US, China talks further economic ties but lack solutions to the crisis

The world watches as the two superpowers, the United States and China, talked about economic matters in a time when their leadership is highly sought by the rest of the world amidst a crippling global economic and financial crisis. The third edition of the China-US Strategic Economic Dialogue in Beijing this week did just that. But the question is, was there enough substance that this summit produced to make any significant impact if at all.

It is the first time Chinese and American finance officials met since the crisis began in October. Both understood now each country is a dependent entity of the other at least in terms of trade. The crisis bared how the decline of US consumption can have adverse effects to China’s mass production. Thus, the summit tackled the issue of economic growth balance which has for years gone to the favor of the Chinese. China has also committed to improve their food and consumer goods safety standards in light of the recent troubles Chinese manufacturers faced abroad with their products from milk to toys, all involved in cases of health hazards.

But what analysts are most interested in is how the two sides are going to address the current crisis that would benefit not only their economies but hope to stimulate the entire world economy back on track. The Americans are mulling for a stronger RMB, China’s currency, in order to make US goods more competitive in the Chinese market. However, their Chinese counterpart is inclined to depreciate their currency because they need to save their rapidly declining export industry, which according to Chinese Premier Hu Jintao has lost its competitive edge.

It’s obvious that the Chinese are facing massive pressure inside because of the rate manufacturing companies are closing shop all over the mainland. Many, however, dispute this notion as nothing but political rather than economic because it is not that the Chinese exports have lost competitiveness but it is the overall fall of American consumption. Since no one is buying their goods, it is just imperative that their exports are expected to fall and a depreciated RMB is not likely to make any difference.

Many believe that the Chinese are simply positioning themselves politically over the Americans since they know the US has not much leverage coming into these talks. They would rather deal more constructively with the next officials of the new Obama administration rather than push for something concrete with a lameduck Bush administration.

Young professionals should start holding on to their money

If you are 20ish and has a habit of jumping from one job to another, now is the time to reform that attitude. The economic crisis, although still in its infancy here in the Philippines, is expected to go full swing next year. The problem is real and most of it is really out of the hands of ordinary middle class families and individuals, especially the yuppies, a slang term for young professionals.

There are things that young working professionals can do to secure themselves financially as our economy transverses this crisis. Start saving. Saving money, though, is easier said than done, because if it were, we would have ranked among the countries with high savings rate but unfortunately we are currently among the bottom of the sphere along with the likes of Bangladesh and Myanmar racking only 17 percent. People from our neighboring countries Thailand and Malaysia save three-tenths of their income while the Chinese save half of theirs.

Why is it important to save? Because it is a form of investing in your future (purchasing a home, buying a car) and bring security to a rather uncertain future (untimely health care costs, other emergency situations). Also, it is a good leverage against a burgeoning credit card debt, which is a situation that most young professionals find themselves into nowadays. A high debt with low or non-existent savings is a recipe for bankruptcy. Certainly, no one wants to be a young, hip, and broke professional at their 20s or early 30s.

Job losses now hounds Filipinos working abroad

Many Filipinos from abroad are coming home this December not because of the holidays but because they have been laid off from their work. Just recently, dozens of Filipino overseas workers were forced to pack their bags and left for home from Taiwan and Macau. In the previous month I was told by my mother that many people from our rural town came back home from China because the call center that they worked for there went out of business.

The ongoing economic and financial crisis has affected Filipino workers all over the world and this could mean peril for our economy. Their remittance dollars, which has been the lifeline of not only our overall economic health but also of our foreign reserve security, is seen to dramatically fall in the months to come. Technically, this will affect the strength of our currency which could trickle down to the competitiveness of our exported products and the national government’s ability to finance its external debt.

The effects on the lives of Filipino middle-class families, however, is much magnified. Income from our overseas workers are used to build homes and pay for children’s education, just to mention a few. When this dries up, it would be least to say catastrophic. Many of these workers are still ridden with debt brought by the high processing fees of their previous stint abroad. The lack of decent-paying work opportunities here in the Philippines is another reason why these workers dread the idea of even coming back home.

Foreign countries, where our OFWs (Overseas Filipino Workers) have been working, have their own problems dealing with the crisis and usually their initial response is protectionism. With this economic climate, their government and private sector are being pressed hard by their own constituents to prioritize locals over international workers like Filipinos in terms of jobs.

Our government, through the agencies that handle the welfare of our overseas workers, has to be ready for more reverse exodus of OFWs by allotting enough funds aimed at providing financial assistance to them.

Liverpool sits top of Premier League as Chelsea bows to Arsenal

For the second straight game, Liverpool failed to find the back of the net and settled for another 0-0 draw, this time against West Ham United. Still, it was good enough to put them ahead of rivals Chelsea for the leadership of the Barclays Premier League.

Despite going behind early, Arsenal managed to score two goals courtesy of Dutch striker Robin Van Persie and frustrate Chelsea at Stamford Bridge. That essentially ended the Gunners’ three-game losing skid in England. For Chelsea, the loss was only their second but a crucial one since Liverpool managed to gain a point against the Hammers.

It could have been worse for the Reds had Craig Bellamy made his 30-yard strike shortly before the end of the first half. Spanish striker Fernando Torres did not suit up for the Merseyside club while Captain Steven Gerrard and Xabi Alonso both were given but missed their chances to end the deadlock.

Liverpool will meet Blackburn Rovers on Saturday before their final Champions League group game against PSV Eindhoven on December the 9th.

‘Bonifacio weekend’ a huge lift for retail sales

It was the perfect weekend. Most Filipino families grabbed the opportunity to spend during the long weekend leading to Bonifacio Day. Although I do not think the government is tracking sales made by major retail stores in any given period of time, it was obvious by the volume of people who flocked the malls in the weekend, that it was a huge day for the Philippine retail industry.

Retail giants like SM, Robinsons, and Landmark made a big killing out of people’s high disposable income in the weekend since the latest payout coincided with the mandated 13th month pay. My wife and I, like many others, stormed the malls to buy items from shoes to tickets to the movie Twighlight. It was like the Filipino version of the Black Friday shopping spree in the US during weekend Thanksgiving weekend.

For the retail industry, it is a good opportunity to bolster their bottom line since the ongoing economic crisis is definitely going to change people’s spending patterns for a while. Because as the crisis grips the economy further, they may have to get used to giving more than 20 percent off the tag just to get people to shop.

