The Philippine Stock Exchange and The Philippine Peso/Foreign Currency Exchange - Compiled Threads [Archive] - Page 19

-TC-

July 17th, 2008, 02:44 PM

http://business.inquirer.net/money/breakingnews/view/20080717-149041/Peso-gains-offshore-after-rate-rise

Peso gains offshore after rate rise
Reuters
07/17/2008

SINGAPORE -- The Philippine peso rose in offshore spot and forwards trade on Thursday after the central bank raised interest rates by half a percentage point, more than some in the market had expected, to contain inflation.

The peso was quoted as high as 44.64 per dollar in offshore trading, its highest level since June 30, and it rose to 45.04 in three-month offshore non-deliverable forwards (NDFs), its strongest level since mid-June.

The peso ended at 45.03 per dollar in onshore trading, up 1.0 percent from Wednesday's close, before the central bank announced the rate rise and sounded hawkish in its accompanying statement.

"The dollar moved significantly lower in NDFs due to the BSP's (central bank) rate hike of 50 basis points, while crude oil prices are down," said a Manila-based trader.

"The Philippine peso is strengthening (offshore), as markets were caught off guard," said Thio Chin Loo, a currency strategist at BNP Paribas.

"The (dollar's) bullish channel on the daily chart is being challenged as the US dollar breaks below trendline support versus the peso. A crack of support at 44.30 opens further losses to 44.00."

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http://business.inquirer.net/money/breakingnews/view/20080717-149025/BSP-raises-key-interest-rates-by-50-basis-points

BSP raises key interest rates by 50 basis points
By Enrico dela Cruz
Thomson Financial
07/17/2008

MANILA, Philippines – (UPDATE) The Bangko Sentral ng Pilipinas, the country’s central bank, raised key interest rates by half a percentage point on Thursday, the second increase in two months and a relatively aggressive move compared to the first hike of only 25 basis points, to fight double-digit inflation.

Policymakers voted to hike the overnight rates to 5.75 percent for borrowing and 7.75 percent for lending.

"Inflation control is the foremost priority of the central bank," said Governor Amando Tetangco Jr.

"Price pressures have increased even as they are projected to ease starting late 2008."

The central bank expects inflation, which jumped to a 14-year high of 11.4 percent in June, to continue rising in the third quarter as food and energy prices soar, before slipping back to single-digit levels in 2009.

"Sustained high inflation can unseat inflation expectations and potentially create a repeating cycle of lingering inflation and wage pressures that could prove costly to the economy," Tetangco said.

As second-round effects of inflation have set in, with core inflation in June jumping to 6.6 percent from 6.2 percent in the previous month, the central bank said inflation this year could hit 9.0 to 11.0 percent, way above the government's target of 3.0 to 5.0 percent.

The central bank is raising its inflation forecasts for 2008 and 2009 for the second time this year. It was previously looking at an inflation range of 7.0 to 9.0 percent for this year.

For 2009, inflation is seen averaging between 6.0 and 8.0 percent, up from the previous forecast of 4.0 to 6.0 percent.

Despite soaring inflation which has been eroding consumers' spending power, the central bank expects the country's gross domestic product to have expanded 5.6 percent in the second quarter from the year-earlier period, faster than the first-quarter growth of 5.2 percent.

The central bank sees a 5.0-percent GDP growth to be "robust enough" and said it was "prepared to take all necessary actions to address the threat of high inflation and promote price stability."

"By responding promptly to inflation risks, the central bank intends to reduce the risks to inflation expectations and the long-term cost to output growth from prolonged high inflation," Tetangco said.

odyssey

July 19th, 2008, 09:01 PM

NY bourse operator seen to invest in RP exchange
PARTIES INITIALLY SIGN TECHNOLOGY TIE-UP
http://www.businessmirror.com.ph/07182008/companies01.html
By Honey Madrilejos-Reyes

STOCK exchange operator, NYSE Euronext Inc., is interested in investing in the Philippine Stock Exchange (PSE).

“Of course, but it’s not for me to say,” said PSE president and chief executive Francis Lim when asked of the New York-based potential entry in the local bourse.

“We will work toward that end. At least the foundation has been laid through the memorandum of understanding [MOU],” he added.

The two parties signed last month a MOU that establishes cooperation between the two exchange companies to explore new opportunities in trading system architecture and technology, exchange traded products, market-participant connectivity and market data management.

The MOU, signed at the New York Stock Exchange (NYSE) and witnessed by President Arroyo, also covers the PSE’s intention to purchase a new trading system technology from NYSE Euronext and its affiliates.

“We welcome this opportunity to partner with chairman Jose Vitug and his colleagues at the PSE,” said NYSE Euronext chief executive Duncan Niederauer.

According to Lim, each possible area of mutual cooperation identified in the MOU may serve as guide in pursuing definitive agreements in the future. This represents the recognition of each party of the important role that the other will play in developing their respective stock markets.

Under the terms, areas of possible cooperation involve the sharing of information and experience on new stock markets products and services.

NYSE Euronext operates the world’s leading and most liquid exchange group. Its family of exchanges, located in six countries, include the New York Stock Exchange, the world’s largest cash equities market; Euronext, the Eurozone’s largest cash equities market; Liffe, Europe’s leading derivatives exchange by value of trading; and NYSE Arca Options, one of the fastest growing US options trading platforms.

NYSE Euronext offers a diverse array of financial products and services for issuers, investors and financial institutions in cash equities, options and derivatives, exchange-traded funds, bonds, market data and commercial- technology solutions.

NYSE Euronext’s nearly 4,000 listed companies represent a combined $30.5 trillion in total global market capitalization, more than four times that of any other exchange group. NYSE Euronext’s equity exchanges transact an average daily trading value of approximately $141 billion, which represents more than one-third of the world’s cash equities trading.

NYSE Euronext is part of the S&P 500 index and the only exchange operator in the S&P 100 index.

bartstrife99

July 20th, 2008, 02:52 PM

barukdok

July 25th, 2008, 05:52 PM

oil has dropped to $123 per barrel, that's down $24 dollars from the high of $147 TWO WEEKS AGO, or a 16% drop over that period. why? because demand is going down and the speculators are pulling their money out of the oil trading market. So guess where all that money would be heading?

instead of wondering when oil will get to the $200 level, i suggest, especially if you're in your 20s or don't have dependents, to put your EXTRA money in the philippine stock market ASAP. Some stocks are really low like Filinvest, Ayala Land Inc., PNOC, SM Prime Holdings, Megaworld etc. and it's a great time to buy.

If you want to play the market, then you can do this: whe you earn 15%, sell. If you lose, hold on for the medium to long term, or until you earn 15%. If you want long-term investment gain, just forget about your money until the market reaches the 3,500 pt. level, and sell.

This is based on the investment dictum: BUY LOW, SELL HIGH.

By the way, some analysts see oil to even slide further, under $100 a barrel...

http://www.silobreaker.com/DocumentClusterReader.aspx?Item=16_871468302

http://news.yahoo.com/s/nm/20080724/wl_canada_nm/canada_economy_exports_col;_ylt=Aq6f7USXPNnN2wtelC7lEGBvaA8F

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/14/bcnoil114.xml

bartstrife99

July 26th, 2008, 02:33 PM

this news is good for us because this will ease the tension we facing today and we are the one affected of the skyrocketing oil prices and hit the inflation to 14 year high. if these all goes well in drop of oil prices, we expect more rebound or rally in RP stock that tumble to 2300~2500 from previous all time high as much as 3800 composite index.

leechtat

July 26th, 2008, 05:15 PM

this is actually my plan for august,, i will buy buy buy, put all my receivables for august (only) in the stockmarlet... yay! and then buy or sell next quarter or so..

bartstrife99

July 27th, 2008, 03:13 PM

this is actually my plan for august,, i will buy buy buy, put all my receivables for august (only) in the stockmarlet... yay! and then buy or sell next quarter or so..

turo mo sa akin kung paano at guide moko pag nag succeed ka ahh!

barukdok

July 27th, 2008, 05:35 PM

^^pre, you can only be taught so much. you have to dip your hands into investing to make gains. suffering losses are part of the trade.

i think the market has opened a good window. dali, baka magsara.

barukdok

July 27th, 2008, 05:37 PM

this is actually my plan for august,, i will buy buy buy, put all my receivables for august (only) in the stockmarlet... yay! and then buy or sell next quarter or so..

good luck, pre. this really is a good opportunity. hanap nga ako ng extra cash eh. sayang if we miss this window :cheers:

johnnyS

July 30th, 2008, 01:33 PM

I don't understand the recommendation to buy real esate development stocks like Ayala and Megaworld.

Interest rate is going up, and real estate bubble is bursting around the world.
Most of real estate in Philippines is driven up by OFW buying for "investment" purposes (on highly leveraged mortgaged basis), not real use, as they will not occupy it for a long, long time, if ever.

I don't know about other stocks on PSE, but I would not touch real estate development stocks with at 10foot pole.

Anyone with differing thoughts on this?

oil has dropped to $123 per barrel, that's down $24 dollars from the high of $147 TWO WEEKS AGO, or a 16% drop over that period. why? because demand is going down and the speculators are pulling their money out of the oil trading market. So guess where all that money would be heading?

instead of wondering when oil will get to the $200 level, i suggest, especially if you're in your 20s or don't have dependents, to put your EXTRA money in the philippine stock market ASAP. Some stocks are really low like Filinvest, Ayala Land Inc., PNOC, SM Prime Holdings, Megaworld etc. and it's a great time to buy.

If you want to play the market, then you can do this: whe you earn 15%, sell. If you lose, hold on for the medium to long term, or until you earn 15%. If you want long-term investment gain, just forget about your money until the market reaches the 3,500 pt. level, and sell.

This is based on the investment dictum: BUY LOW, SELL HIGH.

By the way, some analysts see oil to even slide further, under $100 a barrel...

http://www.silobreaker.com/DocumentClusterReader.aspx?Item=16_871468302

http://news.yahoo.com/s/nm/20080724/wl_canada_nm/canada_economy_exports_col;_ylt=Aq6f7USXPNnN2wtelC7lEGBvaA8F

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/14/bcnoil114.xml

barukdok

July 30th, 2008, 05:38 PM

^^ here are a few considerations:

1. do not understimate the OFW market, which is 8 million strong and growing. that's 10 of the population and they're not going home anytime soon (that means THEY HAVE MONEY to pay mortgage). ask any OFW what his priorities are, and chances are buying a home or unit for investment will be in his top 3 list. And what about the retirees and expat markets?

2. the real estate market isn't limited to the OFW, retirees and expat markets. there's the BPO market as well, with growing demand for office space. right now, outsourcing markets other than the US are being looked into. Also, Megaworld has BPO projects lined up in Iloilo and Cebu. Ayala is expanding in CDO, Davao and Cebu. In Mega Manila, what do you think? ;)

3. another thing, these blue chip developers have "hedged" their projects against inflation and currency fluctuations, apart from having deep pockets. example is metrobank's federaland: their 66-storey project is pegged at $1 : P56.

4. after the olympics, demand for construction materials will slow down, so the cost is expected to go down.

5. the developers who are most likely to suffer are the smaller ones or those with no or poor track record. this is also true in the event of oversupply, which in due time will be corrected. matira ang matibay (BLUE CHIPS), ika nga.

6. go to www.pse.com.ph and check out how much the megaworld and ayala stocks have GAINED in TODAY's trading. but that's not the point, since i'm not a short-term investor. what's interesting to look at is the 52-week high value of the stocks. isn't that a good target, even half of that value? do you really think that Ayala land and Megaworld will stagnate or go bankrupt in the next 2 to 5 years, given the considerations above?

7. when the US housing bubble burst months ago, investors ALREADY unloaded their global equity investments, expecting a ripple effect in the global real estate market, and that included investments in the pse. that means the anticipated real estate crisis has been factored in long before it happened, hence the drop in local stock prices particularly real estate.

however, this is a cyclical crisis, and the bulls will be back soon. short term investors will have a greater chance to get burned, although they'll have a big a chance of earning a quick buck in these volatile markets. however, the mid- to long-term investor will definitely gain. Take note, these BLUE CHIP stocks -- real estate, power, etc. -- are relatively cheap. Even if these drop further, say 10% in the short term (6 months to 1 year), they are likely to bounce back.

one more thing, just don't forget to DIVERSIFY in buying stocks. if you don't invest in these BLUE CHIP real estate stocks, the opportunity costs might be great. short-term loss in favor of long-term gain won't hurt and is a good investment strategy.

But it's your money. Besides, that 10 foot pole will cost you big-time. :)

portludlow

July 30th, 2008, 07:11 PM

barukdok

July 31st, 2008, 04:20 AM

^^ if it's cheap and has a significant upside, shouldn't you buy? if not, chances are, you'll still be laughing about hindsight truths six weeks from now. then again, i'm a medium/long term-investor, and i avoid short-term investing, the worst strategy when putting your money in equities if you don't have the time. it will make your broker happy, though.

keeping real estate to about 10-20% in your stock portfolio wouldn't hurt.

but what i see now is a window.

portludlow

July 31st, 2008, 05:11 AM

crappypants

July 31st, 2008, 07:19 AM

^^which brokerage company you use in the PHils?

barukdok

July 31st, 2008, 07:40 AM

i think you can never go wrong if you are for the long term with ayala land. :) im a market timer, more sentiment and momentum play. currently, there are chances that the bottom has not been reach. waiting for the next shoe to drop before i make my move, i hope im right.

i was waiting for 2,200 pse level as well to put extra, but from what's going on abroad, there's a chance it won't happen. i use dollar-cost averaging, by the way, since i'm for long term. let's just cross our fingers...

by the way, i went to a vietnam forum on a looming real estate crash and asked if they have a substantial number of OFWs. apparently they have few OFWs and their problems seem bigger (25% capital gains tax, etc.). here's the link...

http://www.skyscrapercity.com/forumdisplay.php?f=588

if the vietnamese market crashes, ours could be dragged along, not necessarily because of loan defaults here but due to speculation (unlike the '97 currency crash triggered by the baht where the peso was inherently weak). this is another factor to consider. oh well. but i think if this happens, the rp market should recover in the short term (6 mos to 1 year). good luck to us all...

johnnyS

July 31st, 2008, 11:06 AM

johnnyS

July 31st, 2008, 12:29 PM

Hi,

I am actually very keen on Vietnam. The people there are scary smart and driven. I think Vietnam will be a mega powerhouse in the region very soon, and they are just facing temporary hiccup in their growth.

So, I was also looking into their stockmarket and real estate.

Care to share what you have learned? Very interested here.

Thanks.

i was waiting for 2,200 pse level as well to put extra, but from what's going on abroad, there's a chance it won't happen. i use dollar-cost averaging, by the way, since i'm for long term. let's just cross our fingers...

by the way, i went to a vietnam forum on a looming real estate crash and asked if they have a substantial number of OFWs. apparently they have few OFWs and their problems seem bigger (25% capital gains tax, etc.). here's the link...

http://www.skyscrapercity.com/forumdisplay.php?f=588

if the vietnamese market crashes, ours could be dragged along, not necessarily because of loan defaults here but due to speculation (unlike the '97 currency crash triggered by the baht where the peso was inherently weak). this is another factor to consider. oh well. but i think if this happens, the rp market should recover in the short term (6 mos to 1 year). good luck to us all...

barukdok

July 31st, 2008, 12:59 PM

If you look at the OFW market as ONE, then you will see a large $ remittance. But we should remember that this is made up of millions of people and most are working menial jobs, paying very little. OFWs are not rich, contrary to the commonly held belief. They need to spend most of their money for living expenses.

Thus, even a slight change in the economy may mean that they don't have money to keep up with mortgage payments, because their "retirement home" comes second to the daily required living expenses.

In general, it's only when there is lack or diminishing demand where you see excessive sales and marketing efforts. Every time I go to a shopping mall, I am grabbed left and right by agents trying to presell. Often with steep discounts. If the demand is strong, they do not need to use these aggressive methods.

One observation I made about the Philippines real estate market is that those who already have land and are interested in selling the land are usually not strapped for cash. They are either rish to begin with, or people who never had money (just a piece of land), so it's ok if they don't sell quickly. Thus, if I drive around the provinces, I see vast tracts of empty lands. They really don't care to sell it for cheap (i.e. market prices). They want the fantasy prices, and if they can't get it? Who cares.

The real estate boom in Philippines started and are sustained for many of the same reasons as in the U.S. In the U.S., Pulte Homes and KB Homes, the Megaworld and Ayala of the U.S., are now trading at 1/10th of their highs. The retirement heaven of Florida has lost 30-40% of house value. There is no sign of this abating any time soon.

What makes Philippines different? Foreigners? I am a foreigner, and on foreign boards, people are talking about how risky it is to buy. They would rather rent because there are so many available at much cheaper prices than the bank interest on the purchase investment.

I don't think we can count on OFWs much longer either, as we can't send the entire population of philippines abroad! If I recall the facts correctly, the number of OFW heads increased by 15 or 20% last year, but remittance increased by only half that. This means that remittance PER HEAD is decreasing, a definite sign of economic difficulties facing each OFW.

OFWs should be considered as individual investors, not in a cluster of ONE.

Anyway, the effects of the global slowdown will be felt in Philippines LAST, because Philippines was also one of the last to start experiencing the latest real estate boom. So I am more of the opinion that the long term trend is downward for these developers.

So I am not in any hurry to invest in Philippine real estate developers.

****just a personal perspective, not to argue any point :)

of 8 million OFWs, one-third work menial jobs or are unskilled. that leaves you with two-thirds, or some 5 million OFWs. these Filipinos are decently paid ENGINEERS, ARCHITECTS, NURSES, VISUAL ARTISTS, IT WORKERS, etc. they aren't rich abroad, but a considerable number of these OFWs do have disposable or investable income here, less family obligations and expenses. there ends the misconception.

and you know what their problem is with their disposable income? -- they don't know WHERE TO PUT THEIR MONEY. in my line of business, I've talked to many of these OFWs as individuals, not as a statistic. 9 out of 10 OFWs I have interviewed want to retire in the Philippines. So tell me, do they need real estate investments or not?

and will there be oversupply?

here's a case in point: in the major CBDs in metro manila, only 4,500 new units are expected for 2008, and some 1,800 units in 2009. supply is expected to fall after that. shall we still do the math?

foreigners who are in no hurry to invest in Philippine real estate are hardly interested in the first place. those who do -- i'm in the real estate business so i talk to actual buyers, sellers and brokers on a daily basis -- prefer to pay in cash, considering that interest rates are rising. and there's a growing number of them.

you've driven past these rural areas, but i've actually spoken to many of these land owners, both poor and middle class, who want to sell their land for a pittance because someone from the family is sick, or they need money badly. and yes, there's a lot of them, contrary to first impressions, if you know whom to ask.

there's so much noise from outside the country and it can be scary. but these times need level-headedness to spot opportunity right in our own backyard.

barukdok

July 31st, 2008, 01:30 PM

johnnyS

July 31st, 2008, 01:40 PM

Some questions/comments on a few points you made:

1) What do you mean by a considerable number of OFWs having disposable/investable income? How much per average OFW do you think on a yearly basis?

2)Don't you think that perhaps the reason for this is because the developers are forseeing a slowdown, and they don't want to risk additional capital? If the supply is expected to be tight and the market expected to grow, why would the developers NOT choose to continue the rapid pace of development?

3)Foreigners have no choice but to pay cash. Banks won't lend them money. Also, the interest rates charged in Philippines is at least double the rate back in their home countries.

I don't see a "growing" interest through. I interact with foreigners all the time both online and offline, and there is a considerable resistance to buy real estate at all costs, as condo prices are not rising at all, and they can't buy houses in their names (and selling houses are really really difficult, as turnovers are so low--people prefer to build their own).

4)Yes, you are quite right about that! I am always looking for opportunities, but I am just saying real estate may not be where the oppty is at at this moment.

1)a considerable number of these OFWs do have disposable or investable income here, less family obligations and expenses. there ends the misconception.

2)here's a case in point: in the major CBDs in metro manila, only 4,500 new units are expected for 2008, and some 1,800 units in 2009. supply is expected to fall after that. shall we still do the math?

3)foreigners who are in no hurry to invest in Philippine real estate are hardly interested in the first place. those who do -- i'm in the real estate business so i talk to actual buyers, sellers and brokers on a daily basis -- prefer to pay in cash, considering that interest rates are rising. and there's a growing number of them.

4)there's so much noise from outside the country and it can be scary. but these times need level-headedness to spot opportunity right in our own backyard.

johnnyS

July 31st, 2008, 01:44 PM

Yeah, I have already visited the link and made a post. Thanks for the link!

Vietnamese productivity of its workers already surpass by 2 times their counterpart here in Philippines. Their wage is much lower than Philippines, but their productivity is still HIGHER. Sigh.

This is kind of strange and sad, because I always thought Philippines wages are high because of the public pressure to appease the mass. Kind of socialism at work.

But Vietnam is a communist country!!!! So this theory doesn't hold :dunno:

So we have here higher paid workers who are less productive...Unless we change something, we are gonna be left behind further and further...

they have discussions there in their link. vietnam is said to overtake RP in terms of per capita income in the next 10 to 20 years. :)

bartstrife99

July 31st, 2008, 02:01 PM

Let us wait and see what would be happen in the Philippine Booming Real Estate Industry for the next coming year's if it will maintain or not. for the news RP has more than 10M OFW and mostly of them is Blue and White collar job having a salary estimated more than $1.5k or above twice a month. the booming BPO need for offices and huge demand for OFW.

bartstrife99

July 31st, 2008, 02:11 PM

Bank lending rises despite lower economic growth
07/31/2008 | 07:49 PM
Email this | Email the Editor | Print | Digg this | Add to del.icio.us
MANILA, Philippines - Bank lending in the Philippines rose in May, despite expectations of slower economic growth, the country’s central monetary authority said on Thursday.

Latest data from the Bangko Sentral ng Pilipinas (BSP) indicated that lending activity increased by 15.4 percent on the average in May, faster than levels recorded in March and April, which hit 10.3 percent and 7.7 percent respectively.

Funds allotted for production activities—which covered bulk of total outstanding loans made during the period—increased by 13.6 percent in May. Credit extended to electricity, gas, and water drove the increase in production loans, helped by borrowing made for community, social and personal services, real estate, renting, and business services.

Similarly, loans given to agriculture, hunting, and forestry loans rose by 10.3 percent, manufacturing by 5.2 percent, and public administration and defense 44.9 percent.

Consumption loans, which covers an estimated eight percent of total loans, climbed by 21.6 percent in May, higher than the increase posted in March and April of 19.4 percent and 15.0 percent, respectively.

The BSP said the growth in consumption loans was reflected mainly by an expansion in credit card receivables. - GMANews.TV

johnnyS

July 31st, 2008, 02:35 PM

barukdok

July 31st, 2008, 02:46 PM

1) What do you mean by a considerable number of OFWs having disposable/investable income? How much per average OFW do you think on a yearly basis?

the number runs in the hundreds of thousands, even millions of OFWs (there are roughly 5 million skilled or decently paid OFWs -- you can take a fraction of that number and that's still substantial). i'm not talking of unskilled workers here, who number around 3 million.

my wife is into financial investments and her OFW clients -- a mix of single and married individuals from different backgrounds but with expected dependents in RP -- each can COMFORTABLY afford forced cash savings of P120,000 to P240,000 per annum in just one account. many of them have other savings accounts in the country they work in. this is the financial industry's best kept secret.

and that's just forced savings. that means they can stretch their funds further if they want to invest in real estate by diverting rental expenses and unnecessary expenses into mortgage payments. you'd be surprised that many of these OFWs are prudent with their hard-earned money. i suspect that those real estate salespeople in malls are trained to spot OFWs at first glance.

as the population expands, more Filipinos are expected to go abroad.

2)Don't you think that perhaps the reason for this is because the developers are forseeing a slowdown, and they don't want to risk additional capital? If the supply is expected to be tight and the market expected to grow, why would the developers NOT choose to continue the rapid pace of development?

that is a possibility. it's a cautious move since a correction is expected anytime. in fact there have been initial corrections already. the thing is, the real estate, financial, equities, commodities, etc. markets are more interlinked than ever. interest rates rise to curb inflation. the peso strengthens as the dollar weakens, and vice versa. equities tumble further with speculations in the oil markets (foreign fund exodus). in other words, we are in such volatile times nowadays.

the only question is: to what extent will the markets -- real estate in our discussions -- be affected? consider these: interest rates in banks aren't that high yet, in fact you can get a fixed interest rate of 10% for a 5-year real estate loan. this was the rate two years ago. oil is projected to drop under $100 a barrel. do we see a currency bubble? highly unlikely.

i've been asking ordinary building contractors if there's a slowdown in construction. i was surprised there was none, despite the skyrocketing cost of materials. that's how bullish the sector is.

if you've noticed in this forum, the bigger developers are starting anew to market 300+ meter, 60+ storey buildings. why? this is the best window to pursue the projects. if they delay, the cost of materials would be prohibitive for their existing plans. besides, they have already hedged the costs for the duration of the project against inflation and currency fluctuation.

take note, the hi-rises under construction and in the planning stage are lined up until 2012. new projects beyond that would be definitely priced differently, depending on how bad (or good) inflation gets.

3)Foreigners have no choice but to pay cash. Banks won't lend them money. Also, the interest rates charged in Philippines is at least double the rate back in their home countries.

I don't see a "growing" interest through. I interact with foreigners all the time both online and offline, and there is a considerable resistance to buy real estate at all costs, as condo prices are not rising at all, and they can't buy houses in their names (and selling houses are really really difficult, as turnovers are so low--people prefer to build their own).

That, in fact, is a huge drawback. That's why they get married to Filipinas or have Filipina girlfriends ;). However, it is not uncommon here even among unmarried couples where a foreign retiree buys property under the name of his fiancee.

You mentioned earlier foreigners prefer to rent. That means there is a rental market for Filipinos who own real estate.

Condo prices are expected to go up. Why? It costs nearly twice as much to build a structure now than it was 6 months ago. (the developers survived this by incidentally hedging ongoing project costs against inflation and currency fluctuation).

as to our high interest rates, this is necessary to keep inflation in check (since our economy is inherently volatile). but these are usually offset by rental income.

4)Yes, you are quite right about that! I am always looking for opportunities, but I am just saying real estate may not be where the oppty is at at this moment.

It's not for everyone. I'm tempted to buy a condo unit, but i'd stick to plan A with a better ROI in the long term: buy raw land at P50 per square meter. in 10 to 20 years time, that same property will be tenfold its original value. why? because the Philippines has a small land area compared to its neighbors and in the next decade or so, land supply will be so tight, property values have nowhere to go but up, up, up:).

johnnyS

July 31st, 2008, 02:53 PM

barukdok

July 31st, 2008, 03:16 PM

$1,500 2x per month is $3,000.
This seems like a lot of money, but it really isn't.

In the U.S., poverty level is if you earn LESS THAN $1,000 per month for a single person. In major cities, this is $2,000 (and most OFWs work in major cities, like NY, LA, etc.).

Thus, you need to make $2,000 just to be above the poverty level in a major city. In Manila, I think poverty level per individual is like 4 ot 5,000pesos?

So, 5,000pesos is equvalent to $2,000!! A crude comparison, I know, but it works.

The cost of living abroad is so high, that the amount they have to save is very, very small. As an interesting sidenote, an average secretary in New York City makes $50,000 per year, or more than $4,000 per month. They are certainly not rich, and barely get by. Secretary in Manila makes, say 7,000 ot 8,000 pesos per month? So you have it. 8,000pesos in Manila is equvalent to $4,000 in NYC.

We just look at the money they make and translate it to pesos and say, wow they are rich!

This is really far, far from the real truth. The OFWs have very little money. But because there are so many, the total remittance is large.

$14billion divided by 10million OFWs is at most 5,000pesos per month. This is remittance that their families back home can live on. How can 5,000pesos per month pay for cost of living, PLUS mortgage?

Sure there is a small portion of OFWs that can send more than 5,000pesos home per month, but their families will also want more, like iPOD, dinners at TFI Fridays, college tuition...

It is a very tight situation, and it is my personal belief that the OFWs were caught in the SAME real estate boom-induced euphoria and started to overstretch their meager earnings to buy homes on mortgage. I think they will soon find out that this was a mistake.

I hope I am wrong, as I also have OFW relatives who did the exact same thing.

That's $3,000 monthly for ONE job. many Filipinos work two jobs. For most Pinoys, $3,000 less expenses is still a lot of money. But there's a growing number of Filipinos who earn more.

Nurses in the US, for example earn $20 to $50 an hour. So if he works 8 hours a day, 20 days a month, that's $3,200 to $8,000 a month. That's P144,000 to P360,000 a month at P45 to $1! And it's not uncommon for them to get two jobs. Now you see why nurses get to save a lot of money? There are roughly 100,000 Filipino nurses working abroad.

Filipino graphic artists and IT practitioners in Dubai earn from P80,000 (starting) to P240,000 monthly. To offset high rent, they share flats or rooms so they can save and send more money home. Filipinos, generally spendthrifts for their hard-earned money, live different lifestyles from Westerners.

Upstart seamen earn P80,000 while officers earn way above that. And there's not much to spend on board the ship, so most of that money goes home. We are a nation of seamen, by the way. You'd see in rural areas in fifth-class municipalities a growing number of gated communities with mediteranean style houses sprouting all over. That's seamen's money.

The list goes on.

Also, Pinoy OFWs seldom tell their families back home exactly how much they earn. Imagine if they are that honest.

johnnyS

July 31st, 2008, 03:24 PM

I hope you are right, and nothing bad happens to the Philippines economy.

barukdok

July 31st, 2008, 03:28 PM

p50 per square meter?
Care to share where?
Most of the land for sale, the owners are in a fantasy land.

If it's p50 with public access and basic utilities, and less than 2 has, it is a bargain, anywhere in Philippines.

