Saturday, 24 February 2018


I've oftentimes said that I would never recommend to young school leavers looking to to pursue a career, that they should pursue print or digital journalism, since with competition for advertising revenue from global Internet giants such as Google and Facebook, and with reports of print advertising revenue declining 10 times as fast as digital advertising revenue is growing, they could find themselves out of work in their 40s or even earlier, burdened with the costs of raising a family, a car loan and housing loan to pay off.

I once told mass communications students at a local private university that instead of journalism, they should seriously consider corporate communications or public relations as a career after graduation.

And, if one still wants to pursue a career in journalism, for a while it was thought that a business and financial publication would be a safer bet than a general news or lifestyle publication but that seems to be no longer so, as some local business and financial publications had gone or are going all online and digital to stay afloat, which usually is the first step on the road to oblivion.

Well, The Star of 23 February 2018 reports that local business and financial newspaper, Focus Malaysia, founded in 2012 has been acquired by digital branding and marketing agency Inno Mind Works Sdn Bhd and that two-thirds of its current staff are likely to be retrenched, as it transitions to an all digital platform.

With the departure of Focus Malaysia from the news stands for the online and digital world, that leaves The Edge standing still in print but for how long, one wonders.

Inno Mind Works is new owner of Focus Malaysia - Business News

PETALING JAYA: Business weekly

Focus Malaysia

has obtained a new owner, digital branding and marketing agency Inno Mind Works Sdn Bhd (IMW).

The staff were verbally informed of the news yesterday.

According to a source, the letters were expected to be given to the staff next week.

It was learnt that only one-third of the staff shall be retained by the new owner, while rehiring will be on a case-by-case basis.

Astro Awani reported that IMW managing director and founder Datuk Michael Yip has confirmed the purchase of Focus Malaysia, adding that it is IMW's main agenda to make a transition to the digital platform.

Focus Malaysia was founded in 2012.

According to its website, Focus Malaysia's thrust was to provide specialist coverage of companies listed on Bursa Malaysia, property news, the role of small and medium-sized businesses, and personal wealth management issues. 

It also provided a platform for the discussion of macro-economic topics such as wealth distribution, sustainability and the impact of innovation and technology.

Meanwhile, The Malaysian Reserve, a business and financial publication which departed the print scene much earlier, reported on  of 23 February 2018 that media company Media Prima reported its fifth consecutive quarter of losses, attributing this to costs incurred in downsizing its workforce, despite it expanding its reach in online and digital platforms.

Media Prima plunges deeper into the red


MEDIA Prima Bhd said costs related to impairments and downsizing of its workforce pushed it deeper into the red for its fourth quarter ended Dec 31, 2017, as traditional revenue from advertisements and newspaper sales continued to fall.

The media group posted a fifth consecutive quarterly loss with an income deficit of RM378.2 million, or a loss per share of 34.09 sen, against a net profit of RM5 million, or earnings per share of 0.45 sen, in the corresponding quarter last year.

Revenue for the October-December 2017 period decreased 4% yearon- year to RM306.2 million from RM318.6 million a year ago.

The group attributed the losses for the quarter to the declining trend of advertising income and exceptional items amounting to RM302.7 million.

Without the latter, Media Prima said it would have posted a net loss of RM82 million.

For the financial year 2017 (FY17), total net loss extended to RM650.6 million against RM59.2 million in FY16, while turnover fell 7% to RM1.2 billion compared to RM1.3 billion.

Although the media conglomerate has ventured into new digital and consumer-based business initiatives to complement its traditional media segments, these initiatives are still undergoing a gestation period, the group said.

Media Prima is expected to increase efforts to accelerate revenue-generating initiatives by maximising available assets and leveraging on extensive reach via its brands on digital and non-digital platforms.

“The structural change in the media sector is forecast to continue affecting traditional media companies in tandem with global trends.

“To remain resilient and relevant, the group is committed to its transformation journey in defending traditional revenue sources, while increasing efforts in growing new revenue streams,” it said.

These efforts include market leadership in broadcast, over-the-top content and digital publishing.

The group is also steadfast on growing commerce revenue through integrated media and plans to expand beyond Malaysia, as cost management practices will continue to be exercised.

Media Prima shares ended 1.6% lower yesterday to close at 62 sen, with 2.8 million shares traded — giving the group a market capitalisation of RM682.2 million.

Meanwhile, shares of the Star Media Group (STAR) have been down in the doldrums over the past 5 months.

According to AllianceDBS analyst report of 21 November 2017, the latest so far, Star Media Group's 3rd Quarter performance saw "Some improvements, but nothing to cheer about".

If the Star Media Group which has the lion's share of advertising revenue amongst English language dailies is struggling to remain profitable, basically the situation looks grim for other English language media organisations which have the remaining one-third share.

New media is proving to not be the "saviour" of media it was touted to be and this adversely affects the livelihoods of mass media workers, including journalists.

I am yours truly


Sunday, 18 February 2018


Dear Right Honourable (Y.B.) Dr. Ong Kian Ming, Member of Parliament for Serdang,

Happy Chinese New Year and may the year ahead be a happy and prosperous year for all Malaysians.

I have commented to your article Different ways to think about ‘Smart’ Transportation in The Malaysian Insight of the 18th day of February in the year 2018 and reproduce it herewith, indicated in blue, with some minor grammatical corrections and some further clarifications.

