Mass Protests Sweep Malaysian Capital As Anger At Goldman-Backed Slush Fund Boils Over

Tyler Durden's picture

If we told you that thousands of protesters donning bright yellow shirts had taken to the streets to call for the ouster of a leader in an important emerging market, you’d be forgiven for thinking we were talking about Brazil, where President Dilma Rousseff is facing calls for impeachment amid allegations of fiscal book cooking and government corruption.

But on this particular weekend, you’d be wrong.

We’re actually talking about Malaysia, where tens of thousands of demonstrators poured into the streets of Kuala Lumpur on Saturday to call for the resignation of Prime Minister Najib Razak whose government has been accused of obstructing an investigation into how some $700 million from 1Malaysia Development Berhad mysteriously ended up in Najib’s personal bank account.

1MDB was set up by Najib six years ago and has been the subject of intense scrutiny for borrowing $11 billion to fund questionable acquisitions. $6.5 billion of that debt came from three bond deals underwritten by Goldman, whose Southeast Asia chairman Tim Leissner is married to hip hop mogul Russell Simmons’ ex-wife Kimora Lee who, in turn, is good friends with Najib’s controversial wife Rosmah Manso.

You really cannot make this stuff up.

What Goldman did, apparently, is arrange for three private placements, one for $3 billion and two for $1.75 billion each back in 2013 and 2012, respectively. Goldman bought the bonds for its own book at 90 cents on the dollar with plans to sell them later at a profit (more here from FT). Somewhere in all of this, $700 million allegedly landed in Najib’s bank account and the going theory is that 1MDB is simply a slush fund. 

So you can see why some folks are upset, especially considering Rosmah has a habit of having, how shall we say, rich people problems, like being gouged $400 for a home visit by a personal hairstylist. Here’s The New York Times with more on the protests:

Tens of thousands of demonstrators in Malaysia defied police orders on Saturday, massing in the capital in a display of anger at the government of Prime Minister Najib Razak, who has been accused of corruption involving hundreds of millions of dollars.

 

The demonstration in central Kuala Lumpur, which has been planned for weeks, has been declared illegal by the Malaysian police, and the government on Friday went as far as to pass a decree banning the yellow clothing worn by the antigovernment protesters.

 

But the demonstrators, who represent a broad coalition of civic organizations in Malaysia, including prominent lawyers, asserted their right to protest on Saturday.

 

The government has acknowledged that Mr. Najib received the money in 2013 and said it was a donation from undisclosed Arab royalty. 

 

One group of protesters on Saturday carried the image of a giant check in the amount of 2.6 billion ringgit, with a sign that read, “You really think we are stupid?”

 

The group organizing the protest goes by the name Bersih, which means clean in Malay.

 

Calls for Mr. Najib to resign have come both from within his party, which is divided, and from the opposition. One junior member of Mr. Najib’s party, the United Malays National Organization, filed a lawsuit against Mr. Najib on Friday asking for details of how the money was spent.

Of course the most prominent voice calling for Najib’s ouster is that of the former Prime Minister Mahathir Mohamad. "I don’t believe it is a donation. I don’t believe anybody would give [that much], whether an Arab, or anybody," he says. 

Meanwhile, Malaysia is facing a re-run of the 1997/98 financial crisis as the ringgit plunges amid broad-based pressure on emerging markets. With FX reserves now sitting under $100 billion some fear a return to capital controls (let's just call it the "1998 option") is just around the corner despite the protestations of central bank chief Zeti Akhtar Aziz. Here's BofAML:

Capital controls are not likely, but the possibility cannot be dismissed, despite <assurances from Zeti. Introducing controls will be a regressive move and a huge setback, hurting the economy and financial sector, and derailing any ambitions of becoming an international Islamic financial center. Malaysia’s reputation and credibility remain tainted by the capital controls of 1998, even after almost two decades.