P50, 1 to 2 hectares. that's raw agricultural land without title, only tax declaration, but can be titled. i have to be very careful, though, that the property is alienable, with deed of sale that's in order, has road-right of way, as well as access to power and water.

there's a lot of those still i metro cebu, for example, and most rural areas. the prices usually skyrocket when they know a foreigner is buying.

this is speculative buying by the way, speculation that development will spill over the area as early as possible. in the meantime i can plant food crops.

barukdok

July 31st, 2008, 03:32 PM

barukdok

July 31st, 2008, 03:34 PM

I hope you are right, and nothing bad happens to the Philippines economy.

we're used to it ;) those who are fed up, leave momentarily. that's how we've stayed afloat. it's almost tragic, but hey, it could be worse.

johnnyS

July 31st, 2008, 03:43 PM

normally, lending activity drops with economic slowdown, is this correct? :)

Well, I think you need to read between the pages.

The commercial loan expansion may be due to the impending, continual rise of the leanding rates. So commercial loan expansion now may be due to companies interested in locking-in lower interest rates, not necessarily due toeconomic growth.

And the personal loan increase is credit card receivables. Receivables increasing is usually NOT a good sign. People have less money to pay in cash so using credit cards, thus rising credit card receivables.

I suppose with anything, there are two faces.

barukdok

July 31st, 2008, 03:51 PM

^^ looks like it. oh well

johnnyS

August 2nd, 2008, 09:23 AM

Barukdok,
what is your general strategy for weathering the global economic downturn, which will most likely affect the Philippines as well?
I know that you even looked into Vietnam.
Do you have some kind of grand strategy, or something in the works?

bartstrife99

August 2nd, 2008, 01:08 PM

Well thanks to OFW Remittances and the controversial E-Vat the Philippines can weather the world economic storm and uncertainty!

------------------------------------------------------------------------------------------------

Property spending of retirees rising, observe analysts

By Tessa Salazar
Philippine Daily Inquirer
First Posted 23:43:00 08/01/2008

MANILA, Philippines—Aside from the overseas Filipinos being cited as a lucrative market for residential properties, retirees are increasing their property spending, mostly from life savings and retirement benefits.

Mike Mabutol, director for Investment Properties and Capital Markets at CB Richard Ellis Philippines, observed that “this trend started four to five years ago and now we see these retired buyers becoming more active in the market.” Mabutol shared this during the recent Asia Pacific Marketing Power and Sales Effectiveness property and marketing conference in Macau, China.

Eric Soriano, adviser of the Philippine Retirement Industry, confirmed this, saying that growth and demand from the retirement sector had, indeed, been steadily moving up.

Soriano added that the demand has been a result of the first and second generation Fil-Am professionals or active retirees coming home to the Philippines for good.

“It now makes good business sense for developers to incorporate retirement standards in their communities as prescribed by PRA as it effectively broadens the segments,” Soriano told Inquirer Property.

Short of global expectations

Soriano lamented that “as for foreign retirees picking up RP as a retirement destination, we haven’t really made inroads as the economy, peace and order, public infrastructure are still short of the minimum global expectations. Country stability and a concerted marketing initiative between private and public sectors are key drivers in wooing foreign retirees.

“During our past two conventions, Gen. Edgardo Aglipay, PRA chair, presented the standards that would appeal to this specific market and the developers took that into consideration,” said Alejandro S. Mañalac, president of the National Real Estate Association.

Past reports cited how the Philippine retirement industry was projected to hit its target foreign exchange receipts at a cumulative $40 billion, with 4 million jobs generated by 2015.

With the Philippines positioning itself to become the major retirement haven in Southeast Asia for foreigners, the structures that will house them need to be physically attuned to senior citizens.

A few months ago, the Philippine Retirement Authority/Philippine Retirement Industry recently provided Inquirer Property with accreditation standards for the design and structure of buildings for nursing homes. These standards require provisions for disability access in line with relevant building codes.

It was stressed that communal areas have to be easily accessible by disabled persons and with comprehensive programs that cater to elderly patients who cannot live on their own.

The basic structures to be followed cover primary facilities and amenities, among others.

Some of those mentioned were big space and wide alleys to allow wheelchairs and beds to move around; with resilient and nonslip tiles and floorings; and gradual access elevation for wheelchairs for a two-story facility. Beyond two stories, an elevator must be available; mechanized equipment for bedridden retirees; and grab or handle bars in desirable locations like toilets and bathrooms.

CBRE Philippines said that to address increasing demand by OFWs and retirees, real estate developers are developing affordable housing and condominium projects, with investments ranging from P1 million to P2.5 million, according to a CBRE Philippines report. From 2008 to 2013, 28 residential condominiums are expected to rise in Makati City, providing more than 18,000 units. In Fort Bonifacio, 33 residential condominiums are expected to be completed between 2008 and 2013, which will provide more than 11,500 units.

barukdok

August 2nd, 2008, 02:27 PM

^^ this is really good news. it's not just OFWs, but "old school" balikbayans and foreigners as well. as for OFWs, many of them in their early to mid-30s already talk about their early retirement, so that's a steady stream of retirees well into the next decade or two.

Barukdok,
what is your general strategy for weathering the global economic downturn, which will most likely affect the Philippines as well?
I know that you even looked into Vietnam.
Do you have some kind of grand strategy, or something in the works?

for investable funds, here's my strategy with an emphasis on capital preservation (this is pretty conservative and basic) ...

1. invest for the long-term. the oldest stock broker in the hong kong bourse gives the same advise. but if i gain big in the medium term, i wouldn't complain. i'm also still hunting for P50-P100 per square meter land, 1 to 2 hectares. here's the good thing: if i bought land with only a tax declaration, its value instantly jumps up three-fold once it gets titled. then again, i'm holding for the long-term. at the rate of urbanization in the country, that P100 per sq. m. land could easily cost P1,000 to P2,000 per sq. m. in 5 to 10 years.

2. buy cheap. i got this advise from someone who lost P20 million in one day in the 1997 Asian currency fallout. but this strategy isn't just with stocks. when times are hard, chances are there'll be a lot of real estate sold at a bargain, as well as foreclosures. it also helps to have connections in the banks.

3. dollar-cost averaging (for equity funds)

4. invest locally. i'm more comfortable investing in the local markets since i'm more familiar with the climate here and it's not bad as it looks. besides, few markets are spared from waves of economic turmoil nowadays. but i'm looking at investing in other emerging markets through global equity funds (i was happy with ING). i'm just waiting for the market to bottom out.

5. diversify
a. financials -- 20% bonds, 60% stocks and 20% TDs (if the economic climate gets worse and interest rates rise further, i'd expect banks to offer TDs with 10% fixed annual interest for 5 years, not compounded. that would be an option for capital protection, with inflation at 7-9%.)
b. real estate -- 40% commercial, 30% residential and 30% agricultural (i prefer cheap uplands. on an extreme speculative note, the water levels could really rise in the next few decades and lowland property are the first to suffer in value, considering the Philippines is an archipelago )

6. stick to my strategy. i don't have time to play the markets on a daily basis, so my best bet is having a good strategy and stick with it. there always is a Plan B, of course.

7. keep a clean credit record. banks value clients who pay on time. so when an opportunity to make good debt arises, getting a loan wouldn't be tortuous.

this investment strategy takes a lot of patience, but i'm certain this will pay off, so long as i don't run out of cash to invest (that's why i try to be as adequately insured as possible).

how about you, what's your general strategy?

johnnyS

August 2nd, 2008, 04:53 PM

That sounds like a pretty comprehensive plan.

I am extremely risk averse. But today's interest return are so small that I have no choice to look around.

1) 70% in gov't insured deposits paying at least 5% return. But I am hesitant on Phil Peso deposits, even if I could get something like 8% because there is a possibility that peso will depreciate rapidly, at least on a short term basis, against the dollar. Still confused on what to do on this one.

2) 10% on ultra risky equity trades--extremely short-term. The way I look at it, ALL equities are highly risky nowadays. Do you notice major indexes trading up and down by 1 to 2% each day is considered normal now? It used to be that these indexes were supposed to trade within 0.1 to 0.2% each day in fluctuations because they are made up of large, stable, predictable companies. Not no more. So even big companies are like risky small ones. GM is trading at 50 year low!!! Wow. So might as well go for really risky ones hoping for a large return.

So my stratgy is to constantly read up on stock market, and make small risky bets on equities, both long and short and get perhaps 20% return per annum (and at least not lose any money).

3) 10% on finding that "sure bet" real estate (lot, not house) that would appreciate 10 20 fold like you said in about 10 years. This would be real sweet. Tax declaration i heard about. But isn't it very risky?

4) 10% investment in dream big-bang business, something on internet. You know, like facebook. I am always thinking of internet based idea which can take off globally :) And when I get a good idea, I get my cousin to create a site and I spend some money trying to get it started. Chances of success nearly zero, but hell, I can dream, right?

---

Regarding your concept:

"if i bought land with only a tax declaration, its value instantly jumps up three-fold once it gets titled."

What do you know of this? Is there any forum that discuss this concept?

And what is your profession?

marchitecto

August 3rd, 2008, 10:56 AM

wala na bang updates ng PSE?
wala na kong nakikitang numbers ah.

cyrusal

August 4th, 2008, 09:44 PM

Reminder:
Seems like consolidation phase has begun. Alright guys, wait for the index to go beyond 2650 and it will break a major resistance! meaning, rallies are expected in the coming months.. yung mga wla pang broker, kumuha na kayo at sumali sa stock trading!..

johnnyS

August 6th, 2008, 02:23 PM

Stocks and investing makes me shiver nowadays. Up and down like rollercoaster.

Lucentino

August 6th, 2008, 06:17 PM

^^It's part of the game! :)

-TC-

August 7th, 2008, 02:59 AM

http://businessmirror.com.ph/08072008/companies06.html

PSE buys new trading application from NYXT
By Honey Madrilejos-Reyes
BusinessMirror
August 7, 2008

THE Philippine Stock Exchange (PSE) has finalized its plan to buy a new trading system application from NYSE Euronext Technology SAS (NYXT), the world’s leading provider of technology solutions for exchanges.

“This new trading system will exponentially improve the capacity of the PSE to handle any future sharp increase in our value turnover,” said president and chief executive officer Francis Lim.

The new system has the capability to handle sophisticated capital market instruments, including those that are only in their development stage.

The agreement with NYXT came roughly a month after PSE entered into a Memorandum of Understanding (MOU) with NYSE Euronext. Lim said the PSE-NYXT agreement will serve as basis for PSE’s acquisition of NYXT’s trading application, called NSC. NSC will replace the PSE’s current trading system, called the Mak Trade. A version of the NSC, which will be customized for PSE’s use, will be completed and launched in the middle of next year.

Lim told the BusinessMirror that he expects transition from Mak Trade to NSC will be seamless as a technical rehearsal will be conducted before the system is fully transferred.

Acknowledged as an integrated trading platform, the NSC trading application has undergone generations of developments, tests and improvements. It has also chalked up a long track record of consistent and stable operation.

bartstrife99

August 7th, 2008, 01:52 PM

Local shares soar as oil prices continue decline

MANILA, Philippines - Share prices on Wednesday soared as market players cheered the huge decline in oil prices, analysts said.

The 30-company Philippine Stock Exchange index surged 94.83 points or 3.644 to 2,697.21 while the all-share index jumped 55.14 or 3.3613 percent to 1,695.58.

Gainers trampled losers 107 to 21 while 39 stocks were unchanged.

Volume traded reached 4.538 billion valued at P3.667 billion.

Irving Ackerman, I. Ackerman & Co president, said with Dow Jones rallying by more than 300 points on Tuesday, investors were heartened to pick up stocks from the local bourse.

“The reason for that is clear. Dow Jones went up a little over 300 points and that was because of the continued decline in oil prices. If oil continued to fall, then we can expect that the worst is over," he said.

However, Ackerman cautioned that the market's movement largely depends on the movement of oil prices.

“We can't predict certain things but we can just hope that the worst is over," he said.

Oil prices plunged to $118 a barrel on slowing demand on the commodity.

On Wednesday, telecommunications giant Philippine Long Distance Telephone Co. rose P45 or 1.7822 percent to P2,570.

Sy-controlled lender Banco de Oro Unibank climbed P1.50 or 3.7037 percent to P42.

Ayala Corp., the country's largest conglomerate, leaped P17.50 or 5.8824 percent to P315.

Developer Megaworld Corp. gained P0.10 or 6.25 percent at P1.70.

Aboitiz Power Corp. advanced P0.10 or 1.7857 percent to P5.70. - GMANews.TV

bartstrife99

August 7th, 2008, 01:55 PM

Philippine peso rallies past P44:$1
08/07/2008 | 03:36 AM
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MANILA, Philippines - The peso extended its rally Wednesday to breach the P44-to-the-dollar territory, following a sharp drop in global oil prices.

It gained a hefty thirty-and-half centavos from Tuesday’s close to P43.82 per dollar, its highest since June 4.

"It’s the same story. The Dow Jones ralled significantly last night as oil prices softened. The market is still looking at the movement of oil prices," a currency dealer said.

The peso opened at its intraday low of P44 per dollar and reached a high of P43.80. The central bank was spotted to have stepped in yet again to cap the local currency’s gain.

The peso averaged at P43.842 against $1.22 billion worth of dollars changing hands. - BusinessWorld

-----------------------------------------------------------------------------------------

Property firms to build units for government
08/07/2008 | 07:15 AM
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MANILA, Philippines - Listed property developer Megaworld Corp. and two sister companies have signed a joint venture deal with the government to develop office buildings and housing units in the cities of Quezon, San Juan and Taguig.

The project will address office requirements of the National Police Commission (NAPOLCOM), Interior and Local Government department, as well as housing needs of the agencies’ employees and beneficiaries.

Megaworld signed the deal on Tuesday with sister firms Empire East Land Holdings, Inc. and First Centro, Inc. and the Bases Conversion and Development Authority (BCDA) and NAPOLCOM, Empire East told the exchange Wednesday.

Under the deal, Megaworld will develop a new office tower covering 24,000 square meters along Quezon Avenue, BCDA Vice-President for Business Development Aileen Anunciacion R. Zosa said in a phone interview.

Megaworld will also build 600 housing units in San Juan, while a seven-hectare land owned by the NAPOLCOM in Fort Bonifacio, Taguig City will be developed for a mixed-use project.

Oscar F. Valenzuela, Interior and Local Government assistant secretary, said they still have to thresh out some details, adding that construction would start this year. — Aizel Joyce A. Catipay, BusinessWorld

johnnyS

August 8th, 2008, 01:19 PM

What do you think are the reasons the Ph market will go up?
I mean the reasons opposite, like the MoA in Mindanao, corruption charges, etc. are plenty. But what are the optimistic reasons?
I just can't see how Ph market is expected to go up where the worldwide markets are in a significant downturn.
Someone please enlighten me.

And any opinions on San Mig Brewery corp (not San Mig Corp) would be appreciate. Is it paying 7% dividend?

bartstrife99

August 9th, 2008, 01:45 PM

As far as i know the Philippine is less dependence on US economy unlike those other asean neighbor like Japan , S. Korea ,Malaysia , Thailand etc....

johnnyS

August 9th, 2008, 03:17 PM

If that's so, we are in more trouble.
China is down 50% and other asian markets are all down far greater than the U.S.

Lucentino

August 9th, 2008, 05:07 PM

As far as i know the Philippine is less dependence on US economy unlike those other asean neighbor like Japan , S. Korea ,Malaysia , Thailand etc....

According to NSO (http://www.census.gov.ph/data/quickstat/index.html), as of Apr. 2007, one of the top trading partners of RP is the US.

bartstrife99

August 10th, 2008, 10:55 AM

Well the Central Bank Monetary Policy is one of the reason why mostly investor are still upbeat in RP stock despite the risk are there and will cut the Corporates earning due to Global uncertainty, with Govt support and not to remove the controversial E-Vat and OFW remittances RP can weather the Global Storm.

bartstrife99

August 10th, 2008, 03:48 PM

Govt taps DBP to raise P40B for central bank
08/10/2008 | 07:43 PM
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MANILA, Philippines - The government has picked the Development Bank of the Philippines (DBP) to raise P40 billion for the recapitalization of the Bangko Sentral ng Pilipinas (BSP) before the end of the year.

BSP governor Amando M. Tetangco would not confirm the specific details of the arrangement, but according to sources privy to on-going discussions DBP has been selected as the special purpose trust (SPT) that would handle the bond issue.

The proposed Financial Stability Bond was supposed to raise funds that would be plowed into the BSP, which had been capitalized by the national government at P10 billion when it was established in 1992.

Tetangco, however, confirmed that the fund was likely to be released to the BSP in one or two tranches, once the bond issue is completed either by the end of the month or early in September this year.

“The proceeds of the bond issue amounting to P40 billion will be used to complete the capitalization of the BSP," Tetangco said. “[The BSP will get it] in one or two tranches."
Tetangco declined to comment until negotiations have been finalized but according to sources, the national government planned to pay off the bonds out of the national budget for a period of ten years.

Getting the entire P40 billion would fulfill the BSP's capitalization program of P50 billion provided under the New Central Bank Act. The national government already put down the initial P10 billion when the BSP was created.

After a delay of over 5 years, the national government is finally making good of its commitment to fully capitalize the BSP.

The plan was for the NG to issue a multi-year obligational authority (MYOA) and to use DBP as the special purpose trust that would securitize the MYOA.

Already bleeding from its foreign exchange operations, the BSP's recapitalization has become even more critical since the national government has put down only P10 billion of the P50 billion required under the New Central Bank Act of 1993.

Under the New Central Bank Act of 1993, the national government was originally required to put down the entire P40 billion for the full capitalization of the BSP within two years of the effectivity of the law.

However, the government has never been in the position to seriously consider how it could pay up.

Despite sustaining heavy losses from its forex operations, however, Tetangco earlier said that the BSP was in a "good fiscal position" after building up capital reserve to absorb the impact of the peso appreciation on its bottom line.

Tetangco explained that over the years when the BSP was making huge profits, capital reserves were put in place as it also continued to build up international reserves.

"In the first place, profit is not the primary objective of a central bank," Tetangco pointed out. "A central monetary authority will do what it would take to maintain price stability. So if we sustain losses, it's just part of what we do, it's the cost of doing price stabilization."

Huge losses being sustained by the BSP, however, underscored the need for the national government to start seriously considering how it would be able to fully capitalize the central bank.

Tetangco said the credit standing would improve dramatically when government pays up the remaining P40 billion of its capitalization and this would ultimately benefit private borrowers.

Tetangco explained that both the national government and the BSP were used as benchmark institutions for pricing private sector loans, which would mean borrowers would have access to cheaper funds.

"Ultimately, this is good for a more effective conduct of monetary policy to achieve stability," Tetangco said. - GMANews.TV

bartstrife99

August 12th, 2008, 01:49 PM

RP shares close higher on Wall St rally

Philippine shares closed sharply higher on Monday as investors, taking their cue from Wall Street's rally last Friday, snapped up blue chips, led by telecom giant PLDT.

Last week's drop in oil prices, which continued to ease inflation concerns, sent US stocks up 302.89 points or 2.65 percent.

Oil plunged below $115 a barrel Friday, its lowest level in three months and was trading at $116.26 in early Asian trade Monday. Oil hit a record high above $147 in July.

"The decline in oil prices is encouraging investors to buy because it means less pressure on inflation and interest rates," said Astro del Castillo, First Grade Holdings managing director.

"The performance of overseas markets also buoy the local equities market. Fundamentals are starting to get better."

Del Castillo noted that investors also bought shares of companies that have reported strong quarterly financial results.

The composite index jumped 75.71 points or 2.8 percent to 2,768.52.

The broader all-share index gained 30.09 points or 1.8 percent at 1,728.95.

Gainers outpaced losers, 83 to 34, while 46 stocks were unchanged.

A total of 3.77 billion shares worth P3.07 billion changed hands.

Market heavyweight Philippine Long Distance Telephone Co. (PLDT) soared P100.00 or 3.8 percent to P2,710.00. Its unit, Pilipino Telephone Corp., rose P0.40 or 4.2 percent to P9.90.

PLDT earlier posted a 4-percent increase in its second quarter profit to P8.8 billion on strong wireless and broadband revenues. The company also approved a second buyback program of up to two million shares to boost the price of its stock, which lost 25 percent in the first semester.

Globe Telecom jumped P20.00 or 1.7 percent to P1,205.00.

Metropolitan Bank and Trust Co. edged up P0.50 or 1.25 percent to P40.50.

Ayala Land Inc. advanced P0.50 or 4.8 percent to P11.00 after it announced a 37-percent jump in first-half profit to P2.91billion.

This week, investors are awaiting the results of conglomerates Ayala Corp., SM Investments Corp. and San Miguel Corp.

manila_eye

August 13th, 2008, 05:07 PM

this is the best time to buy stocks. im lovin' the economy.

johnnyS

August 13th, 2008, 05:52 PM

Why is it the best time? Any specific reasons?

lazybum

August 13th, 2008, 07:47 PM

Unfortunately, the world's major economies are just catching up with the US. Consumption in the US has slowed down quite dramatically and is projected to continue its downward trend for the rest of the year, and the emerging economies will mimic this downward trend - there is just no avoiding it. This is the reason why major investors have been constantly revisiting their growth projections for most countries in Asia.

I will not be surprised to see the major Asian stock indices including the PSEI, to test new lows within next 2-3 weeks. Investors were hoping that the Beijing Olympics will provide a much needed confidence boost to the markets. Unfortunately that has not happened. It is interesting to note that major indices particularly in Japan, HK and China are down significantly from pre-Olympic levels.

There are just no stable investment alternatives at the moment – investment visibility for the next 6 months is almost zero.

lazybum

August 13th, 2008, 07:51 PM

Until the all of the major markets capitulates, I would stay away from equities and currencies.

red_jasper

August 14th, 2008, 06:42 AM

Market to get boost from revised mining reporting code

The local stock market is expected to get a boost with full implementation of the Philippine Mineral Reporting Code (PMRC), which applies internationally accepted standards of reporting for publicly listed mining companies.

The revised PMRC has been approved by the Securities and Exchange Commission.

In a statement, the Philippine Stock Exchange said the PMRC sets out the minimum requirements, recommendations, and guidelines for public reporting of exploration results, mineral resources and ore reserves undertaken by a competent person of a mining company.

PSE added that it adopted a fresh definition that describes the qualifications and type of experience required to be qualified as a competent person.

Under the PMRC, this person must have a minimum experience of five years in the mineral reporting activity he or she is undertaking.

He or she, however, must be a duly-licensed professional and an active member or fellow of the Philippine Society of Mining Engineers, Geological Society of the Philippines, and Society of Metallurgical Engineers of the Philippines.

"We in the PSE welcome the SEC's decision to set a higher standard requirement for the Competent Person of mining companies. This way, we can assure our investing public that we are providing them not only with material information, but also quality and credible reports on mining and minerals, which will guide them in making investment decisions," said Francis Lim, PSE president and chief executive officer.

The PMRC also provides a mandatory system for classification of tonnage/grade estimates according to geological confidence and technical economic considerations.

"This is a positive development for our stock market because the PMRC minimizes the risks our investors are exposed to through proper disclosure. By way of implementing the PMRC, it makes our disclosure reporting compatible with major global mineral reporting standards and elevates the language we use with that of the international codes of South Africa, Canada, Australia and European Union, which is a better way to attract more foreign investors to penetrate our local stock market," Lim noted.

"We believe that it will not only curb speculative trading in our listed mining companies but will also help soften market volatility."

Full story (http://www.abs-cbnnews.com/storypage.aspx?StoryId=128252)

johnnyS

August 14th, 2008, 04:10 PM

The news buzz from the U.S. is that non-U.S. economies, including the emerging markets, will just now start to experience downturns, whereas U.S. has already experienced it and is emerging from it.

So more people are investing in the U.S. over others, and the US Dollar is expected to strengthen.

I would really like to hear from people who have some insights on how to play this in Philippines.

le Reine

August 14th, 2008, 04:43 PM

Peso update

P44.975 = USD1.00
previous close: 44.720

Stock Market
Market Closed
As of THU AUG 14, 2008 12:10:00 PM
PSE COMPOSITE AND SECTORAL INDICES

VALUE / CHANGE / % CHG
PSEi 2,727.28 / 5.34 / 0.1962 ^
All Shares 1,692.82 / 10.38 / 0.6094 V
Financials 680.98 / 5.96 / 0.8676 V
Industrial 3,114.94 / 68.59/ 2.1545 V
Holding Firms 1,450.50 / 3.10 / 0.2142 ^
Property 935.72 /12.81 / 1.3505 V
Services 1,583.11 / 30.76 / 1.9815 ^
Mining & Oil 6,984.87 / 41.17 / 0.5929 ^

lazybum

August 14th, 2008, 09:53 PM

jvl

August 20th, 2008, 12:43 PM

Peso is now sliding ---> 45.50+ to the dollar... how can the government tame inflation when the Peso is depreciating again.

mygz14

August 20th, 2008, 02:22 PM

We were able to fight global crises last year due to the appreciating peso. It tames global increases thus limiting domestic inflation. Although we are in a free-market, the government can provide for ways for the peso to appreciate again.

Weina

August 21st, 2008, 07:01 AM

not with the gov't waging war in the south.

johnnyS

August 21st, 2008, 03:38 PM

bartstrife99

August 21st, 2008, 04:23 PM

As of now we cannot predict the Peso will end at P45/$ or P40/ $ at the year end, let us see and wait the remittances season on last quarter of the year!

jvl

August 21st, 2008, 06:24 PM

I think the Gov't gave up trying to prevent the peso from depreciating.
I think it all depends now on whether the USDollar will continue to strengthen or not relative to global currencies. And the peso will just follow.

I don't think the Peso can buck the trend by itself while the rest of currencies are weakening against the dollar...

Yes, let the market forces dictate the real value of the currency.

Intervention should only be done to soften the impact and not totally influence the value.

johnnyS

August 22nd, 2008, 02:47 AM

I am just so stuck.

I mean I don't have much money, and here in Philippines, the inflation is so high (much higher than the official 11%, because cmon, look at all the food prices and fuel and just about everything we buy). But just to beat inflation, put money in stockmarket? Too risky. And the bank deposits are returning much less than inflation. And rural banks are more or less a gamble, not "investment".

So what am I or people like me supposed to do in Philippines???

johnnyS

August 22nd, 2008, 05:06 AM

Yesterday, USD lost about 1% against the Euro and slightly less so against the Yen.
Yet the USD is holding steady with peso at around 45.6...

jvl

August 22nd, 2008, 10:22 AM

^Well, the Peso's slide can be attributed to so many factors. Could be the destabilisation in the south, or the remittances, or the lack of investments, etc.etc.....

Anyway, you are right in saying that investing in stocks is quite a dillema at the moment. In case you do invest in the stock market, don't consider it as a gamble though.

johnnyS

August 22nd, 2008, 11:09 AM

I am thinking maybe I should just invest and become a farmer.
That seems to be the only stable thing going at the moment...

bartstrife99

August 23rd, 2008, 07:41 AM

I am thinking maybe I should just invest and become a farmer.
That seems to be the only stable thing going at the moment...

Must Be! :lol:

bartstrife99

August 23rd, 2008, 07:41 AM

RP market could see bargain-hunting next week: analysts

Agence France-Presse

Philippine share prices may see some bargain-hunting next week after falling sharply in recent days, analysts said Friday.

However oil prices and the state of the US economy could continue to influence trading, they said.

"We are nearing the 2,600 level now, so maybe we will swing back to a rally next week," said Sandra Araullo of Regina Capital Development Corp.

"There may be bargain-hunting. Definitely there are a lot of stocks that are below book value," she said.

Araullo noted there was a lot of selling by foreign investors but said value was "still there" in shares.

"The two main stories next week will still be oil prices and what is happening to the US economy," said Astro del Castillo of First Grade Holdings.

For the week to August 22, the composite index fell by 2.6 percent or by 71.97 points to 2,653.18.

Average daily volume for the week fell to 1.047 billion shares worth 1.651 billion pesos (36.22 million dollars).

bartstrife99

August 29th, 2008, 07:28 AM

Shares close 1.2% up on Wall St. gains overnight

INQUIRER.net
First Posted 12:42:00 08/29/2008

MANILA, Philippines -- Shares closed 1.2 percent higher on optimism over Wall St. gains overnight. The composite index rose 32.34 points to 2,688.09.

The all-share index was up 1.3 percent to 1,668.75 points.

There were 69 gainers compared to 29 losers, while 51 counters were unchanged. Volume amounted to 1,773.2 million shares worth P2.57 billion.

---------------------------------------------------------------------------------------

Philippine peso, Korean won fall on resilient dollar

Reuters
First Posted 12:08:00 08/29/2008

SINGAPORE -- The Philippine peso and South Korean won fell half a percent each on Friday, while other currencies eased against the dollar, which gained on data showing the US economy grew at a robust pace in the second quarter.

The peso dropped to 45.85 per dollar.

"This is due to market covering some corporate dollar demand which we saw late yesterday," a Manila-based trader said.

The South Korean won fell to 1,089.2 versus the dollar as data showed the country's current account in July posted its biggest deficit in six months.

"The current account data prompted investor reluctance to buy the won," said an analyst at a local futures firm.

The Malaysian ringgit also slipped 0.4 percent, weighed down by the stronger US currency which held on to gains against a basket of major currencies from Thursday.

The dollar rose after data on Thursday showed the world's largest economy grew at a 3.3 percent annual rate in the second quarter compared with the initial estimate of 1.9 percent.

Traders said regional currencies were also bogged down by usual month-end corporate settlements, when companies convert local currencies to US dollars for payments.

The ringgit fell to 3.3940 per dollar, hitting a 10-month low.

"The dollar/ringgit was higher because there was month-end US dollar demand, and fundamentally because the central bank did not raise rates to contain inflation," a trader in Kuala Lumpur said.

Investors continued to doubt the viability of the central bank's decision on Monday to hold interest rates steady at the same level since April 2006, especially in light of soaring inflation.