Philippine property sector appears headed for a slump

As I rode the bus along Ayala Avenue, I read the headline on the ticker tape screen in Insular Life Building saying the country’s property sector will endure the economic crisis. I tried to search on the Internet to see the full details of this news but I never found anything. Or maybe I am just not that good at searching.

But you see, I can not help but notice how many of the new high-rise residential condominiums built here in Manila especially in these last couple of years, are still unoccupied. Cement prices have also significantly dropped recently indicating slowdown in construction projects. Although the commercial space sector still continues to enjoy positive growth because of the foreign outsourcing companies, the residential property sector is becoming a huge question mark.

The property boom in the Philippines in the last few years saw property prices jump in astronomical levels. Buoyed up by speculative and foreign buying, property prices went up so high that many Filipino middle class families could no longer afford to own a home in the greater urban areas. Then the global financial and economic crisis struck out of nowhere, affecting most property sectors in most economies in Europe, the Middle East, and the Asia-Pacific region.

Now, the paradigm has shifted and property owners are forced to significantly lower price valuations in order to attract buyers. In many cases, these developers, which made their projects through loans from banks, will find themselves in a bind since they will be unable to meet their projected sales. The economic crisis has caused a decline in appetite for home purchases and for those who are willing, the credit crunch has made it difficult for people to obtain loans to finance their mortgages.

I am not sure how the property sector will survive the crisis without falling hard and eventually deal with consolidation. With tremendous supply of space and demand quickly drying up, the property sector here in the Philippines is going to need a massive shot in the arm in order to avoid an impending collapse.

What is there to cheer about the 3Q GDP growth?

Surely, the Philippine economy did beat analysts’ expectations but other than that, nothing is worth rejoicing about a 4.6 percent GDP growth. I am still very much amazed of how this administration continues to allay public concern about the risks of global economic meltdown. Even the Press Secretary still regards this figure as ‘positive.’ Clearly, our leaders in Malacanang and Congress have been behind the curve all this time since the crisis began.

One thing is for sure is that we are currently in an economic slowdown and it is disconcerting that the government has not openly discussed the solutions nor prepared us of what to expect next year. When our neighbors are already talking about stimulus plans to cushion the possible hard fall that is expected because of the economic and financial turmoil, our leaders in Congress are busy killing an impeachment complaint against the President and preoccupied with their investigations of the ‘Euro generals’ scam and former Agriculture undersecretary. Nothing wrong with these actions but their priorities are clearly skewed.

The jury is still out whether National Economic Planning Secretary Ralph Recto, who is a clear political appointee to the post, can steer the economy through an expected tumultuous 2009. The President’s economic team, are definitely going to have their hands full next year. Secretary Tevez of the Finance Department commands great respect from both the administration and the opposition in Congress and his experience is a huge plus. I am deeply concerned, however, with the liberal-minded Budget Secretary Rolando Andaya because of his inclination for high spending. For some reason, our filibuster-proof House of Representatives was more than willing to make sure government is paced for another record-breaking spending next year.

The new $800 billion rescue plan poised to bail out Main Street

I surfed through CNBC and Bloomberg last night and Treasury Secretary Hank Paulson was once again talking to the press. I do not have the luxury to watch these channels lately unlike in the previous weeks since my wife’s work schedule has now changed back to regular day shift. In other words, she gets absolute control of prime time television.

Nevertheless, the morning news reported what the press conference was all about. Surprise, surprise? Not quite. The Federal government has unveiled another multi-billion bailout package amounting to US$800 billion this time. If you recall, Congress approved last month a US$700 billion rescue plan that was supposed to ease the credit markets for businesses and consumers to gain access to credit. However, half of that amount has already been allocated to the financial sector but the credit markets has yet to fully thaw leading Federal authorities to realize that their plan did not materialize the way they were hoping for.

This new stimulus plan, on the other hand, claims to directly benefit consumers and businesses. Unlike in the first stimulus plan where the government infused funds directly into ailing banking institutions, the new package will buy troubled assets of institutions that are involved in providing student loans, credit cards, and auto loans. Likewise, it will also infuse massive amounts of money to improve liquidity of mortgage lenders Fannie Mae, Freddie Mac, and Ginnie Mae so that they will be able to service Americans who are planning to own a home but could not gain access to financing because of the credit crunch.

Government wants to make sure that struggling homeowners, who have seen their home equity dropped dramatically since the housing bubble burst, will have a better chance to sell their homes because potential buyers now have access to financing. This is also a welcome news to automakers who are hoping that the stimulus would make it easier for consumers to get car loans, something that they have been desperately wanting since this crisis began as flagging sales has threatened to put them out of business.

The Philippines could elect an independent president in 2010

(Last of three-part series)

The global economic crisis would be a game changer next year. If the country falls into a recession or extreme slowdown, there is no way the President’s coalition will stand a chance in 2010. It would be a political suicide for somebody to run for president under the President’s coalition. However, the administration could spend their way out of the crisis in order to show to the people they have managed to cushion the effects of the crisis and end the year with a decent 4.8 percent growth in GDP and probably a 5.5 percent the quarter before the elections in 2010.

This, however, will come at a price because the nation might return to a fiscal crisis because of the government’s deficit spending. But none of this will matter because it is up to the next president to handle, may it come from the administration party or from the opposition. The Filipino public must be reminded, though, that the premise for the imposition of the VAT, which was vigorously pushed by the President’s allies in Congress, is to stabilize the country’s fiscal health and to balance the budget in 2010. At the rate of how events are unfolding in these last few fiscal quarters, a balanced budget may be entirely scratched out of the equation. Congress may be partly blamed for this as they let spending let loose.

Neither can the current administration take credit for their so-called achievement of the highest economic growth in a lifetime because despite growing a little above 7 percent in GDP, a country of 90 million people requires at least 9 percent of growth in order to sustain the population. Their case that the economy was in good hands under their watch is largely contentious.

The expected spike in unemployment, reduction in real income especially among the middle class and those below poverty line will pave way for the people’s increased appetite for fresh policies in terms of taxation and government spending. At the same time, the people will be smart enough not to buy into any divisive rhetoric against the government, which would likely come from the mainstream opposition, because they know better now the harsh consequences brought by extreme political division.

This kind of political climate is ripe for any independent presidential candidate to take advantage. If he or she can make her case to the Filipino people that she can unite a weary and divided nation and has the technical skills to run the economy more efficiently where an economic growth can be achieved that can sustain the current population, that candidate may have a chance.