 

The ringgit has depreciated almost 13% year-to-date, the worst performing EM Asian currency. FX reserves fell to $94.5bn at mid-August, falling below the $100bn threshold and down by about $9bn in July alone. At the peak, FX reserves were $141bn in May 2013. Cover to short-term external debt is only 1x, while cover to imports stands at 5.9 months. Downside risks remain given looming Fed rate hikes, China's RMB devaluation and the political crisis over 1MDB. Malaysia's vulnerability is also heightened by high leverage (household, quasi-public and external) and a fragile fiscal position (heavy oil dependence, off balance sheet liabilities)

 

The current crisis has not reached the extreme stress seen during the Asian financial crisis, when draconian capital controls were eventually introduced in September 1998. During that episode, the ringgit collapsed by about 89% from peak to trough at its worst (to 4.71 from 2.49 against the USD). The ringgit has depreciated some 26% in the current crisis. During that episode, the KLCI fell by about 79% from peak to trough (from 1,271 to 263) at its worst. The KLCI today has fallen by only about 12% from its recent peak. Nevertheless, downside risks remain given looming Fed rate hikes, China’s RMB devaluation and the political crisis.

So in short, Malaysia is on the brink of political and financial crisis, and it looks as though the nuclear route (capital controls) may be just around the corner, which would of course only serve to alienate the country's financial system at a time when the government looks to be on the brink of collapse. What's particularly interesting here is the timing. Mahathir Mohamad famously clashed with George Soros during the '98 crisis, going so far as to brand the billionaire a "moron". Now that the country's "founding father" is looking to oust Najib, it will be interesting to see what role he plays in shaping Malaysia's response to the current financial crisis and on that note, we'll leave you with a quote from Dr. Mahathir ca. 1997:

"I know I am taking a big risk to suggest it, but I am saying that currency trading is unnecessary, unproductive and immoral. It should be stopped. It should be made illegal. We don't need currency trading. We need to buy money only when we want to finance real trade."

 


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Jonathan Livingston Phallus's picture

Goldman needs to be broken up.

remain calm's picture

The mob needs to turn on Lloyd Blakefein. Cut the head of the snake off.

jcaz's picture

Pick up your pitchforks, you fuckers-  just dressing in colorful pastels does not a revolution make.... 

realmoney2015's picture

This is why foreign aid never works for humanity reasons. Thats why Rand wants to end all foreign aid. He knows that it just goes to foreign dictators!

Clint Liquor's picture

Tried and true method used for centuries by the 'Money Changers'. Bribe the leaders to enslave the people. Worked like a motherfucker in the USA.

chunga's picture

It's easy to see how an old story about "throwing out the money changers" could develop a cult following. The problem with that story is that it's absolutely false.

WordSmith2013's picture

GOLDMAN Sachs -- the ultimate moneychangers!

‘Goldman Sachs has engineered every major market manipulation since the Great Depression’

http://themillenniumreport.com/2015/07/goldman-sachs-has-engineered-ever...

realmoney2015's picture

Yes they are enslaving the population.  'Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.' Since every FRN is a debt note, anyone who uses the dollar is a slave to the banks that makeup the Federal Reserve.

I am trying to get out of personal debt (student loans). I am also trying to be more of a peasant and a gentleman. I often trade goods for other goods. I try to make bets and deals in silver.

I'm also trying to raise awareness on tyhe fed and spread silver to more people. I also sell candles with silver coin prizes (https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu) in hopes that it will help people realize the value of real money.  Many of my firends and family have started stacking because they have awakened to our terrible financial sytem.

And you are correct about the moneychangers! As we know Jesus was a peaceful man. The only people we got angry with was the moneychangers! That should show us how truely evil they are!!

El Oregonian's picture

"the going theory is that 1MDB is simply a slush fund."

1MDB? Is that you Million Dollar Bonus?

Publicus's picture

Another colored revolution brought to you by the western elites.

MalteseFalcon's picture

"I know I am taking a big risk to suggest it, but I am saying that currency trading is unnecessary, unproductive and immoral. It should be stopped. It should be made illegal. We don't need currency trading. We need to buy money only when we want to finance real trade."

This guy for US president or head of the NWO.

Maybe he'll get rid of all derivatives as it's all BS that steals from the productive sector of the economy.

turtle's picture

Is it drawing too long a bow to suggest bribery - renegging - retaliation - MH370 - MH17...? 

Dutti's picture

I used to feel that all the talk on ZH about taking out the pitchforks, hang the bankers from lampposts etc. was a bit over the top. However, I have come around to feel that the corruption of governments and politicians worldwide have become so egregious that I feel those culprits, cronies and profiteers should be dragged out to the market square and suffer the fate of Ghadaffi, the fate of the rulers during the French revolution etc.