Ringgit traders said they were eyeing the government's fiscal budget due later in the day and data indicating the economy's growth in the second quarter, which market players expected to have slowed to an annual 5.9 percent from 7.1 percent in the first quarter.

pushstars

September 3rd, 2008, 12:47 PM

http://www.gmanews.tv/story/117852/Philippine-shares-rally-on-crude-price-decline

Philippine shares rally on crude price decline
09/03/2008 | 02:14 PM
Email this | Email the Editor | Print | Digg this | Add to del.icio.us
MANILA, Philippines - Boosted by the drop in oil prices, Philippine share prices on Tuesday rose.

The 30-company Philippine Stock Exchange index climbed 41.78 points while the all-share index jumped 15.63 points or 0.9349 percent to 1,687.48.

Losers, however, edged out gainers 46 to 44 while 57 stocks were unchanged.

Volume traded reached 1.414 billion valued at P2.26 billion.

Peter Raymond Lee, IGC Securities analyst, said investors cheered the drop in oil prices, which had even fallen as low as $105 a barrel in the US.

"The rally today was on the drop in oil prices. Although Dow Jones was down, it had gained 250 points in the early session in reaction to favorable oil prices," Lee said.

In Asia, oil was trading at about $109 a barrel level. Just last month, crude prices had reached a record high of $147.

Developer Megaworld Corp. slipped P0.02 or 1.2987 percent to P1.52.

Telecommunications giant Philippine Long Distance Telephone Co. leaped P45 or 1.6453 percent to P2,780.

Philex Mining Corp., the country's largest miner, was steady at P7.50.

Metropolitan Bank & Trust Co., the country's largest lender, surged P1 or 2.6316 percent to P39.

Globe Telecom Inc., the country's second-largest telecommunications company, advanced P10 or 0.9529 percent to P1,090. GMANews.

cyrusal

September 3rd, 2008, 02:39 PM

^^ haha.. that article from GMANews never mentioned the prime movers of the index today which are Benpres, First Philippine Holdings, and all other Lopez-owned companies which all went up to 4-7%...

well... no surprise for the no-mentions...

TheRick

September 5th, 2008, 12:53 PM

Last time I looked exchange rate was P46.85 = $1...

I guess the people who predicted exchange rate would go back to P45 = $1 were correct...
The P38 = $1 would have been really bad for the OFW sending money to their families and overseas pinoys who invested in real estate...

Any prediction on how low the Peso will go?
Any prediction on how the Peso will rebound during X-Mas season?

Peso gains further, on the verge of entering the P40:$ 1 territory
By FIL C. SIONIL
http://www.mb.com.ph/BSNS20080105113484.html

The peso is in the verge of hitting the P40 level against the US dollar, ending the trading week for the new year at an intra-day high of P41 and closing at P41.01 due the general weakness of the dollar as concerns that the US economy is facing recession snowballed.

Bank treasury officials observed the local currency would have breached into the P40:$ 1 level had it not been for BSP intervention. "The BSP (Bangko Sentral ng Pilipinas) was always in the spot" to stem the rapid appreciation, they said.

It was stressed that as far back as the last three weeks of trading for the month of December, the peso would have broke the P41 wall but the BSP was "always there to prevent this from happening."

"Our assumption is, it is there way of supporting the exporters, who have been clamoring for the help from the government ever since the rally started in the last quarter of 2007," surmized a treasury official of a foreign bank heavy in dollar trading.

The P41 wall will be "easy to break next week," the source said.

The "light demand for dollars" plus the unabated flow of dollar remittances from overseas Filipino workers (OFWs) and the across the board weakness of the US dollar on fear that the full impact of the subprime mortgage chaos has yet to be quantified lifted the value of the local unit.

Already, some of the big retail shops in the US have been feeling the hit of the sub-prime mortgage market turbulence.

Bank of the Philippine Islands (BPI) Vice President for treasury Lito Biacora supported this, adding that the "R40 level is well within the horizon" when the spot currency market resumes Monday.

"The weakness of the US dollar against global currencies, including Asian currencies because of the risk of a recession contributed to a great extent in the strengthening of the peso. The technical support lelvel of between P41.05 and P41.20 has already been breached. And the market is now looking at P40 level," Biacora said.

While the BPI treasurer is conservative, refusing to provide a trading range figure, a foreign banker, who asked not be named, was more fortright, predicting that the local unit could hit P40.90 on Monday.

"The outlook is for a strong peso, but, it will be a slow drag down because the BSP is supporting it. But, eventually, they will have to let go (because it is costing them)," the foreign banker said.

To back-up his view, the source cited that yesterday, alone, the BSP was a heavy participant in the spot, selling dollar at P41.07, eatingup close to "one-third" of the total volume for the day, or roughly over $ 200 million out of $ 629.2 million.

On a weighted to weighted average, the peso appreciated by 18.9 centavos to P41.019 from Thursday’s P41.208.

Lucentino

September 5th, 2008, 02:37 PM

TheRick

September 5th, 2008, 06:42 PM

I agree with you on that... P45-46 = $1... Is a good rate...

Not to low for OFWs and foriegn pinoys who are paying for real estate properties they bought...
Not to high for the people living in the Philippines... I remember the highest was around P56 = $1...
That was the perfect time to buy properties in the Philippines - prices were low and rate was so much in our favor...

I guess it is quite difficult for traders to make a bold prediction on the direction the Peso will go these days. It is because most currencies are affected by too many internal and external factors.

Analysts used to say May-June (enrollment) and Nov-Dec (Christmas) of every year is a time when the Peso firms up, but this is no longer applicable due to external forces (oil supply & demand, US Economy, etc.).

Considering that OFW's are the primary bread-winners of RP, I hope the Peso would average within a fair enough level for both OFWs and local RP market (would 45:$1 be enough?).

Latest update:

TheRick

September 6th, 2008, 10:25 AM

http://www.mb.com.ph/BSNS20080906134400.html

by Fil C. Sionil

HSBC Philippines is positive on the business prospects here despite the global economic slowdown and on the back of its expectation of a continuing climb in interest rate along with the peso remaining volatile.

"The global economic situation is the bleakest I’ve ever seen. The world has hit a very big bump. (But), I remain quite optimistic on the Philippines," HSBC Philippines Chief Executive Officer Mark Watkinson said in a press briefing held yesterday.

The bank, on the other hand, believed the peso will continue to be volatile as the US dollar index rises. It, too, assumed the Bangko Sentral ng Pilipinas (BSP) to keep its monetary tightening policy as a way to temper inflationary pressures.

HSBC Treasurer Jose Arnulfo Veloso explained the peso depreciation will be sustained should the US dollar index, composed to major currencies, keeps its upward movement.

He said that if the peso breaks the P47 level, the new resistance will be P47.20 and the depreciation momentum going strong, the peso could even go back to P49.

On the interest rates, Veloso said the BSP will pursue monetary tightening to depress inflation pressures, despite the current drop in the prices of crude oil in the international market.

He placed the overnight interest rates to possibly end the year between 6.25 to 6.5 percent from the prevailing 6.0 percent.

According to Watkinson, the "robust" growth in consumption lifted the domestic economy to its positive growth of 4.7 percent and 4.6 percent in first and second quarters of the year, inspite a contraction year-on-year.

He attributed this development to the strong dollar remittances of overseas Filipino workers (OFWs) that continued to come on stream, particularly from the Middle East. The changing demographic profile of OFWs with more highly-skilled and professional workers contributed as well to this, added Watkinson.

"The Philippines is a positive story. What gives me the level of optimism is the OFW remittance. We’re very blessed that OFW is growing remarkably strong, coming from exciting areas such as the Middle East rather than the US," explained.

Authorities projected OFW dollar remittances to hit its historic high this year to a little over billion. The consumption led economy has, actually, nuetralized and mitigated the contraction in the export performance.

"GDP (gross domestic product) growth is not a bad number. i remain optimistic. If GDP continues to perform as it is performing, then, that is a good thing. In the medium term, the outlook is very positive," he said.

jvl

September 7th, 2008, 08:07 PM

Peso falls..... BSP intervenes..... inflation is just around the corner!..... Government tried to prop up the economy by infrastructure spending, but seems not working out.....

47-49 Peso to the $ will surely make OFW's happy, but will not bode well with local consumers and workers.

Weakness in Peso reflects weakness in economy?

barukdok

September 8th, 2008, 03:24 AM

duh. it's a global crisis.

manila_eye

September 8th, 2008, 11:35 PM

malapit na ang pasko lalakas ulit ang piso... this is a fact and natural flow of philippines peso.

Animo

September 15th, 2008, 07:14 PM

MANILA, Sept 12 (Reuters (http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSMAN31521920080912)) - Ayala Corp (AC.PS: Quote, Profile, Research, Stock Buzz), the Philippines' oldest listed conglomerate, said on Friday it plans to raise 6 billion pesos ($128 million) from a public offer of preferred shares in November to fund expansion plans.

The company, valued at $3.1 billion, will sell 12 million preferred shares to fund more investments in its business process outsourcing (BPO) arm and overseas real estate business.

It will be the group's second offer of preferred shares. In 2006, it raised about 5.8 billion pesos from a similar offer.

"Ayala is embarking on a new phase of business-building and these proceeds are expected to facilitate Ayala's plans to establish new platforms for future growth," the company said in its offering prospectus.

BPI Capital Corp, a unit of the Ayala group, is issue manager for the offer.

Aside from real estate and outsourcing, Ayala Corp -- owned by a Spanish-Filipino business clan with the same name -- has interests spanning a water utility, electronics, telecommunications, banking and finance, and car distribution.

Common shares of Ayala Corp lost 0.85 percent on Friday, as the main stock index .PSI slipped nearly 1 percent. ($1 = 47 pesos) (Reporting by Rosemarie Francisco, Editing by Jacqueline Wong) ((rosemarie.francisco@thomsonreuters.com; Reuters Messaging: rosemarie.francisco.reuters.com@reuters.net; +63 2 841-8937))

Weina

September 16th, 2008, 10:22 AM

Peso slides back to P47:$1 territory

THE PESO yesterday swung back to the P47-to-the-dollar territory, as the worsening turmoil in the US financial markets had investors scouring for safer assets such as the greenback.

The local currency closed at P47.095 against the dollar, a twenty three-and-a-half centavo dive from Friday’s finish.

Lehman Brothers Holdings’ announcement it would file for bankruptcy protection, signaling an end to its 158 years of existence, plus news of Merill Lynch & Co. being bought by the Bank of America Corp. and world’s largest insurer American International Group Inc. seeking liquidity assistance from the US Federal Reserve rocked financial markets, triggering another bout of risk aversion.

"The peso was weaker due to concerns about Lehman. It’s all a Lehman story. The market is playing safe holding on to the dollar at the moment," a trader from a local bank said.

"It’s another sell-off for the peso. People were getting out of emerging markets and going to quality. You can see the demand for the dollar, with non-deliverable forwards quoted with a premium of 48 centavos," another trader said.

The peso opened at P46.75 and reached a high of P46.70 before settling at its intraday low of P47.095 against the dollar. It averaged at P46.979.

Volume of dollars exchanged reached $608.64 million.

Elsewhere, the dollar fell against other Asian currencies.

The Thai baht and Singapore dollar rose yesterday as the dollar fell broadly due to concerns about the US financial sector but falling regional stocks weighed on the Philippine peso and Indonesian rupiah.

The US dollar tumbled against the euro and yen as Lehman Brothers said it would file for bankruptcy, heightening concerns over the US financial stability and sparking talk of a possible US rate cut.

The Thai baht rose as far as 34.49 per dollar, up half of a percent.

The Singapore dollar rose as far as 1.4275 per dollar, up almost half of a percent, while the Taiwan dollar firmed to 31.89 per US dollar.

But worries about the health of the US financial system strained by the spreading credit market turmoil, hit regional stocks and put several local currencies under pressure.

"I foresee flows getting into low risk/low reward asset classes from high risk/high reward asset classes," said Suresh Ramanathan, currency strategist at CIMB Investment Bank.

"Asia ex-Japan currencies will not benefit much from latest dollar weakness given the above reason. Though the baht has made gains, its gains will be short-lived," he said.

The Indonesian rupiah slipped to 9,457 per dollar.

Meanwhile, the Indian rupee fell to 46 per dollar, its lowest in nearly two years.

Markets in Japan, South Korea, China and Hong Kong are closed for holidays. — Maria Eloisa I. Calderon with Reuters
http://www.bworldonline.com/BW091608/content.php?id=021&src=2

3cr

September 17th, 2008, 12:31 AM

Stocks, peso continue to be hammered
By Des Ferriols
PhilStar
Wednesday, September 17, 2008
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2008091624

The local financial markets continued to take a beating yesterday as the dramatic collapse of US investment bank Lehman Brothers prompted investors to dump regional assets on fears more bad news is to come.

The peso went on a freefall yesterday, closing at its lowest level in 16 months at 47.200 to a dollar amid widespread panic over the meltdown in the US financial markets.

“The peso weakens due to risk aversion of markets and we are seeing the Bangko Sentral ng Pilipinas (BSP) on the sell side from 47.20 to 47.30,” a trader said.

The peso faltered to as low as 47.30 during intraday trading before recovering to close slightly higher at 47.200 to $1. Yesterday’s close, however, was still 10.50 centavos lower than Monday’s close of 47.095 to $1.

Local shares also suffered heavily yesterday, plunging by 114.44 points or 3.5 percent to settle at 2,421.72 points. Yesterday’s drop was the sharpest one-day fall since Jan. 22 when the index plunged 173.89 points, or 5.5 percent on fears of a US recession.

The all shares index lost 56.2 points or 3.5 percent to 1,538.82 with 107 issues down compared to 13 advancers and 22 unchanged, while turnover reached 1.70 billion shares worth P2.55 billion.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said Philippine banks had enough liquidity to weather even this latest deluge in the financial market but admitted the market would suffer from heightened risk-aversion.

Unlike US banks that have been widely dependent on debt, Philippine banks had a lot of cash and no inclination to invest in lending, except to consumers whose spending are being funded out of remittances.

The BSP’s attempt to defend the peso, however, was seen as a largely futile exercise and could lead to billions worth of losses fighting an impossible battle against market forces.

Moody’s Investor Services said yesterday that currency market intervention is likely to have little success, with many factors still pointing to weakening Asian currencies.

“With the exception of the yen, the outlook for Asian currencies remains bearish,” Moody’s pointed out.

Moody’s said the central bank should take the cue from the unsuccessful performance of the Bank of Korea in attempting to prop up the ailing won which demonstrated the futility of currency market intervention.

“Hopefully other central banks in the region will not make the same mistake and lose billions fighting an impossible battle against markets, which hold the upper hand in these matters,” Moody’s Economy said.

“We have yet to know the extent of what has transpired in the US,” he said. “Cautious is an apt word to describe equity investors right now.”

Credit Suisse analyst Gilbert Lopez said “the ongoing global financial market turmoil in our view would lead to weakness in the Philippine market over the near term.”

The Philippines had stood out as the best performing market in the Asean region since early July, rising 13 percent from a year earlier.

Banco de Oro led the local decline after the country’s second-largest lender in asset terms said it was setting aside P3.8 billion to cover possible losses from its exposure to the collapsed US investment bank.

Banco De Oro shares fell 15.4 percent to P33.
Philippine Long Distance Telephone declined 3.7 percent to P2,500.

Metropolitan Bank fell 10.8 percent to P33, while Bank of the Philippine Islands ended 3.5 percent lower at P41.50.

Central bank governor Amando Tetangco said Tuesday some domestic banks have limited exposure to structured Lehman Brothers products.

San Miguel A dropped three percent to P47, while its B shares ended 5.2 percent down to P46.

______________________________________

Peso drops to 16-month low
Business World
http://www.bworldonline.com/BW091708/content.php?id=021

THE GROWING anxiety over the health of US financial institutions pulled down the peso to its lowest in 16 months against the dollar yesterday.

The local currency closed at P47.20 to the dollar, ten-and-half-centavos lower than Monday’s finish.

This was the peso’s weakest close since May 11 last year, when it settled at P47.175 per dollar.

The peso joined other Asian currencies that extended their losses for the second straight day in the wake of this weekend’s drama that featured the collapse of US investment bank Lehman Brothers and Merrill Lynch & Co.’s takeover by Bank of America.

Investors remain wary of how the problems of the world’s largest insurer Americal International Group Inc. would be resolved.

"It was a case of risk aversion," a trader said.

The peso opened at its intraday high of P47.10 and settled near its low of P47.30 per dollar. It averaged at P47.27 with $764 million worth of dollars exchanged.

The central bank was believed to have stepped in to arrest the local currency’s fall. Expectations of a rate cut by the US Federal Reserve, which is seen to boost liquidity in the cash-strapped system, also eased pressure on the peso during afternoon trade, currency dealers said.

The Fed was to meet last night to review its benchmark federal funds rate, currently at 2%.

Most Asian currencies fell on Tuesday as investors dumped regional assets following Lehman Brothers’ filing for bankruptcy protection, but the Chinese yuan rose moderately despite the country’s surprise interest rate cut.

The South Korean won tumbled to 1,165.8 per dollar down almost 4.9% from Monday’s domestic close and hitting its weakest level in more than four years.

The won’s loss, which has amounted to 19% so far this year, was limited by suspected dollar-selling intervention from the South Korean authorities.

The Indonesian rupiah fell as far as 9,470 per dollar, its lowest in about eight months, as Bank Indonesia Governor Boediono pledged to take necessary steps to mitigate the turmoil in financial markets.

"It’s generally a continuation from yesterday’s risk aversion environment-dollar/Asia remains biased higher with external uncertainty still abounding," said Han Sia Yeo, currency strategist at Bank of America.

Lehman Brothers has filed for bankruptcy, Bank of America has agreed to buy Merrill Lynch and insurer American International Group faces short-term funding trouble.

Fears of the spreading financial turmoil persuaded investors to dump Asian shares, with the MSCI’s index of Asia-Pacific stocks outside Japan falling 4.8% to the lowest level since August 2006.

But the Thai baht and the Chinese yuan bucked the regional trend.

The baht hit a two-week high at 34.25 per dollar as traders cited heavy dollar selling by foreign players amid expectations of a possible US rate cut and reduced domestic political uncertainty after the lifting of a state of emergency.

The Chinese yuan gained a third of a percent to 6.8230 per dollar, even after the central bank’s surprise move on Monday to cut lending rates for the first time since early 2002 to head off a sharp economic slowdown.

Against a background of acute stress in global financial markets, the People’s Bank of China also lowered the reserve requirement for all banks, except the five largest and the Postal Savings Bank, by one percentage point.

The rise in the yuan has slowed in recent months and most analysts believe the rate cut indicates that Chinese policy makers are more concerned about economic growth than inflation.

"The surprise move came on the back of U.S. financial troubles, and sent an important signal that China sees clear and present dangers for its economy," analysts at DBS Bank said in a note.

The analysts predicted the yuan would even depreciate against the dollar to 7 by mid-2009.

3cr

September 17th, 2008, 12:40 AM

RP banks set aside $94.7 M
By Ted Torres and Des Ferriols
PhilStar
Wednesday, September 17, 2008
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20080916113

The country’s two largest banks, Metropolitan Bank and Trust Co. and Banco de Oro, said yesterday they were setting aside provisions totaling $94.7 million to cover their exposure to the Lehman Brothers’ collapse.

“Due to the uncertainty relating to the financial condition of Lehman Brothers, Banco de Oro Unibank Inc. is setting aside provisions totaling P3.8 billion ($80.7 million) to cover its exposure to said entity,” the No. 2 lender said in a disclosure to the Philippine Stock Exchange.

Metrobank, the country’s biggest bank in terms of assets, said it has “made provisions equivalent to $14 million” for its direct bond exposure of $20.4 million.

It told the PSE of a separate lending of P2.4 billion to a Lehman subsidiary in the Philippines.

“The loan status is current and the company is in normal operations,” it said.

Banco de Oro did not disclose the extent of its exposure to Lehman, saying only that its balance sheet should be “adequately covered from potential losses arising from its Lehman exposure.”

“The provisions will come from reallocation of excess reserves and from additional provisions in the current period,” it said.

Bangko Sentral ng Pilipinas Gov. Armando Tetangco said the central bank is ready to assist local banks that might get affected but that there might be no need for such action because “some banks” exposure was small.

“Our banks are benefiting from the banking reforms we’ve already made, particularly the increase in their capital,” Tetangco said. “This was meant precisely to improve banks’ capacity to absorb shocks like this one as well as better risk management.”

Should things get worse, Tetangco said the BSP has a standing repurchase facility that troubled banks may tap to tide them over the current turmoil.

“But its use is unlikely because there is enough liquidity in the system,” Tetangco said.

“Nevertheless, we are monitoring the situation particularly for any other potential effects that may arise from recent events,” he said.

Banco de Oro and Metrobank said they expect to be in the black at the end of the current calendar year.

Metrobank said it “believes it is still on track with its income expectation for the whole year of 2008.”

Banco de Oro said it expects to post a “reasonable net income for the year.”

Metrobank, with a market capitalization of P66.9 billion, ended 10.8 percent down to P33.

Banco de Oro, capitalized at P89.8 billion, closed 15.4 percent down to P33.

Meanwhile, the Philippine American Life and General Insurance Co., or Philamlife, said yesterday it is insulated from the financial difficulties of its major shareholder, American International Group Inc. (AIG), Dow Jones Newswires reported.

“While AIG is our parent company, we are separately capitalized ... the largest and strongest capital base of any insurance company in the Philippines,” Philamlife president and chief executive Jose Cuisia said in a television interview.

“There is no impact of what’s going on in the US on the Philippine operations. Most of our investments are in government securities and prime equity blue-chip stocks, local stocks not US stocks,” Cuisia clarified.

Insurance Commissioner Eduardo Malinis also vouched for Philamlife’s capability to survive despite AIG’s travails.

“Philamlife remains to be the largest insurance company in the Philippines with the strongest balance sheet in the industry,” Malinis said.

“Philamlife is adequately capitalized and its customers’ and policyholders’ interests are protected with the company’s financial strength,” he said. “With its vast resources, Philamlife is capable of meeting it commitments and obligations to its clients.”

Sun Life Financial also admitted that it holds $334-million worth of Lehman bond securities and approximately $15-million net value of Lehman derivative instruments.

Sun Life’s Philippine subsidiaries include Sun Life of Canada (Philippines) Inc.

As of June 30, Sun Life Financial group’s total assets under management stood at CDN$413 billion.

Finance Secretary Margarito Teves, meanwhile, said Lehman Brothers’ financial troubles could stem investment flows to the Philippines but he said the problem would be “temporary.”

“There could be some risk aversion towards emerging markets, including the Philippines, due to the financial troubles of Lehman Brothers which again shook the global financial markets, but we expect this to be temporary,” Teves said.

“We hope that when the global markets finally smoothen out, investors would look at the Philippines favorably given the country’s resilience and stronger macroeconomic fundamentals due to the fiscal and economic reforms that we have been undertaking,” Teves said.

Lehman Brothers, an investment bank established before the US Civil War, filed the largest bankruptcy in the US as Merrill Lynch, another giant, was bought out by Bank of America.

Clear picture sought

Senators want the Government Service Insurance System (GSIS) and the Social Security System (SSS) to bare their exposures in Lehman and AIG as well as how they intend to deal with an emerging global financial crisis.

“They should disclose their investments and how these affected their books, the trust fund of their members,” Sen. Manuel Roxas II said.

Roxas said the appeal was meant to ensure that the people’s money is protected and not to hold SSS or GSIS liable for any wrongdoing.

“What’s important is to guard the people’s money. GSIS and SSS were allowed to invest internationally. At that time, many were saying they should go slow because we were not sure of what was going to happen in the international (investment market),” Roxas said.

“They should just invest here but were allowed to go international so they should explain if they were affected,” he said.

Sen. Loren Legarda also urged the BSP, Insurance Commission and the Securities & Exchange Commission to ascertain the effects of Lehman’s and AIG’s problems on local financial institutions and deal with them promptly.

In September last year, GSIS said it would stash up to $1 billion overseas under its global investment program, Legarda said. Sen. Francis Escudero said GSIS actually got $4 billion in investible funds.

“We are not that concerned about entities listed in the PSE, since they are compelled to quickly report any material events affecting them, as what BDO and Sun Life just did. Our concern is more with respect to entities that are covered by less rigorous disclosure rules,” Legarda said.

“If any banks, insurers, pre-need providers or other institutions take a direct or indirect hit from Lehman’s failure, then they should be required to address those losses right away, such as by raising additional capital, or putting more cash in their trust funds, if necessary, to safeguard depositors and investors,” Legarda said.

GSIS denies AIG exposure

The GSIS said it has no investments in AIG.
“That is ridiculous,” Winston Garcia, GSIS president and general manager, said of reports that GSIS invested part of the state workers’ pension funds in AIG.

The GSIS chief admitted that the current financial turmoil in the US would definitely have an impact on the local stock market and on the foreign exchange market in the Philippines.

“The GSIS has no investments with AIG and Lehman, and is thus not directly affected by the worrisome developments concerning said US companies,” GSIS spokesperson Estrella Elamparo said.

Elamparo said that while GSIS has allocated $1 billion to fund its Global Investment Program (GIP), the amount is equivalent only to approximately 12 percent of its total loans and investment portfolio.

_____________________________

RP banks prepare for fallout
Business World
http://www.bworldonline.com/BW091708/content.php?id=001

Banco de Oro, Metrobank bare Lehman exposure, set aside funds
DOMESTIC BANKS with direct exposure to failed Lehman Brothers have begun setting aside funds to cover possible losses arising from the US financial institution’s collapse.

This would freeze money that could be used to support lending in an economy under threat of a slowdown, according to analysts, but regulators said they were not worried.

The Bangko Sentral ng Pilipinas (BSP) yesterday claimed the local banking industry remained adequately capitalized but also said troubled banks could turn to it for support.

"The BSP has a standing repurchase facility which can be used by banks that may need funds, although its use is unlikely as there is enough liquidity in the system," central bank Governor Amando M. Tetangco, Jr. said.

Local markets fell anew yesterday, with the main stock index down 114.44 points or 4.51% to 2,421.72, led by financial stocks. The peso hit a 16-month low, closing at P47.20 per US dollar.

Finance Secretary Margarito B. Teves, meanwhile, said he expected the fallout from Lehman’s collapse to be temporary.

"We hope that when the global markets finally smoothen out, investors would look at the Philippines favorably given the country’s resilience and stronger macroeconomic fundamentals," he said in a statement.

Banco de Oro Unibank Inc. (BDO) took the lead in announcing its Lehman-related exposure, saying it had allocated P3.8 billion as a buffer against the US firm’s potential failure to repay debts.

BDO, which had surplus reserves of P1 billion and total equity of P54.5 billion as of end-June, said it remained bullish about its bottomline.

"With these adjustments, BDO’s balance sheet should be adequately covered from potential losses ... BDO still expects to post a reasonable net income for the year," the bank said.

In a separate disclosure to the stock exchange, Metropolitan Bank & Trust Co., said it held $20.4 million worth of bonds issued by Lehman and another P2.4 billion loan to a Philippine-based subsidiary of the US bank.

Metrobank said it had made provisions of $14 million, adding that "Despite this development, the bank believes it is still on track with its income expectation for the whole year of 2008."

Banks are required to shore up risky assets under the Basel 2 framework. When the US firm received a downgrade in its credit ratings — Standard & Poor’s Ratings Services yesterday gave Lehman a default rating — banks had to appropriate capital to match the move.

"Our banks are benefiting from the banking reforms made, particularly the increase in their capital which is meant precisely to improve banks’ capacity to absorb shocks like this one...," Mr. Tetangco said.

Industry officials said there were at least a dozen more banks and insurance firms in the Philippines that have Lehman-related investments, mainly in the form of derivatives, collateralized debt obligations and credit-linked notes that are investment-grade.

In separate statements, Aboitiz-led Union Bank of the Philippines and state pension fund Government Service Insurance System said they had no exposure to any troubled US financial institution.

Philippine American Life and General Insurance Co. (Philamlife) did not return calls made by BusinessWorld, while other banks said they would soon make disclosures.

The Insurance Commission came to Philamlife’s defense, issuing a statement late afternoon yesterday amid speculation that the local-based insurer could be pulled down by the problems of American International Group, Inc. (AIG), its parent firm.

"Philamlife is adequately capitalized and its customers’ and policyholders’ interests are protected with the company’s financial strength," Insurance Commissioner Eduardo T. Malinis said.

The central bank estimates that Philippine banks’ exposure to structured products accounts for only a fraction of 1% of the industry’s total portfolio.

"The overall exposure is very minimal. Our banks are adequately capitalized that’s why we’re not concerned about any particular weakness of any local bank. All of them have the ability to absorb the losses," BSP Deputy Governor Nestor A. Espenilla, Jr. toldBusinessWorld.

Existing regulations do not mandate domestic banks to fully disclose exposures to such sophisticated instruments, but Emmanuel Leyco, president of Credit Rating and Investors Services Philippines, Inc., urged transparency.

"People want timely disclosure," he said.

3cr

September 17th, 2008, 01:18 AM

Looks like there's a realistic possibility the Peso exchange could be heading back to the P50/$1 range again...

Economists see further peso slide
By Michelle Remo
Philippine Daily Inquirer
First Posted 06:27:00 09/17/2008
http://business.inquirer.net/money/breakingnews/view/20080917-161144/Economists-see-further-peso-slide

MANILA, Philippines--The peso has breached 47 to the dollar and is at its lowest in a year, but an economist said the worst was yet to come where the exchange rate was concerned.

Josef Yap, president of the Philippine Institute for Development Studies (PIDS), said the latest round of financial market turmoil in the United States could further drag down the peso. However, he declined to make specific predictions.

Foreign investment banks suffering from liquidity problems are expected to consolidate their balance sheets, Yap said.

