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Wednesday, May 24, 2023

The Bankrupting of America

 




 

US debt ceiling impasse and a default’s impact on Malaysia remains a concern

 

US debt issue may affect global demand


PETALING JAYA: With the United States currently being embroiled in a debate as to whether it should raise its debt ceiling before the June 1 deadline, concerns over the impact on Malaysia of the world’s largest economy defaulting on its borrowings were understandably raised among certain quarters.

This is all the more relevant when one considers the fact that the United States is Malaysia’s third-largest trading partner, with World’s Top Exports reporting that Singapore, China, the United States, Japan and Hong Kong contributing to more than half of Malaysia’s export revenue – 51.8% to be exact – in 2022.

The website also revealed that the United States accounted for US$38bil (RM173.5bil) or 10.8% of Malaysia’s export income in 2021, again behind only Singapore at 15% and China 13.6%.

Thus, it is not difficult to understand the oft-used adage, “When the US sneezes, the world catches a cold”, including of course, Malaysia.

Chief economist for HSBC Global Research Frederic Neumann had remarked on Monday that should the debt ceiling issue be drawn out of proportion, it could lead to a depression of US growth, and adversely impact Malaysian exports stateside, possibly even reducing global demand because of an increase in financial uncertainty.

The current debt ceiling is known to be at US$31.4 trillion (RM143.4 trillion), and reports from yesterday indicated that a resolution could be imminent.

Shedding more light on the matter, Centre for Market Education chief executive Dr Carmelo Ferlito said the debt ceiling can be raised again, but only if it can be voted through the House of Representatives, which has a Republican majority.

“The Republicans are trying to use the deadline to pressure President Joe Biden to agree to spending cuts.

“On April 26, the House approved a bill to raise the debt limit by US$1.5 trillion (RM6.85 trillion), but only on the condition that spending would be cut to 2022 levels and then capped at 1% growth per year,” he told StarBiz.

A simple analogy to illustrate the ceiling standoff is the case of a parent providing a teenage child with a credit card.

If the teenager exceeds the spending limit, and asks the parent for an extension of credit, it is only natural for the parent to go over the spending habits of the child before deciding to provide more credit, which has to be repaid.

If the ceiling is not raised and the US officially defaults, Ferlito said the consequences for other economies – including Malaysia – should be looked at more in the light of a general financial turmoil that the default could cause rather than the more immediate link with American bonds that firms or governments may have. 

“We do not see direct repercussions on Malaysia; rather, we foresee indirect effects in case of (a US) default, coming from a global financial turmoil,

He explained: “We do not see direct repercussions on Malaysia; rather, we foresee indirect effects in case of (a US) default, coming from a global financial turmoil.

“If there is a default, which is doubtful, there will be a financial shock and the entity of such a shock will determine how much it would impact Malaysia.”

He elaborated that a potential default and its effect on an exporting country like Malaysia can be seen as two separate phenomena, a sovereign debt default; and the business relationship between private entities.

Ferlito added: “Even if the US defaults, private companies can still transact independently from the scale of the mutual business relationship. What we have to fear more are the indirect consequences.”

Economists at Coface Services South Asia-Pacific Pte Ltd, Bernard Aw and Eve Barre, believe a breach in the debt ceiling would result in outlay cuts currently funded with borrowing while the US dollar would weaken, elevating yields.

“Such a default would also have an impact on global financial markets, which rely on the dollar as the world’s primary reserve currency and as a safe asset.

“For Asian exporters, a weakening of the dollar against their currencies would dampen their competitiveness, including for Malaysia as the United States represents its third-largest export market up to 2022,” they told StarBiz.

Although acknowledging that a negative impact on the US economy from reducing public spending would depend on the extent of those cuts, they pointed out that if an agreement leads to deep spending decreases, economic growth for the United States could be slower than the already sluggish 1.2% that Coface is forecasting for 2023.

Aw and Barre opined: “This would have a direct impact on Malaysia by reducing US demand for Malaysian goods but also on foreign investment.

