesday, 19 January 2010 12:03

    KUALA LUMPUR: Baswell Resources Bhd’s shares hit their 52-week high of 67.5 sen yesterday, before tapering off to end the day at 58 sen, which marks a 4.5 sen gain from last Friday’s close.

    The stock’s closing price is also its highest level since March 2006.

    Also, trading volume on Baswell was unusually heavy yesterday, with some 15.68 million shares changing hands, representing almost a third of Baswell’s 48 million-share base. This
    trend of heavy trading volume started last Friday, when some 4.86 million shares were transacted in the tightly held counter.
    Although not certain as yet, a takeover could be on the cards at Baswell.

    According to shareholding changes filings via Bursa Malaysia Securities, an individual Ng Min Lin emerged as a substantial shareholder in Baswell, after acquiring a direct interest of 5% or 2.4 million shares. According to filings, he had made the acquisition on Dec 24 last year.

    Ng upped his stake to 23% or 11.04 million shares after buying two tranches of 4.32 million shares each for a total of 8.64 million shares on Dec 31 last year and Jan 5 this year. Bursa announcements yesterday, however, showed that Ng had since pared down his stake to 21.9 million shares.

    Pursuant to the filings, Ng could have acquired his stake from Dr Oh Han Cheng or Dr Oh’s spouse Khoo Yew Kheng, who have been trimming their stake in the furniture company.

    Oh is the founder of Baswell, and its executive chairman, while Khoo is Baswell’s managing director. Khoo’s brother Khoo Yew Nean is an executive director of the furniture maker.

    According to Baswell’s latest annual report for FY2008, the trio collectively control some 52% of Baswell. The only other substantial shareholder in the company is Wan Ismail Wan Nik who has 10.52 million shares or 21.91% of Baswell.

    Two board appointments were also made last Friday. Tan Beng Kheng, who is the managing director of Penang-based Seng Seng Construction Sdn Bhd, and Ng’s father- in-law, Datuk Wong Kam Hoong, were appointed to the board in non-executive positions. Wong was formerly deputy minister of culture, arts and heritage.

    A check with the Companies Commission of Malaysia reveals that Seng Seng Construction is controlled by privately held Tan Kiew Seng Holdings Sdn Bhd, and Tan is a director of Seng Seng Construction.

    Seng Seng Construction suffered a net loss of RM1.9 million on RM38 million in revenue for its financial year ended June 2008.


    This article appeared in The Edge Financial Daily, January 19, 2010.

Makes you wonder... why... and how come... our journalist DARE to publish news when they dare to admit that it's not even certain! Doh!

See. The writer dared to say "Although not certain as yet, a takeover could be on the cards at Baswell." Bottom line, there's no concrete proof, yes? It's all uncertain! Why publish news that are not certain? Doesn't this makes our financial news look silly?

Which was followed by this article...
  • Baswell seals RM336m subcontract for Abu Dhabi project
    Written by Financial Daily
    Thursday, 21 January 2010 10:53

    KUALA LUMPUR: Baswell Resources Bhd, which has been the subject of intense investor attention over the past few days, has bagged a US$100 million (RM336 million) subcontract from Hong Kong-based project management and building material sourcing company Metroplex Resources Ltd for a mixed development project in Abu Dhabi.

    Baswell has signed a memorandum of understanding (MoU) with Metroplex to entirely manufacture and install the furniture and fittings of the development.

    The Edge Financial Daily reported yesterday that market talk over the last few days had it that a Middle Eastern job was on the cards for the local furniture maker. Investor interest in the stock had also heightened that substantial shareholding changes could prompt a takeover situation.

    In an announcement to Bursa Malaysia yesterday, Baswell said it would collaborate with Metroplex and the Al-Amry Group to design, build and install a project for the Al Reem Island mixed development.

    “The MoU is consistent with Baswell’s market development plans as the company intends to enter into various collaborative agreements with other parties to enhance its international furniture manufacturing status,” said the company.

    Baswell shares were unchanged yesterday, closing at 76 sen per share with 9.92 million shares traded.

    The company’s share price had soared on heavy trading volume since last Friday. Nearly 24 million shares were traded, and the stock has seen a surge of 114% in its share price since the beginning of the year.

    Changes in substantial shareholdings fuelled speculation that a takeover was on the cards, a rumour that was promptly quashed by Baswell’s board of directors who said the announcements on substantial shareholding changes had been misconstrued.

    Baswell has seen the emergence of new substantial shareholder, Ng Min Lin, who owns 21.86% of the company. The largest shareholder in Baswell is Wan Ismail Wan Nik, who holds a 21.96% stake.


