Every Dark Cloud Has Silver Lining, Bottom Fish in 3Q09

2009 In A Nutshell, According to TA Research:
• Projected slowdown in Malaysia's GDP growth to 3.8% in 2009 due to dampening global demand and softness in domestic expansion is a reflection of weak corporate earnings growth potential in 2009. We have more than halved our CY09 earnings growth forecast to 3.3% after the 3QCY08 earnings reporting season.
• A bear market rally is expected in early 1Q09 mainly due to external factors and seasonality due to the Capricorn effect. A quick endorsement of Barack Obama's aggressive US multi-hundred billion stimulus package to revive real housing market and create 2.5mn new jobs after taking control of the oval office on January 20th will have a positive spillover effect on global equity markets.
• UMNO election in March 2009 could ignite speculative interest in the market as more small scale development projects will be rolled between now and March to appease the smaller class F contractors, but not many drivers are apparent for listed players unless the pump priming on big ticket 9MP projects takeoff full swing.
• Nevertheless, the above two short-term drivers are not capable of dwarfing the bearish market sentiment that will prevail well into 3QCY09 before we see some light at the end of the tunnel. Market worries will escalate as months pass by as economies that were thought capable of withstanding the current economic blow like China are already cracking under the turmoil due to weaker demand for its products, not to mention Malaysia's key trading nations like US and Japan.
• On the back of a doom and gloom outlook, demand for our commodities will take a back seat and significant price recoveries in CPO and crude oil could be delayed until 4Q2009. We expect CPO and crude oil prices to average RM2,000/tonne and US$45/barrel in CY09, much lower than this year's average of RM2,800/tonne and US$104/bbl respectively.
• The two key sectors, banking and plantation that have more than 35% weighting on the KLCI will come under further pressure due to weakening global demand. Any upswing in the benchmark index has to be driven by upward movements in the share price of banking and plantation stocks. We do not foresee them driving the index given the declining capital market activities and faltering credit expansion, and softening pricing power for CPO, respectively.

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The Greatest Wealth Transfer in the History of Mankind Starts Now!

Right now, the Treasury, the Federal Reserve, and the banking system seem to be gearing up for an event the likes of which has never been seen. I believe the crisis that will unfold over the next few years will add up to the biggest economic event in history. The scale of what is happening will dwarf all other economic events combined. The Tulip mania of 1637, John Law's "Mississippi Scheme" of 1720, and the dot-com / tech bubble of 1999 will pale by comparison. Even the hyperinflation in Weimar Germany in 1923 and the Great Depression will seem like a walk in the park compared to what is coming.

But wealth is never destroyed - It is merely transferred. Neither you, nor I, have the power to stop what is coming. But we do have the choice to either freeze in panic and be crushed under the wheels of the economic freight train that is bearing down upon us, or catch the ride of our lives on the road to immense wealth.