One way to do so was to pull out their investments in emerging market economies like the Philippines, he said at a forum on “Managing the Development Impact of International Migration.”

“This phenomenon will lead to major restructuring in the international financial systems. Tendency now is more depreciation of the currency,” Yap said.

Capital flight, which results in the dumping of pesos to revert funds into dollars, leads to a weakening of the local currency against the greenback.

But while the peso is expected to be hurt by the US financial crisis, foreign exchange remittances from overseas Filipino workers (OFWs) are expected to remain robust, another economist said.

Studies show that contrary to common perception, OFW cash remittances actually grow when times are tough, said Aniceto Orbeta, senior research fellow at PIDS.

“Remittances are counter-sequential,” Orbeta said at the forum. If there is a decrease in household income, OFWs make it a point to send more money to their families.”

Fernando Aldaba, chairman of the economics department of the Ateneo de Manila University, said the projections made by the central bank on OFW money remittances this year were attainable.

The central bank expects OFW foreign exchange remittances to reach as much as $17 billion by yearend.

The economists said that although unemployment could worsen in the United States, OFW remittances would still be strong, given demand for labor in other countries.

lazybum

September 17th, 2008, 01:33 AM

lazybum

September 17th, 2008, 01:39 AM

-TC-

September 17th, 2008, 05:39 AM

Looks like there's a realistic possibility the Peso exchange could be heading back to the P50/$1 range again...

50? No not possible.

jvl

September 17th, 2008, 08:21 AM

^Anything is possible!

-TC-

September 17th, 2008, 08:07 PM

http://business.inquirer.net/money/topstories/view/20080918-161292/Peso-rises-to-47081-stocks-up-146

Peso rises to 47.08:$1; stocks up 1.46%
Investors cheer Fed’s $85-B rescue of AIG
By Doris Dumlao, Elizabeth Sanchez-Lacson
Philippine Daily Inquirer
09/18/2008

Philippine financial markets Wednesday recuperated from Tuesday’s bloodbath as reports of an $85-billion emergency loan by the US central bank to insurance giant American International Group brought a glimmer of hope to Wall Street and the rest of global markets.

The peso, after falling to a 16-month low on Tuesday—when investment banking icon Lehman Brothers declared bankruptcy and Merrill Lynch sold out to Bank of America—closed 0.12 stronger at 47.08 to the dollar.

The rebound was supported by a 1.46-percent gain in the stock exchange’s main index.

“There’s less risk aversion but we’re in a very volatile situation,” said Rizal Commercial Banking Corp. senior vice president Marcelo Ayes of the stock market. “For now it’s on a consolidation mode.”

He said the global markets were initially frustrated because the US Federal Reserve chose to keep its interest rates steady, contrary to some expectations that it might cut to boost market confidence after Lehman’s collapse. But early news of a liquidity injection for AIG perked up financial markets across the globe.

The peso reached a high of 46.93 to the dollar during trading on Wednesday before closing at 47.08.

“I think we’re not yet out of the woods,” Ayes said, noting that dollar supply on the currency spot market remained thin, given the importation season while a stronger inflow of foreign exchange from Filipinos overseas was unlikely until mid-October. “But there is a silver lining when these remittances come,” he said.

“The saga of Lehman is still unfolding because apparently a lot of trades are off-books,” he added.

“Those that were in the books had been disclosed, but we don’t know about the off-book [transactions].”

Stock market investors heaved a sigh of relief when the US Federal Reserve moved to rescue AIG, sending a signal to global markets that US authorities would not let international financial markets and the US economy go bust.

The Philippine Stock Exchange index (PSEi) rose 35.28 points or 1.46 percent to close at 2,457, off the day’s high of 64.56 points or 2.66 percent at mid-session as investors took profits toward the closing bell.

Conrado Bate, Citiseconline.com president, said, “The rescue of AIG was positive since the US government tried to avoid another financial meltdown. But it will take some time before confidence returns [to the stock market]. People are expecting more shoes to drop.”

“It’s good that at least one of the swords hanging over our heads has been lifted,” added Edgar Bancod, research head at ATR Kim Eng Securities.

The broader all shares index also edged higher by 1.36 percent or 20.88 points to 1,559.70. Value turnover reached P2.73 billion with gainers trouncing losers, 67 to 26.

Click link for complete article.

Weina

September 18th, 2008, 06:10 AM

RonnieR

September 18th, 2008, 07:30 AM

RP Stocks today plunged 4.26%!

Weina

September 18th, 2008, 07:38 AM

yeah seems the P6 is averaging a daily low of 100 points except for a 1 night stand yesterday... kala ko nga mag ka ka sore eyes na ako sa kakatingin nang reds, hay

-TC-

September 18th, 2008, 03:38 PM

http://biz.yahoo.com/ap/080918/eu_central_banks.html

Fed, ECB pump billions into money markets
September 18, 7:58 am ET
By Matt Moore, AP Business Writer

Federal Reserve, other central banks to pump billions more dollars into money markets

FRANKFURT, Germany (AP) -- The world's major central banks banded together on Thursday to inject as much as $180 billion into money markets in a bid to stave off the growing global financial crisis.The Federal Reserve joined with the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank to pump more short-term dollar liquidity into the financial system.

Credit markets have tightened since Monday after the weekend collapse of investment house Lehman Brothers Holdings Inc., and central banks already provided billions Monday and Tuesday in hopes of turning the tide and to keep fearful banks from hoarding cash. The hope is that that would help stabilize world financial markerts which have been reeling.In its statement, the Fed said it had authorized a $180 billion expansion of swap lines, or reciprocal currency arrangements, with the other central banks, including amounts up to $110 billion by the ECB and up to $27 billion by the Swiss National Bank.

The Fed also said new swap facilities had been authorized with the Bank of Japan for as much as $60 billion; $40 billion for the Bank of England and $10 billion for the Bank of Canada. The Bank of Canada said it was "not neccesary" to draw on the swap facility at the moment.

"These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures," the Fed said in a statement on its Web site.

Michael Schubert, analyst with Commerzbank AG, said the move was done in part to help banks that may not have direct access to the Fed.

"Firstly, some euro-area banks have no direct access to the Fed. Secondly, euro-area auctions for (U.S. dollars) provide better timing for euro-area banks," he said.

The ECB, which oversees the 15-nation euro zone, said it plans to provide as much as $40 billion to cash-starved banks, money that is being provided to it by the Federal Reserve swap line. The one-day operation opened for bids Thursday morning. The bank is also going to increase a 28-day tender operation the to $25 billion and an 84-day tender to $15 billion.

"Overall, the dollar funding operations conducted by the Eurosystem could reach an outstanding amount of $110 billion," the ECB said in a statement.

The Bank of England said it would inject $40 billion as part of the coordinated effort. So far, the London-based bank has provided a total of 25 billion pounds ($44.8 billion) to markets since Monday.
In Tokyo, the Bank of Japan said Thursday it has also concluded a U.S. dollar swap agreement worth $60 billion with the Federal Reserve to supply U.S. dollar funds to market participants in Japan. "The bank will continue to strive to maintain market stability through money market operations," it said in a statement.

In Washington, the Fed has pumped $70 billion into the nation's financial system to help ease credit stresses. In emergency sessions over the weekend, the Fed expanded its loan programs to Wall Street firms, part of an ongoing effort to get credit flowing more freely. On Wednesday, the U.S. Treasury Department said that in an effort to help the Fed deal with unprecedented borrowing needs resulting from the current credit crisis, it will begin auctioning debt for the central bank.

Federal Reserve: http://www.federalreserve.gov (http://www.federalreserve.gov/)

Bank of Canada: http://www.bank-banque-canada.ca (http://www.bank-banque-canada.ca/)

Bank of England: http://www.bankofengland.co.uk (http://www.bankofengland.co.uk/)

Bank of Japan: http://www.boj.or.jp (http://www.boj.or.jp/)

Swiss National Bank: http://www.snb.ch (http://www.snb.ch/)

licoan_kings

September 18th, 2008, 05:17 PM

-TC-

September 19th, 2008, 03:28 AM

Dow up 410 pts. with biggest percentage gain in 6 years.

http://biz.yahoo.com/ap/080918/financial_meltdown.html

Word of possible financial crisis fix lifts stocks
Thursday September 18, 8:15 pm ET
By Patrick Rizzo, Jeannine Aversa and Martin Crutsinger, AP Business Writers

WASHINGTON (AP) -- Wall Street finally found reason to rally Thursday, soaring on a report that the Bush administration was considering setting up a government agency to soak up bad loans and mortgages. But it was far from clear that the government had settled on any solution to the worst crisis on Wall Street in decades.

The Dow Jones industrial average rose 410 points, recording its biggest percentage gain in nearly six years and adding to a week of extraordinary volatility in the American financial system and markets.The rebound also came after an infusion of billions of dollars by the Federal Reserve and world governments aimed at getting nervous banks to stop hoarding money and lend again.

Stocks had fluctuated throughout the day, without severe swings in either direction, until CNBC reported the administration might back a new agency to take bad assets off the books of struggling financial institutions.

But a person with knowledge of the talks told The Associated Press that the idea, patterned after the Resolution Trust Corp. set up in the aftermath of the savings and loan crisis of the 1980s, was just one idea on the table.

The person, speaking on condition of anonymity because of the sensitivity of the discussions, said the talks had not narrowed to a single option, and that the RTC-style solution was not a certainty.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke met with congressional leaders Thursday night. House Speaker Nancy Pelosi, who participated in the discussions, told President Bush in a letter Congress could work past its scheduled adjournment next week to deal with the crisis.

Before the sun rose on Wall Street, the Fed said it would boost by as much as $180 billion the amount of cash it would supply to foreign counterparts that are short on dollars. For banks in the United States, the Fed supplied $105 billion in short-term loans later in the day.

But, at least initially, those efforts did little to unfreeze the global credit markets. Banks remained extremely reluctant to lend money.

The No. 2 official at the International Monetary Fund, John Lipsky, said the past few days were "searing manifestations of a financial crisis that has expanded to historic proportions." He predicted the turbulence would continue for "some time to come."

British financial regulators also banned short-selling the stock of financial companies listed on the London Stock Exchange. U.S. regulators tightened rules on short-selling Wednesday.

The Fed said it had authorized the expansion of swap lines, the process by which it supplies reserves to other central banks, to include amounts up to $110 billion for the European Central Bank and up to $27 billion for the Swiss National Bank.

The Fed also said new swap facilities had been authorized with the Bank of Japan for as much as $60 billion, $40 billion for the Bank of England and $10 billion for the Bank of Canada.

For more than a year, investors around the world have watched with growing alarm as the U.S. economy, the world's largest, has struggled to right itself amid massive home foreclosures, many of them from mortgages issued to homeowners with bad credit.

The turmoil has swallowed some of the most storied names on Wall Street. Three of its five major investment banks -- Bear Stearns, Lehman Brothers and Merrill Lynch -- have either gone out of business or been driven into the arms of another bank.

The Dow's gain of nearly 4 percent on Thursday sent the average back above 11,000 and nearly erased its losses from a day before.

But as the uncertainty wore on, investors continued to flock to Treasury securities, considered a haven in times of crisis, and the price of gold rose yet again. And worries about even the safest investments intensified as Putnam Investments abruptly closed a $15 billion money market fund because institutional investors had pulled their cash.

Bush canceled out-of-town fundraising trips to Alabama and Florida to stay in Washington and huddle with Paulson and the heads of the Fed and the Securities and Exchange Commission.

In an appearance earlier in the day, the president acknowledged "serious challenges" in the markets and said: "The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence."

The credit troubles reverberated around the globe. Asian stocks closed lower. European stocks rose but struggled to hold on to the gains. Russia closed its stock exchanges for a second day, and President Dmitry Medvedev pledged a $20 billion injection into financial markets.

In the United States, investors worried for another day about the health of the banks still standing. Earlier in the week, venerable Lehman Brothers was forced into bankruptcy, and Merrill Lynch was driven into the arms of Bank of America.

On Thursday, Morgan Stanley scrambled to strike a major deal or raise more cash that will reassure investors and prevent more damage to its battered stock. Its CEO, John Mack, reached out to China's Citic Group overnight about a possible investment, according to a person familiar with the talks.

Morgan Stanley is also considering a combination with retail bank Wachovia Corp. and an investment from Singapore Investment Corp., one of the world's biggest sovereign wealth funds, said the person, who spoke on the condition of anonymity because the discussions were still ongoing.

On Capitol Hill, lawmakers in both parties became increasingly vocal about their concerns with the Bush administration's handling of the current crisis.

Administration officials refused to attend a closed-door briefing with House Republicans this morning, leaving their congressional allies in the dark about the government's $85 billion emergency loan to insurer American International Group, House GOP leader John A. Boehner said.

And Sen. Chris Dodd, D-Conn., the Banking Committee chairman, was irritated that Paulson twice canceled appearances he was to have made before the panel this week.

Associated Press Writers Catrina Stewart in Moscow, Matt Moore in Frankfurt, Ellen Simon in New York and Chris Rugaber, Deb Reichmann and Julie Hirschfeld Davis in Washington contributed to this report.

3cr

September 19th, 2008, 03:39 AM

Closer market scrutiny urged
ADB chief calls for Asian Financial Stability Dialogue
Business World
http://www.bworldonline.com/BW091908/content.php?id=001

CLOSER SCRUTINY of Asian financial markets is necessary as "reactive" policies are not enough to deal with a worsening credit crisis, the chief of Asian Development Bank (ADB) yesterday said.

Speaking at the start of a two-day conference in Manila, ADB President Haruhiko Kuroda proposed the creation of an "Asian Financial Stability Dialogue" which he said would allow monetary authorities to build an early warning system against market storms as well as integrate the region’s financial systems.

Mr. Kuroda’s call came in the wake of this week’s drama where markets worldwide were shaken by Lehman Brothers’ collapse, Merrill Lynch being gobbled up by Bank of America, and insurer American International Group, Inc. being bailed out by the US government.

"This week’s turbulence only underlines the urgent need for central banks and regulators to assess the underlying problems and build a cogent and proactive plan of action to better preserve regional financial stability," Mr. Kuroda told an audience of regulators as well as market participants and ratings agency representatives.

"Reactive responses may be necessary to avert a meltdown, but they will hardly be able to seal the cracks that threaten the foundations of financial stability."

The crisis prevention plan involves stepped-up risk management systems that would help regulators track the assets financial institutions carry in their balance sheets.

"We believe that an ’Asian Financial Stability Dialogue’ — including finance ministries, central banks, and other financial regulators and supervisors — could coordinate regulatory development," Mr. Kuroda said.

"It could monitor potential financial vulnerabilities, through the use of objective early warning systems and other mechanisms," he added.

The International Monetary Fund (IMF) said Asian economies, already threatened by rising risk aversion that would constrain domestic liquidity, do not have the luxury of duplicating the US government’s move to rescue troubled institutions.

Instead, Asian central banks and regulators should ensure that mechanisms such as deposit insurance and bridge financing, backed by a legal framework, are put in place, said Chee Sung Lee, director of the IMF Asia and the Pacific office.

The IMF estimates bank losses from the US-led subprime mess to reach $1 trillion, and said Asia has to learn from mistakes arising from the lack of quality control in loan origination as well as insufficient attention to risks and liquidity.

"Central banks and regulatory agencies need to develop contingency plans more fully and expand the range of steps and measures that they will take when a crisis comes in," Mr. Lee told BusinessWorld.

JP Morgan Chase & Co., which early this year bought stricken US investment bank Bear Stearns, noted that the Bangko Sentral ng Pilipinas (BSP) was doing the right thing in offering a facility — the standing repurchase window — which banks could tap for liquidity support.

"That’s why the BSP has been more proactive relative to other central banks in the region," David Fernandez, JP Morgan managing director and head for Asia, told BusinessWorld.

The Philippine central bank, however, along with its counterparts in Asia, could begin easing monetary policy to free up funds needed to buoy up the economy amid increasing likelihood of a global downturn, he pointed out.

"That’s what they (central banks) need to do to provide interbank liquidity," Mr. Fernandez said, adding that the focus should now be directed to growth rather than containing inflation which is expected to follow a downward path on easing oil prices.

JP Morgan said the oil bubble had burst, with the commodity seen settling between $90 to $100 a barrel until next year.

BSP assistant governor Ma. Dolores B. Yuvienco noted monetary authorities’ efforts to boost transparency in bank reporting following the implementation of the International Accounting Standards.

"We believe this new framework will give us an information set that is more relevant, hence improving our monitoring abilities over the institutions we supervise," she said during yesterday’s conference.

_____________________________

Peso sustains rally
Business World
http://www.bworldonline.com/BW091908/content.php?id=025

THE PESO yesterday continued its modest rally against the dollar, after investors pocketed profits from their heavy holdings of the US currency.

The peso gained twelve more centavos to close at P46.96 per dollar from Wednesday’s P47.08, reversing its weakness in early morning trade when it opened at P47.25.

Banks have actually been betting on the US local currency following the fall in US share prices and Asian stocks, according to traders. However, news of central banks pooling cash in a concerted effort to avert a credit crunch buoyed the market later in the day.

"There was an announcement that central banks would provide dollar liquidity to their respective markets. That somehow eased risk aversion. The market was buying dollars the whole day. But the move cause massive unloading of dollars," a trader from a Manila-based bank said.

And while Asian equities continued to be battered by waning risk appetite, the amount of losses has been easing, signaling some "relief rally" in the near term, another trader said.

The peso averaged at P47.206 after trading from P46.95 to P47.29. Volume of dollars exchanged inched up to $772 million from $721.95 million.

-TC-

September 19th, 2008, 03:42 AM

What was the Resolution Trust Corporation?

The Resolution Trust Corporation was a US Government-owned asset management company charged with liquidating assets (primarily real estate-related assets, including mortgage loans) that had been assets of savings and loan associations ("S&Ls") declared insolvent by the Office of Thrift Supervision, as a consequence of the Savings and Loan crisis of the 1980s.

It also took over the insurance functions of the former Federal Home Loan Bank Board. It was created by the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), adopted in 1989.

In 1995, its duties were transferred to the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation.

Between 1989 and mid-1995, the Resolution Trust Corporation closed or otherwise resolved 747 thrifts with total assets of $394 billion.

Dow up 410 pts. with biggest percentage gain in 6 years.

http://biz.yahoo.com/ap/080918/financial_meltdown.html

Word of possible financial crisis fix lifts stocks
Thursday September 18, 8:15 pm ET
By Patrick Rizzo, Jeannine Aversa and Martin Crutsinger, AP Business Writers

WASHINGTON (AP) -- Wall Street finally found reason to rally Thursday, soaring on a report that the Bush administration was considering setting up a government agency to soak up bad loans and mortgages. But it was far from clear that the government had settled on any solution to the worst crisis on Wall Street in decades.

The Dow Jones industrial average rose 410 points, recording its biggest percentage gain in nearly six years and adding to a week of extraordinary volatility in the American financial system and markets.The rebound also came after an infusion of billions of dollars by the Federal Reserve and world governments aimed at getting nervous banks to stop hoarding money and lend again.

Stocks had fluctuated throughout the day, without severe swings in either direction, until CNBC reported the administration might back a new agency to take bad assets off the books of struggling financial institutions.

But a person with knowledge of the talks told The Associated Press that the idea, patterned after the Resolution Trust Corp. set up in the aftermath of the savings and loan crisis of the 1980s, was just one idea on the table.

The person, speaking on condition of anonymity because of the sensitivity of the discussions, said the talks had not narrowed to a single option, and that the RTC-style solution was not a certainty.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke met with congressional leaders Thursday night. House Speaker Nancy Pelosi, who participated in the discussions, told President Bush in a letter Congress could work past its scheduled adjournment next week to deal with the crisis.

Before the sun rose on Wall Street, the Fed said it would boost by as much as $180 billion the amount of cash it would supply to foreign counterparts that are short on dollars. For banks in the United States, the Fed supplied $105 billion in short-term loans later in the day.

But, at least initially, those efforts did little to unfreeze the global credit markets. Banks remained extremely reluctant to lend money.

The No. 2 official at the International Monetary Fund, John Lipsky, said the past few days were "searing manifestations of a financial crisis that has expanded to historic proportions." He predicted the turbulence would continue for "some time to come."

British financial regulators also banned short-selling the stock of financial companies listed on the London Stock Exchange. U.S. regulators tightened rules on short-selling Wednesday.

The Fed said it had authorized the expansion of swap lines, the process by which it supplies reserves to other central banks, to include amounts up to $110 billion for the European Central Bank and up to $27 billion for the Swiss National Bank.

The Fed also said new swap facilities had been authorized with the Bank of Japan for as much as $60 billion, $40 billion for the Bank of England and $10 billion for the Bank of Canada.

For more than a year, investors around the world have watched with growing alarm as the U.S. economy, the world's largest, has struggled to right itself amid massive home foreclosures, many of them from mortgages issued to homeowners with bad credit.

The turmoil has swallowed some of the most storied names on Wall Street. Three of its five major investment banks -- Bear Stearns, Lehman Brothers and Merrill Lynch -- have either gone out of business or been driven into the arms of another bank.

The Dow's gain of nearly 4 percent on Thursday sent the average back above 11,000 and nearly erased its losses from a day before.

But as the uncertainty wore on, investors continued to flock to Treasury securities, considered a haven in times of crisis, and the price of gold rose yet again. And worries about even the safest investments intensified as Putnam Investments abruptly closed a $15 billion money market fund because institutional investors had pulled their cash.

Bush canceled out-of-town fundraising trips to Alabama and Florida to stay in Washington and huddle with Paulson and the heads of the Fed and the Securities and Exchange Commission.

In an appearance earlier in the day, the president acknowledged "serious challenges" in the markets and said: "The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence."

The credit troubles reverberated around the globe. Asian stocks closed lower. European stocks rose but struggled to hold on to the gains. Russia closed its stock exchanges for a second day, and President Dmitry Medvedev pledged a $20 billion injection into financial markets.

In the United States, investors worried for another day about the health of the banks still standing. Earlier in the week, venerable Lehman Brothers was forced into bankruptcy, and Merrill Lynch was driven into the arms of Bank of America.

On Thursday, Morgan Stanley scrambled to strike a major deal or raise more cash that will reassure investors and prevent more damage to its battered stock. Its CEO, John Mack, reached out to China's Citic Group overnight about a possible investment, according to a person familiar with the talks.

Morgan Stanley is also considering a combination with retail bank Wachovia Corp. and an investment from Singapore Investment Corp., one of the world's biggest sovereign wealth funds, said the person, who spoke on the condition of anonymity because the discussions were still ongoing.

On Capitol Hill, lawmakers in both parties became increasingly vocal about their concerns with the Bush administration's handling of the current crisis.

Administration officials refused to attend a closed-door briefing with House Republicans this morning, leaving their congressional allies in the dark about the government's $85 billion emergency loan to insurer American International Group, House GOP leader John A. Boehner said.

And Sen. Chris Dodd, D-Conn., the Banking Committee chairman, was irritated that Paulson twice canceled appearances he was to have made before the panel this week.

Associated Press Writers Catrina Stewart in Moscow, Matt Moore in Frankfurt, Ellen Simon in New York and Chris Rugaber, Deb Reichmann and Julie Hirschfeld Davis in Washington contributed to this report.

3cr

September 19th, 2008, 04:17 AM

Market again retreats by more than 100 pts
BY KRISTINE JANE R. LIU
http://www.bworldonline.com/BW091908/content.php?id=131

PHILIPPINE SHARE prices crashed by more than a hundred points for the third time this week, as the US financial market continued to be in turmoil even after the US Federal Reserve came to the American International Group, Inc.’s (AIG) rescue.

The benchmark Philippine Stock Exchange index fell sharply by 4.25% or 104.63 points to 2,352.37 while the all-share index tumbled by 3.68% or 57.55 points to 1,502.15.

Turnover reached 1.81 billion shares worth P2.16 billion. Losers swept gainers 117 to 14 while 23 stocks were unchanged.

"[The drop in the market] was really inevitable and it gave you a foreshadowing of what is going to happen in the future," said Tristan E. Valerio of Lucky Securities, Inc.

Jason G. Lagrimas of 2TradeAsia.com said the market’s fall yesterday was caused by investors’ negative sentiment towards equity markets as a result of the ongoing financial crisis in the US.

"Until [the crisis] settles, we will not see [any change] in the market," Mr. Lagrimas said. "There is no good news right now."

US stocks plummeted to a three-year low on Wednesday despite the US government’s efforts to calm global markets.

The Dow Jones industrial average fell by 4.06% or 449.36 points to 10,609.66 while the Standard and Poor’s 500 index shed 4.71% or 57.20 points to 1,156.39.

The Nasdaq composite index dropped 4.94% or 109.05 points to 2,098.85.

Light, sweet crude for October delivery also jumped anew as a result of the fall in Wall Street, gaining $6.01 to settle at $97.16 per barrel on the New York Mercantile Exchange.

"This has been a very historic week for the whole world. This could potentially be a [deciding] point as to whether the market will go down further or bounce back," Mr. Valerio said.

At home, all six subindices tumbled along with the composite index.

Industrial companies shed heavily, losing 6.80% or 190.43 points to 2,606.74, followed by property companies which went down by 5.87% or 51.82 points to 829.88.

Holding firms retreated by 4.97% or 66.23 points to 1,263.74 while services stocks fell by 2.74% or 39.58 points to 1,403.53.

Mining and oil companies slipped by 2.74% or 165.07 points to 5,857.59 while financial companies shed 1.90% or 11.43 points to 588.78.

Most blue chips, especially property shares were battered yesterday. Vista Land & Lifescapes, Inc. tumbled by 13.40% or P0.26 to P1.68, while Filinvest Land, Inc. lost 8.82% or six centavos to P0.62.

Megaworld Corp. went down by 7.14% or P0.10 to P1.30.

The Bank of the Philippine Islands, which said it has no exposure to Lehman Brothers, slipped by 6.97% or P3 to P40 while Lopez-led Manila Electric Co. went down by 6.73% or P3.50 to end at P48.50.

Metropolitan Bank and Trust Co. shed 4.68% or P1.50 to P30.50 while Ayala Land, Inc. dropped 4.12% or P0.40 to P9.30.

Index heavyweight Philippine Long Distance Telephone Co. lost 1.78% or P45 to P2,480.

Banco de Oro Unibank, Inc. surprisingly gained 9.52% or P3 to P34.50 yesterday while Robinsons Land Corp. managed to stay at P7.20.

"Until everything settles, investors will not buy heavily even if prices have already dropped," Mr. Lagrimas said.

He added, however, that there are some who are already positioning themselves in the market.

barukdok

September 19th, 2008, 04:20 AM

^^ luma na yang news na yan. the market just went up 100+ points as of 10:30 a.m. today.

nakakalula!:nuts:

-TC-

September 19th, 2008, 05:48 AM

^^ luma na yang news na yan. the market just went up 100+ points as of 10:30 a.m. today.

nakakalula!:nuts:

Yup it's yesterday's news.

After Dow went up by 410 pts last night, the Phisix is now up by 109.85 pts as of 11:48 am, September 19, 2008.

-TC-

September 19th, 2008, 06:05 AM

Phisix up by 110.42 pts (+4.69%) as of close of trade today, September 19, 2008.

RonnieR

September 19th, 2008, 09:21 AM

Agence France-Presse
First Posted 12:16:00 09/19/2008

MANILA, Philippines -- Share prices rose 4.69 percent on Friday, in line with other foreign markets after the US government unveiled a plan to deal with the debt crisis, dealers said.

The composite index gained 110.42 points to 2,462.79 points, while the all-shares index gained 3.78 percent to 1,558.93 points. There were 99 gainers compared to 18 losers and 29 unchanged.

Volume totalled 10.35 billion shares worth P3.095 billion ($66.26 million).

The local currency traded at 46.71 to the dollar.

"The Philippine market is only tracking what is going on with overseas markets," said Raul Putong of Accord Capital Equities Inc. "We might have seen the bottom for the Dow last night," he added.

The recovery came after US financial and monetary officials announced later Thursday they were putting together a plan to clear the mountains of bad debt that have weighed down banks and caused the worst financial crisis in decades.

"What lifted the market was the late announcement of US Treasury Secretary Henry Paulson," said Putong.

"If the plan of Paulson pushes through, if there is no opposition to it, that may be the ultimate solution to the subprime mess," he said.

Philippine Long Distance Telephone Co. gained 2.8 percent to P2,550.00.

Ayala Land Inc. rose 2.15 percent to P9.50.

San Miguel Corp. saw its A shares gain 4.25 percent to P49.00 while its B shares gained 5.3 percent to P49.50.

RonnieR

September 19th, 2008, 09:22 AM

Sana maka recover soon, luging lugi na talaga.....

-TC-

September 19th, 2008, 10:56 AM

Looks more like an Resolution Trust Corp-like entity is already in the works. A temporary ban on short-selling maybe implemented as well. Read the article below:

http://biz.yahoo.com/ap/080919/financial_meltdown.html

Congress promises quick action on bailout package
Friday September 19, 4:08 am ET
By Jeannine Aversa and Julie Hirschfeld Davis, Associated Press Writers

Congress promises quick action on financial crisis bailout plan from Bush administration WASHINGTON

(AP) -- Congress promised quick action on a plan to buy up toxic assets, such as bad mortgages, held by troubled banks and other institutions, hoping to lift the nation out of its worst financial crisis in decades.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are crafting a plan, which they plan to soon deliver to lawmakers, after concluding they need broader powers to combat fallout from a housing and credit market meltdown that has sent shock waves through Wall Street and around the globe. Congressional leaders said they expected to get the plan Friday and act on it before Congress recesses for the election."We hope to move very quickly. Time is of the essence," House Speaker Nancy Pelosi, D-Calif., said after Paulson and Bernanke briefed congressional leaders Thursday night.

Stocks on Wall Street shot up more than 400 points late Thursday on word that a plan was in the works. Fallout from the housing and credit debacles have badly bruised the economy and pushed unemployment to a five-year high.