You wrote - "No matter how ‘smart’ a system is, it cannot solve traffic problems caused by human driving patterns and infrastructure bottlenecks."

Very good point Y.B. Dr. Ong! To put it simply, the devil is in the implementation and remediation (or more precisely, the lack thereof) on the ground in realspace, not in cyberspace, and and I wish you had focused more on addressing realspace issues, rather than about providing information, data and analytics about them to the public and the authorities but otherwise do nothing on the ground about them.

Long before Jack Ma proposed his gee whiz City Brain Artificial Intelligence (AI)-driven smart city solution in Kuala Lumpur, the Integrated Transport Information System (ITIS) was operating (in the Klang Valley) since 2005, with signboards over major roads telling us what we already knew - i.e. that we are stuck in a horrendous traffic jam and for how far we will have to have to endure it, and more recently, users can also check traffic current conditions on certain roads on their Apple iPhones, iPads or Android devices so as to plan our travel route and time to avoid or at best minimise being caught in a jam.

All fine and dandy, except that this has continued to be the case day after day, year after year since 2005, apparently with nothing or very little having been done to resolve the causes of the jams, many of which are due to entry and exit ramps from and to other highways being added to older ones such as the Federal Highway, such as those to and from the Penchala Link and those to and from the LDP, all of which result in creating traffic bottlenecks during peak traffic periods, not to mention the horrendous traffic jams in Bandar Sunway, Subang Jaya and other places within the Klang Valley.

So if the realspace causes of these traffic jams were not resolved long after ITIS went into operation, how will Jack Ma's gee whiz City Brain Artificial Intelligence (AI)-driven smart city solution solve the problem in realspace within the Klang Valley, Penang and elsewhere in Malaysia?

Let me leave you with my open e-mail to your party comrade, Y.B. Lim Lip Eng, Member of Parliament for Segambut way back on 21 August 2017.


And my more recent post where towards the end, I also referred to this gee whiz traffic solution proposed by Jack Ma.
"Digital Free Trade Zone !!!! - Hmmmm! And what about Dagang Net"

To add to that, as someone who has written about the information and communications technology industry in Malaysia and worldwide since September 1994, I have heard so many claims about how this or that application or IT-based system will solve problems on the ground in realspace in Malaysia when the first thing which needs to be done is to solve basic maintenance and remedial issues on the ground promptly, for example to promptly repair a traffic light which has failed but failed traffic lights can go unrepaired for days on end.

As far back as the late 1990s, I saw a working model of the proposed use of artificial intelligence and neural networks to control traffic lights at junctions developed at a Malaysian public university. The proposed system would have sensors in the road which would detect the queue of cars waiting for the traffic light to turn green and based upon the length of the queue, the proposed system would prioritise letting the cars in the longer queue clear. And, when there are few cars on the road, such as late at night, the system would give the green light to a car which arrives at the junction when there are no other cars detected at the other traffic lights.

Whilst it potentially would be a good system in principle, however, I am unaware of whether or not, or where this proposed system was ever implemented, and knowing how often roads are dug up and shoddily filled up again, as well as the poor maintenance track record of traffic lights and the sensitivity of existing systems to heavy rain, lightning and so forth, I fear that such a sophisticated and sensitive traffic light system would break down very often.

I'm glad that The Petaling Jaya City Municipal (MBPJ) has replaced those gee whiz, high-tech and oh! so hip, hype happening and cool, solar powered parking coupon vending machines with very much low-tech scratch paper parking coupons sold by dealers from amongst local businesses who can earn some commission. Better still revert to parking attendants who put parking bills on your windscreen which you can pay at a parking payment booth. That would provide employment, including for the many unemployed university graduates, including unemployed IT and engineering graduates, who have otherwise had to find work cleaning toilets or driving Uber.

The gee whiz public traffic information and bus arrival times accessible on PC's tablets, smartphones and so forth only inform the public about problems or help them plan their travel times but do not solve the problem in the medium or long term. These are like a sign placed a road warning motorists to avoid a big pothole or sinkhole in the road which remain there for years without the big pothole or sinkhole being filled in.

So please don't believe everything IT industry promoters and "pandits" tell you, since quite often what they told the public and which was reported via the IT media has turned out quite differently on the ground in realspace and in real life many years later.

Like would you believe someone comes to you with with a smartphone app claiming that it will raise the dead back to life, magically fix a broken glass or magically fix and re-inflate your car's flat tyre without you having to do anything apart from pressing a few icons on your smartphone screen?

If you need a professional opinion about solving traffic problems, ask a Professional Civil Engineer whose area of practise includes traffic planning and management. I'm sure you have quite a few of them within the ranks of your own party or you may want to ask the Institution of Engineers Malaysia in Petaling Jaya to recommend some prominent members whom you can consult.

Meanwhile, if you haven't already done so, may I recommend you read the book "Silicon Snake Oil: Second Thoughts on the Information Highway" by scientist Clifford Stoll, published 22 years ago on 1 March 1996.

Old is gold and it's still available on Amazon, with used copies going for a low as 10 US cents. Hmmm! The courier charges will cost much more than the book.

And while you're at it you may also want to also get Clifford Stoll's "High Tech Heretic: Why Computers Don't Belong in the Classroom and Other Reflections by a Computer Contrarian" published on 19 October 1999.

"Who the hell is Clifford Stoll?" you may ask.