Liverpool keeps pace with Chelsea despite dropping points vs Fulham

Not the best weekend for the so-called Big Four could hope for in the Barclays Premier League. Neither Liverpool, Chelsea, Manchester United, and Arsenal could gain maximum points as they were held by their respective opponents in last Saturday’s fixtures. As it stands Liverpool and Chelsea are deadlocked at 33 points.

Liverpool were clearly not in their usual dominant form in their game against Fulham, a game that ended in a 0-0 draw. The usual sharpness was clearly absent and they were caught a step behind in many occasions especially on the defensive end. It could have been fatigue that was caused by the international friendly fixtures in the mid-week where many of their players came back from international duties. Javier Mascherano, who captained Argentina in their win against Scotland, was constantly out sprinted by Fulham striker Bobby Zamora. Fernando Torres did not have his usual speed and his shots lacked power.

Captain Steven Gerrard’s absence was another crucial blow. He could have made a huge difference especially inside the box. Many times Albert Reira did managed to slip the ball inside the penalty area and had Gerrard suited up, he could have provided more threat to Fulham keeper Mark Schwarzer.

Manager Rafael Benitez’s tinkering with the lineup starting Lucas Lieva instead of the much experienced Xabi Alonso and opting to sit out Gerrard very much indeed proved costly for the Reds. As the game was wrapping up, I could not help but check the Chelsea-Newcastle game which was shown on the other channel because a Chelsea win would have brought them two points ahead. To my relief, Newcastle held their own in Stamford Bridge and ended with a goalless draw of their own.

Liverpool has a midweek Champions League fixture against French Ligue 1 club Marseille and will return to action in England against West Ham United on Monday, December the 1st.

The Philippines could elect an independent president in 2010

(Second of three-part series)

What is certain in this country is that local politics is immune from events in the national political arena. This was especially true in 2007 after despite the President's unity coalition's humbling defeat in the Senate, she continued to maintain control of the House. In addition, during the 2004 elections, Fernando Poe Jr. managed to beat Mrs. Arroyo in not just a few but many provinces despite the clear handicap in terms of support in the local level since traditionally the administration maintains a stronghold in the local front.

In this scenario, the next president of the Philippines could be elected without massive support from the local politicians. The rules of elections have changed in these last few years. We are now seeing a decline the politics of patronage. In an election climate where the likely candidates for the presidency would come from the swing parties, this could be the best time for a third force to enter the fray.

Perhaps what will happen in 2010 will be the same of what happened in 1992 with the Laban ng Demokratikong Pilipino, the most prominent political party at that time, that involved then Speaker Ramon Mitra and then Defense Secretary Fidel Ramos. Mitra got the party's presidential nomination but Ramos continued his bid and founded his own party, Lakas.

Let us just assume that Estrada picks Villar as the standard bearer for the opposition. I truly believe this would not matter. Just like 1992, I believe that there is no clear advantage from any of the cast of candidates at this point. So a blessing or a non-blessing from any Vito Corleone would not decide the election. What will decide the election is what matters to every Filipino family at this moment- the economy.

(To be continued)

The Philippines could elect an independent president in 2010

(First of three-part series)

The official word is that the Palace has declared President Gloria Arroyo would indeed step down after her term of office ends in 2010. The presidential election that same year will virtually make People Power 2 in 2001 come full circle. That event shifted the political landscape of this country from a loose multi-party system to a somehow solid two-party affair, although not exactly the way how the Nacionalistas and the Liberals did for almost 25 years since the end of American occupation.

For most part of this century, the spectrum of the political arena is divided between the followers of Joseph Estrada, who was kicked out by a popular revolt in 2001, and those loyal to President Arroyo. For six years, Arroyo almost had a firm grip in both houses of Congress. But that changed in 2007 when the people decided there should change in direction especially in the Senate although the President’s coalition party continues to enjoy filibuster-proof in the House of Representatives.

The people are clearly beginning to get wary of the President’s tax measures and corruption charges that are consistently being put under the rug. Despite losing seats in the Senate, however, time is on the Palace’s side since most senators are likely to take their positions next year in prep for 2010. That brings us to the elections. Clearly, Estrada and Arroyo will not be participating but this would be potentially the last time their respective parties, Puwersa ng Masa and Kampi, will face off in a political battle.

The problem is, neither parties do not have candidates directly from their stable that can be considered ‘presidentiable’. Look at the current candidates that have openly declared their intentions for the presidency: Mayor Jejomar Binay (PDP-Laban, Makati), Senate President Manny Villar (Nacionalista, Las Pinas), and Bayani Fernando (Lakas-CMD, Marikina). Even other potential candidates rumored to be interested in the position are affiliated with other parties such as Senator Mar Roxas (Liberal, Capiz), Loren Legarda (Nationalist People’s Coalition (NPC), Manila), Francis ‘Chiz’ Escudero (NPC, Sorsogon), and Vice President Noli De Castro (Independent, Mindoro).

Filipinos seem to have largely forgotten about the hysteria of 2001 and the furious run-off battles that it brought which divided the nation for over half a decade. What I am saying is, the 2010 polls could be a potential free-for-all and those candidates mentioned above could definitely win without the baggage of an Estrada-Arroyo rivalry.

(To be continued)

Do GM, Ford and Chrysler deserve a Grand Auto Bailout?

Last night, the biggest three automakers in the US, General Motors, Ford and Chrysler ,also dubbed as the “Big 3”, went to Capitol Hill begging for a US$25 billion bailout from Congress. There has been a lot of opposition to this proposal because it still remains unclear where the money would be taken from to finance this another massive rescue plan.

I watched Treasury Secretary Hank Paulson last night in his hearing with the Senate Finance Committee and he reiterated to senators that the TARP was exclusively for the financial sector and does not include the automakers. There was no secret though that some lawmakers, especially from the Democratic aisle, are bent on getting the Detroit triumvirate a piece of pie from the TARP. Some argue, though, that the Big 3 should just use the US$25 billion granted to them in a separate legislation earlier this year for creating cleaner cars. And there are those who think that GM, Ford and Chrysler should simply declare bankruptcy and directly face the day of final reckoning.

For those who think that the auto makers should be left to file Chapter 11, they have a point. First of all, the business model of the Big 3 is not efficient and has hemorrhaged them for years because of the lopsided contracts they entered with the auto workers’ union and with the car dealers. How do you expect the American taxpayer to bail out a company and never hope to get their money back? Second, bankruptcy will eventually make these companies deal with their inefficiencies and will get them to trim down and be more competitive against the Toyotas and the Hondas, which have been pretty successful in the US.