"I don't say any prudent money manager would say we're out of the woods, but right in this moment it all seems positive and leading toward an upward move for the market going into Friday session," said Scott Fullman, director of derivative investment strategy for New York-based institutional broker WJB Capital Group.

Fullman said the biggest bonus of any potential government plan is that it is being put together to help the banking industry as a whole. Until now, the Treasury and Fed have selectively bailed out institutions that were the most vulnerable.

"This staves off Judgment Day," said Anthony Sabino, professor of law and business at St. John's University. "This is a detox for banks, and will help cleanse themselves of the bad mortgage securities, loans and everything else that has hurt them."

The roots of the current crisis can be traced to lax lending for home mortgages -- especially subprime loans given to borrowers with tarnished credit -- during the housing boom. Lenders and borrowers were counting on home prices to keep zooming upward. But when the housing market went bust, home prices plummeted. Foreclosures spiked as people were left owing more on their mortgage than their home was worth. Rising mortgage rates also clobbered some homeowners.

As financial companies racked up multibillion-dollar losses on soured mortgage investments, and credit problems spread globally, firms hoarded cash and clamped down on lending. That crimped consumer and business spending, dragging down the national economy -- a vicious cycle policymakers have been trying to break.

"The root cause of the stress in the capital markets is the real estate correction," Paulson said, adding he hopes to have a solution "aimed right at the heart of this problem."

Bernanke said a resolution would help "get our economy moving again."

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, discounted the idea of setting up a new agency -- similar to the Resolution Trust Corp. -- established in 1989 to help resolve a savings and loan crisis at a cost to taxpayers of $125 billion.

"It will be the power -- it may not be a new entity. It will be the power to buy up illiquid assets," Frank said. "There is this concern that if you had to wait to set up an entity, it could take too long."

The federal government already has pledged more than $600 billion in the past year to bail out, or help bail out, some of the biggest names in American finance. There was no immediate word on how much the new rescue plan might cost.

Paulson, Fed Chairman Ben Bernanke and other officials planned to work through the weekend on a solution.

Christopher Cox, chairman of the Securities and Exchange Commission, told lawmakers the SEC may put in a temporary emergency ban on all short-selling, not just the aggressive forms it already has targeted, according to a person familiar with the matter, speaking on condition of anonymity because no final decision had been made.

The ban might apply to stocks of selected financial companies, to all financial companies or even possibly to all public companies. Short-selling, which has been practiced on Wall Street for decades, is not illegal per se.

For more than a year, investors around the world have watched with growing alarm as the U.S. economy, the world's largest, has struggled to right itself amid massive home foreclosures, many of them from mortgages issued to homeowners with bad credit.

The turmoil has swallowed some of the most storied names on Wall Street. Three of its five major investment banks -- Bear Stearns, Lehman Brothers and Merrill Lynch -- have either gone out of business or been driven into the arms of another bank.

Associated Press writers Andrew Taylor and Marcy Gordon in Washington and Joe Bel Bruno in New York contributed to this report.e

Lucentino

September 19th, 2008, 11:07 AM

Sana maka recover soon, luging lugi na talaga.....

Sounds like you have investments there huh...

Sometimes, the stock market and the Peso treads diffent directions. Stock market gains does not automatically translate to Peso appreciation, but it is a mutal relation wherein what happens to one, directly affects the other in the long run.

-TC-

September 19th, 2008, 12:50 PM

It's official! Short-selling of stocks has been temporarily banned by the US SEC! :applause:

http://biz.yahoo.com/ap/080919/sec_short_selling.html

SEC bans short-selling
Friday September 19, 6:38 am ET
SEC temporarily bans short-selling to boost investor confidence

WASHINGTON (AP) -- The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks.The move, announced on the agency's Web site, may well be unprecedented and a reflection of regulators' concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.

http://us.bc.yahoo.com/b?P=urhaI9FJqz8z_aY7SISOswDAejUYKUjTgakAAhJU&T=1ej8dqju7%2fX%3d1221820841%2fE%3d8988914%2fR%3dfin%2fK%3d5%2fV%3d2.1%2fW%3dH%2fY%3dYAHOO%2fF%3d3827651611%2fH%3dY29udGVudD0icG9saXRpY3MiIGNvYnJhbmQ9IjxhIGhyZWY9aHR0cDovL3VzLnJkLnlhaG9vLmNvbS9maW5hbmNlL25ld3MvYXBmL1NJRz0xMGtmbW9mb2wvKmh0dHA6Ly93d3cuYXAub3JnLz48aW1nIGJvcmRlcj0wIHNyYz1odHRwOi8vdXMuaTEueWltZy5jb20vdXMueWltZy5jb20vaS91cy9maS9nci9wYXJ0bmVyX2xvZ29zL2FwMl8xNzB4MzMuZ2lmIGFsdD1BUD48L2E.IiBjYWNoZWhpbnQ9Ijg5ODg5MTQiIGNhY2hlaGludD0iODk4ODkxNCI-%2fQ%3d-1%2fS%3d1%2fJ%3dFDAA49D1&U=13fpf9gev%2fN%3d.7r8A0LaX94-%2fC%3d658308.12993691.13207512.1435155%2fD%3dLREC%2fB%3d4743079%2fV%3d1In the announcement, the commission said it was acting in concert with the U.K. Financial Services Authority in taking emergency action to "prohibit short selling in financial companies" to protect the integrity of the securities market and boost investor confidence."The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," SEC chairman Christopher Cox said in a statement. "The emergency order temporarily banning short-selling of financial stocks will restore equilibrium to markets."

The move, he said, would not be necessary in a well-functioning market and is only a temporary step that is part of the actions being taken by the Federal Reserve, the Treasury and Congress.

A recent wave of the market maneuvers -- where traders seek to profit by selling unowned shares of companies in the anticipation their prices will drop -- has been blamed in part for the demise of venerable investment firm Lehman Brothers and other big companies.

Cox, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke held a closed-door meeting Thursday night with members of Congress.

The SEC said its action calls a time-out to aggressive short-selling in financial stocks and said it would consider measures to address short-selling in other publicly traded companies.

Short-selling, in a normal market, contributes to efficiency while adding liquidity to the markets. But now, the SEC said, it appears that "unbridled" short-selling was contributing to the sudden price declines in the securities of financial institutions.

On Wednesday, New York Sens. Charles Schumer and Hillary Clinton, both Democrats, appealed to the SEC for such a temporary ban, saying the watchdog agency "has the power to take a temporary but important step to help restore a measure of stability to our financial markets."

The California Public Employees' Retirement System, the nation's largest pension fund, said that starting Thursday it is no longer lending out shares of Goldman Sachs Group Inc. and Morgan Stanley, joining a growing number of public pension funds that are attempting to curb short-selling of two investment banks' stocks.

-TC-

September 19th, 2008, 01:37 PM

European markets are surging right now due to the news.

UK's FTSE100 is +7%, French CAC40 +6%, German DAX40 +4%.

It's official! Short-selling of stocks has been temporarily banned by the US SEC! :applause:

http://biz.yahoo.com/ap/080919/sec_short_selling.html

SEC bans short-selling
Friday September 19, 6:38 am ET
SEC temporarily bans short-selling to boost investor confidence

WASHINGTON (AP) -- The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks.The move, announced on the agency's Web site, may well be unprecedented and a reflection of regulators' concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.

http://us.bc.yahoo.com/b?P=urhaI9FJqz8z_aY7SISOswDAejUYKUjTgakAAhJU&T=1ej8dqju7%2fX%3d1221820841%2fE%3d8988914%2fR%3dfin%2fK%3d5%2fV%3d2.1%2fW%3dH%2fY%3dYAHOO%2fF%3d3827651611%2fH%3dY29udGVudD0icG9saXRpY3MiIGNvYnJhbmQ9IjxhIGhyZWY9aHR0cDovL3VzLnJkLnlhaG9vLmNvbS9maW5hbmNlL25ld3MvYXBmL1NJRz0xMGtmbW9mb2wvKmh0dHA6Ly93d3cuYXAub3JnLz48aW1nIGJvcmRlcj0wIHNyYz1odHRwOi8vdXMuaTEueWltZy5jb20vdXMueWltZy5jb20vaS91cy9maS9nci9wYXJ0bmVyX2xvZ29zL2FwMl8xNzB4MzMuZ2lmIGFsdD1BUD48L2E.IiBjYWNoZWhpbnQ9Ijg5ODg5MTQiIGNhY2hlaGludD0iODk4ODkxNCI-%2fQ%3d-1%2fS%3d1%2fJ%3dFDAA49D1&U=13fpf9gev%2fN%3d.7r8A0LaX94-%2fC%3d658308.12993691.13207512.1435155%2fD%3dLREC%2fB%3d4743079%2fV%3d1In the announcement, the commission said it was acting in concert with the U.K. Financial Services Authority in taking emergency action to "prohibit short selling in financial companies" to protect the integrity of the securities market and boost investor confidence."The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," SEC chairman Christopher Cox said in a statement. "The emergency order temporarily banning short-selling of financial stocks will restore equilibrium to markets."

The move, he said, would not be necessary in a well-functioning market and is only a temporary step that is part of the actions being taken by the Federal Reserve, the Treasury and Congress.

A recent wave of the market maneuvers -- where traders seek to profit by selling unowned shares of companies in the anticipation their prices will drop -- has been blamed in part for the demise of venerable investment firm Lehman Brothers and other big companies.

Cox, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke held a closed-door meeting Thursday night with members of Congress.

The SEC said its action calls a time-out to aggressive short-selling in financial stocks and said it would consider measures to address short-selling in other publicly traded companies.

Short-selling, in a normal market, contributes to efficiency while adding liquidity to the markets. But now, the SEC said, it appears that "unbridled" short-selling was contributing to the sudden price declines in the securities of financial institutions.

On Wednesday, New York Sens. Charles Schumer and Hillary Clinton, both Democrats, appealed to the SEC for such a temporary ban, saying the watchdog agency "has the power to take a temporary but important step to help restore a measure of stability to our financial markets."

The California Public Employees' Retirement System, the nation's largest pension fund, said that starting Thursday it is no longer lending out shares of Goldman Sachs Group Inc. and Morgan Stanley, joining a growing number of public pension funds that are attempting to curb short-selling of two investment banks' stocks.

-TC-

September 19th, 2008, 03:06 PM

http://biz.yahoo.com/ap/080919/world_markets.html

World markets soar on possible US rescue package
Friday September 19, 7:54 am ET
By Matt Moore, AP Business Writer

From Tokyo to London, world's markets soar higher in reaction to possible
US financial fix

FRANKFURT, Germany (AP) -- Global stock markets roared higher on Friday after news of a possible U.S. government plan to rescue banks from toxic mortgage debt raised a collective sense of hope amid the world's worst financial crisis in decades.

Europe exchanges, which had spent nearly all of this week drowning in declines responded with ferocity to the possible plan, surging as battered bank stocks rebounding along with them.The news of a likely U.S. lifeline, along with new changes to short-selling in the U.S., Britain and Ireland, also helped push markets higher, analysts said.

Early Friday, the U.S. Securities and Exchange Commission took the dramatic step of temporarily banning the routine practice of betting against company stocks, announcing the move on its Web site.

The commission said it was acting in concert with Britain's Financial Services Authority in taking emergency action to "prohibit short selling in financial companies" to protect the integrity of the securities market and boost investor confidence.

"The short-term changes to short selling are certainly giving markets and regulators room to breathe," said Keith Bowman, equity analyst Hargreaves Lansdown Stockbrokers. "But there are going to be a significant number of hurdles to overcome for this temporary measure to prove useful at solving the fundamental problems over the long term."

Another factor were moves by the European Central Bank, Swiss National Bank and Bank of England to offer up more cash Friday. The three banks put a combined $90 billion into money markets in a lockstep move.

London's FTSE jumped more than 7 percent, led higher by Lloyds TSB, which gained some 30 percent in trading only a day after sentiment about its financial strength hobbled its appeal.

In Frankfurt, the DAX index sprung more than 4 percent higher with shares of Commerzbank AG and Deutsche Bank AG leaping 18.6 percent and nearly 16 percent, respectively.

The Irish Stock Exchange responded with its biggest burst in Dublin trading history, rising more than 25 percent in the first hour. The financials-heavy index soon settled back on profit-taking, but remained up nearly 12 percent at 4,175 in midmorning trade.

The most dramatic gains were scored by Anglo-Irish Bank, a niche lender that had been heavily targeted by short-sellers in recent weeks, knocking two-thirds off its market capitalization.

Anglo-Irish stock value initially surged by an incredible 120 percent, then settled back, still up more than 35 percent. Allied Irish rose 19.7 percent, Bank of Ireland 28.3 percent, and Irish Life & Permanent 21.6 percent.

Irish regulators also banned short-selling on the stocks of the country's four largest financials: Allied Irish Banks, Bank of Ireland, Irish Life & Permanent and Anglo-Irish Bank Corp.

Russia's leading stock exchanges suspended trading for a second time in several hours after stocks rose too sharply. Earlier Friday, trading was suspended on both the RTS and MICEX within an hour of opening, in line with exchange rules. They reopened after an hour only to close again.

MICEX, where most share trading takes place, was up 25.4 percent since the start of Friday after two-day suspension. The RTS was up 20.2 percent. Both indexes were closed on Wednesday for two days after the MICEX suffered one-day losses on a scale not seen since Russia's 1998 financial collapse. It plunged 25 percent in just 2 1/2 days on the back of tumbling oil prices and Wall Street turmoil, and was down more than 55 percent since its May peak.

Austria's ATX surged past 9 percent in early afternoon trade after opening about 8 percent higher earlier Friday. In Madrid, the SMSI was up nearly 6.2 percent while Swedish shares climbed 6.8 percent higher in Stockholm. In Belgium, shares gained 7.5 percent on the Euronext Bel-20.

Across Asia, similar spikes were seen around the region. Hong Kong's Hang Seng Index surged a stunning 9.6 percent to 19,327.73, while Japan's Nikkei 225 average rose 3.8 percent to 11,920.86.

In China, the Shanghai benchmark jumped 9.5 percent -- its biggest gain ever -- after the government eliminated a tax on share purchases and said it was buying shares in state-owned banks.

The global turnaround came after investors took to heart word that the U.S. government was seeking the power to rescue banks by buying distressed assets at the heart of the financial system turmoil that's brought down Wall Street giants Lehman Brothers, Merrill Lynch and Bear Stearns.

Details of the plan were still being worked out, but U.S. Treasury Secretary Henry Paulson emerged from a nighttime meeting on Capitol Hill Thursday to say he hoped to have a solution "aimed right at the heart of this problem."

"It definitely gives investors a light at the end of the tunnel," said Daniel McCormack, a strategist for Macquarie Securities in Hong Kong. "The solution is of such a magnitude that it could eventually fix the problems ... That's hugely important at the moment because that's what markets are focused on."

Oil prices were above $100 a barrel Friday, with light, sweet crude for October delivery rose $2.16 to $100.04 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. Overnight, the contract rose 72 cents to settle at $97.88.

The euro fell to $1.4221 in European trading from the $$1.4247 it bought in New York late Thursday.

The British pound drifted down to $1.8019 from $1.8076, while the dollar rose to 107.40 Japanese yen from 106.19 yen.

AP Business Writers Emily Flynn Vencat in London, Jeremiah Marquez in Hong Kong and Elaine Kurtenbach in Shanghai, and AP Writers Shawn Pogatchnik in Dublin, Veronika Oleksyn in Vienna and Tomoko Hosaka in Tokyo contributed to this report.

-TC-

September 20th, 2008, 04:55 AM

http://biz.yahoo.com/ap/080919/wall_street.html

Stocks soar as investors bet on gov't rescue plan
Friday September 19, 6:58 pm ET
By Tim Paradis, AP Business Writer

Wall Street extends big rally on bank rescue hopes, temporary ban on short sales of financials

NEW YORK (AP) -- Wall Street had another extraordinary rally Friday as investors stormed back into the market, relieved that the government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt. The Dow Jones industrials soared about 370 points, giving them a gain of about 780 over two days, and Treasurys fell as money flowed into equities.

The government's proposal, while still a work in progress, has placated investors who worried that a continuum of bad bets on mortgages would hobble more financial companies and cause further damage to the strained banking system and the overall economy."If a solid plan is put in place, it's definitely going to be a positive in easing the pain," said Stephen Carl, principal and head of equity trading at The Williams Capital Group. He added, though, that the set-up of any plan will determine its success.

A new government ban on short selling, or placing bets that a stock will fall, likely added to the market's gains as traders adjusted their positions. "A big chunk of this is scaring all the shorts to cover their bets," said Joe Battipaglia, market strategist at Stifel, Nicolaus & Co., referring to short sellers.

Treasury Secretary Henry Paulson, speaking about the rescue plan, said a bold approach is needed to remove troubled assets from the books of financial firms. He offered few details, but said he would working through the weekend with congressional leaders to assemble a remedy.

The plan could help neutralize a yearlong credit crisis that intensified this week. Wall Street suffered massive losses Monday and Wednesday, and credit markets essentially seized up following this week's bankruptcy of Lehman Brothers Holdings Inc. and the bailout of teetering insurer American International Group Inc.

Analysts said it was the first government response decisive enough to restore confidence in the markets; in the past, it has relied largely on steps like injecting cash into the banking system that, at least until now, had a limited impact.

"Everything they had done had been a Band-Aid approach, at the margins," said Jay Mueller, economist at Strong Capital Management. "Now we're dealing with the root problem."

The government took other steps Friday to restore stability to the financial system. The Federal Reserve said it will expand its emergency lending and let commercial banks finance purchases of asset-backed paper from money market funds. The Fed injected more money into the U.S. financial system, as it had done earlier in the week. The central bank also said it will buy short-term debt obligations issued by mortgage giants Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

To further ease investors' anxieties and bolster tattered investor confidence, the Treasury Department has decided to use a Depression-era fund to provide guarantees for U.S. money market mutual funds. Money market mutual funds are typically considered safe, but some investors have been fleeing them, fearing that the funds' holdings included souring corporate debt.

And to help limit the freefall in financial stocks, the Securities and Exchange Commission on Friday enacted a ban until next month on the short-selling of nearly 800 financial stocks. Short-selling is the common practice of betting against a stock by borrowing shares and then selling them in the open market. A short-seller's hope is the stock will fall; if it does, the stock can be bought back at the lower price. Those cheaper shares can be returned to the lender, allowing the investor to pocket the profits. Traders can lose, however, if the stock rises.

Wall Street observers have disagreed over the extent to which pressure from all those bets that a stock will fall shaped investor sentiment and strangled some financial stocks, like those of Lehman Brothers last week. Some say the fundamental problems with overleveraged financial companies warranted the pessimism while others say the short selling was a death knell for some financial names.

"The federal government has been petitioned by Wall Street to take evasive action in the money markets, the stock and bond markets, to avoid a complete meltdown of the credit system," said Battipaglia. "Once the credit system melts down, the economy falls. We can hand-wring about if this is the proper thing for the government to do, or if Wall Street pulled the panic button too soon, but that's something for the historians to sort out."

It's difficult to quantify how much of the market's gains reflected short sellers who are forced to step in and cover their bets by buying now rising stocks that had predicted would fall. While that appeared to play some role in the advances Thursday and Friday, the Nasdaq composite index -- dominated by big technology stocks, not financials -- showed big gains along with the Dow and the Standard & Poor's 500 index.

The Dow rose 368.75, or 3.35 percent, to 11,388.44 after having been up as much as 463.36.

Friday was a quarterly "quadruple witching" day, which marks the simultaneous expiration of options contracts, an event that often adds to volatility and heavy volume. Still, much of the market's moves were due to the government's actions Friday.

Broader stock indicators also surged. The S&P 500 index rose 48.57, or 4.03 percent, to 1,255.08, and the Nasdaq composite index rose 74.80, or 3.40 percent, to 2,273.90.

Even with Friday's big gains, stocks didn't end the week with much change after the whipsaw sessions. The Dow slipped 0.29 percent, the S&P 500 rose 0.27 percent and the Nasdaq added 0.56 percent.

Treasury prices dropped as investors poured money back into stocks. The yield on the 3-month Treasury bill -- a safe investment to which investors have rushed this week -- rose to 0.95 percent from 0.07 percent late Thursday. Yields move opposite from price. The yield on the benchmark 10-year Treasury note shot up to 3.81 percent from 3.53 percent late Thursday.

The stock market's enormous swings during the week reveal how anxious investors have been about the tightness in the credit markets the possibility that other financial companies might succumb to the difficulties in the markets.

The only lasting move in a week of intense volatility came late in Thursday's session when reports emerged that the government was considering a plan that would shift soured debt off financials' books. A wobbly market rocketed higher, giving the Dow a 410-point gain for the session, buying that continued through Friday.

The dollar rose against most other major currencies in Friday trading, while gold prices jumped. Light, sweet crude rose $6.67 to settle at $104.55 a barrel on the New York Mercantile Exchange.

Advancing issues outnumbered decliners by about 7 to 1 on the New York Stock Exchange, where consolidated volume came to a heavy 9.1 billion shares compared with 10.3 billion shares traded Thursday.

The Russell 2000 index of smaller companies rose 30.06, or 4.15 percent, to 753.74.

Overseas stock markets soared. Japan's Nikkei stock average jumped 3.8 percent, and Hong Kong's Hang Seng index surged 9.61 percent. In Europe, Britain's FTSE 100 jumped 8.84 percent, Germany's DAX index advanced 5.56 percent, and France's CAC-40 rose 9.27 percent.

The Dow Jones industrial average ended the week down 33.55, or 0.29 percent, at 11,388.44. The Standard & Poor's 500 index finished up 3.38, or 0.27 percent, at 1,255.08. The Nasdaq composite index ended the week up 12.63, or 0.56 percent, at 2,273.90.

The Russell 2000 index finished the week up 33.48, or 0.27 percent, at 753.74.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended at 12,882.14, up 117.26 points, or 0.92 percent, for the week. A year ago, the index was at 15,371.29.

------------------------------

http://i57.photobucket.com/albums/g227/tcc_0888/Misc/DJIASep15-19.jpg

http://finance.yahoo.com/banking-budgeting/article/105803/The-Week-That-Broke-Wall-Street?mod=weekend

The Week That Broke Wall Street
by David Goldman
Saturday, September 20, 2008

A shocking series of events that forever changed the financial markets

September 14 Sunday - Trouble Brews

News that Lehman Brothers was on the brink of collapse and scrambling for a buyer first surfaced on Friday. But by Sunday, there were still no suitors for the 158-year-old investment bank, and bankruptcy seemed inevitable. Indeed, just after midnight, in Monday's early hours, the firm officially announced its intention to file for Chapter 11.

Equally as staggering, just hours after reports surfaced that Bank of America broke off talks to buy Lehman, BofA unleashed the news that it would pay $50 billion to scoop up Merrill Lynch, another iconic Wall Street name.

As if that weren't enough, American International Group, the nation's largest insurer, said that it planned to sell some of its troubled assets in order to raise cash and boost investor confidence.

Concerns about the credit crisis grew increasingly dire, even though the government had already pledged to backstop Fannie Mae and Freddie Mac up to $200 billion just one week ago, and months earlier engineered JP Morgan's purchase of Bear Stearns with a $29 billion guarantee.

But it looked like that wouldn't be enough, so Sunday afternoon the Federal Reserve, along with 10 banks, announced a $70 billion pool of funds to aid troubled financial firms. The U.S. central bank also loosened its lending restrictions.

September 15 Monday - The Collapse

As traders sold off stocks on the weekend's sour news, rumors began to circulate that AIG was struggling to raise enough capital to fend off a downgrade. As a result, New York Governor David Paterson bent intra-corporation lending rules, allowing the company to loan itself $20 billion from a subsidiary.

In the worst day on Wall Street in seven years, the Dow Jones Industrial Average tanked more than 500 points after Lehman Brothers' epic collapse and the buyout of Merrill Lynch.

By Monday night, AIG was in fact hit with a downgrade, as Fitch bumped the insurance group down a notch. With $1.1 trillion in assets and 74 million clients in 130 countries, investors feared AIG's collapse would severely hurt consumers and further tighten already strangled credit.

Also Monday, news cropped up that the nation's largest savings bank, Washington Mutual, was in search of a white knight.

September 16 Tuesday - The Fed Steps In

Stocks saw another sharp drop on Tuesday morning as worries mounted that the financial system was broken beyond repair. Investors poured money into bonds, and the yield on the benchmark 10-year Treasury note fell to a 5-year low.

Next, several rock-solid money market funds began to falter, dipping below the $1 per share benchmark.

Meanwhile the Fed was scheduled to meet on Tuesday afternoon. Wall Street analysts, who just a week ago expected the Fed to hold rates steady, began to anticipate a rate cut. But the central bank chose not to succumb to panic and unanimously decided to hold rates steady at 2%.

Markets cheered the decision, and the Dow jumped 140 points at the close.

After the bell, British bank Barclays agreed to buy up $2 billion worth of Lehman's brokerage assets and real estate holdings, and Morgan Stanley reported better-than-expected earnings.

But the big news came later that night when the government announced that it would stage a staggering $85 billion bailout of AIG, and take an 80% stake in the company.

September 17 Wednesday - Another Free Fall

Investors gave an enormous thumbs-down to the AIG news, sending stocks plummeting, while traders piled funds into safer havens. Gold rose $70, a new record. Oil rose $6, its second-largest jump ever.

And the yield on the three-month Treasury sank to 0.02%, the lowest level since 1940.

The Dow dropped 450 points by the end of the day, dragged down by bank stocks in a tail-spin.

Despite reporting better-than-expected results, Goldman Sachs shares dipped below $100 a share for the first time since 2005. Morgan Stanley took a tumble as well, as rumors circulated that it would merge with troubled bank Wachovia.

Many Wall Street analysts blamed the stock market's collapses on so-called "naked" short sellers, who short stocks without ever buying the security. Subsequently, the U.S. Securities and Exchange Commission stepped in and banned naked short selling.

September 18 Thursday - The Bailout

With a crisis on its hands, the Fed convinced five other central banks around the world to invest a total of $180 billion in global financial markets.

Meanwhile, AIG was tossed out of the Dow Jones Industrial Average and replaced with food giant Kraft.

The stock market soared towards the close of the session, with financial stocks rebounding. The Dow added more than 400 points on rumors that an even more extensive federal bailout of the banking industry was in the making. Investors cheered these early reports that the Treasury would create an independent federal agency to take bad loans off of bank balance sheets.

Late Thursday night, Treasury Secretary Henry Paulson met with Congressional leaders to hammer out the details of a large-scale bailout.

September 19 Friday - The Confidence Boost

As Wall Street eagerly awaited the details of Secretary Paulson's plan, the SEC took what it called "emergency action" Friday morning and temporarily banned investors from short-selling 799 financial companies.

The Treasury also said it would insure up to $50 billion in struggling money market fund investments at financial companies, guaranteeing that the funds' value will not fall below the standard $1 a share.

The Fed also said it would make unlimited funds available to banks to finance purchases of asset-backed commercial paper from money market funds.

In a press conference, Treasury Secretary Paulson outlined the government's plan to put up hundreds of billions of dollars to help stem the crisis, saying "the financial security of all Americans ... depends on our ability to restore our financial institutions to a sound footing."

Later, President Bush held a separate press conference, flanked by Paulson, SEC Commissioner Christopher Cox and Fed chief Ben Bernanke, saying it was "essential" that the government step in to save the economy.

Investors cheered the moves, sending stocks soaring throughout the day.

Although the U.S. government had set various bailouts in motion to the tune of roughly $1 trillion, investors finished the week with renewed confidence that Wall Street may be broken - but not beyond repair.

Weina

September 20th, 2008, 09:00 AM

^^i thought this thread is only for phil stocks?

anyway, i think this rally we are seeing right now is only artificial. the market could still go either bull or bear so just be careful folks.

3cr

September 20th, 2008, 11:26 PM

US bailout plan buoys the peso
Business World
http://www.bworldonline.com/BW092008/content.php?id=022

A recovery in US stock prices on the back of a proposed bailout package for troubled American financial institutions pulled up the peso yesterday.

The local currency surged forty-and-a-half centavos to P46.555 against the dollar from P46.96 last Thursday.

It tracked Asian currencies that rallied against the dollar after being battered for days by rising risk aversion brought on by the collapse of US investment bank Lehman Brothers.

US Treasury Secretary Hank Paulson’s plan of setting up a government facility to take on financial firms’ bad debts further calmed jittery investors, who earlier cheered on central banks’ concerted efforts to infuse liquidity into their economies.

"Risk appetite improved mainly because of the measures taken by the US government and the world’s top central banks," a trader said.

"There was an uptick in the Dow Jones. The regionals appreciated across the board, including the peso," another trader said.

The peso opened at P46.66 against the dollar and traded within a wide range of P46.54 to P46.78. It averaged at P46.662 at $769.05 million worth of dollars exchanged.

The central bank was spotted to have intervened, trying to cap the peso’s rise by buying dollars, according to traders.

__________________________________________

Bush team, Congress negotiate on $700B bailout
By JULIE HIRSCHFELD DAVIS and DEB RIECHMANN, Associated Press Writers
Yahoo News
http://news.yahoo.com/s/ap/20080920/ap_on_bi_ge/financial_meltdown

WASHINGTON - The Bush administration asked Congress on Saturday for the power to buy $700 billion in toxic assets clogging the financial system and threatening the economy as negotiations began on the largest bailout since the Great Depression.

The rescue plan would give Washington broad authority to purchase bad mortgage-related assets from U.S. financial institutions for the next two years. It does not specify which institutions qualify or what, if anything, the government would get in return for the unprecedented infusion.

Democrats are pressing to require that the plan help more strapped borrowers stay in their homes and to condition the bailout on new limits on executive compensation.

Congressional aides and administration officials are working through the weekend to fill in the details of the proposal. The White House hoped for a deal with Congress by the time markets opened Monday; top lawmakers say they would push to enact the plan as early as the coming week.