Well according to Wikipedia, Clifford Stoll is:-
"Clifford Paul "Cliff" Stoll (born June 4, 1950) is an American astronomer, author and teacher. He is best known for his investigation in 1986, while working as a systems administrator at the Lawrence Berkeley National Laboratory, that led to the capture of hacker Markus Hess, and for Stoll's subsequent book The Cuckoo's Egg, in which he details the investigation.

"Stoll has written three books, as well as technology articles in the non-specialist press (e.g., in Scientific American on the Curta mechanical calculator and the slide rule), and is a frequent contributor to popular mathematics channel Numberphile."

Whilst I do not dare claim anywhere near the credentials of Stoll, however I have worked as a humble computer service engineer before some mid-life crisis, itch, starry-eyed notion or something in my genes led me into writing and like Stoll, I too am critical of what I hear from the marketing side of the IT industry, and from IT futurists, business and management consultants and speakers who make their money from the number of backsides in seats which pay handsomely to hear them speak, but whose speeches often make guys like me want to vomit.

Here are two more of my IT.Scheiss posts which are in similar vein to what Clifford Stoll wrote in book High Tech Heretic but within the Malaysian context:-

Teachers' union says 1BestariNet useless for online learning from home

In my recent post 'Why Would Norwegians Go to #Shithole US?!':, I briefly refer to Trump but mostly relate to my encounters at a Computers in Education on 28 January 1997.

A couple or so years ago, a professor at a Malaysian university offering computer science and engineering courses said, “After all these years, there has been no clear evidence anywhere in the world which shows that purely computer-based learning is more effective than traditional instructor-based learning especially in schools, colleges and universities, even though it has proven to be effective in facilitating continuing professional development amongst working professionals”

So there you go. After being told all the hype, hoohah, bullshit and ballyhooby distance learning and e-learning advocates since the mid-1990s about how computer-based learning and e-learning would "revolutionise" and "democratise" education, bring education to the poor worldwide and help "raise them out of poverty", now an academic involved in such programmes admits that computer-based learning has proven to not be all that effective in basic education.

So if you need to know, ask the experienced practitioners about the real-world results on the ground.

BTW. Why did you leave early from that MSCPMP Forum #2/2016 “On Leadership: The COST of Bad Decisions” at the Kuala Lumpur and Selangor Chinese Assembly Hall on 21 July 2016?

Perhaps I misunderstood but I somehow understood that you were to be one of the panellists and I would have loved to hear what you had to say and perhaps ask you some questions.

Remember I told that former Bank Negara Deputy-Governor that if Trump wins the U.S. Presidential elections, the tide would turn against the globalised, open-borders world which he appeared to have been advocating?

Well, now that Trump is U.S. President, for the better or the worse, he slammed the door on U.S. participation in the TPPA (HURRAH!) and the proverbial pendulum has begun to swing back against neo-liberal globalisation towards more protectionism, not so open borders, as the popular sentiment is turning away from globalisation, especially since the global economy has not quite recovered from the crash of 2008.

Whilst I am no Trump fan, however I have been against imperialist, neo-liberal globalisation since it was proposed in the mid-1990s, so I welcome the pendulum swing against it.

I am, yours truly

IT. Scheiss

Saturday, 17 February 2018


Whilst China, India and Russia are coming up, the latter-day "Romes" are in decline, mired in hedonism and decadence.

Great Lakes Millennial Interview

The interviewer should have asked the interviewee to write a quotation using a word processing software on a PC and print it out to see if he could perform such as simple task, despite being so adept at social media and at knowing his smartphone backwards.

Millennials in workplace

Pria Viswalingam for the new six-part documentary series, Decadence, as he considers whether we are now completely bogged down in a mire of meaningless self-indulgence, and whether we do really need iPods, plasma screen TVs, Brazilian waxes and self-navigating 4WDs to achieve happiness. He asks if family incomes have never been higher in the western world, property values are soaring, if conspicuous consumption and material wealth have never been so evident, why are we so unhappy?

Decadence - Meaninglessness of modern life - Episode 1 - Money

Decadence - Meaninglessness of modern life - Episode 2 - Sex

Decadence Episode 3 Democracy

Decadence - Meaninglessness of Modern Life - Episode 4 - Education

Decadence - Meaninglessness of Modern Life - Episode 5 - Family

Decadence - Meaninglessness of Modern Life - Episode 6 - God

Whilst Pria Viswalingam looks at the problem as a conflict between the acquisitive culture of present day society on the one hand versus spirituality, the culprit behind all this is CAPITALISM and the PROFIT MOTIVE of CAPITALIST corporations, which take advantage of today's increased, anytime, anywhere connectivity to make their workers work anytime, anywhere, thus blurring the lines between work life, family and personal life, with work life and work time forcibly intruding people's family and personal lives.

The liars and charlatans of the dis-information society industry have touted the mobile lifestyle as enabling a balance between work and live but this is a load of IT scheiss.

If China, India, Russia and other countries go down this capitalist path, they too will eventually fall into the same decadence too, having fallen from their golden age.