It is understandable that politicians will look after the interests of their constituents and they will fight tooth and nail to keep the Big 3 afloat thus averting the situation of massive layoffs. However, the world has changed and the new rules point towards the survival of the fittest. The Big 3 are the now the dinosaurs of the auto industry. And we all know what happened to those humongous reptiles.

Is the TARP turning into a huge joke?

I was appalled to see the latest headline on CNBC.com that a Netherlands-based insurance company Aegon is looking to buy a small Maryland thrift company just to gain access to bailout funds from the TARP amounting to US$1 billion. It gets me thinking perhaps I should set up my own company as well because guess what, I also need a bailout.

Let me just offer a refresher. This crisis broke out a couple of months ago when Lehman Brothers opted to declare bankruptcy that led to a domino effect in the financial sector. The US Congress, through the insistence of the Treasury department, pushed the panic button and declared to infuse US$700 billion of taxpayers’ money to the faltering industry.

However, it proved to be that the devil is in the details since companies that were never intended to receive the funds initially can now have access to it if they change the nature of their business or if they have friends in the Democratic-controlled Congress like the Detroit auto giants GM, Ford and Chrysler.

Treasury Secretary Hank Paulson’s shift in position last week that offers bailout for non-bank institutions even made it more possible for party crashers to cash in into federal funds. There is a joke in Wall Street that coffee-chain giant Starbucks in also asking for a bailout. Good for them.

But the latest move by the Dutch insurer is just mind boggling. Americans taxpayers have no business bailing out non-US companies. There has to be some order on how these funds are allocated. Because so far there has been little of it.

Liverpool dumps Bolton as race with Chelsea gathers steam

I missed most part of the game because my wife and I spent extended hours for the second tranche of our gift buying for our nieces and nephews for the holidays. As soon as we got home, we both raced for the television and we had a huge sigh of relief when the scoreline showed Liverpool were two goals ahead of Bolton Wanderers. It stayed that way until the final whistle and the victory put them at the top of the table in the Barclays Premier League with 32 points which Chelsea would match a few hours later with a predictable victory over Stoke City.

The game involved a Dirk Kuyt goal in the 28th minute off a feed from Fabio Aurelio. Liverpool captain Steven Gerrard also got into the score board in the 73rd minute after a terrific cross from striker Fernando Torres. More scoring opportunities were given for Liverpool where Robbie Keane could have made it two-nil before halftime and Xabi Alonso and Torres missed their respective chances for a third goal for the Reds. But in the end, there was no need for it.

There were some scare for the Liverpool defense especially in the second half as Bolton showed some physicality. A header goal by Bolton’s Gary Cahill that was disallowed offered a few controversies in the match to the dismay of the local supporters at the Reebok Stadium.

Liverpool will face dangerous Fulham this Saturday while Chelsea is set for a huge showdown with Newcastle United as both clubs vie for some more breathing space between them and inconsistent Manchester United and faltering Arsenal.

G-20 leaders in DC in hopes of finding the answer to the global economic riddle

Leaders of the world’s 20 industrialized and developing nations met this weekend in Washington DC with one thing in their agenda–how to solve the global economic crisis. Hosting the momentous event is the place where it all began, the United States. Just after Asian and European leaders met a fortnight ago to tackle the issue, this event has a much broader participation which includes the Americans and rising stars Russia and Brazil.

Some sectors are drawing parallelism for this summit towards Bretton Woods, a post-Second World War conference among Allied nations that laid out most of the world’s economic system that are currently in place.

The Washington summit plans to promote government spending as primary source to boost declining economic activity. It also reminded participating economies to stay wary of protectionism as an easy escape route. And finally, a more rigid global financial regulation must be enforced in place of the current ones being used.

So far, the markets are not too impressed with the consensus made in DC. The Dow futures as of this writing (Monday evening Manila) are pointing deep south indicating a tough start in Wall Street this week. Economic news around the globe are not too encouraging either. Japan just announced they are officially in recession and Britain will have the same recessionary outlook next year, seen to be the worst in 20 years.

Cash-strapped West looks East in midst of financial turmoil

Western economies seem to have to no choice but to engage in an awkward marriage with cash-rich nations in the Middle East and the Asia-Pacific. The financial crisis has forged that necessity in the face of staggering losses among US and European financial institutions. The credit crunch, which has already brought some of the Western economies to their knees, has definitely tipped the balance of power towards the East. Cash is king in these economic conditions and the US and Europe do not have much of it these days.

Just yesterday, the word is out that Germany, Europe’s biggest economy, is now officially in recession and France just narrowly escaped with a tenth of a percent growth. Tomorrow, the G-20 nations will converge in Washington DC to discuss measures for collective action regarding the crisis, which has now swept almost all parts of the world. Almost, but not all it seems. In the same meeting, Japan is set to offer US$100 billion of its foreign reserves to the IMF to provide financial assistance most especially to needing emerging economies, such as the Argentina, Pakistan or even the Philippines.

Gulf states like the UAE and Saudi Arabia are also being wooed by Western economies, like the UK for example, to invest in some of their troubled industries such as in the banking sector. These countries have benefited tremendously in the oil bubble earlier this year and have loads of cash at their disposal at the moment. They even led the setting up of a so-called Sovereign Wealth Fund which through the IMF, would inject funds as investments into industries that were badly hit by the crisis but have huge potential of recovery and future financial returns. Now, the West are racing fast for those highly valuable investments just to keep some of their industries above water.

Treasury unveils changes in rescue package

I watched most part of Treasury secretary Hank Paulson’s press conference last night. The brains behind the Treasury Rescue Package was updating the nation of what actions were done since Washington approved of it more than a month ago.

The capital purchase program, as the secretary dubs it, was initially meant to buy toxic assets from banking institutions compounded by the housing turmoil. The idea was to free these banks of illiquid assets for them to start with their normal banking operations like lending, the blood source of all economic activity. We even saw how Congress fiercely went back and forth in order to secure the fine print before it could reach President George W. Bush’s desk

Of course that was then. Now, Paulson is singing a different tune. He is now backtracking on his initial theory of federal government purchase into mortgage-tainted assets, saying it was not such a good idea after all. He is now even considering non-bank institutions, such as those who offer securitization of credit cards, auto loans, and student loans, to get a piece of the action of the TARP’s hefty $700 billion ammunition.