As Samuel Johnson so eloquently stated: "A good hanging concentrates the mind".

Dutti's picture

The same kind of anti corruption demonstrations are happening right now in Guatemala. The previous president in Panama, Ricardo Martinelli was incredibly greedy and corrupt. Brazil has it's own mayor corruption stories. In Turkey and South Africa current presidents built themselves real Palaces etc, etc. All of those "Leaders" were democratically elected by the masses of misled voters.

CheapBastard's picture

Gee, I wish even $100 bucks would show up "mysteriously" in any of my accounts.

SWRichmond's picture

Corruption, they name is "government".  ALL governments are corrupt, by definition, the bigger they are, the more corrupt they are.  You cannot use government to solve a corruption problem.  That is like solving a debt problem with more borrowing.

HowdyDoody's picture

The interesting thing about these anti-corruption rallies is that the proposed replacement leader (US funded natch) is usually more corrupt than the incumbent.

Perkins Stage II, I think.

 

HowdyDoody's picture

"Is it drawing too long a bow to suggest bribery - renegging - retaliation - MH370 - MH17...? "

You forgot to mention that, in 2013, The Kuala Lumpur War Crimes Commission* held a tribunal charging Israel and General Amo Yaron with the crime of genocide and war crimes. The Zionists do not like being held to account.

* - the KLWCC looks at cases the Internation Criminal Court won't touch.

 

 

 

SoilMyselfRotten's picture

:::flutter:::flutter:::flutter:::

 

Don't look up

StychoKiller's picture

That Guye Fawkes sure gets around!

WOAR's picture

The only reference I'm getting is that Million Dollar Bonus finally got his payoff.

1MDB, amiright?

chunga's picture

hmmm...I've got news for you bible-thumpers. If the money-changers did get kicked out of the temple, they weren't gone long.

83_vf_1100_c's picture

"I've got news for you bible-thumpers"

 

Well which is it, true or false? I await your wisdom oh angry one. It's alright, God and I don't get along all that well either. Hmm, my teenaged son and I don't either. Might be something there to chew on.

CheapBastard's picture

The BigDawgs usually get away with embezzling and money laundering millions while most gubmints chase dawn and haunt the little peeples for $10k to $50k that some poor sap tried to hide from their Leaders.

 

Alos, if I'm off 1 puny dollar on any payment, you can be sure the bank, cc company, etc will track thaty $1 dpown and go after me. Yet, somehow, these felons make off with millions and no one notices?

... or it is simply ignored by the bribed officials and banksters.

Son of Loki's picture

I knew of a doctor who was trying to hide a few thousand from his wife before their divorce. Poor guy; some [nasty, low down, traitorous bitch] woman in his office squealed on him and he incurred the wrath of a scorned women as well as the Eye-R-Us.

 

[All the decent good-hearted women on zh, pls forgive me for those vulgar comments above. However, I know no ZH gal would ever do something like this dastardly deed]

RichardParker's picture

Not to worry, our man(boy) Obama is on the job eradicating slavery in Malaysia.

https://www.google.com/?gws_rd=ssl#q=obama%2Btpp%2Bmalaysia%2Bslavery

(Sarc)

 

 

de3de8's picture

Good, U.S next ...... I hope

Stuck on Zero's picture

Definition of foreign aid: When the rich in a rich country tax the poor to give money to the rich in a poor country.

Implied Violins's picture

Yes, that is called: 'hood robbin'.

Time to turn that around again...

Flankspeed60's picture

Foreign aid is the transfer of money from poor people in rich countries to rich people in poor countries.

CheapBastard's picture

<< Foreign aid is the transfer of money from poor people in rich countries to rich people in poor countries. >>

 

... and then stashed away in some secret Swiss bank account.

FreedomGuy's picture

My favorite was the billionaire Yassir Arafat. Anyone who says he is "of" or "for the people" is most likely the opposite. He/she is of/for himself and suckering the people. 

Okay, I often enjoy being the contrarian at least to challenge the templates. Where is Goldman the actual bad guy here? I see the bonds for 90 cents on the dollar but I would buy them that way, too, if I could. Their currency depreciated 13% in one year. Seems about right. Now, I am not a trader and maybe there is something I am missing. 

I am not saying Goldman is an angel but I do not see where it is doing anything we would not do like buying stuff at discount that the government offered it. 