Yours trully


Sunday, 11 February 2018


Kudos to The Star, well Star Business and Tan Sri Lin See Yan to be precise, over the article - Bitcoin: Utter pipedream - Business News of 10 February 2018

In my post Chart: Follies With Tulips & Bitcoins of 21 December 2017 on my IT.Scheiss blog, I wrote the the exuberance and euphoria over cryptocurrencies about one and a half months back reminds me of similar wild exuberance, hype and euphoria in the period back in 1998 and 1999, before the DotCom Bust of 2000, and that I my gut feeling was that with 1,368 crypto currencies listed on aorund 21 December 2017, there will not be enough money in the world to raise the values of all these digital alternative fiat currencies as high as the price of Bitcoin at the time as crypto-gamblers switch to one or more of the increasing number of other cryptocurrencies, thus causing the respective prices of all cryptocurrencies to average out towards a lower level and also that it looks like the cryptocurrency craze is heading towards a "DotCom Crash 2.0" about 20 years after the first DotCom Crash.

My gut feeling remains the same today when as of 11 February 2018, 05.54 hours Coordinated Universal Time (UTC), there were 1,523 cryptocurrencies listed on or 155 more in about one and a half months.

Bitcoin was created as an alternative currency independent of the control of establishment national and international currency regulators and of the establishment banks, following the 2008 financial and economic crisis (and the bailout of the "too big to fail" banks, which President-elect O'Bummer agreed with in late 2008 - so much for a "president of the people") and that the distributed Blockchain ledger technology behind it put its control in the hands of the "the people" - or more precisely, the people who have enough funds and resources to afford the huge computer farms,powerful computers and for the electricity to process the complex algorithms to create more Bitcoin (a process called "mining" in simple terms), as well as those with enough funds to buy and sell Bitcoin as people do shares on stock markets. This certainly isn't something which the plaebian masses can play in - it's a big boys game.

Once the emphasis shifted to the exchange rate of Bitcoin with establishment currencies such as the U.S. dollar, Bitcoin ATMs and so forth, that was when Bitcoin proverbially lost its virginity as an independent, alternative currency, fell from grace and became just a part of the established capitalist currency system, fiat or otherwise.

And today, Bitcoin and other cryptocurrencies have become assets to be speculated upon and traded on markets, just as shares and commodities are speculated upon and traded.

As an individual,  very small time, retail investor and trader on the share market, I understand the importance of studying the fundamentals behind each share, such as the healthy revenue and profit track record of the company over the past three to five years, prospects of continued or increased future revenue and profitability due to expansion, penetration into new foreign markets, tenders and contracts won recently which would result in greater revenue and profitability; as well as the technical indicators of its share price movements which reflect the speculative forces acting upon its share price, such as an increase in its share price in the period pending acquisition of some of its units by another company or in the period between the closing of its books and the release of its quarterly or annual report, where a rise in its share price reflects anticipation of better quarterly results, whilst a falling share price before the estimated release of the quarterly or annual report reflects expectation of poorer results.

In stock trading terms, an investor is one who bases ones share purchases and sale based primarily on the company's underlying fundamentals, whilst a trader is one who bases one's purchases and sales of shares based upon speculation, often aided by the movement of technical indicators, especially the movement of graphs of short, medium and long term moving averages relative to each other, as well as more complex indicators such as Fibonacci Retracement, Elliot Waves, previous highs (resistance levels), previous lows (support levels), candlestick patterns and so forth.

However, an astute stock trader will first do all due diligence research to ensure that the fundamentals behind a stock are sound, then buy when a share price is relatively low and well before the latest quarterly or annual report is released, then ride the share price upwards until the indicators show that its uptrend is weakening and is likely to turn down, then sell and lock in one's profit. On the other hand, if the price of a company's share begins to trend downwards in the lead up to the release of the next quarterly or annual report, a wise trader will stay clear, since this is an indication of a poor report.

I good place to do a quick check on the fundamentals of companies listed on Bursa Malaysia is

Yes, there are speculative forces which act upon the intrinsic value of a company's stock which drive it up and down around its intrinsic value based upon fundamentals but a wise stock trader who "plays" the stock market will ensure that the companies whose shares he or she "plays" in have strong underlying fundamentals or can likely get burned badly like gamblers in a casino. Usually, the prices of the shares of companies with sound fundamentals are less prone to wild fluctuations in share price - i.e. volatility.

When it comes to fiat establishment currencies, such as the U.S. dollar, whilst their value is not tied to tangible assets such as gold or silver, however their exchange rate vis-a-vis other national currencies reflects the fundamentals of the economy of the country issuing them, so their exchange rate is like the price of a company's share - based upon fundamentals as well as the speculative forces acting upon them.
Now with the exception of some cryptocurrencies which are backed by gold, silver or other tangible assets, the prices of cryptocurrencies, most of which are also fiat, are driven purely by speculative forces, hence their great price volatility.

The chart of the price of Bitcoin on below shows that its price peaked at US$19,206 on 18 December 2017, resulting in all the exuberance and euphoria in December last year but its price had dropped to US$6,036.92 on 6 February 2018 and has since rebounded  to US$8,088.53 when this screen cap was taken today 11 February 2018.

Yes the price of Bitcoin rebounded since 6 February 2018 and rose to above US$8,000 but its price has been "going sideways" in stock trading terms and this rebound is showing signs of losing steam and is heading southwards.

Whilst nothing is absolutely certain, nor permanent with share and commodity prices or foreign exchange rates, however this looks like the Bitcoin price is going through what stock, commodity and currency traders call a "dead cat bounce" (see chart below) in the short or medium term at least.