Not too many are pleased with the news, though. Some feel these guys from the Fed, FDIC, and the Treasury are almost always behind the curve throughout this crisis. Last night was another indication of such and basing upon all actions taken by the government, theirs could prove to be a very expensive trial and error.

Markets retreat on Veterans Day

Wall Street once again closed in negative territory to begin the trading week with two days of consecutive sell off. At the back of the Veterans Day celebrations in the United States, the Dow Jones Industrials fell 177 points with 29 of its 30 listed companies all ended up in the red. Negative news coming from the corporate side continue to cripple stocks in almost all sectors.

Troubled auto maker General Motors, which was downgraded by Deutsche Bank and Barclays earlier in the week, has began talks with Democratic leaders in Congress concerning a proposed Federal government bailout for the auto industry. The issue was even reportedly discussed by President George W. Bush and President-elect Barack Obama during their meeting on Monday at the White House.

The continuing free fall of crude prices is another indicator that the markets are keenly anticipating. New York crude prices touched below $60 for the first time in 19 months indicating slow demand especially in the United States, which is the world’s biggest oil consumer. Some states in the midwest are already selling gas less than two bucks per gallon. What is good for consumers, though, is bad for business.

Monday’s $600 billion economic stimulus plan by China, which accounts for a little less than 10 percent of their GDP, was quickly shelved by investors into the background and was overwhelmed by the rush of negative corporate results by American companies.

The Great Economic Stimulus of China

Tag price, US$ 586 billion. That is the amount the People’s Republic of China is willing to shed off its coffers in order to stimulate their economy, which now stands the fifth biggest in the world, back into position of strength once more. Despite growing 9 percent in GDP last quarter, which is incidentally the slowest in five years, the Chinese government is taking no chances.

The move resulted to a buying frenzy in Asia-Pacific and European stocks yesterday and even the Philippine Stock Exchange joined the fray rising by over 70 points. This translated to upside movements in Wall Street earlier in the session last night Manila time before eventually succumbing to negative territory on overwhelming negative reports on corporate troubles such as the GM downgrade and the Circuit City bankruptcy.

Nevertheless, the move is seen to pump up the Chinese economy by inducing domestic consumption. Although the stimulus package is spread through a number of years, it is seen to bolster infrastructure spending and social welfare projects. This means more jobs for construction especially in the rural part of China. This is also a good measure since it would partially ease the migration of rural folks to the urban centers, which has brought tremendous pressure on resources in the likes of Shanghai and Beijing.

The Philippines is expected to keenly watch how this would turn out for the Chinese economy. The Philippines and China have forged several infrastructure projects in the past and others are even still in the pipeline. Since this would mean China will focus on spending domestically, will their projects in the Philippines be put on hold? Interestingly, a similar policy could be in the offing with the upcoming Democrat administration in Washington. President-elect Barack Obama, during his campaign, focused on a much more internal spending policy as a promise to get the US economy back on track.

Keane’s double sparks Liverpool’s 3-0 romp of West Brom

Pundits on the ESPN Star coverage panel believed it was Robbie Keane’s best game so far as a Liverpool player. I agree as well. No question that Keane provided the threat for Liverpool against a much overwhelmed West Bromwich Albion defense. Liverpool went on to an impressive 3-0 victory at Anfield.

Before the game, Keane did score a couple of goals for the Reds but all in European competition. With Fernando Torres continues to be not yet in game fit, it was certainly time for Keane to deliver the needed boost as the results of the last two games were definitely unimpressive by manager Rafa Benitez’s standards. And deliver he did last Saturday which moved them again at the top of the Barclays Premier League table with 29 points before Chelsea tied them up the next day with their own thrashing of Blackburn Rovers.

It was also a timely lift of confidence for a Liverpool side that seems to have lost a step after their conquest of Chelsea a fortnight ago. It was evident in the early goings of the first half wherein West Brom managed to create a few chances before Liverpool took control of the midfield which brought an impression that it would only take a matter of time before they scored their first goal. Keane has eager to oblige in the 34th as well as the second goal which resulted from another Liverpool’s pesky defense at midfield. Arbeloa provided the finishing touch with a third goal in the second half. Liverpool will meet Bolton Wanderers in the weekend.

President-elect Obama faces prospect of further economic decline as more jobs are lost

The new Barack Obama administration, which will start holding office in January 20th next year, is fast realizing that the very crisis that propelled them to election victory just a couple of days ago is now the top of its priorities. Just a few minutes ago, the Department of Labor reported 240,000 job losses in just the month of October up from September’s 159,000. This is worse than most people thought and it has certainly hurt confidence in the markets.

Although reports also today suggest that Obama will not yet be making personnel announcements regarding the people who will be helping him run the economy, calls on him to name an economic team as soon as possible is growing louder by the day. To even illustrate the pressing concern for the new president-elect, immediately after his election victory against Republican rival John McCain, Wall Street fell to its worst two-day loss ever.

Many believe that not since the 1930s when Franklin Roosevelt took over the reigns of a country that was experiencing a depression, that an incoming president will inherit an economy in such massive economic turmoil. Just as when many had thought the seemingly stable movements in the stock markets in the last two weeks would mark the end of extreme volatility, the dismal numbers in the jobs market has now reaffirmed fears that the credit crunch is now coupled with a major standstill in the real economy.

Media and the US elections: Who called it first?

The smoke has cleared and the United States just elected Democratic nominee Barack Obama as the 44th president and also the first-ever African-American to hold the Oval Office. I spent the entire morning watching the coverage of the US elections. My cable provider has CNN, Fox News, BBC, CNBC (NBC’s affiliate), and Al Jazeera, and all these media outfits carried the election almost every second most especially by the time the first polling station closed at 8:30am here in Manila.

I was mostly toggling between the American networks CNN, Fox News, and CNBC. It was amazing to see how CNN pulled off that hologram stunt streaming a female reporter from Grant Park in Chicago to the CNN headquarters in Atlanta just as if Wolf Blitzer and the reporter were just talking face to face. If you missed it, just remember Star Wars when Luke Skywalker and Obi Wan Kenobi opened the device that showed the hologram of Princess Leia pleading for help.

Fox News made a few blunders when their election map proved to be unreliable at times and when they inadvertently called Ohio for Obama much earlier than they should. Fox News anchor Brit Hume was quick to recall the projection though.

