The US stock market (Dow Jones) in 2014:
The Malaysian stock market in 2014:
Reuters attributes the plunge in Malaysian and Singapore share prices to weaker oil and gas prices. But is that the only reason?
The Edge has a cover story revealing that quite a few malls are reporting lower sales (except perhaps for F & B sales) even though their car parks may be full (well, there are not many other places to hang out, given the lack of green spaces in our urban areas).
This lower sales have been attributed to the higher cost of living (not to forget the higher household debt, mainly due to higher property prices and car loans), which has left many people feeling poorer.
And with the onset of GST, many are cutting back even more on non-essential items long before the implementation date. (Do you sense that you, your family and friends are more careful about their spending now?)
This sense of feeling worse off could erode support for Umno-BN in the coming months.
Looked at deeper, the slump reflects structural problems in the economy: low real wages, high household debt and neo-liberal policies (including an increasingly regressive tax system), which result in income inequality, leading to poorer consumer demand.
This poorer demand translates to lower sales, lower profits and excess capacity.
But the quest for corporate profits continues, regardless. But how to make profits, given slack demand? There is the drive towards the financialisation of the economy (banks and financial institutions amassing huge profits by extending cheap credit, further worsening household debt), speculation in properties (by developers and wealthier Malaysians and foreigners with cash to buy properties), speculation in commodities and sectors based on the depletion of natural resources (forests and oil).