There appears to have been an inverse correlation between the price of cryptocurrencies and the Dow Jones Industrial Average (DJIA) stock market index (based upon the prices of shares of 30 large companies on the New York Stock Exchange and NASDAQ), since some investors who sold their shares on the NYSE or NASDAQ following the plunge of the DJIA since 1 February 2018, had sought "refuge" in cryptocurencies instead or some intending investors decided to speculate on cryptocurrencies instead whilst stock prices were on a downturn.

Well these speculators who think that cryptocurrencies such as Bitcoin are a "safe haven" may well be hit by a double whammy if their price drops further.

If you want to play in the game of finance capitalism, be prepared to get burned and burned badly.

How about going back to play that board trading game Monopoly, with real fiat Monopoly money? At least that's not a load of IT scheiss.

These starry-eyed anarcho-capitalists and libertarians thought that they could solve the problems with central banks such as the U.S. Federal Reserve, Bank of England, Bank Negara Malaysia, international banking regulatory institutions and so forth through creating an alternative, fiat, digital, cryptocurrency in parallel to the establishment currency system, and as always has happened, the establishment, capitalist and imperialist currency system co-opted the alternative systems, as has often happened with other alternatives such as whole foods, organic foods, alternative medicines, alternative music and so forth, which were co-opted by established food processing, pharmaceutical (big pharma) and music corporations.

Perhaps most of them are anarcho-opportunists out to sucker many well intentioned but naive techno-Utopians into getting caught up in this crypto-Ponzi scheme. 

Whilst admittedly difficult, the solution to the problems in the establishment currency system is to confront the problems head on and fix the problems within the establishment currency system - and that requires political will.

At the end of the day, let me get one thing clear - the DotCom Bust of 2000 did not see the end of dotcoms but a massive shakeout of the majority of dotcoms, leaving a handful, such as, Google, Facebook and others to fill the void and come to dominate the Internet today. Likewise, "DotCom Bust 2.0" or let's say when it hits, Crypto Bust 1.0 will see a massive shakeout of cryptocurrencies, leaving a handful, including perhaps Bitcoin to dominate the "alternative" financial space and we the plaebian masses will be beholden unto them, just like how we are beholden to Google to yield us our search results today, as well as to Facebook, WhatsApp and an handful of other social media sites, even though we don't quite like it.

Also, like those You Tube content creators who vehemently and strongly objected and criticise You Tube on You Tube itself, for demonetising their videos deemed inappropriate by You Tube's algorithms, yet they have no choice but to tenaciously hang on to You Tube, since there are no other platforms which are as lucrative or provide them with as much exposure for their views as the now dominant You Tube does.

Like right libertarian "Styxhexenhammer666" complains about You Tube on You Tube

And Canadian Maoist You Tube commentator Jason Unruhe

Earlier Jason had even stronger words for You Tube on You Tube.

Jason admits to him being in a part-time, lowly paid job in the services side of the much touted information and services economy.

So much for the Internet empowering the little guys to compete on a level playing field with the big corporations, when over the past 20 or so years, a handful of little guys have pushed aside the rest to become giant corporation dominating the Internet.

Besides that, these big Internet guys have been sucking away advertising revenue from print, online and digital publications around the world, especially where fixed and mobile broadband penetration are high enough, including in Malaysia and Singapore, where newspapers are in trouble, and some online only publications have gone under, unless they have a rich sugar daddy or sugar daddies who continue to prop them up financially.

As for me, I'm staying far away from this crypto-casino craze but will watch as the proverbial shiess hits the proverbial fan and those who continue to have faith in this crypto-scheiss get badly burned.

The Star's article referred to follows below.

Yours most truly

IT.Scheiss (A HiTekHeretik)


Bitcoin: Utter pipedream - Business News

by lin see-yan - what are we to do?

I JUST returned from a meeting of the Asian Shadow Financial Regulatory Committee in Bangkok.

The group comprises Asian academic experts on economics and finance. Their role is to monitor the state of the world economy and the workings of its financial markets in the light of existing and prospective policies; and draw lessons and give advice on vital public policy issues of current interest to regulators and market practitioners to make the world a better place.

The group comprises 23 professors from 14 countries, coming from a diverse group of universities and think-tanks, including the universities of Sydney and Monash, and of Fudan, Hong Kong and Sun-Yat-Sen in China, Universitas Indonesia, universities of Tokyo and Hitotsubashi, Yonsei and Korea universities, Sunway University, Massey University in New Zealand, University of the Philippines, Singapore Management University, National Taiwan University, Chulalongkorn University and NIDA Business School, University of Hawaii and University of California at Davis, University of Vietnam, and Tilburg University in the Netherlands.

They examined key issues surrounding the theme: “Cryptocurrencies: Quo Vadis?” focusing on the role and activities of the flavour of the month, bitcoin. At the end of it all, they issued the following statement:

“Cryptocurrencies in general, and bitcoin, in particular, have been receiving considerable press of late, driven mainly by wide swings in value in the cryptocurrency exchanges. There are now in excess of 2,500 products considered to be cryptocurrencies and in the last three weeks alone their combined market value has plummeted from US$830bil to US$545bil as of today, of which US$215bil is attributed to bitcoin and bitcoin cash.

