Not The 9 O'Clock News

The heading was the name of one of my preferred UK TV shows many years back.

All-England - Datuk Lee was in his element beating the phenom Lin Dan to win the All-England. I will refer to him as Datuk as one of the few who deserves such a title. I think Malaysians in general are only happy when we win the big ones, when they don't tons of critics are out. Most sports people only have 10-12 years when they are in their prime. We can't all be world beaters in sports. Hence people like Nicol and Lee are exceptional achievers. Even when he loses to Lin Dan, I think we have to appreciate what an athelete Lin Dan is. If there was no Lin Dan, can you imagine the number of titles Lee would have gotten. Its just like if there was no Tiger Woods, the golf world would be looking at Phil Mickelson very differently as he would have had collected at least 2 more majors and a number of other top events. We like to blare it out when our sports icons are winning but we are usually not there when they are not. After their use by date, they are cast aside with no pension to speak of, they usually have to build their financial side all over again when they are 30 or 35, or worse end up as lifetime employee of one of our utility companies. Seriously, any parents would object to their kids choosing sports over education. But back to Lee, well done. Even if you stop now, you have achieved a lot.

Japan - It is very sad to see such calamities. The prospect of nuclear reactors leaking is a bigger concern for all. Japan’s 56 nuclear reactors provide about a fifth of the nation’s power.

Markets and the Japan effect - As terrible as it may sound, no one wants to link the disasters to how markets will perform. Unfortunately in financial markets, you are supposed to absorb all information and predict. On balance, markets should rise. I know this is probably not your usual views that you can glean from the CNN or CNBC. The fact of the matter is the purely economic consequences will be modest: some reconstruction, some more government spending. The rebuilding of Japan is actually "market positive".

When calamities happen, the media gets themselves into a frenzy. Costs of this quake are initially estimated at $1-$2 billion, according to JPMorgan. The larger insurance bill falls to the insurers, about $30-35 billion, which is not loss factor to the economy. So when you talk about damage, its less than $2-5 billion even if you include the nuclear thing. (Provided the situation does not implode further). That is a fraction of the $102.5-billion worth of damage caused by the Kobe earthquake of 1995, which was a 6.8. Just like during the Kobe quake in 1995, the stock market reaction will be momentary, also because the epicentre was far from Tokyo, and it isn’t likely to affect Japanese economy as a whole.

It may rattle the Japan markets but will be positive for the rest. Bank of Japan Governor Masaaki Shirakawa said the central bank will provide huge amounts of liquidity to the banking system on Monday, reinforcing the bank's determination to keep markets stable in the wake of the devastating earthquake that struck northeastern Japan. Economics Minister Kaoru Yosano also said the government will fight decisively against speculative moves and will not tolerate short-selling to take advantage of the quake.

Oil and Europe - Until the Japanese earthquake rocked the world on Friday, the two biggest threats to the global economy were a potential oil supply shock triggered by the political turmoil in the Middle East and the worsening debt crisis in the eurozone. These are external shocks which are priced into the price of oil. While the Spain and Greece issues are worsening, its not entirely new news. No one thought that the Euro crisis could have been solved with curing Greece alone.

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