"We're going to work with Congress to get a bill done quickly," President Bush said at the White House. Without discussing specifics, he said, "This is a big package because it was a big problem."

But lawmakers digesting the eye-popping cost and searching for specifics voiced concerns that the proposal offers no help for struggling homeowners or safeguards for taxpayers' money.

The government must bail out the financial system "because if we don't, it will have a tremendous impact on American consumers, homeowners, taxpayers and the rest," House Speaker Nancy Pelosi, D-Calif., said at a citizens' workshop in San Francisco.

But, she added, "We cannot deal with this unless this bailout helps families stay in their homes."

Sen. Chuck Schumer, D-N.Y., called the plan "a good foundation," but said it was missing "some kind of supervisory authority, and some kind of protection for homeowners and taxpayers."

The proposal would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue.

"The American people are furious that we're in this situation, and so am I," the House's top Republican, Ohio Rep. John A. Boehner, said in a statement. "We need to do everything possible to protect the taxpayers from the consequences of a broken Washington."

Signaling what could erupt into a brutal fight with Democrats over add-on spending, Boehner said "efforts to exploit this crisis for political leverage or partisan quid pro quo will only delay the economic stability that families, seniors, and small businesses deserve."

Bush said he worried the financial troubles "could ripple throughout" the economy and affect average citizens. "The risk of doing nothing far outweighs the risk of the package. ... Over time, we're going to get a lot of the money back."

He added, "People are beginning to doubt our system, people were losing confidence and I understand it's important to have confidence in our financial system."

Neither presidential candidate took a position on the proposal. GOP nominee John McCain said he was awaiting specifics and any changes by Congress.

Democratic rival Barack Obama used the party's weekly radio address to call for help for Main Street as well as Wall Street.

"We need to help people cope with rising gas and food prices, spark job creation by repairing our schools and our roads, help states avoid painful budget cuts and tax increases, and help homeowners stay in their homes," Obama said. "And we must also ensure that the solution we design doesn't reward particular companies, or irresponsible borrowers or lenders, or CEOs, some of whom helped cause this mess."

Their language reflected a tricky balance that politicians in both parties are trying to strike, just six weeks before Election Day: Back a plan that doles out hundreds of billions to companies that made bad bets and still identify with the plight of middle-class voters.

Besides mortgage help and executive compensation limits, Democrats are considering attaching middle-class assistance to the legislation despite a request from Bush to avoid adding items that could delay action. An expansion of jobless benefits was one possibility.

Bush sidestepped questions about the chances of adding such items, saying that now was not the time for posturing. "I think most leaders would understand we need to get this done quickly, and you know, the cleaner the better," he said about legislation being drafted.

Treasury officials met congressional staff for about two hours on Capitol Hill on Saturday. Discussions centered on how the plan would work, and Democrats proposed adding the executive compensation limits and new foreclosure-prevention measures.

Among the key issues up for negotiation is which financial institutions would be eligible for the help. The proposed legislation doesn't make it clear, leaving open the question of whether hedge funds or pension funds could qualify.

The proposal does not require that the government receive anything from banks in return for unloading their bad assets. But it would allow the Treasury Department to designate financial institutions as "agents of the government," and mandate that they perform any "reasonable duties" that might entail.

The government could contract with private companies to manage the assets it purchased under the rescue.

Treasury Secretary Henry Paulson says the government would in essence set up reverse auctions, putting up money for a class of distressed assets — such as loans that are delinquent but not in default — and financial institutions would compete for how little they would accept.

If enacted, the plan would give the treasury secretary broad power to buy, manage and sell the mortgage-related investments without any additional involvement by lawmakers. It would, however, require that the congressional committees with oversight on budget, tax and financial services issues be briefed within three months of the government's first use of the rescue power, and every six months after that.

3cr

September 20th, 2008, 11:33 PM

No repeat of Asian crisis: policymakers
Business Mirror
http://www.businessmirror.com.ph/0919&202008/headlines03.html

ASIAN policymakers see little risk their countries will be hit by a crisis similar to the economic meltdown of 1997, downplaying concern the US turmoil will infect the region’s financial system.

“This is nothing” compared with 1997, Bank of Thailand Governor Tarisa Watanagase said on Bloomberg Television in Bangkok on Thursday. “The direct impact is very limited, although we may see some slowdown through the trade channel later on.”

Central banks continued to pump money into their financial systems to ensure liquidity as investors sold shares of Australia’s Macquarie Group Ltd. and Kookmin Bank, South Korea’s biggest lender. Asian banks have limited exposure to Lehman Brothers Holdings Inc., which filed for bankruptcy earlier this week, officials say.

“The risk to Asian banks is more from the impending economic slowdown and market turmoil than from direct exposure to the distressed US financial institutions,’” said Ritesh Maheshwari, a Standard & Poor’s analyst in Singapore. Their “strengthened balance sheets as a result of healthy profits can withstand the impact of likely losses from direct exposure.”

The Asian financial crisis, set off by plunging currencies, led to the collapse of companies as they buckled under billions of dollars of debt, forcing Indonesia, Thailand and South Korea to turn to the International Monetary Fund for bailouts. The region has since accumulated more than $3.3 trillion of reserves, about half of the global total.

BOJ’s Shirakawa

“I don’t think a financial crisis will take place in Asia,” Bank of Japan Governor Masaaki Shirakawa said on Wednesday.

“The situation of Asian economies is different from the time of the 1997-1998 crisis. They have plenty of foreign reserves.’”

The Japanese central bank on Thursday added 2.5 trillion yen ($23.9 billion) to its financial system in its third day of fund injections, while Reserve Bank of Australia pumped in A$3.015 billion ($2.4 billion).

“There is a credit crunch everywhere, even in Japan, but it’s relatively better here as Japanese banks are still okay,” said Susumu Kato, chief economist in Tokyo at Calyon Securities, a primary dealer required to bid at government debt sales. “Domestic institutions don’t want to give money to foreign institutions, so the BOJ stepped in to stabilize the market.”

Lehman’s bankruptcy, the sale of Merrill Lynch & Co. to Bank of America Corp. and the US government bailout of American International Group Inc. this week has sparked concern of more financial failures, sending the cost of short-term credit higher in the US and Europe. In Asia, money market rates have remained relatively low.

Asia Vs US

The difference between what the Japanese government and banks pay to borrow yen for three months reached its lowest in six months. By contrast, the so-called US TED spread expanded to the widest since Bloomberg began compiling the data in 1984.

The London interbank offered rate, or Libor, rose 19 basis points to 3.06 percent, the British Bankers’ Association said Thursday. The increase was the biggest since September 29, 1999.

Japan’s banks and insurers, including Mitsubishi UFJ Financial Group Inc., have announced a combined 245 billion yen of potential losses tied to the collapse of Lehman, while lenders in China said they have about $384 million of exposure to the US securities firm.

Potential losses of Japanese banks “seem to be within the levels that can be covered by their profits,” Bank of Japan’s Shirakawa said. “There’s no concern that the latest events will threaten the stability of Japan’s financial system.”

Thailand, which triggered the Asian financial crisis with the devaluation of its baht in July 1997, has no shortage of capital and the nation’s lenders are “strong and resilient,” Tarisa said today.

The banking industry is “a lot more cautious and risk adverse ever since the 1997 crisis,’’ she said. “We had learnt from the crisis. I don’t think there is any chance at all that one of our banks will come into problems.”

The exposure of local banks in the Philippines to Lehman is between 0.3 percent and 0.4 percent of their total assets, central bank Governor Amando Tetangco said in a Bloomberg Television interview today. Losses stemming from the holdings may hurt bank earnings though won’t damage their capital, he said.

Australia’s bank regulatory system is strong enough to give customers “certainty” about the state of their lenders, Prime Minister Kevin Rudd said even as he warned that it was a serious time for the nation’s financial institutions.

During Asia’s 1997 financial crisis, Indonesia, Thailand and South Korea spent most of their currency reserves attempting to prop up their exchange rates after investors abandoned them. The IMF arranged more than $100 billion of loans to the three countries after their currencies collapsed.

“Emerging Asia should be relieved that, unlike the 2001 tech bubble burst and the 1997-98 financial crisis, the ‘action’ has started elsewhere for a change,” said Paul Gruenwald, an economist at Australia & New Zealand Banking Group Ltd. In Singapore. “As a result, the region seems likely to pass through the current credit crisis relatively well.” (Bloomberg)

-TC-

September 21st, 2008, 05:32 AM

^^i thought this thread is only for phil stocks?

Yes and no.

Remember that when the US sneezes, the Philippines catches a cold.

In the past week, the US caught the cold and the Philippines got pneumonia.

It has been an extraordinary week and I've been posting about the US market here to preclude what will happen to the Philippine market. Let's see what will happen to the PHISIX on Monday. It will be its first chance to react to Friday's announced bailout, short-selling ban and the 370 pt rise of the DJIA.

When the US market flies up to the sky, the Philippine market takes off to the moon.

johnnyS

September 21st, 2008, 08:26 AM

All I know is that I am scared to death...

le Reine

September 22nd, 2008, 08:35 AM

(UPDATE) Shares close 2.3% higher (http://business.inquirer.net/money/breakingnews/view/20080922-162163/UPDATE-Shares-close-23-higher)
Agence France-Presse
First Posted 12:31:00 09/22/2008

MANILA, Philippines -- Share prices closed 2.3 percent higher Monday, tracking Wall Street's recovery after the US government announced its $700-billion bailout plan for the battered financial services sector, dealers said.

The composite index rose 57.34 points to 2,520.13.

The all shares index added 31.8 points or 2.0 percent to 1,590.72 points with 73 issues advancing, 21 retreating and 44 issues unchanged.

Turnover reached 1.3 billion shares worth P3.0 billion ($67 million).

The peso traded at an average of P46.225 to the dollar in the morning.

"The immediate objective of the (composite index) now is to remain above the 2,500-level," Francisco Liboro of PCCI Securities told Dow Jones Newswires.

Apart from improving risk appetite, Liboro said easing inflation pressures -- after the central bank said the price index would return to single-digit levels in early 2009 -- are positive for equities as this will "certainly translate into better corporate earnings."

However, the local market ended off its day's high as some investors were quick to cash in gains amid ongoing volatility in the global financial markets.

"As investors continue to be risk-averse, the Philippine market may continue to trail sideways," Unicapital Securities Inc. said.

Top-traded Philippine Long Distance Telephone ended 2.9 percent higher at P2,625.

Ayala Corp. rose 3.5 percent to P295.

San Miguel A-shares added 1.0 percent to P49.50 while its B-shares rose 2.0 percent to P50.50.

le Reine

September 23rd, 2008, 07:53 AM

Shares close 1.34% lower (http://business.inquirer.net/money/breakingnews/view/20080923-162374/Shares-close-134-lower)
Agence France-Presse
First Posted 12:24:00 09/23/2008

MANILA, Philippines -- Share prices closed 1.34 percent lower on Tuesday amid new concerns over the US government's bailout package for its troubled financial services sector, dealers said.

The composite index slipped 33.84 points to close at 2,486.29.

Peso firms up to 46.285 to $1 (http://business.inquirer.net/money/breakingnews/view/20080923-162291/Peso-firms-up-to-46285-to-1)

By Doris Dumlao
Philippine Daily Inquirer
First Posted 00:59:00 09/23/2008

The peso firmed up Monday against the dollar for the fourth straight session as a massive $700-billion bailout plan unveiled by the US government for distressed financial institutions perked up regional financial markets.

The peso gained 0.27 to close at 46.285 to the dollar Monday from Friday’s 46.555, riding on a generally upbeat trading across Asia’s currency markets.

The rally in regional markets was led by the Malaysian ringgit, which rose against the greenback on initial speculation that its government may reimpose capital controls similar to what it did during the Asian currency crisis of 1997. The idea, however, was later dismissed by the Malaysian finance minister.

The peso has been rebounding against the greenback since Wednesday last week on a string of favorable news following the bloodbath triggered by the bankruptcy of Lehman Brothers. The markets welcomed the US government’s $85-billion lifeline for sagging insurance giant AIG, a collective intervention among the world’s central banks to address the global financial turbulence and the limited fallout on Philippine banks of Lehman’s bankruptcy.

“I guess the risk aversion faded after the move of the US Fed. For the last two trading days, the rains have stopped but the storm isn’t over yet,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.

With the fresh liquidity boost from the US government, Ravelas said, there is now a semblance of calm in global financial markets.

He said the market was next targeting 46.00 to the dollar and anything above this level would likely give an opportunity, such as for corporate users, to buy dollars.

On Monday, the peso rose to a high of 46.07 and fell to a low of 46.40 to the dollar.

But currency dealers agreed that continuing uncertainties in the US financial markets were still making investors jittery. With editing by INQUIRER.net

3cr

September 25th, 2008, 12:15 AM

View From Asia
By Walden Bello
The Nation
September 24, 2008
http://www.thenation.com/doc/20081006/bello

Many Asians absorb what is happening in Wall Street with a combination of déjà vu, skepticism and "I-told-you-so."

For many, the Wall Street crisis is a replay, though on a much larger scale, of the 1997 Asian financial crisis, which brought down the red-hot "tiger economies" of the East. The shocking absence of Wall Street regulation brings back awful memories of the elimination of capital controls by East Asian governments, which were under pressure from the International Monetary Fund and the US Treasury Department. That move triggered a tsunami of speculative capital onto Asian markets that sharply receded after sky-high land and stock prices came tumbling down.

Treasury Secretary Paulson's proposed massive bailout of Wall Street's tarnished titans reminds people here of the billions the IMF hustled up after '97 in the name of assisting them--money that was used instead to rescue foreign investors.

So Asian governments and financial players are skeptical about Washington's talk of re-regulating the financial sector, and, although their central banks and sovereign wealth funds are flush with cash, they're wary about being drawn into the Wall Street maelstrom. Among East Asian official funds, only Singapore's Temasek and the China Investment Corporation have stepped up to the plate. Temasek pumped over $4 billion into Merrill Lynch a few months ago, but only after driving a hard bargain. CIC invested $5 billion in Morgan Stanley last December but refused the troubled investment bank's recent desperate plea to increase its share of the firm. Initially seen as a potential savior, the Korean Development Bank turned down the overtures of Lehman Brothers a week before the latter's historic collapse into bankruptcy.

Trillions of dollars of Asian public and private money are invested in US firms and property, with the five biggest Asian holders accounting for over half of all foreign investment in US government debt instruments. Funds from Asia have become a key prop of US government spending and the middle-class consumption that have become the driver of the American economy. With so much of Asia's wealth relying on the stability of the US economy, there is not likely to be any precipitate move to abandon Wall Street securities and US Treasury bills.

At home, however, there are growing worries, and consumer advocates, NGOs and academics are demanding more transparency about how much the local banking system is exposed to Wall Street's toxic assets. In the Philippines, there are calls from civil society groups for the banning of derivatives trading, the return of capital controls and the renegotiation of the country' massive foreign debt now that the international banks are in a weak position.

There is, moreover, resignation throughout Asia about the inevitability of a deep US recession and its likely massive impact on the East: the United States is China's top export destination, while China imports raw materials and intermediate goods from Japan, Korea and Southeast Asia to shape into the products it sends to the United States. Despite some talk a few months ago about the possibility that the economic fate of Asia could be "decoupled" from that of the United States, most observers now see these economies as members of a chain gang shackled to one another, at least in the short and medium term.

Greater regional integration is now seen widely as a healthy antidote to a global integration that has run out of control. Some elements of regional economic cooperation are now in place, notably the so-called "ASEAN Plus Three" formation, which unites the Association of Southeast Asian Nations with China, Korea and Japan in a mechanism to facilitate bilateral exchanges of funds in the event of a financial crisis. Eventually this arrangement could become a full-blown regional monetary fund.

On the other hand, NGOs and social movements, while in theory supportive of integration, distrust a process monopolized by governing elites they view as unaccountable. Active participation of civil society, they insist, must be central to the crafting of such regional formations.

3cr

September 26th, 2008, 01:49 AM

Can China, India save the world?
Business World
http://www.bworldonline.com/BW092608/content.php?id=003

IT’S THE KIND OF SALE that becomes a portent of things to come.

In 2004, Chinese computer maker Lenovo announced it was buying the entire PC business of American icon IBM for $1.75 billion, creating the world’s third-largest PC maker. To many in Wall Street, the deal was China’s pink slip to the US that it was taking over as the world’s economic powerhouse.

Since the Lenovo sale, the US government has become increasingly skittish about selling American interest in vital industries such as information technology and manufacturing. Last year, a Chinese firm attempted to buy disk drive maker Seagate Technology. That overture did not prosper but it was enough to further fuel speculations on China’s global ambitions.

Fear of China’s world domination was still thick in the air when an Indian firm announced in early 2006 that it was taking over a home textile maker based in Virginia. What drew interest was not the price tag but the swiftness with which GHCL took over the operations of cash-strapped Dan River. GHCL shut the American firm’s factories and started sourcing its raw materials from India.

The same year, the Tata Group, a major Mumbai-based conglomerate, bought Eight O’Clock Coffee, a venerable US brand. Tata Tea also acquired majority stake in Glaceau, a maker of vitamin water.

With economies that continue to chug along at breakneck speed and flush with foreign exchange reserves that exceed $1.5 trillion combined, China and India are now more in a position to acquire American firms. And as the US falls on harder times, the rest of the developing world is now looking to China and India to save them from a potential global economic meltdown.

"It’s not enough to acknowledge China and India are becoming competitors [of the US] when the future belongs to Asia’s two nascent superpowers, at least in the longer term," wrote columnist William Pesek Jr., who is one of the speakers at the 7th Management Association of the Philippines’ (MAP) International CEO Conference this October 7 and 8 at the Makati Shangri-La Hotel.

The recently released World Investment Report 2008 by the United Nations Conference on Trade and Development (UNCTAD) underscored the role of the two regional economies in sustaining world growth. The report said prospects for foreign direct investments remain promising despite concerns about the impact of the US financial crisis.

While it came as no surprise that China and India remained the top two investment destinations, what is drawing huge interest in the report is the staggering speed by which Asian firms are investing offshore.

In 2007, $150 billion came from Asian investors, of which $89 billion went into cross-border acquisitions. The investment outflow was the highest level ever recorded by the UNCTAD and accounted for the bulk of outward investment from developing countries (59%).

"More Asian firms are engaging in international production for various reasons, including to build or acquire brand names and technology, and to harvest natural resources," the report said. "The region is also home to a growing number of large sovereign wealth funds, reflecting the rapidly rising foreign exchange reserves and proactive government policies of some countries."

Combined outflows from Hong Kong and China reached $75 billion in 2007, while investment from South Asia reached US$ 14.2 billion, mostly from India ($13.6 billion).

"Outward FDI is likely to grow even more as Asian firms are increasingly aspiring to become significant regional and global players in their respective industries — particularly in telecommunications, finance, and manufacturing," the UNCTAD said.

Driving the increased investments by Chinese and Indian companies, targeted mainly at industries like steel, mining, energy property and construction, are their higher corporate reserves and high profitability. The Chinese and Indian governments are also reaping praises for adopting policies that relaxed ownership restrictions on foreign investors, encouraged private-sector investment in infrastructure, and introduced a variety of measures to attract FDI.

At their current feverish pace, China and India are now being seen as the twin anchors of global growth. Even US investment house Goldman Sachs is forecasting that China’s economy — which is now only a quarter of the $14-trillion US economy — will exceed America’s in the 2020s if it is able to sustain its plausible growth.

The emerging roles of China and India in the new economic order will be one of the hottest topics at the 7th MAP International CEO Conference. Several noted speakers will tackle the issue, including: Kevin Hogan, vice-president of the American International Group (AIG), who also serves as AIG’s senior regional life division executive in China and Taiwan; Asian economic relations expert Dr. Dennis Tai Lun Sun, president of the Asian Association of Management Organization and chairman of the China-Hongkong Photo Product Holdings Ltd.; and Harinder Kohli, chief executive of the Emerging Markets Forum and president and chief executive of the Centennial Group.

3cr

September 26th, 2008, 01:56 AM

Peso seen back to 45:$1 next year
By Des Ferriols
PhilStar
Friday, September 26, 2008
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27

The Philippines would benefit the most from the decline in commodity prices, with the peso expected to bounce back to the 45 to $1 level by mid 2009 as the balance of payments recovers despite the global economic slowdown.

Swiss banking giant UBS said yesterday that the recent commodity boom had been more about price changes than production, with rising commodity prices transferring income away from households towards commodity producers.

If commodity prices start declining, UBS said the impact on countries in Southeast Asia would be varied in the context of a global slowdown.

The Philippines, according to UBS analyst Edward Teather, would be the key beneficiary if commodity prices declined sharply.

“The abatement of the uptrend in commodity prices, or even just a modest decline, should be positive for the peso,” Teather said.

Teather said the exchange rate would go in favor of the peso to 45 by mid-2009 and further up to 44 to the dollar and possibly even as high as 42 to the dollar by end 2009.

“We found that consumption growth clearly suffered in Thailand and the Philippines in the first half of 2008,” Teather said. “If inflation comes off, consumer-related equities could see a benefit from improved household purchasing power those economies.”

Moreover, Teather said farmers in the Philipines that have large agricultural workforces might benefit from a profitable second harvest since the initial harvest this year might have been sold to millers/middlemen before the spike in rice prices.

According to Teather, the Philippines would gain from a stabilization or decline in commodity prices relative to Indonesia and Malaysia. “However, the relative gain may be outweighed by the negative connotations of the global slowdown,” he said.

Despite record-high remittances from overseas Filipinos, economists said an increasingly anaemic consumer spending, among other factors, would trim growth down to 4.6 percent this year and 4.4 percent in 2008.

Although the country’s second quarter economic slowdown is not surprising, economists said the details of the national income accounts indicated potentially lasting economic slowdown.

Economic growth was recorded at 4.6 percent in the second quarter of the year and the National Economic and Development Authority (NEDA) also revised its first quarter report, showing that the economy expanded only by 4.7 percent and not 5.2 percent.

Economists earlier said this suggested that the overall economic trajectory remained weaker than initially thought, with exports unlikely to sustain this growth pace especially since imports in the second quarter actually contracted by one percent as a result of slowing global demand growth.

-TC-

September 26th, 2008, 03:17 PM

http://business.inquirer.net/money/topstories/view/20080926-162973/UBS-sees-peso-at-441-in-09

UBS sees peso at 44:$1 in ’09
By Doris Dumlao
Philippine Daily Inquirer
09/26/2008

MANILA, Philippines—Investment bank UBS expects the peso to firm up at 44 to the dollar by the end of 2009 on the back of softening of global commodity prices and continued interest rate increases by the central bank.

“With the Philippines seen as one of the key beneficiaries of lower commodity prices, the peso ought to get a lift if commodity prices would stabilize or fall,” UBS said in a research note released Thursday. “At the same time, because of remittances from [Filipino] overseas workers, the current account surplus remains positive, unlike that of Thailand and Indonesia.”

“We also expect the central bank to continue edging policy rates higher, which should increase the attractiveness of the yields available in the local currency,” the bank said.

And because the export sector is smaller than in Thailand and the external debt stock is bigger, UBS believes Philippine monetary authorities will have greater interest in a stronger currency.

The peso closed Thursday at 46.45 to the dollar, compared with 46.44 on Wednesday.

Over the long term, UBS believes the US government’s $700-billion bailout program for distressed financial institutions would be good for the dollar as it would enable banks to clean up their balance sheets and end the fire-sale of assets.

UBS said it was worth bearing in mind that a key part of the US government’s efforts was to allow banks to resume lending and lessen the effect of the credit crunch.

“Whether US borrowers are in a position to borrow is another matter, but the yield on credit securities and associated risk premia should fall,” it said. “This should increase the attractiveness of ASEAN equity markets and certain bond markets.”

“With the US returning to a likely protracted slowdown scenario with low yields, the relatively high-yielding currencies in the ASEAN could benefit—something we have factored into our forecasts,” it noted.

UBS said more monetary tightening was likely in the Philippines and Indonesia. “Here, non-commodity price inflation pressures are more onerous, and in the case of the Philippines a higher interest rate will help stabilize the currency,” it said.

“A high foreign-currency debt stock means the Philippine government will want to avoid excessive currency weakness if possible,” the report said. “In Indonesia, still high inflation in the context of a current account deficit will both encourage the authorities to keep raising the interest rate.”

barukdok

September 27th, 2008, 09:43 AM

-TC-

September 28th, 2008, 07:33 AM

the pse has gone up for 3 days straight. it's been a tough the past few weeks. but once the $700-billion bailout plan gets approved, i expect the pse to go up at least 200 pts. in a week's time. after that, nobody knows.

The PSE Index hasn't yet taken off to the moon in the last few days but here is some fuel to add to its boosters:

BREAKING NEWS:

http://biz.yahoo.com/ap/080928/financial_meltdown.html

Deal reached on financial markets bailout
Sunday September 28, 1:23 am ET
By Charles Babington and Alan Fram, Associated Press Writers

Congress leaders, Bush administration reach tentative deal on financial bailout deal

WASHINGTON (AP) -- Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession.

House Speaker Nancy Pelosi announced the $700 billion accord just after midnight Saturday but said it still has to be put on paper."We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol.

"We worked out everything," said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks. He said the House should be able to vote on it Sunday, and the Senate could take it up Monday.

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place limits on severance packages for executives of companies that benefit from the rescue plan, but details were sketchy.

Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.

To help struggling homeowners, the plan requires the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

The measure's main elements were proposed a week ago by the Bush administration, with Paulson heading efforts to push it through the Democratic-controlled Congress. Democrats insisted on greater congressional oversight, more taxpayer protections, help for homeowners facing possible foreclosure, and restrictions on executives' compensation.

To some degree, all those items were added.

At the insistence of House Republicans, who threatened to sidetrack negotiations at midweek, the insurance provision was added as an alternative to having the government buy distressed securities. House Republicans say it will require less taxpayer spending for the bailout.

But the Treasury Department has said the insurance provision would not pump enough money into the financial sector to make credit sufficiently available. The department would decide how to structure the insurance provisions, said Sen. Kent Conrad, D-N.D., one of the negotiators.

Money for the rescue plan would be phased in, he said. The first $350 billion would be available as soon as the president requested it. Congress could try to block later amounts if it believed the program was not working. The president could veto such a move, however, requiring extra large margins in the House and Senate to override.

Despite the changes made during an intense week of negotiations, the heart of the program remains Bush's original idea: To have the government spend billions of dollars to buy mortgage-backed securities whose value has plummeted as hundreds of thousands of Americans have defaulted on their home loans.

Senate Majority leader Harry Reid, D-Nev., said Saturday that the goal was to come up with a final agreement before the Asian markets open Sunday night. "Everybody is waiting for this thing to tip a little bit too far," he said, so "we may not have another day."

Hours later, when he and others told reporters of the plan in a post-midnight news conference, Reid referred to the sometimes testy nature of the negotiations.

"We've had a lot of pleasant words," he said, "and some that haven't always been pleasant."

"We're very pleased with the progress made tonight," said White House spokesman Tony Fratto. "We appreciate the bipartisan effort to deal with this urgent issue."

psyche

September 29th, 2008, 09:01 AM

nice to know peso it gradually beating on,

by the time i made my degree, hopefully working abroad is an ease

-TC-

September 30th, 2008, 12:39 AM

Bad news from the US markets... :ohno:

http://biz.yahoo.com/ap/080929/wall_street.html

Stocks tumble as bailout plan fails in House
Monday September 29, 5:52 pm ET
By Tim Paradis, AP Business Writer

Stocks plunge as financial bailout plan fails in House vote; Dow fall 777, biggest drop ever

NEW YORK (AP) -- Wall Street's worst fears came to pass Monday, when the government's financial rescue plan failed in Congress and stocks plunged precipitously -- hurtling the Dow Jones industrials down nearly 7 percent. The almost 780-point decline was the largest one-day point drop ever for the index.

The percentage declines for the Standard & Poor's 500 and Nasdaq composite indexes were even larger. And credit markets, whose turmoil helped feed the stock market's angst, froze up further amid the growing belief that the country is headed into a spreading credit and economic crisis.Stunned traders on the floor of the New York Stock Exchange, their faces tense and mouths agape, watched on TV screens as the House voted down in midafternoon the administration's $700 billion plan to buy up distressed mortgage securities. Activity on the floor became frenetic as the "sell" orders blew in.

The Dow told the story of the market's despair. The blue chip index, dropped by hundreds of points in a matter of moments, and by the end of the day had passed by far its previous record for a one-day drop, 684.81, set in the first trading day after the Sept. 11, 2001, terror attacks.

The selling was so intense that just 162 stocks rose on the NYSE -- and 3,073 dropped.

It takes an incredible amount of fear to set off such an intense reaction on Wall Street, and the worry now is that with the rescue plan's fate uncertain, no one knows how the financial sector hobbled by hundreds of billions of dollars in bad mortgage bets will recover.

While investors didn't believe that the plan was a panacea, and understood that it would take months for its effects to be felt, most market watchers believed it was a start toward setting the economy right after a credit crisis that began more than a year ago and that has spread overseas.

"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid."

The plan's defeat came amid more reminders of how troubled the nation's financial system is -- before trading began came word that Wachovia Corp., one of the biggest banks to struggle due to rising mortgage losses, was being rescued in a buyout by Citigroup Inc. It followed the recent forced sale of Merrill Lynch & Co. and the failure of three other huge banking companies -- Bear Stearns Cos., Washington Mutual Inc. and Lehman Brothers Holdings Inc.; all of them were felled by bad mortgage investments.

And it raised the question: Which banks are next, and how many? The Federal Deposit Insurance Corp. has a list of over 110 banks that were in trouble in the second quarter, and that number surely has grown in the third.

Traders on the floor were stunned by the House vote.