“In 2021, the United States was the first source of foreign direct investment flows to Malaysia, accounting for roughly a third of the total.”

On the flipside, they projected that sharp cuts in US public spending are unlikely to be approved by the Senate, as it is controlled by the Democrats.

Meanwhile, approaching the problem from an investment perspective, chief investment officer for Tradeview Capital, Nixon Wong, echoed the economic view that a US default would have global ripple effects, including on the FBM KLCI.

“A default on US federal debt would disrupt imports of electronics and manufactured goods from Chinese factories to the United States, resulting in slower growth of orders in the entire supply chain that includes Malaysia.

“Reduced spending in the United States would lead to slower aggregate demand and import growth globally,” he said.

The effect could likely be seen on export-oriented companies on the local bourse, he said, including manufacturers of electrical and electronic and rubber products, as well as in the producers of metal, optical and scientific equipment.

He added that although Malaysia’s trade volume with the United States may be smaller compared to China, the repercussions from reduced US spending would still impact Malaysia’s exports, whether directly or indirectly.

History has shown that American political leaders have always managed to raise the debt limit before it becomes a crisis, and it is likely that this pattern will continue, Wong said.

“While there are debates and partisan divisions in Congress, it is expected that Republicans will seek spending cuts before supporting the raising of the debt ceiling.

“After all, the main agenda is to prevent a catastrophic event or severe fallout in the United States and global financial markets,” he observed. 

By KEITH HIEW

Source link

 

After engaging in a protracted political showdown on raising the US national debt limit – capped at $31.4 trillion at the current stage – the White House and the Republican-controlled Congress reached an initial deal on Saturday which is heading ..

 

US President Joe Biden touted that the debt-ceiling deal will help the US avoid economic collapse, but experts warn that the US debt-ceiling crisis is a systemic problem that will erupt periodically, and that rising US debt is severely undercutting the credit of US assets and status of the US dollar.

 

 

 US urged against passing risks to world amid growing chance of a US default

A Chinese official on Tuesday warned of the significant spillover effect of US domestic policies and urged Washington to avoid passing on domestic risks to the rest of the world just to protect its own interests. The comment came after US leaders failed to reach a deal on the debt ceiling issue, with the deadline to avert the first-ever default approaching rapidly.

 

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The strong dollar should not become a sharp blade to cut the world, THE NEED FOR BRETTON WOODS III

 

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Tuesday, May 23, 2023

Rise in chronic kidney disease

CLICK TO ENLARGE https://cdn.thestar.com.my/Content/Images/SlimmingProduct.jpg


Ministry: Taking unregistered health supplements one of contributing factor

 

PETALING JAYA: Almost 9,000 new kidney patients are registered annually, and they require dialysis treatment, says the Health Ministry.

The prevalence of chronic kidney disease (CKD) in Malaysia has been on the rise, it said.

“In Malaysia, one in seven of the 33 million population, or 4.7 million adults, have various stages of CKD.

“Preliminary data from the National Renal Registry (NRR) shows that there were 49,447 dialysis patients in Malaysia last year.

Of this number, 43,663 patients are undergoing hemodialysis treatment, while 5,784 go for peritoneal dialysis treatment,” the ministry said in a statement to The Star.

Overall, the prevalence of CKD had gone up from 9.07% in 2011 to 15.48% in 2018.

The ministry said that the consumption of unregistered health supplement products was among the factors contributing to kidney disease.

“From January 2018 until December 2022, the National Pharmaceutical Regulatory Agency (NPRA) received 67 reports of adverse events associated with renal functions suspected to be due to the consumption of health supplements.

“Of these, 14 were suspected to be due to the use of unregistered health supplements.

“The most frequently reported adverse events were acute kidney injury (six), increased blood creatinine (three) and acute chronic renal failure (two),” it said.

NPRA is responsible for monitoring the safety of registered products on the market, including health supplements.

“One of the key activities in monitoring the safety of the products is through adverse drug reaction (ADR) reporting by healthcare providers, pharmaceutical companies and consumers.