    This article appeared in The Edge Financial Daily, January 21, 2010.
LOL! The Edge Financial should had at least owned up the takeover speculation and rumour was given a massive helping hand by its own 'journalist', yes?

Anyway, this is not what the posting is all about.

This is Baswell's 5 minute charts.

Hmmm... two sudden spikes .... followed by increase in volume after the spike. Would this be the classical "pump up to dump"?

On Saturday, there was this news on Baswell.
  • Saturday March 13, 2010

    Baswell plans capital reduction

    PETALING JAYA: Furniture maker Baswell Resources Bhd has proposed a
    55% capital reduction under a plan to eliminate the group’s accumulated losses and facilitate future fund raising exercises, the company told Bursa Malaysia.
    The capital reduction means its issued and paid-up capital would be reduced from RM48mil, comprising 48 million shares of RM1 each, to RM21.6mil comprising 48 million shares of 45 sen each.
Hmmm... makes you wonder, doesn't it?

Did those 2 spikes happen because of the capital reduction issue?

And needless to say, Baswell is currently trading down on huge volume. At one moment of time, the stock was trading as low as 29 sen, down 9 sen from Friday's closing of 38 sen!

--------------------

Two comments from the posting.
  1. solomon said...
    Pump and dump?? But I think Moolah by having you at Bursa and SC will do more transparency to the market if they are serious abt CG.In Malaysia, good earning stock don't need good news. Most of the stocks in the limelight are normally Titanic to be. I maybe wrong and you are right ya.....
  2. c said...
    i like ur point , these people r 'bought ' b4 they publish the article. think , why they want u to know if something so good happen? they will buy quietly!!
Many months have passed.

Some might have made money in the stock. The unlucky ones? They probably lost a lot!

But the question, I want to raise today is... what happened to the takeover speculation?

The reporter cleverly wrote..
  • Although not certain as yet, a takeover could be on the cards at Baswell
I mean, seriously, if it's not certain, as a reporter, as a financial reporter, doesn't he have a duty to report facts and only facts?

Yeah Jose Barrock!

Here was Baswell response to that so-called 'financial reporting' (What's the purpose of a 'financial news' when the news is based on nothing but speculation? Is the purpose of the financial news to drive a stock price higher?)
  • Reference is made to the letter from Bursa Malaysia Berhad dated 19 January 2010 and the Article entitled :"Takeover on the cards at Baswell?" which appears in The Edge, Financial Daily, Cover Page and Page 4 on Tuesday, 19 January 2010 (“Article”), the Board of Directors of BASWELL wishes to inform that, after making due enquiry with all Directors and major shareholders and all such other persons reasonably familiar with the matters about which the disclosure is to be made in this respect, the Board of Directors wishes to clarify that it has not, to date, received any take-over offer on the shares of the Company. However the recent announcements on the changes of substantial shareholdings in the Company may have been mis-construed as a situation involving take-over.

    At the same time, the Board of Directors of the Company wishes to advise that it was not aware of the Article prior to its publication and that the Company has neither verbally nor in writing released any information to the author of the said Article.
This is where I don't understand. Why isn't the author of the said Article being questioned?

Yeah babe, ask the bugger where he got all these sources?

Anyway... it's now August 2010. Baswell is still Baswell and Baswell made news today again but for the wrong reason.
  • Baswell ceases ops, becomes PN17 firm
    Published: 2010/08/10

    FURNITURE maker Baswell Resources Bhd (7156) yesterday said it had ceased all its furniture manufacturing operations and become a Practice Note 17 company.

    Baswell also said a memorandum of understanding signed with Hong Kong's Metroplex Resources Ltd in January had been terminated.

    The MoU was for Metroplex and Baswell to collaborate with AL-AMRY Group to design, build and instal a project for AL REEM Island mixed development.

    Under the pact, Metroplex was to sub-contract the entire manufacturing and installation of furniture and fittings worth US$100 million (RM314 million) to Baswell.
    In a filing to Bursa Malaysia, Baswell said it is trying to sell some of its properties, plants and equipment, and to formulate a comprehensive restructuring.
Ceased all furniture manufacturing operations????

huhu!

And currently Baswell is now trading at 15 sen, down some 21%!

Last but not least, here is the chart of how Baswell is trading since Jan 2010! ( Can you imagine the fortune of those speculators who believed in what was written by Jose?)




How?

Me? I pray more integrity in our financial news!

Must Watch: Dylan Ratigan Is Simply Mad As Hell

WOW! WOW! WOW! WOW! WOW! WOW!

Fnally... someone speaks up!