NBC was for me, the winner of the election coverage as they were almost always the first to make a projection. Fox News comes at close second and CNN last. Despite their massive resources, CNN were a bit too risk-averse in making projections. It should be known though that despite the difference, all three simultaneously called the elections for Obama when the California polls closed at noon, Manila time.

HBO’s Recount: Democracy at work, democracy at its worst

I was looking forward to the HBO original movie ‘Recount’, a film about the controversial 2000 US presidential elections. The film starred academy award winner Kevin Spacey as a Democratic Party campaign manager. For political and history junkies, this film is indeed a must-see.

As events would tell, George W. Bush eventually won the presidency against Al Gore, but not without a bitter fight that almost placed America in a leadership crisis never seen before. The movie began with the election in progress and the confusion among television networks on which candidate did win Florida. Then Vice President Gore was forced to retract his concession to then Texas Gov. Bush upon learning that the Florida tally might have been flawed.

This resulted to a recount that led to a can of worms being opened regarding the manner of how the elections were conducted. Allegations of mass disenfranchisement of voters and the medieval-like electoral process exposed cracks in America’s once –mighty reputation as the role model in holding free and fair elections.

Elections in the Philippines has always been scrutinized for being violent and laden with cheating. Since democracy was restored in 1986, all but one presidential election have not escaped the opinions of many that the result may have gone the other way if no deliberate attempt to sway it was placed. As the Gloria Arroyo experience has shown, the price of having any question to the legitimacy of a sitting president that has not been sufficiently brought into closure can be expensive.

Lower fares expected as fuel prices drop

Pump prices drastically dropped yesterday pushing renewed calls for reduced transport fare prices in buses and jeepneys. Fortunately for commuters, they will get their wish after the All Souls weekend when transport groups and the government agreed by principle to implement it. After all, diesel, which fuels most of our public transport, dropped by five to six bucks per liter.

Despite declining pump prices in the past few weeks, yesterday’s reduction is the biggest. Petroleum products continue to slope downwards since the financial crisis, that has now engulfed the world, broke out. This trend points to falling demand in the United States but consumers there are not complaining. At least driving their SUVs would not mean they have to cut their basic cable subscriptions.

However, some feel this is merely a token effort on the part of the oil companies. In addition, the left in the House of Representatives are pushing for the Oil Deregulation Law, which was intended to promote completion in the oil industry, to be repealed and even the conservatives in the Senate are calling for added taxation to the likes of Shell, Petron, and Chevron in an attempt to unlock their books to the public.

But what does it really mean to Juan the retail store employee? For a hundred bucks per day, perhaps he will get to save at least P6 when commuting to work and back to his home. That is enough to buy coffee during his break. Something he deserves for working his ass off for the last 10 years yet not able to pay his bills on a regular basis.

Liverpool stay in top with 1-0 win over Pompey

Early this morning when I was preparing to go to work, I opened the TV to watch the latest in Wall Street but was surprised to see Barclays Premier League games on ESPN and Star Sports. I did not catch SportsCenter last night but I did check out the TV listings on ESPN’s website yesterday and found there were no BPL games on schedule.

Still, I was a bit disappointed that the Liverpool-Portsmouth game was never covered but I did see Arsenal went ahead 4-2 against Spurs after a massive Emmanuel Adebayor goal. Amazingly, when I checked the results just a few minutes ago on the web, Tottenham managed to grab a point at the Emirates as the scoreline ended 4-4. No doubt that the Houdini has really made a positive difference in that club.

Earlier, I was concerned that Liverpool might lose two points or worse will be beaten by Pompey with the match still scoreless at the half while the rest of the Big Four already hacking up a double in their respective fixtures. But Captain Marvelous Steven Gerrard made a goal 15 minutes left that proved to be the winner. That kept the Reds a full game ahead of Chelsea and 8 points top of Manchester United.

This is a good sign for Liverpool despite missing their top striker Fernando Torres. They are not burning the back of the net like the rest of the Big Four but they are getting the job done. And that is what matters. Incidentally, they will be up against the resurgent Spurs in the weekend in an interesting match up of two clubs that have so much to prove.

Gloomy consumer confidence halts market rally

The cat is out and the Federal Reserve did lower short-term interest rates by 50 basis points. It also provided a bleak view of the economy that pulled down the major stock indexes in the US. After yesterday’s record surge that saw the Dow, the NASDAQ, and the S&P 500 all rise, the news became a bit of a reality check which dampened the mood of the investment community leading to the sell-off.

The Fed is certainly very much concerned with the plunging consumer confidence that has hit its lowest level since the mid 1970s during the oil crisis. In other words, people are cutting back on spending especially on high ticket items like cars and appliances. Fears over job security because of the credit crisis make people take a second look on the items they purchase and that hurts the profit expectations of companies. Companies on the other hand, continue to slash jobs in order to keep afloat. Huge layoffs by companies, like the one by auto giant General Motors, is one of the more vivid demonstration of how the Wall Street crisis has affected Main Street.

Meanwhile, many of those jobs are fast migrating abroad like here in the Philippines. Just as China are taking over US manufacturing jobs, the Philippines have been getting many of the services jobs of American companies as we have seen the explosion of the call center industry here in the last decade. This has boosted consumer spending here especially in the urban centers where these call centers are operating. But it is interesting to see whether the slowdown in the US will have any effect to the flow of services jobs here. Many of the client pool of these call centers incidentally belong to the financial sector, which has been badly hit by the crisis like the now-bankrupt Washington Mutual.

Rafa-era Reds finally win at the Bridge

Coming into this game, I already conditioned myself that we would be lucky if Liverpool could at least snatch a point in their game against Chelsea. Odds are certainly against us especially that the it has been four years now since Rafael Benitez acrimoniously left then La Liga champions Valencia to manage England’s most decorated club, yet until Sunday he has yet to muster a win against their bitter rivals from London.

Can not blame me nor even many of Liverpool fans all over the world for being cautiously pessimistic on any idea of a win at Stamford Bridge since Chelsea themselves has not tasted defeat in their grounds in 86 games. Although, the day eventually belonged to Liverpool, defender Jamie Carragher, who received the nod as the game’s best player for keeping Nicolas Anelka less ambitious in the box than usual, was quick to downplay their title credentials saying it was still too early in the season.

I, too, believe that Liverpool, despite at the top of the BPL table after nine matches played, needs more than this win to convince most especially their supporters that they are indeed serious contenders for the league this season. What they need is to win against the middle table clubs like the Blackburns, the Portsmouths, and the Aston Villas consistently, something they have had difficulty in the last four years.

