Power play

Electricity tariffs went up.

Thank goodness, or else my price (un)expectations theory suggests that worse price distortions in the future will be forthcoming. And hating the less than 7-day policy time frame between announcement and implementation.

One of the main reasons why tariffs have gone up, is to erm...make sure we'd be more efficient in its use. But have we really done any better than say.... 1989?

Apparently not... as a nation, we generate less GDP per KWH compared to 2 DECADES AGO (graph below)! How did no one see this coming?

But really for a proper indicator of efficiency you should normalize by population. So erm... Amount of national output per capita consumption of electricity. *To read...it says that the amount of electricity consumed by one person in a year, generates "x" amount of national GDP*

Quite frankly.... I have no idea why we are as inefficient with energy use for so long... I'm sure there's got to be a good reason. I mean we are no better than 1989 Malaysians when it comes to electricity savings!

Money and the media

It's kinda annoying - especially for believers of rational expectations - to see price-expectation setting announcements in the media. *click on link to see why*

It's even worse that they (the Government) would set up very, very, very vague expectations of subsidy removals before any concrete announcement, which of course means that the public would already over-react to the slightest hint of that policy move. Yes, even economists - sometimes, unknowingly - set price expectations (for good and ill). *frown*

And of course...there wasn't any cuts today.

Frankly, I think firm-level and employee-level price expectations will be very distorted following this weird turn of events. There's only so many times you can say "review" before expectations become immuned to announcements. And that's gonna lead to lots of (longer-term) problems...particularly if labour markets - which are solely in need of reform - are going to be continually biased for firms. No amount of minimum wage laws are going to fix that!

*Even more annoyed after writing this post...need some Kool Aid*

Food fright

Would love to talk about the 1st Quarter GDP results, but its not all that interesting except for that unexpected growth in imports relative to exports.

Right now...

The only thing people can talk about is prices these days, so i'll add my own 2 cents (hmmm, might have to adjust that for inflation)

The funny thing is, the papers kinda have a consumer-bias to it. I'm sure the producers would have a thing or two to say about that.

But really, current data from DOS says that not all producers are created equal when it comes to prices! It's not real rocket science to see those industries which are commodity-dependent (food, rubber, chemicals, etc.) to feel a significant pinch from their input costs.

Almost makes you sympathetic to the producer, considering the reported 5%-ish food CPI increase in recent months. Now, if we can only fix that darn labour market so we won't lose that much consumer surplus.

Whatever floats your boat

This feels like a prisoner exchange in any action movie.

But like (almost) everything I do, I figure that demographics are important for analysis.

The largest applicants for asylum in Australia are the Chinese, followed by the (former) citizens of Afghanistan and Sri Lanka.

Makes you wonder if these asylum seekers knew that they would cause that much controversy - which would lead to more bureaucratic red-tape - they would pick another country to go to.

P/s: The United States (256,710) and France (185,850)  are apparently the top picks for the refugees, and the applicants for those countries vastly outnumber that of those applying to Australia. Hmm, must be some geographical reasoning for these type of flows..is there a possible gravity model study for this type of things?

P/P/s: But apparently the most accomodative people are the Swedes, who now live with 3 refugees for every 1000 people.

You are my candy, girl

Another 20 sen/kilogram got removed from the domestic sugar subsidy programme.

After some investigation, I have to say that sugar consumption per capita varies a lot by countries [see graph]. And its not income dependent. A typical Japanese consumes the same amount of sugar as someone from Haiti!

Among the other surprising findings - hopefullythe International Sugar Organization has got the data for consumption right - is that Singaporeans consume even more sugar than us over-subsidized Malaysians! Might just send this data to PEMANDU just to see their reaction. One hypothesis that springs to mind is that as the influx of Malaysians to Singapore continues to increase, they bring with them their sugar addiction.

In any case, Malaysia is seriously on the wrong side scale. Whether or not Malaysians respond to price effects (i.e.  find a better substitute or altogether forego sugar consumption) remains to be seen - not enough data to confirm otherwise, since last year. At present, according to the latest CPI weights, sugar consumption is around 0.25% of the total basket; the other component that's likely going to get directly affected - Food from Cafes and Restaurants - is another 2.95% of the total basket.