To keep this in perspective, however, Apple Inc has a market value of US$880bil as of today. Market value measures the equity value of a business – or what investors are willing to pay for its future profits. Unlike enterprises, however, bitcoin has no business, no intrinsic value, no cash flows, no profit and loss statement, and no balance sheet. It is a speculative instrument.

Cryptocurrencies, including bitcoin, are not considered currency today because they are not a universal means of payment, nor a stable store of value, nor a reliable unit of account. Buyers purchase on the basis that these cryptocurrencies would rise in value. While market value has been the main focus of the current interest, the more important issues are around the role of cryptocurrencies both as financial assets, and the role they can play in transaction settlements, and their implications, if any, on financial stability.

While there is much interest in cryptocurrencies, especially bitcoin, the volume of transactions remains very small currently. For example, total US dollars (cash) in circulation amount to US$1.6 trillion as of today. M3 (broad money) is valued by the Federal Reserve at US$14 trillion. Total US economy assets in 2016 were valued at US$220 trillion. So why the fascination with cryptocurrencies? Supporters of Bitcoin claim it to be a superior store of value to fiat money issued by central banks because its supply is limited by design and therefore cannot be debased. In addition, the technology behind bitcoin, called the Blockchain, provides anonymity to its players. That is why it is a favourite with money launderers, tax evaders, terrorists, drug smuggler, hackers, and anyone who wants to evade the rule of law. Many people who use cryptocurrencies assert that they pay minimal transaction costs mainly because it avoids the cost of financial intermediation.

Still, there is large potential for capital gains because of the wide volatility of its price movement. This is the main driving force behind the popularity of cryptocurrencies like bitcoin. However, there are high risks involved including extreme volatility and opaque, unregulated exchanges that are prone to cyberattacks.

Authorities and regulators worry about bitcoin because they fear it is a bubble. In the event of a bust, investors in bitcoin – they are many, spread over various continents and countries – will be hurt; and they exert pressure on governments to regulate this business in order to protect investors.

In addition, they worry about the impact – in the event that cryptocurrency trading becomes a significant element in maintaining financial stability – in terms of the impact on the transmission of monetary policy and on its effects on the banking system, and most of all, on systemic risk, if any.

Authorities have responded in different way. In South Korea, new regulations today require banks and exchanges to identify who their customers are, imposing greater transparency in the conduct of the cryptocurrency business. On the other hand, Japanese authorities are more liberal. They only require the registration of companies engaged in this business at this time.

Many other authorities, including those in the US, are adopting a wait-and-see attitude while studying the issues, recognising that there may be a role for them to introduce some regulatory measures in the event that the volume and price volatility of cryptocurrency transactions become more and more significant.

In the meantime, government and tax authorities feel uneasy about the impact on revenue collection. Other regulators are worried about crowdfunding through ICOs (initial coin offers). Authorities in a number of countries, including the US, have introduced measures to regulate the issue of new ICOs to ensure that investors are provided with the necessary information before making such investments.

At the same time, central banks in many countries are looking into the desirability and possibility of issuing their own digital currencies, including to counter privately-issued cryptocurrencies.


1. Bitcoin came into prominence because of an apparent lack of confidence in fiat currency. It is imperative that governments and central banks continue to give priority to (i) protecting the integrity of their currencies; (ii) designing policies to contain inflation to prevent it from debasing the currency; and (iii) strengthening their mandate to promote financial stability over financial development, if needed (including ensure fintech development does not undermine confidence). Also, in cases where authorities do not have the power to regulate the cryptocurrency business, they should actively seek such authority where appropriate.

2. Monetary authorities should be open to creating digital currencies rather than confining their money supply to notes, coins and deposits. But they should do so in a transparent manner and only after careful consultation and study.

3. It is the role of government to warn their citizens and investors about the high risk involved, and ensure transparency in bitcoin activity, and not to unduly introduce more and more regulations that will stifle innovative initiatives. Blockchain technology, for example, does have other useful applications apart from the issue of its use in the creation of digital currency.

Investor protection

As we see today, bitcoin and the other cryptocurrencies are not currencies. Mostly, they reflect speculative activity. Hence, investing and transacting in them involve high risks. It is imperative that investors realise this and approach investing in cryptocurrencies with great caution and with as much information as is available to help them manage these risks.

Investors must fully understand that cryptocurrency prices need not necessarily always rise, particularly because they have no intrinsic value, they could just as easily fall. So investors beware: Caveat emptor.”


The following developments are noteworthy:

Columbia’s Prof N. Roubini (Dr Doom) claims bitcoin is not a currency. Few price anything in bitcoin. Not many retailers accept it (even bitcoin conferences don’t accept it as payment). And it’s a poor store of value because its price can fluctuate 20%-30% a day. Worse, he labelled it “the mother of all bubbles” because its claim of a steady-state supply is “fraudulent”.

It has already created thee similar currencies: Bitcoin Cash, Litecoin and Bitcoin Gold. Together with the hundreds of such other currencies invented daily, this creation of money supply is debasing the currency at a much faster pace than any major central banks ever did. Furthermore, bitcoin’s claimed advantage is also its Achilles’s heel – for, even if it actually did have a steady supply of 21 million units, it is not a viable currency because the supply won’t track potential nominal GDP growth; hence, prices will become deflationary – the kind of phenomenon that economist Irving Fisher believed caused the Great Depression.