“The NPRA also receives ADR reports suspected to be due to the use of unregistered health supplement products, including those adulterated with illegal substances such as dexamethasone, chlorpheniramine, and sibutramine,” the ministry said.

From 2020 until March this year, the ministry confiscated 30,209 slimming products sold online, valued at almost RM1.27mil.

Through various efforts, the ministry has also been regulating and monitoring the sales of unregulated supplements on social media.

This includes ensuring pharmaceutical products, health supplements and traditional medicines are registered with the Drug Control Authority in accordance with the Control of Drugs and Cosmetics Regulations (CDCR) 1984.

For the purpose of marketing, the ministry said registered traditional medicines are only permitted low-level claims that indicate the purposes of the products.

“All proposed claims must be supported by reliable references.

“Excerpts from pharmacopoeias, monographs, published journals or articles, and data from clinical studies are generally accepted as evidence of use and product indication,” it said.

The ministry is also doing post-marketing surveillance activities, such as constantly monitoring the products that have been registered.

This was to ensure that all registered products that are marketed and supplied are safe and of good quality, it added.

Selling products that are not registered is an offence under Regulation 7 (1) (a) of the Control of Drugs and Cosmetics Regulations 1984.

It is also an offence under Regulation 30 (1) of the same Regulations.

Such an offence can be punished under Section 12 (1) or 12 (2) of the Sale of Drugs Act.

The ministry has been working with other government agencies and the private sector, including emarketplace platform providers, social media platforms and Internet-based service industries within and outside of Malaysia, to combat sales of unregulated products.

“Additionally, the ministry has partnered with other agencies, such as the Malaysian Communications and Multimedia Commission, to help in taking further action on content that breaches laws and regulations,” it said.

Besides this, the ministry has set up a cyberintelligence and forensics team within the Pharmaceutical Enforcement Division to monitor websites, social media and ecommerce platforms throughout Malaysia.

According to the ministry, the team served as a central point for their engagement with Internet platform providers like Facebook, Google and other similar companies.

“From 2020 to March 2023, a total of 1,345 advertisements related to weight loss or slimming products suspected of violating the Medicines (Advertisement and Sale) Act have been screened.

“Out of the total number of screened advertisements, five were found to promote products containing 2,4-Dinitrophenol (DNP),” it added.

DNP, which has been classified as a poison under the Poisons Act, is an organic compound that is usually used in the manufacturing industry as an industrial chemical.

It might also be used as an antiseptic.

The substance has been discovered in certain products that purport to help in weight reduction. 

 Source link

 

https://www.thestar.com.my/news/nation/2023/05/21/hidden-risks-in-illegal-ingredients-added-to-slimming-pills


QUOTED:

Malaysian Pharmacists Society president Amrahi Buang said the public should be wary of some herbal products sold in the illegal market and promoted as weight loss supplements.

“Some herbal products marketed for weight loss have been found to be adulterated with sibutramine, which is a controlled substance. It was previously used as an active ingredient in some weight loss pills.

“Sibutramine was removed from the market due to safety concerns, as it can significantly increase blood pressure and interact with other medications in life-threatening ways,” he said.

Amrahi said it was important for consumers to buy herbal weight loss products only from regulated producers while also receiving consultations from professionals.

For instance, a certain prescription for weight loss could be effective for some people, but it should still be used only with the guidance of a healthcare professional and taken together with a healthy diet and an exercise regimen, he said.

Malaysian Society of Nephrology president Dr Lily Mushahar said one should avoid taking slimming products with other medications as it could potentially cause organ failure.

“Slimming or weight loss pills can cause serious kidney, liver and organ failure.

“This damage can be reversible after stopping the drug, but sometimes it can cause permanent damage.

“Fat-blocking or herbal slimming drugs may have diuretic effects, causing crystal or stone formation that can irritate the kidneys,” she said.

According to the Health Ministry, the National Pharmaceutical Regulatory Agency (NPRA) has received several reports of adverse drug reactions due to the use of unregistered health supplement products. 

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