"How could this have happened? Is there such a disconnect on Capitol Hill? This becomes a problem because Wall Street is very uncomfortable with uncertainty," said Gordon Charlop, managing director with Rosenblatt Securities. "The bailout not going through sends a signal that Congress isn't willing to do their part."

Wall Street is contending with all these issues against the backdrop of a credit market -- where bonds and loans are bought and sold -- that is barely functioning because of fears that anyone lending money will never be paid back.

The evidence of the credit markets' ills could again be found Monday in the Treasury's 3-month bill; investors were stashing money there, willing to take the tiniest of returns simply to be sure that their principal would survive in what's considered the safest investment. The yield on the 3-month bill was 0.15, down from 0.87, and approaching zero, a level reached last week when fear was also running high.

Analysts said the government needs to find a way to help restore confidence in the markets.

"It's probably fair to say that we are not going to see any significant stability in the credit markets or the stock market until we see some sort of rescue package passed," said Fred Dickson, director of retail research for D.A. Davidson & Co.

Treasury Secretary Henry Paulson indicated that the government would try again.

"We need to put something back together that works," Paulson said. "We need it as soon as possible."
On Wall Street, the Dow fell 777.68, or 6.98 percent, to 10,365.45. The decline also surpasses the 721.56-point intraday decline record also set during the first trading day after the terror attacks.

Still, it was the 17th biggest percentage decline for the Dow and remained well below the more than 20 percent drops seen on Black Monday of October 1987 and the Depression.

Broader stock indicators also tumbled. The Standard & Poor's 500 index declined 106.85, or 8.81 percent, to 1,106.42. It was the S&P's largest-ever point drop and its biggest percentage loss since the Oct. 19, 1987, crash.

The Nasdaq composite index fell 199.61, or 9.14 percent, to 1,983.73, the third worst percentage decline for the index.

The Russell 2000 index of smaller companies fell 47.07, or 6.68 percent, to 657.72.

A huge drop in oil prices was another sign of the economic chaos that investors fear. Light, sweet crude fell $10.52 to settle at $96.36 on the New York Mercantile Exchange as investors feared that energy demand would continue to slide amid further economic weakness.

And gold, where investors flock when they need a relatively secure investment, rose $23.20 to $911.70 on the Nymex.

Marc Pado, U.S. market strategist at Cantor Fitzgerald, said investors are worried about the spread of troubles beyond banks in the U.S. to Europe and other markets.

"Things are dying and breaking apart," he said.

The federal Office of Thrift Supervision, one of the government's banking regulators, indicated that the market was overreacting to the House vote and that its fears about the financial system are misplaced.

"There is an irrational financial panic taking place today, and we support and applaud the continuing efforts of Secretary Paulson and congressional leadership to restore liquidity and public confidence," John Reich, Director of the federal Office of Thrift Supervision, said in a statement. "We will continue to work diligently with our institutions to ensure they operate safely and soundly, and to restore stability to the marketplace."

Spokesmen for the Treasury Department's Office of the Comptroller of the Currency and the Securities and Exchange Commission had no immediate comment after the House voted against the bailout package.

Lawmakers voted down a plan that was different than what the Bush administration had originally proposed. There were restrictions allowing Congress to limit how much of the money goes out the door at once. It also included caps on pay packages of top executives as well as assurances that the government also would ultimately be reimbursed by the companies for any losses. The Treasury would have been permitted to spend $250 billion to buy banks' risky assets, giving them a much-needed necessary cash infusion. There also would be another $100 billion for use at president's discretion and a final $350 billion if Congress signs off on it.

But Wall Street found further reason for worry overseas, as the fallout from U.S. economic problems kep spreading. Three European governments agreed to inject Fortis NV with a $16.4 billion bailout. Fortis, with has headquarters in Brussels, Belgium and Utrecht, Netherlands, is Belgium's largest retail bank.

The British government, meanwhile, said it is nationalizing mortgage lender Bradford & Bingley, which has a $91 billion mortgage and loan portfolio. It was the latest sign that the credit crisis has spread beyond the U.S.

The economic news in the U.S. only made matters worse. The Commerce Department said consumer spending fell in August to its lowest level in six months, while analysts expected it to edge up slightly.

With consumers already uneasy and the uncertainty from the financial markets likely to spill over to the rest of the country, the outlook for spending remains bleak -- and consumers are the biggest driver of economic growth.

Business Writers Joe Bel Bruno in New York and Christopher S. Rugaber in Washington contributed to this report.

-TC-

September 30th, 2008, 12:49 AM

http://biz.yahoo.com/ap/080929/financial_meltdown.html

House nixes $700B bailout bill in stunning defeat
Monday September 29, 6:09 pm ET
By Julie Hirschfeld Davis, Associated Press Writer

House rejects $700B emergency bailout bill in stunning defeat, leaving both parties scrambling

WASHINGTON (AP) -- In a vote that shook the government, Wall Street and markets around the world, the House on Monday defeated a $700 billion emergency rescue for the nation's financial system, leaving both parties and the Bush administration struggling to pick up the pieces. The Dow Jones industrials plunged nearly 800 points, the most ever for a single day.

...

In the House, "no" votes came from both the Democratic and Republican sides of the aisle. More than two-thirds of Republicans and 40 percent of Democrats opposed the bill. Several Democrats in close election fights waited until the last moment, then went against the bill as it became clear the vast majority of Republicans were opposing it. Most vulnerable Republicans refused to back the bill.

In all, 65 Republicans joined 140 Democrats in voting "yes," while 133 Republicans and 95 Democrats voted "no."

barukdok

September 30th, 2008, 02:50 AM

holy crap.

diz

September 30th, 2008, 05:28 AM

patay.
PSE is about 2% down... or about 60 pts.

RonnieR

September 30th, 2008, 05:48 AM

Shares down 2.9% in mid-trade

Agence France-Presse
First Posted 10:22:00 09/30/2008

MANILA, Philippines -- Share prices were 2.9 percent lower in mid-morning trade Tuesday following the US market's plunge overnight, dealers said.

The composite index dropped 77.13 points to 2,530.45 a little more than an hour after trade ope

Doomed:

ATLANTA (CNN) -- Asian and Pacific stock markets tumbled in early trading Tuesday after the U.S. House of Representatives failed to adopt a $700 billion bailout measure, triggering a huge drop in U.S. stocks.

Japan's Nikkei Index was down nearly 550 points - or 4.6% - at 11,199.02, two hours into the trading session. The Australian Securities Exchange was down nearly 150 points - or 3.8% - to 4,560.9.

The Hang Seng index in Hong Kong opened more than 5% lower. (See world markets)

In the United States on Monday, the Dow Jones industrial average closed down almost 778 points - just under 7%. Other leading indexes were down more: The S&P 500 and the Nasdaq both dropped roughly 9%.

The day's loss in the United States knocked out approximately $1.2 trillion in market value, the first $1 trillion-plus day ever, based on the change in the Dow Jones Wilshire 5000, the broadest measure of the U.S. stock market.

The next steps for the U.S. bailout bill were unclear. The abrupt defeat on Monday left the Bush administration and congressional leaders scrambling to figure out whether to renegotiate the bill and introduce it again as soon as Thursday or to try other options.

First Published: September 29, 2008: 8:52 PM ET

America's Money Crisis: Full coverage

Stocks crushed: The Dow slumped nearly 778 points Monday, in the biggest single-day point loss ever, after the House rejected the government's $700 billion bank bailout plan.

Bailout plan rejected: The fate of the government's $700 billion financial bailout plan was thrown into doubt Monday as the House rejected the controversial measure.

Weina

September 30th, 2008, 06:46 AM

out of touch talaga tong PSE. imagine just a low of less than 2%? not bloody enough...so seems like everyone factored out already what's going to happen in the US...or we're just having a window dressing here?

comapred to other markets in asia, pse is doing fine, we even bottomed to 7% limit here in taiex...we're bloody green here today, tsktsktsk...

johnnyS

September 30th, 2008, 08:15 AM

Actually, Philippines is holding up remarkably well compared to other Asian markets.

China down 50%...
Korean won down 30%...

Are we really ok, or is there interference from the Gov't?

Bosnyboy

September 30th, 2008, 10:23 AM

Its maybe becoz of stricter banking regulation set up by our monetary officials. Besides our investment instruments are quite crude compare to our more advance neighors as such we are shielded from the current world turmoil. I think the Phils will come out of this crisis in better shape than say korea or japan. We have a very effective weapon which they dont have, OFW.

c0kelitr0

September 30th, 2008, 11:33 AM

scared :ohno:

greed and karma are quite the bitches. :bash:

i just hope that the Philippines will prove as resilient as it always has been and come out of this looming world financial mess less scathed.

-TC-

September 30th, 2008, 05:52 PM

http://business.inquirer.net/money/topstories/view/20080930-163752/Shares-close-14-lower

Shares close 1.4% lower
Agence France-Presse
First Posted 12:31:00 09/30/2008

MANILA, Philippines – (UPDATE) Share prices closed 1.4 percent lower on Tuesday, but off the day's low, following the collapse of a Wall Street bailout package, dealers said.

The composite index fell 37.93 points to 2,569.65 after plunging 6.0 percent in early trade.

The exchange approved a "circuit breaker" rule calling for a 15-minute halt in trading if the main index fell by 10 percent based on the previous day's close, but the market did not breach this point Tuesday.

The all-shares index fell 1.58 percent to 1,622.25 points, with 24 gainers, 95 losers and 30 unchanged.

Turnover reached 3.6 billion shares worth P3.033 billion ($64 million).

The local currency also came under pressure, trading lower at P47.36 to the dollar in the morning.

"We're still in a nightmare but in today's trading, we somehow managed to bounce," Astro del Castillo of First Grade Holdings told AFP.

"Investors are still hopeful that a package will be passed," del Castillo said.

"A lot of listed companies are really at bargain prices and that is attracting investors. Investors are too liquid so they have to put money somewhere and the best candidates are still in the stock market," he added.

"Long-term investors are responsible for the bounce in the market." But he warned "we are still bracing for more bad news."

Philippine Long Distance Telephone was unchanged at P2,685.

Ayala Land was down 2.0 percent to P9.20 while Megaworld was down 4.1 percent to P1.40.

San Miguel saw its A-shares fall 4.0 percent to P58.50 while its B-shares were down 6.5 percent to P58.

mAiNsTrEaMhunter

October 1st, 2008, 11:29 AM

yeah and with all these happening...you can tell that whenever the US sneezes, everybody catches a cold!!!! :ohno::ohno::ohno:

barukdok

October 2nd, 2008, 04:13 AM

the US Senate has just passed the bailout plan (the ball is in the Lower House's court). the Phisix is up almost 2% :)

but here's the real good news...

Just this hour: Singapore-based Channel News Asia report says the PHILIPPINES is the HOTTEST REAL ESTATE MARKET in SOUTHEAST ASIA!

:banana::cheers::banana::cheers:

absinthe_888

October 2nd, 2008, 06:03 PM

http://bworld.com.ph/BW100308/Frontpage_photo.jpg

A trader reacts at the Phililppine Stock Exchange as share prices closed 1.68% higher. The composite index rose 43.24 points to 2,612.89 yesterday with the market catching up with Wall Street’s previous gains, dealers said. — AFP

http://bworld.com.ph/

cyrusal

October 3rd, 2008, 03:17 AM

^^ ibaba mo kamay mo ngayon!

diz

October 3rd, 2008, 09:24 AM

http://bworld.com.ph/BW100308/Frontpage_photo.jpg
"Who da man?!"

-TC-

October 4th, 2008, 04:37 AM

http://biz.yahoo.com/ap/081003/financial_meltdown.html

Historic bailout bill passes Congress; Bush signs
Friday October 3, 6:02 pm ET
By Julie Hirschfeld Davis, Associated Press Writer

Congress enacts historic bailout legislation for financial industry; Bush quickly signs it

WASHINGTON (AP) -- With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.

The 263-171 vote capped two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act."We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the plan cleared Congress, although he conceded, "our economy continues to face serious challenges."

His somber warning was underscored on Wall Street, where enthusiasm over the rescue gave way to worries about obstacles still facing the economy, and the Dow Jones industrials dropped 157 points.

The Labor Department said earlier in the day that employers had slashed 159,000 jobs in September, the largest cut in five years.

The historic vote was a striking turnaround from the measure's spectacular failure earlier in the week, which had triggered a massive stock sell-off and prompted jittery lawmakers -- fearing a crushing economic contagion that was spreading to their constituents -- to reconsider.

"Let's not kid ourselves: We're in the midst of a recession. It's going to be a rough ride, but it will be a whole lot rougher ride" without the rescue plan, said Rep. John A. Boehner, R-Ohio, the minority leader, as he prepared to cast his vote for the most sweeping federal intervention in markets in decades.

Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.

The bailout, which gives the government broad authority to buy up toxic mortgage-related investments and other distressed assets from tottering financial institutions, is designed to ease a credit crunch that began on Wall Street but is engulfing businesses around the nation.

"In these past two weeks, we've seen things we never thought we would see before in terms of the economic insecurity of our own country," said House Speaker Nancy Pelosi, D-Calif. She said the measure would "begin to shape the financial stability of our country and the economic security of our people."

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, said the rescue bill was just the beginning of a much larger task Congress will tackle next year: overhauling housing policy and financial regulation in a legislative effort he compared to the New Deal.

"We were the EMTs rushing to the rescue of an economy that suddenly found itself choking, but now we have to perform more serious reform," Frank said.

Just four days earlier, the previous version of the bill was sent down to defeat, largely at the hands of angry conservative Republicans. On Friday, a total of 33 Democrats and 25 Republicans switched from opposition to support. In all, 91 Republicans joined 172 Democrats to support the measure while 108 Republicans and 63 Democrats voted "no."

The reversal reflected a high-stakes political environment just four weeks before Election Day. Some lawmakers were worried about their own jobs, but others -- mostly Democrats -- focused on the prospect that a new president could have a far more significant effect on the economy than any one piece of legislation.

Several of the Democratic switchers were members of the Congressional Black Caucus who said they changed course after securing commitments from presidential candidate Barack Obama that he would back legislation to help struggling consumers and homeowners facing foreclosures if he wins the White House.

"It's not too often you get the future president telling you that his priority matches your priority," said Rep. Elijah Cummings, D-Md., one of 13 black lawmakers who switched from "no" to "yes."
Republican presidential candidate John McCain also lobbied for the measure, according to aides who declined to say whom he called.

Rep. Roy Blunt, R-Mo., the party vote-counter, said McCain phoned Rep. John Shadegg, a fellow Arizonan who switched to "yes."

The legislation's roller-coaster ride through Congress began at a somber meeting in Pelosi's office in mid-September, where Paulson and Federal Reserve Chairman Ben Bernanke frightened senior Democrats and Republicans with their warnings of an impending economic collapse without quick legislative action.

As lawmakers scrambled to draft a bill, they were barraged by angry calls from constituents to reject what many saw as a huge giveaway to the very financial institutions that helped cause the subprime mortgage meltdown at the root of the economic crisis -- with nothing to help its ordinary victims.

"Pray for our republic," intoned Rep. Marcy Kaptur, D-Ohio, a leading opponent of the measure. "She's being placed in very uncaring and greedy hands."

Supporters said the prospect of economic disaster superseded their political fears.

"I may lose this race over this vote, but that's OK with me," said Republican Rep. Sue Myrick of North Carolina, who switched her vote to favor the measure. "This is the right vote for the country."

After the breathtaking House defeat on Monday, Senate leaders took custody of the rescue, adding on $110 billion in tax breaks designed to attract additional support. They attached the overall measure to a popular bill mandating broader mental health coverage in the insurance industry.

The rescue measure was changed to lift, from $100,000 to $250,000, the cap on government bank deposit insurance -- a key priority for Republicans. Also key to winning GOP support was a decision by the Securities and Exchange Commission to ease accounting rules that require financial institutions to show the deflated value of assets on their balance sheets.

The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the presidential candidates and outside groups joined forces behind the measure.

The maneuvers worked -- augmented by a shift in public opinion that occurred after the stock market took its largest-ever one-day dive on Monday.

The plan -- initially a three-page request from the Bush administration for unlimited power to use $700 billion any way it saw fit to stabilize markets -- swelled to more than 450 pages as negotiators added restrictions for the administration and sweeteners for anxious members of Congress.

Lawmakers added greater supervision over the $700 billion -- including a process where Congress could vote to block half the money -- measures to protect taxpayers, and steps to crack down on "golden parachutes" for corporate executives whose companies benefit from the bailout.

cyrusal

October 4th, 2008, 06:37 AM

^^ bagsak pa rin Dow :(

barukdok

October 4th, 2008, 04:03 PM

sounds more like speculative profit-taking for an expected rise.

brownman

October 5th, 2008, 04:58 AM

Investors are still skeptical about the bailout coz most think it's not enough.

johnnyS

October 5th, 2008, 12:37 PM

queetz@home

October 5th, 2008, 05:16 PM

^^ I think the reason why the PSE doesn't react as violently as the other markets in terms of swings is the foreign investors, who pretty much determine the price of the stocks in our country, regardless of fundamentals, pretty much pulled out a while ago. And it may have more to do with them trying to get their money back cuz they need it over there rather than because the fundamentals of Philippine corporations are crappy. I remember record profits in press releases of local companies being broadcasted left and right but it doesn't matter, events in the US overshadows everything we do and if the US gets hurt, the foreign investors to the PSE, whether its AMericans, Europeans or other Asians, get hurt too so they pull out.

So the PSE is pretty much bottomed out, I couldn't see how it could sink any lower unless the local investors pull out as well, many of them would incur massive losses. This includes local major shareholders such as executives or tycoons that own a large stake on our companies (imagine John Aboitiz or Jaime Ayala selling stocks of their own companies en masse). I think the PSE will only see an upswing if the global economy stabilizes as well. This would allow these foreign investors to have the extra funds to invest in emerging markets even more, hence pushing up our stock price. In addition, a healthy global economy would add more investments in the projects of our local companies (more sales of condos for developers, investment in infrastructure for power and utility companies, demand of more products from food and beverages, and so on).

I too wish the Philippine media as well as the local economists would realize this instead of saying that "everything is okay"...

johnnyS

October 5th, 2008, 08:03 PM

I am not really referring to the stockmarket. The stock market is such as small piece of the Philippine economy for a variety of reasons.

If the economic hardtimes hit Philippines (I just can't see how it can pass over Philippines if it hits everyone else...), then our currency will be hit hard, and our real estate market also.

This is why I think/hope the gov't is preparing for this possiblity, rather than just sitting and hoping (and believing it's own words and news articles) that we will be just fine....

**PSE is really, really small. ANd I have this gut feeling that whatever "foreign investment" there is still here, is really the funds overseas controlled by the Philippine tycoons themselves investing in their own companies in Philippines (that is, their foreign assets invested back into Philippines). This explains why they will not sell. Why sell? It's their own stock value that would decrease if they sell stocks of their own companies...

Weina

October 6th, 2008, 09:36 AM

I think the real concern is that this is a domino situation.

U.S. is in trouble, but so is Europe and the rest of the world.

U.S. has this 700billion bailout. Europe countries, like Ireland and France are already getting into recession. This infection is just starting to spread.

This is really a global crisis. We would like to think that it's localized in the U.S. (or we hope), but it really isn't.

China is next. Did any of you hear of the new financial scam that is hitting China right now? 200,000 people are on the hook for $2billion real estate scam.

Massive demonstration starting to happen there.

It really is global, and I am really concerned.

**Another reason I am concerned is that all the news in Philippines seem to indicate that we are OK because we are not exposed to Lehman or subprime, etc. This is a very simplistic view. I hope our gov't is doing things to protect the country, not just sitting and hoping that this financial tsunami will just miraculously pass over Philippines...

that is why i just couldn't fathom why some people are preaching this so called false optimism. There are even cheerleaders posting how good and stable is the philippines right now. I don't know if they're trading their own funds or just playing with their client's fund. For me, the best thing one should do now is to warn everyone to be careful of their investments and not to underestimate this mess. It could drag everyone out of the market.

By the way, do you have source of what you posted about china. I'm following news there and haven't read about that. As to chinas being next to US i hardly believe that. Well China's stock market is battered terribly already but i don't think the same fate will happen exactly to their real estate. Surely it is affected but to a very limited degree and i don't think it would collapse just like how it is in the US. I just read a news today that the Chinese will help the US by buying 200 billion bonds. China has great liquidity so it has the ability to help if it would really want to but i'm just worried and afraid of preconditions though.

johnnyS

October 6th, 2008, 10:44 AM

jvl

October 6th, 2008, 12:16 PM

If the economic hardtimes hit Philippines (I just can't see how it can pass over Philippines if it hits everyone else...), then our currency will be hit hard, and our real estate market also.

that is why i just couldn't fathom why some people are preaching this so called false optimism. There are even cheerleaders posting how good and stable is the philippines right now. I don't know if they're trading their own funds or just playing with their client's fund. For me, the best thing one should do now is to warn everyone to be careful of their investments and not to underestimate this mess. It could drag everyone out of the market.

Right! I can see some people here have a reactive sense (like most politicians do). Or maybe too pretentious enough not to notice the on-coming freight train! :lol:

Any economy that wont be hurt by the US credit crunch is either isolated, too small, or independent enough to withstand the flu. Don't misunderstand this observation as pessimism, this is just a reality check for those who turn a blind eye.

-TC-

October 6th, 2008, 11:42 PM

http://biz.yahoo.com/ap/081006/wall_street.html

Dow recovers to close down 370 after plunging 800
Monday October 6, 5:13 pm ET
By Joe Bel Bruno and Tim Paradis, AP Business Writers

Dow plunges 800 before recovering and closing down 370 amid growing fears over credit crisis

NEW YORK (AP) -- Wall Street suffered through another extraordinary and traumatic session Monday, with the Dow Jones industrials plunging as much as 800 points -- their largest one-day point drop -- before recovering to close with a loss of 370. The catalyst for the selling, which also took the Dow below 10,000 for the first time in four years, was investors' growing despair that the spreading credit crisis will take a heavy toll around the world.

Investors have come to the realization that the Bush administration's $700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze the credit markets.That sent stocks spiraling downward in the U.S., Europe and Asia, and drove investors to sink money into the relative safety of U.S. government debt. Fears about a global recession also caused oil to drop below $90 a barrel.

"The fact is, people are scared and the only thing they're doing is selling," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "Investors are cleaning out portfolios and getting rid of everything because nothing seems to be working."

The selling was so extreme that only 264 stocks rose on the NYSE -- and 2,986 dropped. That's a telling sign considering the stock market is considered a leading economic indicator, with investors tending to buy and sell based on where they believe the economy will be in six to nine months.

Monday's stock trading extended what has been an exceptional stretch of volatility, in which triple-digit drops in the Dow are becoming almost commonplace; in the past week, the blue chips have fallen more than 1,100 points, or nearly 11 percent. This latest decline indicates that investors are becoming more convinced that the country is leading a prolonged economic crisis that is shifting to other nations.

"The market view is shifting from looking just at the misery of the financial sector to the global economy," said Georges Ugeux, chairman and chief executive of New York-based Galileo Global Advisors. "There are enough indication that two things are happening: The crisis is spreading to other sectors, and that it is becoming global."

Ugeux believes Monday's rout had little to do with any short-term problems facing the market, such as paralyzed credit markets or ailing financial companies. He believes that, regardless of the late-day rebound in stocks, "the reaction is clearly giving a downtrend and that there is a lack of confidence of investors into the future growth of the U.S. and the world economy."

The Dow fell as much as 800.06, then recovered in erratic trading to a loss of 369.88, or 3.58 percent, to close at 9,955.50, closing below 10,000 for the first time since Oct. 26, 2004. The Dow surpassed its previous record for a one-day point decline -- 778, which the blue chips suffered a week ago when investors feared the bailout package might not pass Congress.

The Dow is down 30 percent from its peak a year ago this week, when it traded as high 14,198.09.
Broader indexes also tumbled. The Standard & Poor's 500 index shed 42.34, or 3.85 percent, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34 percent, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79 percent, to 595.91.

In Asia, the Nikkei 225 closed 4.25 percent lower. Europe's stock markets also declined, with the FTSE-100 down 5.77 percent, Germany's DAX down 7.07 percent, and France's CAC-40 down 9.04 percent.

The global sell-off came after governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits. As the U.S. tries to repair its battered banking system, the German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG. And France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.

The Fed also took fresh steps Monday to help ease credit markets. The central bank said Monday it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.

Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., said government intervention certainly might help. However, he believes investors are sensing that what's happening in the economy is a shift in the extent to which consumers and businesses take on debt, a change that will take years to play out.

"This is a global deleveraging of many economies," he said. "It might appear that you're going into the abyss where the economy grinds to a halt and the financial system goes into complete disarray. But, what the market is really reading here is that this is a global phenomenon, and when you delever like this, it is a process that takes a very long period of time measured in years, not quarters."

The anxiety was again obvious in the credit markets. The yield on the three-month Treasury bill fell to 0.43 percent from late Friday at 0.50 percent. Demand for bills remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place.

Investors also moved into longer-term Treasury bonds. The yield on the 10-year note fell to 3.47 percent from 3.60 percent late Friday.

Anthony Sabino, a professor of law and business at St. John's University in New York, said the "market is displaying one of its worst traits with a herd mentality, and investors have an appetite for feeding on fear." He cautions that, while there are deep economic and financial problems being faced, it is still not a nightmare scenario.

"Most certainly, this is not the Great Depression of the 1930s, but (is like) the savings and loan crisis of the 1980s -- and we bailed them out," he said. "Once people catch their breath, they'll see this is the proper analogy and this will breathe life back into banking institutions."

But, most analysts believe that there will be no quick fixes to the current financial crisis. Ryan Jacob, portfolio manager for the Jacob Internet Fund, said he's sensing the market might be getting closer to a short-term bottom but that problems for the economy likely will persist.

He said the passage of the bailout package, billionaire investor Warren Buffett's investment last week in General Electric Co. and even a skirmish between Wells Fargo & Co. and Citigroup Inc. over control of Wachovia Corp. are positive signs.

"We've had some positive anecdotal events in the last week so it's making me a little bit more confident," Jacob said. "These are all signs that make it more likely than not that we're trying to find a near-term bottom."

He's been hunting for bargains lately.

"We had had been a little bit cautious up until really about a month ago," he said. "Over the last few weeks we've been increasing our position levels."

Frederick Dickson, chief market strategist at D.A. Davidson & Co., believes investors are eager for any signs about the well-being of the economy. He doesn't believe that will happen until Wall Street overhauls its expectations for growth of corporate earnings and the overall economy.

"Wall Street at this point is shifting its attention from whether Congress was going to act on the emergency stabilization bill to the realization that the economy is slowing significantly faster than most analysts had expected," he said. "The downturn has shifted from first gear to about third gear in about two weeks."

barukdok

October 7th, 2008, 03:19 AM

in every crisis there's opportunity. has anyone found theirs?

3cr

October 7th, 2008, 03:58 AM

America, then Europe, could Asia be Next? :ohno: :ohno: :ohno:

Europe scrambles to rescue banks
Business Mirror
http://www.businessmirror.com.ph/10072008/headlines05.html

PARIS—The global credit crunch deepened in Europe as government leaders pledged to bail out troubled banks and protect depositors.

BNP Paribas SA will take control of Fortis’s units in Belgium and Luxembourg after government efforts to ensure the company’s stability failed, while Germany’s government and financial institutions agreed on a €50-billion ($68-billion) rescue package for Hypo Real Estate Holding AG. UK Chancellor of the Exchequer Alistair Darling said Britain is “ready to do whatever it takes” to help its banks.

The developments Sunday came a day after a summit in Paris where leaders of Europe’s four biggest economies stopped short of a plan mirroring the $700-billion rescue in the US. Instead, they agreed to work together to limit the economic fallout, ease accounting rules, and seek tougher financial regulations.

“Until now the solutions have appeared to be uncoordinated, so perhaps it’s time for a more coordinated approach globally,” said Torsten Slok, an economist at Deutsche Bank AG in New York. “It’s not just the US and Europe, it’s banks in every part of the world.”

French President Nicolas Sarkozy, who convened the Saturday meeting, called for a global summit “as soon as possible” to implement “a real and complete reform of the international financial system.” He said “all actors” must be supervised, including credit-rating firms and hedge funds. Executive-pay systems must also be reviewed, he said.

“We want a new world to come out of this,” he said. “We want to set up the basis for a capitalism of entrepreneurs, not speculators.”

Finance ministers from the Group of Seven nations meet in Washington later this week.

German Chancellor Angela Merkel’s opposition to collective action underscored the hurdles to a European front. “Each country must take its responsibilities at a national level,” she told a joint press conference after the summit.

Germany will guarantee the savings of private account holders, Merkel said, in a bid to prevent a rush of withdrawals. Until now, German savings accounts, including those of small, privately held companies, have been guaranteed by 180 banks in Germany, the BDB private banks group said. The guarantees of the banks covered 90 percent of an account’s balance to a maximum of €20,000, the group said.

The German government’s commitment follow similar verbal pledges by Sarkozy and Italian Prime Minister Silvio Berlusconi, both of whom have promised to prevent losses for depositors in their countries. Ireland is guaranteeing banks’ deposits and debts for two years, to restore confidence in the country’s financial industry.

Amid the race to shore up Europe’s faltering financial institutions, Belgian Prime Minister Yves Leterme said late Sunday BNP Paribas will buy 75 percent of Fortis Bank Belgium for €8.25 billion in stock and purchase the company’s Belgian insurance operations. France’s biggest lender will also acquire 66 percent of Fortis’s bank in Luxembourg.

The sale of Fortis’s units comes after a September 28 bailout failed to stabilize what was Belgium’s biggest financial-services provider, as clients withdrew money and the company had trouble obtaining loans. Fortis received an €11.2-billion capital injection from Belgium, the Netherlands and Luxembourg.

The Belgian government will have an 11.7-percent stake in BNP Paribas, and Luxembourg a 1.1-percent holding, after the purchases are completed, BNP Paribas chief executive Baudouin Prot estimated.

