PHILIPPINE VOYAGER

THE PROBLEM OF AMERICAN ECONOMY is quite predictable.  Lacking various ideas for entrepreneurship, people flock to fads and trends and anything that will promise cash returns without too much effort on their part.  They turn to banks, endowment funds, money-market placements, insurance, houses, stocks, mutual funds and all money substitutes that promise to give a safe return on investment aside from being a “safe harbor” for parking their hard earned cash

 Little did Americans knew they are being set up for the BIGGEST SCAM of all times, perpetrated by financial leaders (Cronies is a better term to define the close relationship with the political powers-that-be in Washington) of Wall Street and what with regulations relaxed or repealed by their political cronies. The financial cronies went wild with the peoples’ money.  Like loose, snarling dogs, the financial cronies inveigled people with their “no cash down payment” house purchases backed by their credit scores, or if none was satisfactory, they were made up by mortgage packagers.  Thus an artificial cycle of housing boom prosperity was in motion.

But before we proceed, I know that sound economic principles states liabilities are extinguished by payment. But the dubious ability to pay was bankrolled as an ASSET by unscrupulous financial cronies and scam products were created with that PROBABILITY OF BEING PAID as the underlying ASSET.  It was leveraged as an INVESTMENT ASSET OR A RECEIVABLE.  BUT WHO WILL PAY IT BACK?

With American companies sending their most productive manufacturing abroad and with AMERICAN WORKERS being marginalized by the World Trade Organization Agreement, NAFTA, GATT, and the slew of free trade “agreements” you wonder how will the Middle Class America pay for their home purchases. WHEN JOBS ARE SENT ABROAD, YOU ALSO LOSE THE MULTIPLIER EFFECT OF THAT JOB TO THE COUNTRY YOU SENT IT TOO.  Jobs that stay home multiplies itself into other American jobs.  America should EXPORT PRODUCTS, NOT JOBS.

THIS IS WHERE THE SCAM STARTED. Enter the Mathematical Magicians, who by extrapolations, algorithms and equations have sagely (OR GUESSINGLY be a better word?) concluded that bad risks can be good risk over time with all things being equal under the principle of “ceterit paribus”.  This is the oft repeated catch all phrase when economists are uncertain and they are uncertain most of the time because no mathematical model can predict human emotions and decisions especially in the macro setting like what we have today.

Armed with voodoo mathematics that defied COMMON SENSE RULE of no income/no job = No capacity to pay, rating agencies indiscriminately proceeded to tag grade AAA labels to all these junks and the bankers and financial scammers joined in to sell bad mortgages papers drawn for people who does not have the ability to pay or wasn’t aware that such mortgages drawn in their name have interest rates that were beyond their means to pay.  It was all a bubble, a mirage.

In order to sweeten the deals, financial cronies came up with “CREDIT DEFAULT SWAP DEALS” a ploy to criminally evade insurance regulations.  The tenor and the intent of such debt swap deals were to assure buyers of the collateralized debt obligations or sub-primes that they will be reimbursed if the mortgagor defaults. The mere idea of reimbursement or to be “made whole” is an insurance agreement clear and simple and in taxation the “substance of the contract and not the name given to it by the parties” should prevail.  Why? Because if we let private individuals to so blatantly evade taxes by allowing them to rename the contracts they enter and get away with is a surrender of sovereignty. The mathematical models failed, the mortgagor defaulted and the rest is history. Another blow to voodoo economics.

That is where the bailout is being put to use, to bail out the bankers, insurers, who participated in and issued the swap deals.

If the US Government is honest and independent of lobbyists, potential tax evasion and RICO criminal cases should be filed now.  And to whet the American appetite for justice, once cases are filed, interlocutory orders for distraint on personal properties and levy on real estate assets of individuals who profited immensely should also be issued.  Unless it can be proven by direct and collateral evidence that their wealth are not “scam related or ill gotten” it should stay within the Government’s possession to defray the cost of the US$ 700 billion bail-out.  

A Presidential Commission on Good Corporate Governance, independent of the 3 branches of Government should be commissioned, with power of subpoena, seizure orders under the distraint and levy provision, constituted without the participation of any representative of the Democratic and Republican parties as members.  It should fall under the RICO statutes since there is a systemic conspiracy that may shake the foundations of both political parties here in the USA.  It should work as a “guilty until proven innocent” philosophy which may be counter to the due process clause but the exigency demands it to be so.  This principle is currently being used by the United States under Bush Doctrine of “pre-emption and regime change”, the Bomb First, and Ask Questions Later segment of that flawed security policy.  Why not use it against the scammers? They should be prevented from enjoying the fruits of their conspiratorial scams while being under indictment.  These will open further other “can of worms” and that should help redeem America’s stature in the World arena.

