The optimism is palpable, and the KLSE in expectation has maintained a respectable stance in the 900-950 range (though it is down to around 850 over the past week).

Cautions of excessive expectations are always appropriate in a conservative investment strategy. The potential for asset-based market evaluation is a risk that has been abnormally low in the past three decades.

The recent weakness in world markets is a widening in the gap between present positioning and the expectation of future gain. One wonders where the magic went.

It has been an earmark of the Mahathir policy to use public money to support the economy, now justified on the 'too-big-to-fail' rationale. One wonders just how the failure is to be prevented given the present burdens.

In Malaysia, public money has been used to support the activities of the BN coalition. The Finance Minister of the country is also the treasurer of the Umno party, and there is every appearance of fluidity in the accounting methods, the incompetence of which Mahathir blames for missing funds in almost every state government of the country.

Accurate accounting methods are fundamental to investor confidence, especially when there is little or no transparency in either governmental operations or private corporate affairs.

Cash is all important to the BN coalition, which they acknowledge is operated according to what is euphemistically called 'money politics'. The term covers all manner of political chicanery, extravagant even by the archaic standards of the Malaysian legislative/judicial system.

Two by-elections and an annual meeting have been expensive, and although the recent campaigners have transferred to bicycles and motorbikes, this is seen more as an attempt to avoid the appearance of offensive luxury at the expense of the kampung voters, it may indicate an unconscious preparation for belt-tightening to come. There are to be no more Mercedes, BMW and Volvo cars for the ministers; all new government cars are to be the national car, the Proton.

Money has been pumped into the many hare-brained schemes of Mahathir from every imaginable source: bribes, kickbacks, gratuities, consultation fees, administrative advice, political counsel, tolls, taxes, extortion, blackmail, public utilities, natural resources, and the public trust funds. There is a continual shift back-and-forth between privatisation of public utilities and re-nationalisation.

Typically this transfer of assets occurs when a government philosophy changes, as when the populist parties gain power over the conservatives. In Malaysia, it occurs under the same government, but with no justification other than an admission by the private sector that the economical benefits expected have failed to materialise, and the government agrees to buy back the failing enterprise, with costs.

The result has been a modest boost to the economy, and Malaysia has managed to buy a little time, but at a price. All Malaysian bonds, the traditional means of providing infrastructure capital, have not been enthusiastically received by the world market. To overcome this perceived inability of the rating agencies to give a fair indication of their credit worthiness, the Malaysians have embarked on the dubious strategy of rating their own bonds.