Tuesday, February 24, 2015

The Black Hole that is 1MDB

Increasingly, it looks like a 1MDB bailout is imminent.

On Monday, in very subtle language, 1MDB said that the refinancing of its mountain-high debt will involve the Ministry of Finance – which owns 1MDB anyway – “as relevant and as required” after Malaysian media reported that the government may inject up to 3 billion ringgit ($823 million) to patch up the black hole that is the 1MDB.

Already, 1MDB last week said it would explore asset sales and the sale of development rights in prime property projects as it seeks to cut its debt – a $11.6 billion burden that has weighed on the ringgit and the country’s sovereign credit rating. But according to the Edge Financial Daily, that may not be timely enough besides the fact that the income generated in the short-to-medium term may be insufficient.

Earlier this month, 1MDB settled a 2 billion ringgit ($550 million) loan it owed to two banks but sources have said it needed a loan from Malaysia’s second-richest man and UMNO crony Ananda Krishnan to do so.

The troubles plaguing 1MDB are certainly expected to exacerbate and I anticipate they will bring avalanches of economic and fiscal shocks to the country.

As it is, the Malaysian ringgit was under tremendous pressure yesterday and it tumbled 0.6% to 3.6435 a dollar as of 9.32 AM in Kuala Lumpur and earlier had already fallen to 3.6460, the lowest level since April 2009, according to prices from local banks compiled by Bloomberg.

A RM42 billion debt is a real cause for worry – but do you think the Prime Minister cares? I really wonder. I don’t believe I am alone in thinking he has wrapped himself in self-denial.

On Sunday, the hills were alive once again, and this time, Lady Gaga (left) was there.

Listen to this phenomenal performer – she has a voice that is luscious, rhapsodic and beckoning. Beautifully brilliant. Expressively enticing. Marvellously magical.

And she delivered a medley of songs that paid tribute to the 50th anniversary of 'The Sound of Music' and to Julie Andrews:

This year’s Oscars – the 87th Academy Awards @ The Dolby Theatre in Hollywood.

Julie Andrews gave a big hug to Lady Gaga on stage. Photo by Mike Blake/Reuters

['The Sound of Music' (1965) is a Rodgers & Hammerstein's cinematic treasure that is a big winner having grabbed a total of five Oscars including Best Director, Best Music and Best Picture. A gem of a movie that many claim is the most beloved musical of all time!]

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