Indeed, the head of the European Central Bank had since declared to the European Parliament that cryptocurrencies are unregulated and “very risky assets. Their price is entirely speculative”. That’s not what we want or need. It’s a pity the FOMO (fear of missing out) of many retail investors will end them in a wild goose ride!

Over its nine-year history, bitcoin has had five-peak-to-trough falls of more than 70% each. The recent decline offers a dose of reality to new investors – bitcoin dropped to a low US$7,850 on Feb 2 for the first time since November 2017 – crashing 60% from the high of nearly US$20,000 in mid-December. Sentiment has shifted dramatically this year.

On Feb 5, it fell another 4% to US$7,524. Also, the fledging market has taken a number of blows: Facebook has since banned advertisements on it (for being misleading); US Securities and Exchange Commission has accused some latest ICOs as “outright scams”; US and UK largest banks have put up “road-blocks” to financing bitcoins; and the recent Japanese hack theft of 523 million crypto-XEM (worth US$500mil) brought back memories of Mt Gox, which collapsed after a similar hack in 2014.

Arbitrage traders (buying where it’s cheap and reselling where it is dear) have been active – taking advantage of price differentials in multiple places and different times. They call it “capturing the arb”. Hedge funds, high frequency traders and even amateur enthusiasts are giving it a shot. Price divergences can be due to glitches or network traffic jams. In South Korea, exchanges quote abnormally wide prices reflecting high investors’ demand for bitcoin in the face of strict capital controls – giving rise to a “Kimchi premium” (of as high as 50% above US price; now down to 5% as price disparities are swiftly traded away).

Concern over cryptocurrency activity is spreading beyond China, Japan, South Korea and India. This prompted the governor of the Bank of England, who also chairs the Global Financial Stability Board, to voice his unease over the anonymity embedded in blockchain technology underlying their use, especially for illicit activity (including money laundering). He disclosed that it would be on the agenda at the next G20 meeting. Tax authorities have also expressed concern over the under-reporting of capital gains tax.

Bitcoin futures trading on Chicago’s CME and CBoE exchanges have been slow to catch fire – at the pace of a “slow walk”.

What then, are we to do

Reality check: Bitcoin is proving that cryptocurrencies can erase wealth as fast as they create it. In January 2018 alone, it wiped off US$45bil from its US$200bil in market value generated in all of 2017 – the biggest one-month loss in US dollar terms in its short history. Since then, more value is being lost. For most economists and finance experts, they don’t represent an investable asset – there are liquidity issues, safety issues, exchange issues; most of all, they have no intrinsic value.

Can’t realistically put a fix on their fair value. They are for speculators who are prepared to lose everything. Of course, its something else for those who use them for illicit activity (home to criminals and terrorists), including money laundering. Anonymity means you are potentially closing a chain, while at somewhere along it had some illicit activity that cannot see the light of day.

Fair enough, these concern regulators. But we shouldn’t lose sight of the huge range of opportunities presented by the underlying technology – a view shared by many in relation to raising the efficiency of payment systems. Regulators are right to want to regulate crypto but also, continue to encourage innovation on blockchain. As I see it, so far in 2018, bitcoin has been a total dud. The list of factors driving its decline is growing, especially rising regulatory clampdown occurring around the world.

So, the cryptocurrency market has fallen on tougher times. For sure, Bitcoin has been highly profitable for many investors. Indeed, there continues to be strong interest among millennials.

Bottom line: the year so far has been terrible for bitcoin. But the fundamental positive story for crypto appears to remain intact. Protecting consumers should make it harder for charlatans to sell digital dust. There is a point where it goes from “buying on the dip” to “catching a falling knife”. Only time will tell. So, beware!

NB: Following global regulatory crackdown, bitcoin’s price has on Feb 6 fallen to a low of US$5,947, wiping out over US$200bil so far this year. Bitcoin’s market cap is now US$109bil, about one-third of the total crypto market (that’s down from 85% this time last year). The Bank for International Settlements (banker to central banks) has now condemned bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster” (refers to huge amounts of electricity used to create it) and warns it can even become a “threat to financial stability”.

Former banker Tan Sri Lin See-Yan is the author of The Global Economy in Turbulent Times (Wiley, 2015) and Turbulence in Trying Times (Pearson, 2017). Feedback is most welcome.

Monday, 5 February 2018

Digital Free Trade Zone !!!! - Hmmmm! And what about Dagang Net

Dear Editor
cc. Chak (my dear former "Lee Duh Fu Sen" colleague)

Pardon me for e-mailing you as I vehemently refuse to participate in Facebook and had deleted my Facebook account some years back and have no wish to return just in order to comment.

Reading Wu Zhen Tan's article "Huh? Why does Jack Ma want to help KL solve its traffic problem?" where the Digital Free Trade Zone is mentioned, it made me kind of wonder whether the DFTZ would kind of duplicate and compete with Dagang.Net established many years ago.

Let's look at some details.

According to SME Corporation, as of 2016 (the latest figures so far), Malaysia had a grand total of 907,065 SMEs, of which 693,670 were microenterprises (I understand microenterprises have under RM500,000 annual turnover), 192,783 small enterprises and 20,612 medium enterprises. Of these, the vast majority i.e. 809,126 or 89.2% provide services (presumably including toilet cleaning and bum wiping services).