Here is the second part. Show me where this is not all about government, as usual. If Goldman got a steal, then government gave it to them. Where is that $700b? In a government leader's account, right? Yes, another "for the people" bullshit fund that gets directed to not just the wealthy, but the government or government connected. This is pretty much all of history and should not be a surprise to anyone except a statist-leftist who actually believes the BS that government people are more caring, smarter and more moral than free people. Only they should be surprised.

I am a libertarian currently and by the end of my life I may be a total anarchist. All I can see is how governments oppress, impoverish and even outright kill people. We can do the charity part ourselves...actually most anything. 

It helps to hang the government thievees but it does not really help for long when you replace them with a new set of thieves. That is what most every country does. 

MEFOBILLS's picture

From Freedom Guy

 

I am a libertarian currently and by the end of my life I may be a total anarchist. All I can see is how governments oppress, impoverish and even outright kill people. We can do the charity part ourselves...actually most anything

 

The libertarian view works in a non-money economy.  In evolutionary terms, tribes of people were 80 or less, and tribe members just remembered who owed who what.   When people give gifts to each other, that encourages gifting in return.  Common survival also depended on each other. 

Sheep herding and wandering cultures settled down for agriculture to grow barley primarily, as people wanted to get drunk and party.  All of the giant stone structures from the past were beer parties and festivals, usually also including lots of meat to eat as sacrifices.  All of the counting systems were related to  30 day lunar or yearly 12 month cycles (hence 12 inches to a foot, and 30/60s for time.)

Metal money came into being to represent ledger debts from the Temples.  The religious class used to call the seasons and when to plant crops, but they grew to also over- see the large class of temple labor, who was making goods.  Temple labor could be seen as a fore runner to welfare, as it was populated by widows and other laborers who did not own land.

These goods in order to trade to far flung cities needed a way to extend the ledger beyond barley exchange, and hence metal became so many barley weights, and later related to cows.  Gold coins were one or two cows worth for centuries, and were measured by weight on a balance scale, where the weight would be grains of barley.

The invention of money, then disrupted credit/debt relations between people, and hence an element of dishonesty started creeping in.  Rents can be taken in a money system fairly easily, especially by those who create it (bankers).  Rents increase prices, so it is a hidden hand.

However, in a gifting goods society, where people gift their time and labor energy, those who are grifters or lazy, usually get shunned.  If they are not shunned outright, they are kicked out.

Ironically, Libertarians are the first to call for privatization of money – it cannot be government controlled.

Yet, it is this privatization of money, first by the Temple priests, and now by banking priests, that allows money to be used to take rents. 

Only the law, done in advance and with high agreement, has the potential to make money moral.  A group of people will always sense immorality and will not allow it to be coded into their laws.

Any sort of calls to encode money’s attributes with “market mechanisms” or weight by metal is bad thinking, and brings about the very thing liberatarians are against.  This thing we are against is encoded into our genes, the idea of fair play.  That somehow government is always a bad agent is also bad thinking, especially if governments intend to stop bad actors. 

It was the Malaysian government that stopped the financial shenanigans with FX controls, thus protecting their sheeple.

It is money that is the bad agent, and money needs repair.  It is legal money that is the highest form and it should flux in accordance with volume and channeling needs.

Pride becomes before a fall, and humans are pride defectives.  There are also psychopaths walking around, about 2 to 3 percent of the population. 

Letting these types of people have their hands on private emissions of credit will be the undoing of civilization.  300,000 years of evolution coding certain groups toward fair dealing is undone by an inability of mankind to get control of money.   

I say certain groups, because I’ve made claim, that former Temple priests are the fore runners of today’s Jewish problem.  The money power is now in the hands of the ancient caravaneers and their thought constructs – these were the cast-outs, the pyschopaths, who were ejected from fair dealing Tribes, to then roam and become traders.   This is not a priori reasoning on my part, it is well documented in the old literature.  The actions of these people span thousands of years.

It is also known that Neanderthals were still wandering the regions, especially around the black sea area before it filled in after the fourth ice age.   Cro Magnon man, his psychopathic outcasts then came into contact with the “thals” and a new type of man emerged – closely related to today’s Semites.  This can also be confirmed with gene mapping and population/language statistics. 

