Introducing ... mortgage-backed securities! No, really

Someone please pass a word of advice to Danareksa Investment Management.

The finance firm is launching 100 billion rupiah worth of ... wait for it ... mortgage-backed securities. It's the first such debt issuance in the country, and it's coming in February, backed by Bank Tabugan Negara.

Um, I don't know how to tell you this, guys, but ... mortgage-backed securities are exactly what got us into this global financial mess. The credit crunch, the asset devaluation, the bank blowups every couple of days? Mortgage-backed securities, where home loans are sliced and diced into risky tranches that PhD-level physicists can't understand.

I hope you know what you're doing, because you're stepping into a true financial minefield. If housing prices collapse in Indonesia, and owners all find themselves underwater (owing more than the house is worth), then those mortgage-backed securities won't be worth the paper they're written on. In fact, those fancy products on the verge of making the American financial system totally insolvent.

But, as the French say, bonne chance!


Today's Top Stories

Myanmar refugees headed home
193 boat people were stranded off Sumatra

In it to win it
Indonesia's shock candidacy to host World Cup

No eye contact, please
Luxurious life of a Sultan

Obama protest?!
Local Muslims don't like Pakistan strike

Read more »

Yoga ban!

I mean, come on.

I have no particular beef with the Ulema Council that recently banned yoga for Indonesian Muslims. But don't they have better things to do, than touring the country's gym classes and coming out against Hindu chanting?

Our global financial system is near total breakdown, some governments (i.e. Iceland) are actually falling, the Mideast is blowing up yet again, conflicts in Afghanistan and Iraq continue apace, global warming is threatening the entire planet ... and our most pressing issue is yoga?

Priorities, people. If the worst financial crisis since the Great Depression has taught us anything, it's to figure out what's important and what's not. This is not important. Our world has many threats facing it; but a college kid in Birkenstocks, chanting 'Om' while doing the downward dog, is most certainly not one of them.


Today's Top Stories

Riau Airlines debuts
From Pekanbaru to, uh, Pekanbaru

Meth with your coffee?
3.5 tons seized in Internet kiosk

Megawati mulling VP
Sultan, Akbar Tandjung, Sutiyoso among possibles

Letter pushed Suharto out?
Top ministers withdrew support en masse

Read more »

CIDA in Indonesia

It's a sad truism that one of the main casualties of a global recession is going to be philanthropy.

Some notable exceptions, to be sure - like the Gates Foundation, which plans to give more this year than ever before, and New York City mayor-slash-billionaire Michael Bloomberg, who's ramped up his giving to hundreds of millions of dollars annually.

When it comes to cash-strapped nations, though, I imagine foreign aid and charitable giving is going to be hurting for several years. When you're having trouble paying your own bills and covering your own mortgage, whether you're a country or an individual, you're less likely to have ready money to send elsewhere.

In that challenging context, some organizations deserve real credit for their massive and ongoing efforts in Indonesia. In particular the Canadian International Development Agency, or CIDA. Check out their lengthy list of Indonesian projects here. Overseas projects like those may not get a lot of credit back home ... but they're the right thing to do.

Today's Top Stories

No smoking in public places? Ha

Don't mess with my Gudang Garam

Sumatran quake hits

Magnitude of 5.6, flashbacks to 2004

Indonesia to host World Cup?

Submits bid to FIFA for 2018 or 2022

Buy our bonds - please

$4-billion government issue coming up

Read more »

Apa kabar, Obama?

Need proof that Barack Obama still has a place in his heart for the place where he spent a couple of years growing up? He's actually chatting up State Department staffers in Bahasa Indonesia.

News of the exchange comes in the Jakarta Post, reporting that Charles Silver - a former staffer at Jakarta's U.S. Embassy - greeted him with a 'Selamat siang, Bapak.' Obama swiftly came back with a 'Terima kasih, apa kabar?' He praised Silver's accent, and said he wanted to visit his old neighborhood in Menteng.

We're betting that beyond the usual pleasantries, his Bahasa is probably a little rusty. (Maybe he can take those free classes given by the Indonesian embassy in D.C.!) Given his previously-stated desire for nasi goreng, rambutan and bakso, we're taking bets that Obama will be headed to southeast Asia in short order. Odds, anyone?


Today's Top Stories

Obama to Muslim world: It's a new era
Hand of friendship instead of clenched fist

Golkar expelling Sultan?
Divine VP wannabe in trouble with party

Kalla planning US trip
SBY's deputy to meet Joe Biden, Hillary Clinton

Global warming could wipe out Jakarta
Potential flooding, massive population a bad recipe

Read more »

Bakrie & Bumi: The saga continues

The always-dramatic dealings of the Bakrie family have caught the attention of America's foremost investing newsweekly.

Barron's has an article this week on a head-scratching financial conundrum. Execs of coal giant Bumi Resources have announced a big share buyback within a couple of weeks, setting the price at a fixed level (2,500 rupiah). Here's the crazy thing: Shares are currently trading well below that level, in fact more than 400% below it. Theoretically, then, you could quadruple your money within days ... a better investment than almost anything else on the planet, except some aggressive loan sharking.

So what gives? Basically, folks don't believe the Bumi/Bakrie story. "Put simply, few Indonesian investors think it will happen," author Eric Ellis writes. HB Capital managing director James Bryson says he would be "very surprised" if the buyback actually takes place. Given that Indonesians know the Bakries and Bumi far better than Western investors, we'll stick with them, and look at this apparently once-in-a-lifetime deal with a very skeptical eye.


Today's Top Stories

Solar eclipse wows astronomers
Indonesia gets front-row seat

Cops fire on Papuan crowd
Trying to destroy local police station

Indonesia wants Hambali
Bali bombing mastermind currently in Hotel Gitmo

No stretching allowed
World snickers at yoga ban

Read more »

Spotlight: Como Shambhala Estate

There are hotels where you flop down for a night in between flights, which all look basically the same (Radisson, anybody?). And then there are hotels which promise to detox you from daily life, and leave you a better person than when you came in. Bali's Como Shambhala Estate claims to be one of the latter.

Como bills itself as a "residential health retreat," pairing luxury digs with a busy activities schedule for body and soul. On the menu, items like pilates and yoga by the riverbanks, rice-paddy hikes, and talks on vedanta philosophy.

Rates for the Ubud resort range from $300 for a garden one-bedroom, up to $1,600 a night for the three-bedroom private villas. Pricey, for sure. But for a locale that's been named one of the top 10 spas in the world by SpaFinder - and is sister resort to Como's Parrot Cay location in the Caribbean, Conde Nast Traveller's number one spa on the planet - might be worth a once-in-a-lifetime splurge.

Today's Top Stories

Apa kabar, Obama?

Barack shows off some of his Bahasa Indonesia

Suharto's long shadow

Indonesia still trying to shake off old dictator

Remittances tanking

Less cash being sent back from overseas

US intelligence chief dogged by Indonesia questions

East Timor rears its head - again

Read more »