According to DagangNet's website, Dagangnet is a member of the Pan Asian E-Commerce Alliance described thus:-

"PAA was founded in 2000, and its current members comprise CAT of Thailand, CIECC of China, CrimsonLogic of Singapore, Dagang Net of Malaysia, InterCommerce of the Philippines, KTNET of Korea, NACCS of Japan, TEDMEV of Macao SAR, Tradelink of Hong Kong SAR, Trade-Van of Taiwan and PT EDI-I of Indonesia. Combined customer base of the PAA members now exceeds 340,000 organisations, representing almost all active trading enterprises in the Asian market. For more information about PAA, visit"

That does not say how many of Malaysia's 907,605 SMEs (as of 2016) plus or minus some by now, are amongst those 340,000 PAA members across the 11 countries mentioned above. However, I don't expect many service providers, would need to export their services, including toilet cleaning and bum wiping through Dagang Net or the Digital Free Trade Zone.

This FAQ (frequently asked questions) about the DFTZ paints a wonderful picture about this high tech, intelligent warehousing facility based at KLIA Aeropolis in Sepang, with future plans for a its first Satellite Services hub of DFTZ, Kuala Lumpur Internet City (“KLIC”) in Bandar Malaysia (That is provided Barisan Nasional wins the upcoming elections and Bandar Malaysia is completed).

However, KLIA Aeropolis is an air freight hub and despite all the gee whiz, cloud-based computer systems to facilitate customs clearance, etc, etc, etc (which Dagang Net also has) and whilst I could be very wrong on this, it does not look like the gee whiz, cloud-based computer system and intelligent warehousing systems in KLIA Aeropolis will be facilitating imports and exports of sea freight through Kort Plang - oops! I mean Port Klang, Tanjung Pelepas, Pasir Gudang and Malaysia's other sea ports, or for that matter road and rail freight across the Malaysia-Thai border and with Singapore across the Johor Strait.

Also according to The Moon -- sorry I mean The Star of 31 October 2017, our Prime Minister Dato' Seri Najib Tun Razak announced whilst launching the DFTZ, that so far, over 1,900 SMEs ahd expressed interest to trade via the DFTZ.


What !!!!! less than 2,000 out of Malaysia 907.065 SMEs expressed interest to trade via the DFTZ.

The Star's article also reported:-

"According to Alibaba Group executive chairman Jack Ma, Malaysia's DFTZ will be the first outside China and is meant to help SMEs reach global markets by lowering trade barriers."

Hmmmm! So if Malaysia' DFTZ is the first outside China, then how many DFTZs then are inside China and how much trade have they been handling?

Well according to Alizila, Alibaba's news portal, it's based in Hangzhou, Alibaba's home base.

"Alibaba said it wants to establish these special trading areas in markets around the world, creating an “e-road” between them. Last year, the company helped to launch the China (Hangzhou) Cross-Border E-Commerce Comprehensive Pilot Free Trade Area, which will now be connected to the DFTZ in Kuala Lumpur."

So OK! Malaysia's DFTZ and Alibaba's Electronic World Trade Platform (eWTP) are very much in pilot phase now and could grow as we head towards 2025 but it also competes and looks like it will overlap with Dagang Net in some aspects.

It remains to be seen whether this DFTZ thinggie will fly or eventually crash.

As for Alibaba cloud helping to solve Malaysia's horrendous traffic problems, I kind of agree with  Cilisos writer Wu Zhen Tan that all this gee whiz computers, communications and information technology will not solve problems which arise from the attitude of human beings and if human beings are screwed up, the most gee whiz computing platforms won't un-screw up human beings.

Sorry Jack Ma but you had better find a way to use Alibaba Cloud to un-screw up human attitudes first before you apply technology to facilitate operations. You must apply business process re-engineering methods towards human attitudes re-engineering.

In my over two decades of covering the information and communications technology scene in Malaysia, I've come across many people who have proposed and even IT-based solutions to traffic problems, including artificial intelligence and neural network - based traffic light control systems, traffic congestion warning and advisory systems and so forth and they have done bugger all to solve the Klang Valley's traffic congestion problems, especially at peak periods. Moreover, knowing the track record of Malaysia's maintenance culture, we need to promptly fix traffic lights which have failed first before we think of more sophisticated systems.

If your Alibaba Cloud can fix it, Jack, then a thousand kudos to you for fixing what Malaysians have been struggling to do without success all these years but quite frankly, I'm not optimistic.

Let me leave readers with what Larry Ellison said about "Cloud Computing" way back in 2008.

I really love it when he said ".. the computer industry is more fashion-driven than women's fashion".

He's right. This Ellison guy co-founded Oracle Corp. in 1977, back when many IT journalists and technopreneurs were either not born or were still pooping in their Pampers, and today Oracle is one of the world's biggest business software companies and Ellison Oracle's CEO until 2014, so the guy surely knows what he's talking about.

Maintaining that clunky old minicomputer which processed our payroll, general ledger and so forth was so much easier to handle than all the IT scheiss (IT shit) I have encountered and had to cover over my over 20 years of writing about the IT industry, where I had to attend numerous seminars and conferences in Malaysia and overseas only to suffer having to listen to and report on all the kok talking heads said on stage and from the podium.

Sigh! Oh! How I miss our "Lee Duh Fu Sen" days back in that "Yellow Hut", which sadly is no more.

And folks, don't forget to check out my old buddy's hard-hitting Cilisos site. We Lee Duh Fu Sen guys go back a long way.

I am yours truly