Blah

"You know a conjuror gets no credit, when once he has explained his trick"

I'm really in awe how people are changing at times. They're all being so progressive. It's like watching yourself standing still in the middle of the road while everything around u moving in extra speed. I've always been waiting for something, i don't know for sure, but it's always been that "something". It's an overdue.

THE STORM IS YET TO COME

The dazzling phase of world oil price recently has pushed many governments all over the globe to adjust their domestic fuel price. Crude oil price shown by WTI and Brent price has peaked to 105 USD/barrel. The three-month average price in 2011 (Jan-Mar) is 90 USD/barrel. The surging oil price indicates either higher demand or unstable supply. The recovery of world economy as a whole has driven the demand up higher, plus the instability in mid-east nations both dragged the oil price up sky high. With the mid-east situation unrests, there’s no short-term possibility of lower oil price.

Indonesia, by APBN 2011 set oil price in 80 USD/barrel. The government has been planning on adjusting the oil price assumption for its APBN. The spread of the adjustment so much correlates to Indonesia’s budget deficit. With its plan to decrease subsidy on fuel price for consumption, the wild movement of world oil price might stir the government plan back to square one. Basically, the calculation of government’s ‘harga keekonomian’ of oil price is with one single formula; it is MOPS price plus 10 USD, alpha (the spread Pertamina requests to cover distribution and operational cost), exchange rate, and taxes. Hence, with the assumption 90 USD/barrel MOPS price, 9000 USD/Rp, 12% alpha, 15% VAT and 5% fuel tax, the economic price of domestic gasoline is 6.889 Rp/lt (Rupiah/liter). Thus the subsidy from the government is Rp 389 times total oil distributed to the economy.

Let’s now imagine if world oil price could reach beyond 100 USD/barrel level.

NOT SO ARCANE TOOL?

Closer - Joshua Radin

Next on my reading list, Super Crunchers: How Anything Can Be Predicted by Steven D. Levitt. Fyi, his previous book Freakonomics along with its provoking ideas didn't end very well due to lack of theoretical ground and led many critics to blow on it. Whatever, I'll just give him another try. Since well, the title itself is worth the buy. Let's hope I can find some solid stats here.

Ciao

IT'S AN OFFER YOU JUST CAN'T REFUSE

Till There Was You - Brazilian Tropical Orchestra

On this iPad thing, since its release in April 2010 iPad has become the major contender of tablet PC segment. the description of iPad: a platform for audio-visual media including books, periodicals, musics, games and web contents. Mostly, it adopts iPhone tech and then is built larger to be called tablet PC, it is in 9,7 in screen and uses multitouch feature to operate. In my opinion it doesn't look completely like tablet PC, some Apple fanatics would so love to call this "revolution in PC history", it doesn't have physical keyboard altho you can buy separately a hardware keyboard for iPad. In addition, it can't exercise any serious programmes, low in memory, mediocre processor and low on connectivity.

iPad, in my serious honest opinion, is in twilight zone between smartphone and tablet PC. But of course it can't make a phone call. iPad user finds it useful during the growing of so called social media. iPad seems to come in handy to perform such needs in social media such as twitter, facebook, flickr and the likes. And not to mention the growing of digital books and newspapers.

But seriously, I remember my first experience of iPad and all I can do was playing Angry Birds. It was so much fun tho. Got extremely bored in the end. Just so you know, I am not an 'anti Apple products', I am now using 13 in MacBook Pro Unibody. Mac OS so far is the most convenient way to experience a laptop, despite its lack of programs relatively compared to Windows. But it'll solve soon, I hope.

All I am saying here is I still have no idea why bother spending my money to get an iPad. I can't stand carrying a 9,7 in 730 g "book" everywhere around. I am not that type of person, not in a million chances. Mea Culpa.

But until today I can't say any arguments that's against the fact that iPad's got its grab to the market, seriously vast market. I love to call this the "participating phase". The phase of which large insensitive consumers are following to the "sharp" and sensitive ones. Well I might as well explain the "phase". There are three phases in price structuring, the accumulative phase, participating phase, and redistributing phase. It is similar to the business cycle only in smaller perspective.. or shorter-term.

In accumulative phase, sharp and tech-sensitive consumers are having their hands on iPad first, they're famous called.. Geek. After the accumulative phase, there's participating phase of which ignorant insensitive consumers are participating in the tech party also, also called follower. The reason behind existence of participating phase is that after the geeks has done "trial and error" sessions on the tech (in this case, iPad) they're beginning to become aware of the tech and try to join the buying spree in order not to be left by the herd's trend. This phase is indicated by extreme increase in numbers/volume of iPad sales during some period. In this phase more people are joining until.. Redistribution phase. In this phase, those followers are getting bored of the iPad thing, they need new excitements, or in harsh fashion, they need new ego boosters.

Really, if you're not a commuter busily working everyday but need to check on news, updates and remote power point or excel files, just don't buy iPad. Well can't say that this nation doesn't need you, we need you guys to keep on stimulating our economy. Just be smart, okay.

ARE WE GOING UNDER?

I'm never an optimistic person. Some would say that it's a bad trait in a person, but I'd rather call it as "self-hedging mechanism". In my spare time I'm doing my job as a stock trader and well, sometimes as personal robo-trader. I've always been giving my negative outlooks toward the IDX and the portfolios.

In this year I remain bearish on IDX. One thick cloud hanging over the sky is the over-the-estimate December 2010 inflation rate. The number hit 0.92 per cent in a month. On a year basis, it went to almost 200 per cent raise y.o.y. Yet Bank Indonesia (Indonesian Central Bank) is resistant to higher BI rate, thus the anchor rate remains 6,5 per cent. The reason why BI kept the BI rate unchanged was because if it raises the interest rate, the banking sector will get hurt. Plus, the inflation is cost-push inflation, thus there's no need to raise the anchor rate since it wont work.

Yesterday second trading session seemed like on a good pace to keep up with the regional Index since BI announced that it hold BI rate at 6,5 per cent. Led by the banking sector, index seemed to enjoy being in the green area. Everyone remained optimistic, my fellow robo-trader bbmed me the big fat smile emoticon and it's kind of ridiculous I might say.

And the judgement day is today. After the week of joy with the Index, it shows its own fragility. The new support level, around 3725, built in 2 months was battered down in a day to slightly above 3600.

Led by the fall of global commodity prices yesterday, and followed by Asian stock index, IDX is beaten to ground today. It fell 104 points, correcting all the gains during December 2010. And yet, people still cast clear optimistic views on the entire economy.

Well, listen up. I'll make it this way, soaring prices reduce real interest rate, hence reduce income in real term. And it doesn't end just like that, interest rate in emerging economies is still relatively higher than developed economies which will drag all the money to every emerging economy. Those money, tho, will only get a grab on "liquid asset", those are capital market. The long-term project investments remain untouched. This, all of you know where it is going, in time will create nothing but bubble in the economy (hot money, in well-known term). Today is the solid evidence that our IDX is still highly dependable on foreign risk appetite, if they say no go then no go. Over 1 trillion Rupiah net sell at our stocks market today.

And it's for the wrap-up of the saddening tale today, the wild inflation rate without any leash is like walking a wild stallion in the evening, you will have no idea where it's going in no time. It will severely hurt our trade balance, investment and definitely our consumption, and who says we can accelerate in 6-6,5 per cent speed a year, I'm not on your side.