Unemployment accelerating

Citibank is dumping an additional 25,000 staff, making a total of 50,000 this year, and a total of 75,000 since the end of 2007.

http://news.my.msn.com/topstories/article.aspx?cp-documentid=1790234
http://www.nytimes.com/2008/11/18/business/18citi.html


And it's worldwide, so don't expect your country to be spared just because it's outside USA. After all, 12500 jobs came from India and 5000 from Germany.

As for the banking industry in general? Expect job cuts. LOTS of them. The banks are now starting to buy each other up in mergers and acquisitions. And we all know what that means: closing down of redundant branches, and laying off in overlapping departments.

What this also means for the rest of the world is: there's going to be a lot of experienced bankers with strong credentials, desperate for a job. Many of them will be willing to take a foreign job offer.

Also, looking in Melaka and all over Malaysia, there were some mergers back in recent years. For instance CIMB bought Southern Bank. However, times were good, so I noticed that there was any closing of any branches. EVEN branches side by side or within 10-20 meters of each other.
... Obviously, this has a good chance of changing.
So, expect some layoffs in Malaysia's banking industries as well.

Speaking of Malaysia, I noticed from our government website: http://www.mpoc.org.my/envo_150908_01.asp

that Palm Oil contributes 5-6% of our GDP and employs 1.4million workers. Palm oil exports in 2007 was Rm45billion.

Palm Oil has dropped from an average of RM3500 last year to below RM1500.

How do you think that will affect our GDP and employment? Well, I can't talk about employment figures (further complicated by foreign and illegal workers), but I can safely say that Palm Oil prices ALONE will cause us a drop in GDP of almost 3%. Our loss in export revenue will be over RM20billion.

BTW, Malaysia's largest export is Electronic goods. The market for electronic goods has really been hit hard and painfully. So expect horrific earnings drops and job cuts in this sector as well. Less efficient companies can expect to close down.

Overall, I am projecting Malaysia to go into a recession of worse than -10% in 2009. I think even -20% is quite definitely possible.

Yes, that looks rather horrifically bad, doesn't it? Don't believe it? We shall see.
But the top analysts in the world seem to agree with me. Even the most optimistic analysts who advocate buying Asian stocks for long term investments, (Morgan Stanley amongst them) all advocate dumping Malaysian shares, as they are among the worst in the region.
So who is more trustworthy? Me and the most reputable analysts in the world? Or our "trustworthy" leaders in government?
We shall just have to see, won't we?

For me though, I have advised all my friends and family to dump Malaysian stocks and not to come back in for the next few years. Keeping Malaysian stocks is a big risk, and a low possible reward at the moment. In fact, I have advised those running their own business to sell those too, as I feel that the Malaysian economy, and in fact Malaysia in general, is sliding downwards.