The debt crises have also brought troubles to overseas banks when it was snapped up as an alternative to US Treasury bonds and the loss of trust effect in those countries should be seriously looked into by the incoming Administration.  The Government should set an example by jailing all whose complicity sent the country into the cesspool of the debt crises. [Written by Deo Quiogue]

Originally posted on Saturday, 19 July 2008

I go through the same routine every month. Collect the paycheck (a smile spontaneously forms), then pay the bills (the smile disappears). Whenever I try to cut down on expenses, it always feels like I am going against the grain of society. Whenever I try to cut down on expenses, it always feels like I am going against the grain of society. In the US there is tremendous pressure to spend and consume. I’ve gotten used to the constant ribbing from peers and co-workers about my ‘kuripot’(skinflint) practices. Sometimes it seems that everything has a price tag attached to it.

Do you have a cellphone? That will be $50 per month please for the cell line. New computer? That will be another $60 for internet access. Bought a new flat screen TV? Only $60 per month for digital HD cable. New car? That’s at least $30/month for gas, and another $90/month for the insurance. Buying a new house to live the American dream? That’s only $1500/month for the next thirty years. You tell yourself that someday you will stop buying things. Perhaps by the time you’re seventy, when you have finally paid off everything and can now start living the life you want.

I was thinking about this great consumer dilemma prevalent in many of the most developed countries – places where everything has a cost value associated with it. Where you are a disposable cog in the corporate economic machine. As long as you provide value, you will be patted on the head and appreciated. But the instant you stop providing value, no one will even remember that you once existed. Then it occurred to me that there is a place in the world where things did not cost so much. In fact, not only were things inexpensive, I found that almost all of the stuff were actually free. Everything of value was being freely given away. And this was in the Philippines. Let me enumerate those items that are free.

Shelter – Rent isn’t really free of course, but sometimes it is. I remember one time when I had a serious conflict in my parent’s house and I decided to get away for some time. The problem is, I didn’t really have money for rent. Fortunately I used to hang out frequently in the shared apartment of a couple of my officemates. So I asked them if they could let me stay there for a week or so until the situation at home improved. Without any hesitation, they said I could stay as long as I wanted, and even asked if they could do anything else to help. Up to this day, I’m really grateful to those guys, I owe them one. The nice thing about living in the Philippines is that you always have someone you can turn to in times of need – whether it is friends, co-workers, family, or even strangers. At that time, rent and shelter was free.

Food – Not only is the food great, but if you have the right timing, it is free also. It is customary for a person having a birthday to treat everyone out to a meal (’pare, happy birthday, saan ka manlilibre?’) . And I remember one week when I was a willing participant to several consecutive birthday dinner blowouts. Everyone was in great spirits because not only was it the birthday of your buddy, it was also him paying the bill. Another custom is when visiting the house of a friend or relative, they will always offer you a meal (what, free again?!) . One time I paid a surprise visit to a girl I was courting. Unfortunately she wasn’t home, but her brother who I only met for the first time then graciously offered me, a total stranger to come in and have a softdrink. After she arrived and got over the shock, they even asked me to stay over for dinner. Although she ultimately declined my romantic advances, I will always have fond memories of the inihaw na liempo they served.

Health Care – If you get sick, there’s no need for any expensive medicines or doctor’s visits. The alternatives are much better than any drug you can get in the US. If you have a sore throat or cold, just gargle salt walter, eat some garlic and drink some vinegar to strengthen your immune system in fighting the virus. If you’re running a fever, you can sweat it out in the nice hot humid weather. Let the body’s natural temperature fight the disease. I remember feeling sick for several days, that type of feeling where you just know you’re coming down with something. It was a Friday night and my officemates invited me to go out with them for a drinking session. I politely declined and told them that I wasn’t feeling well and that I should go home to rest. Unfortunately they did not accept my explanation and instead insisted that beer has miraculous healing power, and that after several bottles, I should be cured of my sickness. So I was coerced in going out with them. The funny thing was that they were exactly right, as after the third beer, my sickness disappeared, and when I got home I was back to 100%. Health care is free.