These new people with their facility with numbers were progenitors of and have high affinity for money.  Thall caves are heavy with counting, and also bones are marked with thier counting.  But, their caves have little to no art or “graven images.”   Their gods are abstract, man in the sky, and do not accord females as part of the reproductive part of nature – hence females are oppressed, have their clit cut off, or their face covered.

So, in many ways, the money problem is a racial problem and an evolutionary problem.  Whether you believe it or not, our favorite in-group is operating under a different set of wet-ware, and it is NOT LIBERTARIAN.  Their mind control system can be accessed now in Kabala, or Talmud.  Read it yourself…don’t take my word for it.

 

To them, libertarians are useful idiots, dupes – to be used, to then keep the private bank credit scheme or even metal by weight money systems going, as control and rent taking means.  What began in Babylon is still with us.

r00t61's picture

The only useful idiot here is you, who constantly advocates for a "sovereign money-topia" controlled by a government so large that it makes Emperor Palpatine's regime look like a Boy Scout jamboree. 

How many goons with badges and guns will be needed in your top-down, monolithic power structure to ensure that the "law" is "moral"?

FreedomGuy's picture

Criticisms of Libertarians are interesting. No one can call us oppressive because there is no real control or ability to oppress in the ideology. Most criticisms come in the range of being impractical or sort of useful idiots and dupes for some other oppressor. 

The idea that libertarians favor one monetary idea over another is false. There are gold-bugs, 100% reserve and mostly Austrian School economic and monetary theories. However, the bottom line is the ability to develop any form of exchange you wish. If you love bitcoin, go for it. If you want solid gold pieces, go for it. If six or seven banks issue some sort of fractional reserve currency, cool. Innovation will provide the best answer. The sheep mentality is to think government is the only source of any currency or even rules of trade. How many companies, banks or individuals would do a Zimbabwe currency? ONLY an oppressive government would do that. If Walmart Bank had issued such a piece of monetary garbage it would be bankrupt with lawsuits. Only governments give the ability to impose the stupidity of a few onto the entire captive population. It is done through the police powers and fake immoral laws. 

The other idea is that libertarians are passive in the face of oppression and we would all get fooled by the Jewish Banker World Domination Mind Control conspiracy. That is the opposite of the truth. First, no conspiracy can survive without either the power of government of the use of force/coercion. Libertarians are well armed and it is okay to organize for mutual protection. It is okay to use law for punishment and recompense, too. However, the police force works for the public, not the mayor, or President. 

There are myths about what money is and what it represents. If I ever go back to college, which is appealing, at times, my economic theses would be two, "The Power of Voluntary Exchange versus Involuntary" and "Money as a Receipt for Work". 

SofaPapa's picture

@FreedomGuy

Your comment is based on a premise that Goldman is responding to policies initiated outside of their control.  They are among those creating these deals, not just the lucky bystander who picks up the fallen $20.

FreedomGuy's picture

I am not actually asserting that. I am asserting Goldman looks the world over for good deals. If governments give them to them preferentially or not, they are not doing anything different from anyone else. This fund might have been part of a public relations campaign to "give back" (a stupid term) or to look charitable in a third world country. I am not sure from the article. 

My main point is the core, central, critical problem is the damned government. It is always the damned government. Even if Sachs is dishonest it really cannot steal taxpayer monies and cut in anyone else without the help of govenment. Governments hide behind a facade of law, police and the only legitimate or authorized uses of force. That allows them to fleece everyone including Sachs, if they wish. 

Minimalist government solves all these problems. 

Maybe in a couple hundred more years and some economic disasters we  will begin to realize or remember that. 

detached.amusement's picture

"If they wish" to bite the hand that feeds them

Iwanttoknow's picture

No body says Arafat was perfect.Why the outrage? member of the tribe?

Allen_H's picture

Foreign aid.....mmmm....Do you mean USAID ? The NGO revolutionary party ? Define please.

mc225's picture

foreign aid: 'from the poor people in the rich countries to the rich people in the poor countries'...

mc225's picture

i see flankspeed already posted that...

KnuckleDragger-X's picture

You fucked up...You trusted us.....

LasVegasDave's picture

goldman, hip hop niggers and allah worshipping wogs;  what could possibly go wrong?

Allen_H's picture

@jkaz the troll in support of this farce. TERRORIST IDIOT !!!

lordkoos's picture

And what have you done lately?