We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, republicans aren’t doing it, an entire integrated system, banking, trade and taxation, created by both parties over a period of two decades is at work on our entire country right now.

The transcript:

Dylan: What are you talking about $4 trillion?

Karen: $4 trillion, I’m saying…

Dylan: We owe $70 trillion. [cross-talking 04:29] a $4 trillion solution, which is basically just a way for the Democrats to avoid dealing with this until 2017. I’m not here to talk about plans to deal with this till 2017. I’m saying we’ve got a real problem, and I’m tired of Republicans and Democrats who either want – Republicans who want to burn the place to the ground and Democrats, with all due respect, who want to offer a plan that gets it through the end of their second term of their presidency, and then screws me and my kids when it’s over! And until we do that, we have to deal with the extraction that is at foot, it is the reason the financial markets are behaving the way they’re behaving, it is a mathematical fact! This is not some opinion; this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, Republicans are not doing it, an entire integrated system, financial system, trading system, taxing system, that was created by both parties over a period of two decades is at work on our entire country right now. And we’re sitting here arguing about whether we should do the $4 trillion plan that kicks the can down the road for the President for 2017, or burn the place to the ground, both of which are reckless, irresponsible, and stupid. And the fact of the matter is until we actually, and I’m sorry to lose my temper, but I tell you what, I’ve been coming on TV for three years doing this, and the fact of the matter is that there’s a refusal on both the Democratic and the Republican side of the aisle to acknowledge the mathematical problem, which is that the United States of America is being extracted. It’s being extracted through banking, it’s being extracted through trade, and it’s being extracted through taxation, and there’s not a single politician that has stepped forward, Susan, to deal with this.

Susan: Yeah, but there’s only one right now, the leader of the free world, whether you like it or not, the President of the United States is arguably one of the most powerful individuals we have out there, and he’s our President.

Karen: But, Susan, what you’re saying is exactly the point that Dylan is making. It’s not about one guy; it’s about all of them.

Susan: No, I actually disagree. I think Dylan – it is about one guy.

Dylan: I agree with her. It is about one guy.

Karen: What would you like him to do? What do you want him to do?

Dylan: I would like him to go to the people of the United States of America and say, “People of the United States of America, your Congress is bought, your Congress is incapable of making legislation on healthcare, banking, trade, or taxes because if they do it, they will lose their political funding and they won’t do it. But I’m the President of the United States, and I won’t have a country that is run by a bought Congress. So I’m not going to work with a bought Congress and try to be Mr. Big Guy, ‘I’m working with a bought Congress’, I’m going to abandon the bought Congress like Teddy Roosevelt did, and I’m going to go to the people of the United States and I’m going to say, ‘You’ve got a bought Congress,” and until we get rid of the bought Congress, which is Jimmy Williams constant point, which is get the money out of politics, and until a President says that’s the problem and says he’s going to fix it, there is no policy that I can possibly see no matter how brilliant your idea may be or your idea or my idea or her idea or your idea at home, is that idea will not happen as long as there’s a capacity to basically fire a politician who disagrees with me by taking funding away from him. Is that a fair assessment?

Jimmy: Money in politics is the root of all political evil. It is corruption at its worst. And until we step up and kick that out of the park, it’s going to be the same system all the way.

Dylan: And only the President can do that.

Jimmy: No, no, no, Congress has to do it, too. Congress has to do it, too.

Dylan: But I’ll tell you what, how bad does it have to get? How much money has to be extracted? How many things have to be heard?

Karen: [cross-talking 07:59] tax. Okay, physically, what do you do?

Dylan: You go and give a speech to…

Karen: Right now.

Dylan: Yeah, right now. You say…

Karen: And then what happens tomorrow?

Dylan: Tomorrow, what happens is you begin the process of actually investing in solving the problems, so I come out and I say, “How?” I create an infrastructure bank with 2% blending immediately. There’s – once I explain to people the problem, once I explain to you that you have cancer, once you understand how screwed up your trade, tax, and banking policies are, believe me, you will have no issue when I incorporate an infrastructure bank that I fund with repatriated offshore money that I bring in and then use to create 2% direct lending to every business in America because when you realize that the banking system is fully corrupt and defrauding us, and I come out and say that, which is what I want my President to do, then at that exact moment I say, “You know what, we’ve got a screwed up situation here, people. You all know it, and now I’m going to admit it.” And as a result, not only have I admitted it, but we’re going to begin the process of solving it like grown ups. They did in World War II, they did it after the Civil War, they did it in Latin America with the Brady Bond; we are not seeing it happen now.


* if the clip doesn't play... double click on it.