Psychiatric counseling – In America and many western countries, there is an epidemic of depression and anxiety. People regularly pay psychiatrists by the hour to listen to their problems and prescribe some drugs to make them feel better. Oftentimes, they can’t sleep, also due to stress and depression, so they take sleeping pills, prozac, and other medication to help them sleep and forget. In the Philippines, you don’t need to go to a psychiatrist or take anti-depressants because those are all free. If you have a problem, or if something is bugging you, you can always turn to your friends for advice. Oftentimes, the advice isn’t helpful of course, but somehow having the listening ear of someone you know and trust is the best form of psychiatric medicine, and it’s free too.

Entertainment – You don’t need a cable subscription, or an iPod, or a high-def DVD player with 50″ plasma in the Philippines. As the country offers much better entertainment than any of those devices can give. Life in the Philippines is like having the best entertainment in the world 24/7. Most of the jokes and ‘pakuwela’ that occurs in offices are better than that of any standup comedian I have heard. Just go out to the streets, shopping mall, or friendly neighborhood and you will be bombarded with hours and hours of entertainment. All free of course. Do you enjoy listening to music and concerts? Then you only need to ride a jeepney that has a good sound system where the driver plays it at full blast (not free unfortunately, it costs 7 pesos for the ride). I get to listen to all sorts of good music while riding the jeep. I even get a small physical workout from the intense vibration of the bass in the subwoofer. The rest of the passengers are the fans and groupies, while the jeepney driver is the rock star. It doesn’t get any better than this.

So if you are a cheapskate like me who doesn’t like to spend for high quality goods, I highly recommend that you take advantage of all the free stuff available in the Philippines. Because here, (almost) everything is free. [Written by Rob dela Cruz]

AS I WRITE this piece, I am in an apartment in Roosevelt Avenue, Woodside New York with the world swirling in a frenzy of bank failures and other manifestations of greed.

I think the best way to fight the low economic expectations we all must suffer is to work for ourselves, WITHOUT BOSSES!!!!

Forget looking for a job if what you’re offering is the same work you do everyday as Johnny Nobody with a nowhere job in a nowhere office and a nowhere salary that has just gone pfft.

As long as you are able to complete a transaction, know how to haggle, buy and sell you got it made, you’re already a probable entrepreneur. Just brush up on your computer skills and attend seminars to further it for other things.

NOW THAT YOU JUST DISCOVERED YOU HAVE THESE SKILLS Let us put it to work!  What I am emphasizing is MARKETING, not the type that you have to talk with other people personally, you talk with them through what you are selling whether products or services or a combination of both. AND IT IS THROUGH THE INTERNET!

Now that’s neat and you can see sites like eBay a buyers’ & sellers’ forum with a wide array of products, Amazon.com also has a system of sorts.  But if you are selling a service such as tutorials for kids, pre teens, special needs like new Moms, new Dads, caring for your dogs or horses etc., you can publish an e-magazine.

But for a personalized touch, you can get a website where members can log in and is available on demand.  You need a more sophisticated set up for that.  The possibilities I have enumerated is just a tip of the mountains of opportunities. 

We were brought up in a system where business is done through business entities, companies, corporations, partnerships but have you ever wondered who executes your requirement or accomplish them?  The individuals skilled and trained for such a job or undertaking! It is you or the Johnny and Jane Nobodys!  You surrendered your entrepreneurial skills to the corporate body. 

People have the wrong notion that being employed is an assurance of stability, well it is not that way for long or even in the near future, what will collapsing corporations who have abandoned their basic core competencies and embarked on the road to speculation and financial ruin.

Companies played the game “blind man’s bluff” self hypnotizing themselves of the stability of the scam products such as “collateralized debt obligations/sub prime mortgages” an offshoot of the derivatives game.  It has turned the financial superstructure into a game of chance, a CASINO, with the complicity of Government regulators who should have regulated it except for the fact that some elected officials advocated de-regulation.  These elected and non elected officials should be imprisoned and the keys thrown into the abyss.

Going back to the business of starting your own e-business, read all the magazines and self help, and I mean self help publications that you can get your hands on. As to the market your target market should be determined by your competencies or what field are you an expert on and can hold on your own when you do the job.

Wait for economic recovery is the typical herd mentality, and you know where the herd is headed, the slaughterhouse.

I am willing to answer all your queries on particular questions you may have. Ciao. [Written by Deo Quiogue]