This Wednesday, Liverpool has a chance to stay three points or more clear of their closest rival as they face a Portsmouth side which drew in the weekend and just lost their manager Harry Redknapp to Tottenham. This is a good opportunity to bolster their chances as they find themselves in unfamiliar territory being chanced by the rest of the Big Four.

Selling spree Monday

The Dow fell sharply in last night’s trading shedding off another 203 points to kick off this week on a bearish mood. Despite pulling modest gains halfway into the session, another late rally southward, which has been eminent for weeks now, proved to be another pivotal setback for equities.

Earlier, Asian and European shares got hammered with even Japan’s Nikkei falling to its 26-year low. There is even talk that the US might follow the Japanese experience when it suffered a long recession after their real estate bubble burst in the late 80s. Almost the same premise now hounds the US with the housing collapse blamed as the culprit for their current woes.

The Phisix fell over 12 percent in yesterday’s session and trading was even stopped momentarily for 15 minutes due to the massive sell-off shades of what happened in Moscow weeks ago when their stock exchange went on a free fall. A lot of wealth has already been lost in the PSE in this past few weeks. Consumer demand in this country is expected to slow down and not even the holidays could make people spend in the level they used to.

Despite the peso’s fall against the dollar, it is not yet ‘all bets are off’ in terms of positive effect to the economy especially for the beneficiaries of remittances. Families of OFWs are likely to hoard their dollars anyway and this continued slow consumer spending would just keep the real economy dampened. This is a ripe scenario for a properties bubble especially here in Manila. Banks that are highly exposed to the property sector would feel the pinch which would lead to a possible credit crunch in the financial system. On the surface, the crisis has barely affected our everyday lives, but the signs are coming and their coming fast.

Europe and Asia meet as the crisis deepens

The weekend saw the conclusion of the biggest global summit that convened yet so far supposedly aimed to address the rapid spread of the financial crisis that originally broke out during the US housing meltdown just a few week ago. The summit brought nations from Europe and Asia and the event was held in the Chinese capital of Beijing. Many believe that the venue was just fitting since China is seen as the country with the best ability to shrug off the contagion that has already taken a number of countries as victims.

If there was something that came out of the summit, it was the adoption by the 45 participating heads of state of the Beijing Declaration which called for sustainable development by strengthening collaboration on environmental issues and the achievement of the Millennium Development Goals. As expected, a summit as huge as this did nothing to provide specific solutions to the pressing effects of the financial tsunami that could well likely turn into a worldwide recession.

Last week, Pakistan and Argentina became the latest countries that sought for either international assistance or employed drastic internal policies. Pakistan has already sent signals that it would be needing financial bailout from the International Monetary Fund and Argentina’s national government has nationalized their pension system in order to salvage their declining to ability to pay their financial obligations abroad.

Here at home, the Phisix continues to get battered and has fallen below the psychological 2,000-points mark. The peso is steadily weakening against the greenback which now stands at around 48.90 per dollar. A likely BSP intervention in the foreign exchange market could be in the offing once it slides further to 50 a dollar.

Slowdown in the real economy fuels the R word

The quest for the bottom in the markets continues after the Dow lost big again. Yesterday, stocks got pummeled by over 400 points despite recovering a quarter of that value at the end of today’s trading. Despite seeing credit markets beginning to thaw with constant government infusion to improve liquidity, this time it is the real economy that is doing the beating on equities.

Negative earnings from various companies dampened investor confidence and reinforced the belief that America is indeed headed for the inevitable – recession. What is interesting is that the gloomy earnings outlook goes across the board; from transports, pharmaceuticals, and technology, in addition to the already battered financials and energy sectors.

Here at home, workers at expected to brace a holiday season possibly without their traditional Christmas bonuses. Fears that many Filipino overseas workers might get laid off in their jobs abroad is getting more real. This puts pressure to our foreign reserves as remittances are expected to drop. Government also needs to tackle a new set of safety net measures in order to provide livelihood opportunities to the workers who will be going back home.

Polls looking blue as election nears

Recent polls show that Democratic presidential nominee Barack Obama is ahead by 9 points against Republican John McCain. This is certainly not what the GOP is expecting after recent public outrage against Obama’s “spread the wealth” economic plan. On the other hand, this is a welcome development for the Obama campaign with barely less than two weeks to go before America cast their ballots.

Just as when the McCain camp finally found a consistent message by going after Obama’s left-leaning ideologies, the recent numbers is yet another blow to a campaign that has been outspent and outplayed. Things are not looking good either for McCain in the crucial battleground states such as Florida, Colorado, Nevada, North Carolina, and Missouri. George W. Bush carried all of these states in 2004 but right now it has either shifted to the Democrat’s favor or too close to call. McCain’s running-mate Gov. Sarah Palin has not been successful either in getting that all-important independent and women voters.

For Obama, there is really nothing left to do but avoid making a mistake in the final days of the campaign and he should hope nothing drastic happens that would take away people’s attention out of the economy and back to national security, which has been the Republican’s mantra for the past 8 years. If election were held today, Obama would win the presidency and his supporters would surely want to keep it that way.

Economic forum

The White House announced that it will sponsor a worldwide economic forum wherein the main agenda will be the current financial crisis. It will be held in November this year and by that time America has already elected either Barack Obama or John McCain. President George W. Bush, who is serving his last few weeks in office, is expected to preside the forum that will be participated by other 19 nations.

What is not certain, though, is whether the president-elect will join the forum. The new chief executive, who will officially assume office by January next year is faced with the gargantuan task of turning the economy around. Should he make it to the forum, representatives from other attending nations will surely be interested to work with the new president-elect because it is widely believed that America’s ability of respond to the crisis is the key to avert what seemingly now a global economic meltdown.

Thailand is reviving the idea of creating a pan-ASEAN fund that aims to help member nations should a systemic financial crisis hit again. After the 1997 crisis, there was a plan to create a fund among ASEAN economies which would pool a significant amount of foreign reserves. However, this never materialized as the situation eventually improved.

There has been a lack of urgency among ASEAN economies, the Philippines included, in making a concerted effort in tackling this crisis, unlike what the Europeans are currently doing. We are expected to know better because of our bitter experience 11 years ago but, ironically, what we are seeing are isolated calls for cooperation and individual action by the region’s central banks.

Hot start

Wall Street roared in the opening day of this week’s trading gaining over 400 points. Positive news from Asian and European markets earlier in the day boosted investor confidence. This should be a nice follow-up to last week’s 4.8 percent overall gain.

