Dreamer,

Even if its 10% to 20% of consumer spending, it will dampen heavy item purchases because high prices of oil and food will sour the overall consumer mood. As you know consumer spending is 2/3 of the economy, and all leading indicators have shown a slowdown in consumer spending. Also, if the consumer inflation expectations increase, then the FED has no choice but prepare to raise interest rate.
IF you notice also, the usage of credit card in America dropped, but the overall debt increased. This is the next CRISIS as more and more people are out of job and with high inflation, there is no way middle/low class Americans can clear its credit card debt.
Speculation or non speculation, crude oil prices are driven by DEMAND and the LACK of SUPPLY and solid production. Simple rule, demand exceeds supply. OF course when China starts to lift its subsidies on fuel, demand drop, hence price of oil will in turn drop.

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Added on June 14, 2008, 8:35 pm

The Feds , and the G8 had agreed that the strength of the US dollar is the key in managing inflation. How does the FED do it? The easiest is increase interest rate. Performing open market transactions is insignificant especially the US dollar marketplace is $2 trillion USD daily. Unless ECB and BOJ coordinates a series of open market transactions (purchasing US dollar) then the Federal Reserve can avoid increasing interest rate.

However, do you guys remember back in 1987? What did West Germany do? Increase interest rate while the US Feds was conducting open market transactions.

Result: 1987 crash, Dow Jones drop 23% and the worldwide market cascaded.

With Bernake being a very inexperience Fed Governor, and EU being a very young concept; a crash will likely happen when both Trichet and Bernake differs in policy.

Well, it will be interesting to see if the Ben will actually raise rates during election year. 

But if the Fed doesn't raise interest rate next week, the Fed's credibility is severely tarnished.

The statement listed four areas of dissatisfaction with Abdullah's premiership:

1) That no concrete action had been taken on the issue of illegal immigrants, despite repeated requests by SAPP and other Barisan component parties;

2) That the government had offered no holistic economic solutions to cushion the blow of the sudden hike in fuel prices, which had greatly burdened the people and threatened further hardcore poverty;

3) That not enough attention had been paid to issues raised by the people of Sabah -- poor delivery systems, corruption, wastage, lack of transparency and accountability -- and that SAPP would have failed in its duty as elected representatives if these issues continued to be ignored; and

4) That the people have lost confidence in Abdullah, and that if he can't perform, he should step aside and make way for another leader to take over.

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Added on June 18, 2008, 3:17 pm

I agree, everything's possible now. Within UMNO, there are already reports of internal revolts.

By juz making the cut of 112...PR will only hv simple majority but not the 2/3 to control the Parliment.
They need more....at least 40+ for that.

Forming a Gov wif juz simple majority they r not strong enuf to reform & make changes

Guess more things will happened in June 23 when the parliment sits again

Like u mentioned...only certain issues need 2/3 vote... all these 2/3 vote issues r mainly big & important issue

eg. ammendment of constituition...ammendment of ISA(correct me if i'm wrong)?

There is no point holding the Parliment when you do not have the total control (2/3 majority) of the house. You are always being bogged down by those 49% fella, and this is not too good.

In view of others...holding 51% power is not a strong government.

My 2 cents...

Guess should switch this to Real World Issues thread...getting OT 

Before the weekend, CI might break its support level. I don't think anyone will want to speculate/invest when there's political turmoil.

time to buy for me. aiming at PANAMY & PBBANK. see whichever reach my target buy price. both also got dividend coming up.

looks like PANAMY price stand very firmly, not affected at all (abit hard to get)

most likely will pour money into PBBANK

PBB & PANAMY are good targets. Hope you get em pana.

No confidence on PM, but confidence on PBB!

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Added on June 19, 2008, 9:47 amCI new intraday low

during time like this, i think it is better to play on defending / dividend stocks

i'll still continue to watch out MAYBULK & RESORTS, and waiting to pick up one heavy-weight plantation counter, when the time is right.

I still think there's room to go down. Week high was 1.57, maybe you should target 1.2-1.25. The CI futures right now is pricing a 15 points discount; pointing to more drop in these few days.

Business wise, i think all steel counters will do good until the olympics but cost of oil will have a significant impact on their profit margin. Then again, might be a possible interest rate hike next month. So pick an entry you are comfortable with.

KULIM is a wonderful stock. love its movement.

tentatively targeting KULIM at 7.50, BKAWAN at 9.50 (still a little distance before reaching my target, unless a big drop like what happened on March 08 occur)

so meantime, pay a close look at PBBANK as it is about to reach my radar now.

I will start shopping on PBB on it is down below RM10.00

Tony says even oil price shoot up to US$200/barrel, their company will still be able to make money!

so looks like they did a good preparation management on this. 

Buy PBBank instead.

currently...foreigners r worried bout banking stocks...so logically PBBANK-o1 might drop more....which means if things become better later......it will rebound faster

but.....really dunno how these foreign funds will acts lately.....with all those bad news fr US......they will wait on sidelines probably longer......

personally...i would prefer PBBANK also.....lower risk.......almost identical returns.... just my 2 cents.....

  i have a different idea instead. i prefer the later one.

thanks for the advise, mr remisier lklatmy, taikior cherroy & SKY 1809