for 10 mins

For once i forgot what i wanted to blog about and i had to go through all previous post until somehow the posts reminded myself of what i wanted to stress today.

Last week my friend was keeping me posted on her upcoming plans. She was telling me that she will be going off to Perth to work. But she hasn't found a job.
she said "No rush since economy is bad and i have no commitments"

it is true to a certain extent. It's good to be positive. It is the kind of attitude to have. I wish you all the best.

Recently, they announced a pay cut in HP. 5% which will be effective soon. I agree that when there's retrenchment an org incurs more costs i.e to shoo ppl away first by offering VSS and when the times are good incur other costs i.e acquisition and training costs. That seems to be a waste of resources. But what if times were to be worsen? Nobody knows what will happen 6 months down the road. Everyone is contracting their spending with the fear of losing their jobs maybe 6 months down the road?

But if you learnt economics, this is not the right action to take. In actual fact, we should spend more. When an economy contracts it is because the supply is in abundance and could not meet the demand. So the overall AD (aggregate demand) fell.

If you remember the Keynesian economics "the paradox of thrift"
When households (demand) contracts their spending by saving more perhaps, basically they are consuming less and therefore overall AD fell and eventually it leads to lower NY ( National Income). This causes a downturn to deepen in the mere short term.
I remember reading on thesun the other day that based on research by a bank, Malaysians are not spending enough. But Malaysians are among the top savers in the world. National Savings were 38% of the GNP in 2007.

Are you surprised?

So most governments in the world is trying to come out with packages to stimulate the economy to boost domestic demand by encouraging spending so as the AD will not fall further and cause the downturn to deepen.

I'm sure everyone will we wondering what the stimulants will be when our new premier announce the package by end of this month when he take over the office.
Tax reductions? What forms of government spending to be expected?
We shall see..

Quote by the 33rd President of the US "Recession is when a neighbour loses his job, Depression is when you lose yours"


Bring to you this song by Fish Leong

以前我不懂得
未必明天　就有以后
想念是会呼吸的痛
它活在我身上所有角落
哼你爱的歌会痛
看你的信会痛　
连沉默也痛
遗憾是会呼吸的痛
它流在血液中来回滚动
后悔不贴心会痛
恨不懂你会痛
想见不能见最痛