Bargain hunting seems to be the buzzword of the day as investors continue to scramble for undervalued shares. Reaction from investment guru Warren Buffett about ‘be fearful when others are greedy and be greedy when others are fearful’ certainly made others take another look at equities. After all, the Oracle from Omaha made millions from making the same unorthodox decisions especially during a bear market.

The weekend also saw Dutch and South Korean governments infuse public money to salvage their respective flagging financial sector. Here at home, investment bank Merrill Lynch predicts the Monetary Board of the Bangko Sentral ng Pilipinas will cut overnight lending rates by 25 basis points when it meets at the end of the month. The BSP has tightened borrowing rates since June when inflation numbers hit staggering levels this year.

Joe the Plumber

Everything seems to be going fine for Democrat presidential nominee Barack Obama. He is up in all nationwide opinion polls and he is slamming his Republican rival John McCain in virtually all battleground states. Then suddenly he bumped into an ordinary plumber from Ohio, a meeting that both men wished never happened.

That plumber turned out to be Samuel Joe Wurzelbacher, now popularly known as ‘Joe the Plumber’. While Obama was doing his routine house-to-house visit in suburban Ohio, Joe the Plumber took the chance and asked the Democrat hopeful whether he will be taxed more under the latter’s proposed tax plan should he become president. Obama’s ‘spread the wealth’ response not only put his tax plan under scrutiny, but his ability to steer the country out of recession.

McCain called the Obama tax plan as socialism and Obama supporters fired back that the current Republican administration’s bailout efforts in the financial system is the highest form of socialism. However, the Joe the Plumber saga has definitely provided the McCain campaign a lifeline less than three weeks to go before election day.

In the last presidential elections in 2004 here in the Philippines, taxes were never a huge debating issue between incumbent President Arroyo and opposition standard bearer the late Fernando Poe Joe Jr. In the upcoming 2010 polls, though, taxes are expected to become a factor as the country moves towards a slowdown and possibly a recession. With steady high inflation and unemployment crippling the economy due to rapid population growth and the global financial crisis, the Filipino middle class will surely be interested how the presidential candidates plan to make their every peso worth.

Irrational

In another twist in the markets this week, the Dow rose to 401 points bucking negative economic news that hounded Wall Street investors during trading day. This came after the industrials lost 733 points the previous day. In this kind of market environment, no one seem to have the answers. Perhaps one can suspect that the only rational explanation for the rise is bargain hunting.

But does that mean that the market has already seen the bottom? Many of the so-called pundits are skeptical with the notion that the markets has reached the abyss and there is no way to go but up. With how the markets are behaving lately, what lies ahead looks even more daunting since any form of logic that was left has clearly been thrown out of the window.

As expected, the local markets followed Wall Street’s lead yesterday with the Phisix slipping to its 18-month low. The peso also breached the P48 to a dollar mark as dollar holders are keeping their greenback in hopes for a better opportunity to sell. A weakening peso holds off any significant reduction in prices of petroleum products here in the Philippines.

I believe any move by the Bangko Sentral to control inflation through monetary measures like increasing interest rates is absolutely counterproductive because it will not address the problem. On the political front, Congress must anticipate a recession next year and should allocate enough funding in anticipation for any pressure to the financial system.

Debating for the future

Just hours before the two US presidential hopefuls square off for their third and final debate, Wall Street suffered one of its worst losses in a single trading day, with the Dow falling 733 points, most coming in the final hour of trading. After Monday’s record breaking rebound, today’s losses reminded people that the economy continues to be the main focal point of this year’s elections.

Democratic nominee Barack Obama currently enjoys a lead in nationwide opinion polls and is ahead in many of the key battleground states. In this debate, the American public will surely be hungry for specifics from the two candidates on how they plan to solve this crisis and avert a 1930s Great Depression-like meltdown.

Four years ago, opposition presidential candidate the late Fernando Poe Jr. backed out from joining any debates. President Arroyo, sensing it was no use being on those debates without her closest rival anyway, decided not to participate as well.

I believe people have the right to see whoever plans to occupy the highest office in the land to at least participate in these healthy exchanges so that they would have a better understanding of the people who would lead them. Nobody said a president has to be a rocket scientist but at least someone who can show that he or she is capable of handling the pressure of a debate.

Back to earth

After the Dow Jones Industrial average reeled and ended with its worst beating in a single week, investors sighed in relief with the composite rebounded for over 900 points on Monday. For the first time in a long while, people got positive news out of Wall Street.

Central banks all over the world coordinated their actions never seen before and the investment community saw it as sign that the economies are starting to recognize the scale of this crisis. For a moment, everyone taught it was the end of the rabbit hole. It seems now that they are mistaken.

The Dow went back to earth again last night as it ended in negative territory although not as brutal as last week’s numbers. The idea that the United States can not avoid a recession is now starting to sync in among the public. The Bush administration is offering the public solutions almost on a daily basis and people are starting to ask what lies ahead after government will run out of tricks.
The recently approved $700 billion bailout package is now in action but concrete results are yet to be seen. Anyway, the government already made it known that the effects of the bailout would take time to kick in.

The Philippine Stock Exchange rose substantially following the lead of other emerging markets on Monday but expected to stay on the sidelines now the US markets are starting to send mixed signals once again. Still, there has been limited coverage of the global financial crisis in the local mainstream media. Congress will be back in session soon and it is interesting how would our elected representatives will respond to this crisis in the midst of another impeachment attempt against President Arroyo.

Darkness in the horizon

Fear and panic is now gripping the world as the financial crisis that originated in America is now felt all over the world. As it looks, the end is yet nowhere in sight.

Yesterday, the markets opened in New York in positive territory after traders received encouraging piece of news from the federal government. But it did not last long as the Dow Jones Industrial Average ended the trading session down by over 500 points. That, after the benchmark fell by over 300 points the day before and a week after it got pummeled by nearly 800 points in its worst single-day loss ever.

The jury is still out on how this crisis will affect the Philippine economy. Right now, signal bells are starting to ring such as the troubles of PhilamLife, the country’s largest insurer. Remember, that PhilamLife has ties with the American International Group (AIG), which a couple of weeks ago shocked the world with their impending bankruptcy that sparked a myriad of events that lead to our current situation.

Shades of the 1930s-style Great Depression are beginning to creep in from the horizon and no wonder many are predicting things will even get worse before it gets better.