Last Friday, the Dutch government took control of Fortis’s units in the Netherlands for €16.8 billion after deciding the initial rescue didn’t go far enough.

Meanwhile, Hypo Real Estate won a reprieve after Germany’s finance ministry said the country’s banks and insurers agreed to double a credit line for the company to €30 billion. The federal government’s guarantee for the credit line remains unchanged, Torsten Albig, a spokesman for Finance Minister Peer Steinbrueck, said in an e-mailed statement late Sunday.

Munich-based Hypo Real Estate had earlier announced that a government-backed €35-billion bailout plan collapsed after commercial banks withdrew their support. The government and the Bundesbank have said that the nation’s second-biggest property lender is too big to fail.

The Hypo reprieve comes after Dexia SA, the world’s biggest lender to local governments, got a €6.4-billion state-backed rescue on September 30. Belgium’s federal and regional governments, France and the company’s largest shareholders will supply the funds for Brussels- and Paris-based Dexia.

Meanwhile, UniCredit SpA, Italy’s biggest bank by assets, said it planned to boost capital by as much as €6.6 billion in an effort to calm investors’ concerns about the strength of the lender’s finances. The capital-raising project approved late Sunday by the bank’s directors includes replacing the lender’s cash dividend for 2008 earnings with €3.6 billion of new shares, and selling €3 billion of convertible securities.

_____________________

Beggar thy neighbour
Oct 6th 2008
From Economist.com
http://www.economist.com/world/europe/displayStory.cfm?story_id=12370596&source=features_box_main

Germany guarantees all retail bank savings, as European governments take more individual steps

AFTER stepping in to save five banks in seven countries in the past week, Europe’s governments had hoped to stop fear spreading through the continent’s financial system. They failed. Authorities are again busily trying to keep afloat several of the banks they had previously bailed out.

The biggest of the bank rescues to flounder was that of Hypo Real Estate, a mammoth German property lender and financier of local governments. Hypo was deeply reliant on money markets to fund its long-term loans. Yet these have frozen in recent weeks. Paradoxically, the source of its weakness—its reliance on money markets—also made it too interconnected to fail. German authorities muttered darkly of their economy and financial system suffering a ripple of unpredictable consequences similar to those caused by the collapse of Lehman Brothers in America in mid-September, had they let it go down.

In the first effort to shore up Hypo, Germany’s central bank last week corralled a group of commercial banks into lending it €35 billion ($48 billion), €20 billion of which would come from the taxpayer. That rescue fell apart on Saturday October 4th, however, when the commercial banks taking part discovered that the cash they had promised would not be nearly enough to keep Hypo afloat. A report in Handelsblatt suggested that the firm needed €60 billion, and perhaps €100 billion, by the end of 2009; Hypo denied the latter figure.

By late on Sunday German authorities had again mustered a rescue, this one worth €50 billion. The worry remains that even this may not be enough. Once a bank is seen as vulnerable it appears that there is little, short of nationalising it, that can be done to regain the confidence of those on whom it relies for funding.

That was illustrated during the week in the Netherlands where a bail-out of Fortis, a large Belgian-Dutch bank, started to unravel. The Dutch, Luxembourg and Belgian governments split the bank into three parts, partly nationalised them and injected €11.2 billion into the bank. Yet even with the additional capital and the backing of the state, few were willing to keep lending to Fortis. On October 3rd the Dutch government grabbed the remaining parts of the Dutch bank. On Sunday the Belgian government took over the remaining Belgian bits and sold a stake in them to BNP Paribas, a large French bank. Disturbing signs also emerged of the panic spreading. Late on Sunday UniCredit, Italy’s biggest bank, said that it would boost its capital by €6.6 billion to restore confidence after its shares had plunged earlier in the week.

While governments on mainland Europe were trying to save their banks, Iceland was trying to save the country after it had overextended itself trying to bail-out its banking system. Its economy had been doing well, but its banks had expanded rapidly abroad, amassing foreign liabilities some ten times larger than the country’s economy, many funded in fickle money markets. Since the country nationalised Glitnir, its third-largest bank, last week the whole Icelandic economy has come under threat. Its currency is tumbling and the cost of insuring its national debt against default is soaring. As of Monday it was desperately calling for help from other central banks and was considering radical actions including using the foreign assets of pension funds to bolster the central bank’s reserves. These stand at a meagre €4 billion or so, according to Fitch, a rating agency, and in effect are now pledged to back more than a €100 billion in foreign liabilities owed by its banks.

Although no other European country is as exposed as Iceland, all should heed it tale. In their desperation to shore up their banking systems, several governments have made reckless promises that they would be hard pressed to make good on. After loudly denouncing Ireland’s beggar-thy-neighbour decision last week to guarantee all the liabilities of its banks, Germany on Sunday promised to stand behind all retail deposits in its banking system, though the government gave few details of how this would be funded. Denmark set up a fund to insure deposits. Britain has also raised the level on its deposit insurance to £50,000, from £35,000, in a bid to stem an outflow of deposits to Irish banks.

Extending insurance on retail deposits is no bad thing, especially in cases where the guarantees make explicit promises that had previously been implicit. Yet when done in haste, it may serve to make deposits more volatile. Blanket coverage of all deposits may encourage further recklessness on the part of banks and those whose money they hold.

Moreover it is not entirely clear how governments would pay these bills, if they ever came due. The chances of governments having to make good on all deposits seems remote, but the figures involved are eye-popping. In Ireland, for instance, national debt would jump from about 25% of GDP to about 325% if the value of its banks’ deposits and debts were taken on to the government’s books, according to analysts at Morgan Stanley, an investment bank. Similarly in Germany, national debt would jump to almost 200% of GDP if it included bank deposits (and about 250% if it included all the debts of its banking system). This may explain why interest rates on Irish government bonds have been rising in recent days.

The failure of piecemeal efforts to shore up European banks, one at a time, has not gone unnoticed. But European governments are reluctant to draw the conclusion that concerted action is needed. At a meeting in France at the weekend, Europe’s leaders rejected—mostly because of German resistance—proposals for a common bail-out fund, saying instead that each country would save its own banks. Given their record over the past week, it may be time for a rethink.

Weina

October 7th, 2008, 04:06 AM

in every crisis there's opportunity. has anyone found theirs?

have you found yours? care to share?

3cr

October 7th, 2008, 04:27 AM

Dow dives below 10,000
Global recession fears
By Kristina Cooke
Mon Oct 6, 6:09 PM ET
http://news.yahoo.com/s/nm/20081006/bs_nm/us_markets_stocks

NEW YORK (Reuters) - Stocks slid for a fourth straight day on Monday, leaving the Dow below 10,000 for the first time in four years, on fears the global economy was hurtling into recession despite government efforts to contain the fast-spreading financial crisis.

The steep declines came in the first full session since the U.S. Congress approved a $700 billion bailout of the financial industry, as lending came to a virtual halt and investors shifted their focus to the crumbling outlook for the economy and profits.

But the market cut almost half its losses in the final hour of the session, as traders speculated the sell-off may trigger a coordinated global response to thaw credit markets. The Dow plummeted as much as 800.06 points -- a record intraday point drop for the blue-chip average -- as it slid 7.75 percent to its session low at 9,525.32. By the closing bell, though, the Dow had recovered 430.18 points to end down 3.6 percent. The S&P financial sector sub-index, which had earlier been down more than 8 percent, closed down 4.2 percent.

The energy sector skidded as the price of oil dropped to an 8-month low below $88 a barrel on expectations that a recession will further hamper global fuel demand.

Wall Street's drop was part of a breakneck global sell-off, which led to trading being halted in Russia, Brazil and Peru. The emergency rescue of two big European banks and a move by several European governments to guarantee bank deposits intensified fears that the credit crisis can not be contained.

"We're clearly in the panic zone now. We've tipped over from bear market to panic," said John Schloegel, vice president of investment strategies for Capital Cities Asset Management in Austin, Texas.

"We're past the bailout now and focused back on fundamentals again and the fundamentals don't look good. People are starting to come to grips with third-, fourth- quarter earnings. If the supertanker of the U.S. economy is at a complete standstill, which it might be, that has not been adequately discounted yet," he said.

The Dow Jones industrial average fell 369.88 points, or 3.58 percent, to 9,955.50. It was the first time the Dow closed below 10,000 since October 2004.

The Standard & Poor's 500 Index skidded 42.34 points, or 3.85 percent, to 1,056.89, while the Nasdaq Composite Index dropped 84.43 points, or 4.34 percent, to 1,862.96.

For the year to date, the Dow is down about 25 percent, the S&P 500 is down 28 percent and the Nasdaq is down 29.8 percent.

___________________________

Dow closes at 4-year low as crisis mood sweeps the world
By Kevin G. Hall | McClatchy Newspapers
http://www.mcclatchydc.com/251/story/53523.html

WASHINGTON — The U.S. financial crisis spread around the world like a wildfire on Monday as stock prices plunged here and abroad amid eroding confidence in the world’s banking system.

The Dow Jones Industrial Average plummeted 800 points before a late rally let it close down "only" 369.88 points, at 9955.50. That’s the first time the Dow closed below 10,000 in almost four years.

The Dow first crossed above 10,000 on March 16, 1999.

Monday’s drop on all three major U.S. indices to levels first reached a decade ago was a sobering reminder that Wall Street and the retirement plans of ordinary Americans are spiraling downward together. The S&P 500 was off 42.34 points to 1506.89 and the Nasdaq sunk 84.43 points to 1862.96.

"This is not the Great Depression. People should not get panicked," said Lyle Gramley, an investment adviser and former Reagan era Federal Reserve governor who has followed markets for more than five decades.

The Fed Monday took more bold steps to keep the widening financial crisis from growing out of control. Before U.S. markets opened, the Fed announced that it would again expand its short-term emergency lending, bringing to $600 billion the amount it has made available to lenders. Its auction of short-term loans to lenders is designed to lubricate the wheels of global finance that are seizing up.

Yet from well-heeled Europe to emerging upstarts Mexico and Brazil, depositors fled banks and traders fled local stock markets in a panicky stampede to the exits.

What sparked the global selloff in part was the German government’s announcement Sunday that it would backstop all bank deposits following the collapse of a rescue plan for a troubled German mortgage lender. This led to fears that problems outside the United States were worse than feared and a global panic ensued.

In Europe, many exchanges posted their worst day ever. France’s CAC-40 index fell 9 percent, Germany’s DAX-30 fell by more than 7 percent and London’s FTSE was off 7.9 percent. Russia's stock index fell by more than 19 percent before trading was halted in what is becoming a near-daily occurrence. Asian stocks were off by about 5 percent, led by Indonesia, whose exchange fell by 10 percent.

Financial contagion also spread quickly to big emerging economies that helped fuel global economic growth in recent years as the U.S. economy slowed.

In Brazil, until recently a darling of global investors, trading on the Bovespa exchange in Sao Paulo was halted twice before noon, as panicky investors pulled out en masse, triggering so-called circuit breakers to halt rapid declines. Wiping out almost two years of gains, the Bovespa closed down 13.54 percent.

Mexico saw its stock market fall 9 percent shortly after the opening bell, before recovering to close off 5.4 percent after a volatile day in which finance ministry officials urged citizens to begin saving in case a global crisis unfolds.

Simply put, the world on Monday suffered a modern-day equivalent of a bank run as investors panicked and nervous traders everywhere ran for cover. They shifted capital to safe instruments such as gold, which rose $33.80 or 4.1 percent, to $862.70 an ounce. And they flocked to Treasury bonds. The yield, or interest payment, on a three-month Treasury was just over four-tenths of a percent, meaning investors were willing to take almost no profit in hope of simply not losing money in stocks.

Oil prices, which hit a record high of over $147 a barrel in July, fell $6.07 a barrel, or 6.5 percent, to settle Monday at $87.81 a barrel on the New York Mercantile Exchange.

The slide in oil prices is likely to mean much cheaper gasoline prices for American motorists in weeks ahead, one of the rare reasons for cheer as recession almost certainly spreads. The average price nationwide for a gallon of unleaded gasoline stood at $3.50, down 17 cents from a month ago, according to AAA.

President Bush went before cameras in San Antonio, Texas, and said the $700 billion rescue package passed by Congress last week will soon help restore confidence to the U.S. financial system.

"It's going to take a while to get in place a program that, one, is effective and, two, doesn’t waste taxpayers' money," said Bush. He pleaded for patience. "It’s going to take awhile to restore confidence in the financial system, but one thing people can be confident of is the bill I signed is a big step toward solving the problem."

Banks are unwilling to lend to each other, or to many consumers and companies. To break this freeze on credit, the rescue plan seeks to take bad assets like distressed mortgage bonds off the balance sheets of banks so they can again begin loaning money.

Treasury announced Monday that Neel Kashkari, the agency's assistant secretary for international economic issues, will run the rescue program and market stabilization efforts.

Like Treasury Secretary Henry Paulson, Kashkari is a veteran of investment bank Goldman Sachs, where he headed the San Francisco-based information-technology investment-banking division.

Kashkari will oversee a complex start-up program to take a wide range of assets no one in the private sector wants, and over time sell them back into financial markets. Late Monday, Treasury announced it would begin taking bids Wednesday for asset-management companies, auction managers and accountants needed to help run the rescue plan. It will announce bid winners next week.

The Federal Reserve was also busy Monday trying to slow the global bleeding. Even before the opening bell rang on the New York Stock Exchange, the Fed announced it was yet again expanding its Term-Auction Facility — a short-term emergency lending program for banks and other financial firms — to ensure that money continues to flow through the banking sector.

The Fed’s 28-day and 84-day loans to lenders — companies bid for these short-term loans since they are unwilling to lend to each other — were each raised by another $150 billion. The move raised the total that the Fed has made available through this facility alone to a once unimaginable $600 billion.

This huge sum in short-term lending reflects the training of Fed Chairman Ben Bernanke, whose academic career was dedicated to the study of the Great Depression and other financial calamities. He has long said that the Fed failed to act aggressively in the financial crisis following the 1929 stock market crash, and he's determined not to repeat that mistake.

"Clearly the Fed has exercised authority that goes well beyond what I thought normal for a central bank," said Paul Volcker, who was Fed chairman from 1979-87, during presentation of a report in New York on Monday.

Asked by McClatchy if there's ever been a time when a Fed chairman has taken more action in a shorter period of time, Volcker was succinct.

"The answer is no," said Volcker, who's known best for raising interest rates so high to choke inflation that they pushed the U.S. economy into a deep recession in 1981-1982, but the economy emerged to a long boom without parallel.

jvl

October 7th, 2008, 08:04 AM

Peso is down earlier (47.50:$1); BSP says it wont be long for it to recover because remittance (Holidays) season has begun. This is an "over-used" statement made to pacify or calm the volatility of the Peso. Do they always have to rely on the remittances of OFWs to keep the Peso afloat?

Last May-Jun of this year, this "over-used" statement was again mentioned because it was "enrollment season". But I think the Peso never recovered as expected. Next year expect the same press release from BSP.

At around 45-48 Peso:$ level, OFWs could be quite happy that their hard earned money has value in RP.

johnnyS

October 7th, 2008, 10:06 AM

Whether it is overused or not, no government should be practicing fiscal management based on the currency rates. This is crazy.

No one (gov't included) can predict nor manipulate currency markets (yeah, for a day or hour maybe), but not as a "trend".

Gov't needs to focus on developing our economy and people to strengthen our peso (meaning that overseas investors look to Philippines with confidence, thus sending dollars into Philippines). Not to rely on OFW remittances!

See what's happening with Korea right now. They have $250billion of foreign reserves. Yet their wons nosedived 30% in the last few months!! They can't do anything about it. Philippines can't do anything either. And it's pathetic to depend on OFW remittances to "strenghten" the peso.

Sorry, I am just getting a little angry...

p.s. talking about gov't being helpless...U.S. dollar dived 60% against the Euro in the last 4 years. U.S. obviously doesn't have power either...

Peso is down earlier (47.50:$1); BSP says it wont be long for it to recover because remittance (Holidays) season has begun. This is an "over-used" statement made to pacify or calm the volatility of the Peso. Do they always have to rely on the remittances of OFWs to keep the Peso afloat?

Last May-Jun of this year, this "over-used" statement was again mentioned because it was "enrollment season". But I think the Peso never recovered as expected. Next year expect the same press release from BSP.

At around 45-48 Peso:$ level, OFWs could be quite happy that their hard earned money has value in RP.

johnnyS

October 7th, 2008, 10:09 AM

in every crisis there's opportunity. has anyone found theirs?

I am proud to say ABSOLUTELY NONE.

I am reading up on the Great Depression of '30s to find out what smart people did back then.

Let us know what you find.

ogiñi_ocram

October 7th, 2008, 10:57 AM

Whether it is overused or not, no government should be practicing fiscal management based on the currency rates. This is crazy.

true, as if it's a real economic indicator.

barukdok

October 7th, 2008, 06:19 PM

I am proud to say ABSOLUTELY NONE.

I am reading up on the Great Depression of '30s to find out what smart people did back then.

Let us know what you find.

what i know is that the smart people back then stopped reading and started doing ;)

i'm going back to basics, specifically agriculture. i've finally bought raw land at P35 per square meter, an hour's drive from the city, payable in 1 year. i'm thinking piggery or poultry, organic or sub-con. why agriculture? crisis or not, people will not stop eating. people might stop driving their cars, but they'll continue eating. besides, fewer people are into agriculture. the farmers' sons and daughters have fled to the cities, leaving their elderly in the fields, or what's left of them.

i've decided my investments in the stock market will have to stay there for the next 5 or 10 years. also, i'll continue to diversify.

a few things about investing on agricultural land:

*titled lots are way safer investments but are more expensive. the transfer process is also easier compared to those with only tax declaration.
*if the lot only has a tax declaration, make sure it can be titled or the land is alienable and disposable.
*make sure the land doesn't fall in a watershed, timberland, etc.
*ask the seller if the land is tenanted. if it is and the owner says he'll take care of it so long as you place a down payment, run for your life. the Department of Agrarian Reform always sides with the tenant (unless of course you invoke the powers of Ninoy).
*some titled lands cannot be sold (e.g. one with an "Emancipation Patent")
*the DENR can have a lot with tax declaration titled through an "administrative" process (Free Patent) but you can't mortgage or sell it within 5 years.
*always consult your trusted lawyer and/or broker.
*if buying more than 5 hectares, check the agrarian law guidelines from your lawyer/broker. (i'm not so sure about this, but having partners and titling the land under two or more owners could help in exempting the land from CARP coverage based on land area.)

purchasing agricultural land can be a bit tricky but it can be rewarding. over time, the value of land shoots up, since as the population grows, demand for land (which is limited) goes up as well. as a result, prices go up, often in spurts.

among the factors that affect the value of land are local government ordinances that changes the zoning classification of land (i.e. from agricultural to residential, commercial, or industrial), which consequently leads to higher taxes.

the good thing about buying agri land is that you can utilize it. you may have to get down and dirty, but if you don't, that land would be such a waste.

johnnyS

October 7th, 2008, 10:51 PM

Weina

October 8th, 2008, 05:41 AM

Sorry, I don't have a link for that. I was told by a person from China directly.

It's in the HUNAN province. The government there in collusion with a private real estate development company sold BONDS against the real estate projects in the province. All in all 200,000 people bought $2billion worth. $2billion! In china, this is incredible amount.

The company is now BUST. And people can't get their money. There is a run on all the banks in that province.

It should be in the news shortly. I think the Chinese gov't is trying to keep it locked up in the media for now.

Johnny the least thing that you need to worry is china to fall down. That 2B is not enough to affect china as the most liquid country. For individuals yes it is big amount but for the country it's nothing. Thanks to the closed door policy of china in the past years. Right now china is the biggest lender of america. and if china falls down that's the end of us asia.

Weina

October 8th, 2008, 06:06 AM

Whether it is overused or not, no government should be practicing fiscal management based on the currency rates. This is crazy.

No one (gov't included) can predict nor manipulate currency markets (yeah, for a day or hour maybe), but not as a "trend".

Gov't needs to focus on developing our economy and people to strengthen our peso (meaning that overseas investors look to Philippines with confidence, thus sending dollars into Philippines). Not to rely on OFW remittances!

See what's happening with Korea right now. They have $250billion of foreign reserves. Yet their wons nosedived 30% in the last few months!! They can't do anything about it. Philippines can't do anything either. And it's pathetic to depend on OFW remittances to "strenghten" the peso.

Sorry, I am just getting a little angry...

p.s. talking about gov't being helpless...U.S. dollar dived 60% against the Euro in the last 4 years. U.S. obviously doesn't have power either...

as for korea, this is what i've mentioned here before that a lot of vultures are there now preying which market to manipulate and cover their loses on this crisis. so everyone should watch out. however ,what is good for korea is they have a lot of reserves to cover for that so i'm sure their won would soon recover.

as our country for the time being although it's pathetic as what you said the gov't has no choice but to depend on OFW emittances especiall now that some foreign funds are pulling out.

by the way don't get angry too much it's expensive to get sick and the gov't can't even pay you a dime

dessertfox

October 8th, 2008, 08:53 AM

what i know is that the smart people back then stopped reading and started doing ;)

i'm going back to basics, specifically agriculture. i've finally bought raw land at P35 per square meter, an hour's drive from the city, payable in 1 year. i'm thinking piggery or poultry, organic or sub-con. why agriculture? crisis or not, people will not stop eating. people might stop driving their cars, but they'll continue eating. besides, fewer people are into agriculture. the farmers' sons and daughters have fled to the cities, leaving their elderly in the fields, or what's left of them.

i've decided my investments in the stock market will have to stay there for the next 5 or 10 years. also, i'll continue to diversify.

a few things about investing on agricultural land:

*titled lots are way safer investments but are more expensive. the transfer process is also easier compared to those with only tax declaration.
*if the lot only has a tax declaration, make sure it can be titled or the land is alienable and disposable.
*make sure the land doesn't fall in a watershed, timberland, etc.
*ask the seller if the land is tenanted. if it is and the owner says he'll take care of it so long as you place a down payment, run for your life. the Department of Agrarian Reform always sides with the tenant (unless of course you invoke the powers of Ninoy).
*some titled lands cannot be sold (e.g. one with an "Emancipation Patent")
*the DENR can have a lot with tax declaration titled through an "administrative" process (Free Patent) but you can't mortgage or sell it within 5 years.
*always consult your trusted lawyer and/or broker.
*if buying more than 5 hectares, check the agrarian law guidelines from your lawyer/broker. (i'm not so sure about this, but having partners and titling the land under two or more owners could help in exempting the land from CARP coverage based on land area.)

purchasing agricultural land can be a bit tricky but it can be rewarding. over time, the value of land shoots up, since as the population grows, demand for land (which is limited) goes up as well. as a result, prices go up, often in spurts.

among the factors that affect the value of land are local government ordinances that changes the zoning classification of land (i.e. from agricultural to residential, commercial, or industrial), which consequently leads to higher taxes.

the good thing about buying agri land is that you can utilize it. you may have to get down and dirty, but if you don't, that land would be such a waste.

Now is the best time to invest in agriculture, I started in goat raising and in just a short time the stocks double (the goats). I also started KAMBY'S MEAT SHOP ATBP. now that almost everything is falling apart our outlet demand is steadily going-up. Thanks, to fellow OFW who continuosly pouring in remittances but be resourcefull enough to help our family get into something productive. SME is the true backbone of the economy so lets share even in small ways.

johnnyS

October 8th, 2008, 09:42 AM

Johnny the least thing that you need to worry is china to fall down. That 2B is not enough to affect china as the most liquid country. For individuals yes it is big amount but for the country it's nothing. Thanks to the closed door policy of china in the past years. Right now china is the biggest lender of america. and if china falls down that's the end of us asia.

But that $2billion is in ONE town . Don't you think this occured across the entire China? I think so, because the real estate boom occured across the entire China.

-TC-

October 8th, 2008, 01:40 PM

BREAKING NEWS:

Fed leads global coordinated rate cut, eases by 1/2 point
Wednesday October 8, 7:09 am ET

WASHINGTON (Reuters) - The Federal Reserve led a coordinated round of global official rate cuts on Wednesday, easing by a half-point, as did the European Central Bank, Bank of England and Swiss, Canadian and Swedish banks. In an attempt to stem unprecedented global market turmoil, the Fed cut its key federal funds lending rate by half a percentage point to 1.5 percent and also lowered its discount rate by the same amount to 1.75 percent.The ECB also cut by a half-point to 3.75 percent as did the Bank of England, taking its rate to 4.5 percent.

UPDATE: Bank of China also cuts rates.

leechtat

October 9th, 2008, 01:43 PM

But that $2billion is in ONE town . Don't you think this occured across the entire China? I think so, because the real estate boom occured across the entire China.

^^ china cannot be affected by mere losses.. china is one of the biggest lender of the u.s. and is the 2nd biggest holder of treasury securities (http://www.ustreas.gov/tic/mfh.txt).. they are very liquid in fact, that in the event that the world economy dump the usd since its going to be worthless, they may all be stocking up on their yuan reserves if not yen, gold or silver.

...i'm going back to basics, specifically agriculture...

^^ i must agree.. i always listen to burukdok, he makes sense amidst this chaos... i'm thinking of starting a farm too..

johnnyS

October 9th, 2008, 02:36 PM

It's not that simple.
If China starts unloading their reserves, their remaining reserve value tanks, adversely affecting China's credit worthiness and balance sheet, which will contribute to further instability in their financials.
This is why they can;t just simply let loose their foreign reserves...

And I am still waiting for Barudok's plans on the land stuff.

^^ china cannot be affected by mere losses.. china is one of the biggest lender of the u.s. and is the 2nd biggest holder of treasury securities (http://www.ustreas.gov/tic/mfh.txt).. they are very liquid in fact, that in the event that the world economy dump the usd since its going to be worthless, they may all be stocking up on their yuan reserves if not yen, gold or silver.

^^ i must agree.. i always listen to burukdok, he makes sense amidst this chaos... i'm thinking of starting a farm too..

Weina

October 10th, 2008, 05:32 AM

It's not that simple.
But that $2billion is in ONE town . Don't you think this occured across the entire China? I think so, because the real estate boom occured across the entire China.
.

As i've told you China is not the country to worry now. It is the US and it is taking hostage the world's economy right now. There might be some areas in china that have some oversupply in real estate but their lending is not that like the US that triggers this crisis you know. Prices are not even overrated and some are even cheaper than in metro manila. I'll take Zhongshan City in Guangdong Province as an example. Prices of real estate there are not changing. Same as last year when we inquired. Stricter measures were put to work already by the gov't since last year or few years ago when real estateinvestments were getting hot.

were getting OT here, let's go back to the topic.

P6 bloody read again today.

RonnieR

October 10th, 2008, 07:49 AM

MANILA, Philippines -- Stocks plunged 163.03 points or 7.12 percent to 2125.41 by midmorning on Friday as confidence continued to be shaken by Wall Street's meltdown.

diz

October 10th, 2008, 07:58 AM

oh my lord.

Weina

October 10th, 2008, 08:10 AM

MANILA, Philippines -- Stocks plunged 163.03 points or 7.12 percent to 2125.41 by midmorning on Friday as confidence continued to be shaken by Wall Street's meltdown.

and it closed to : 2,097.80
190.64 points low today :ohno:

Manila-X

October 10th, 2008, 08:12 AM

oh my lord.

Its the same with HK!

Weina

October 10th, 2008, 08:24 AM

and as well here in taiwan

dancethingy

October 10th, 2008, 08:25 AM

^^ DEPRESSION!!!!!!!!!!!!! a worldwide one.

The markets are fine here in the middle east.

diz

October 10th, 2008, 08:34 AM

Australia S&P/ASX 200: ▼ -360.20 (-8.34%) - 3,960.70
HK Hang Seng: ▼ -1,121.31 (-7.03%) - 14,821.93
Ho Chi Minh: ▼ -18.62 (-4.68) - 379.06
India Mumbai SENSEX 30: ▼ -668.56 (-5.90%) - 10,659.80
Indonesia Jakarta Composite: ▼ -168.05 (-10.38%) - 1,451.67
Japan Nikkei 225: ▼ -703.75 (-7.68%) - 8,453.74
Korea KOSPI: ▼ -53.42 (-4.13%) - 1,241.47
Philippines Composite: ▼ -190.64 (-8.3%) - 2097.80
Shanghai Composite: ▼ -59.96 (-2.89%) - 2,014.62
Singapore FTSE: ▼ -35.18 (-6.96%) - 470.45
Thailand SET: ▼ -30.25 (-8.69%) - 317.89

RonnieR

October 10th, 2008, 08:58 AM

^^ the markets are getting crazy everyday. Where are we heading?

Weina

October 10th, 2008, 09:00 AM

Peso recovers after rate cuts
(http://www.bworldonline.com/BW101008/content.php?id=023)
SINGAPORE — The Korean won, Indonesian rupiah and Philippine peso recovered from their lows yesterday after the previous day’s coordinated rate cuts by major central banks spurred a somewhat delayed rally in the euro and other high-yielders.

"Everything’s recovering. Euro is up, dollar/yen is up, high-yielders are up," said a trader in Kuala Lumpur.

The peso closed at P47.39, up by 36 centavos from its P47.75 close on Wednesday.

It rose to a high of P47.39 and a low of P47.80 during the day.

"It is possible for the peso to strengthen more until the end of the week," said Ricky Cebrero, treasurer of East West Banking Corp.

But he quickly cautioned that with the situation very volatile, it is very hard to predict where the peso would go.

"Since the market trend of the Philippines is in line with what is happening internationally, we cannot really say where we are heading," he explained.

Traders suspected heavy intervention from the Bank of Korea, following a rate cut earlier in the day, helped the won rally from 10-1/2-year lows near 1,485 per dollar to levels 8% higher.

But as the euro and Aussie rallied alongside a recovery in stock markets, Asian non-deliverable forward markets too pared their bearishness on the local units.

One-month rupiah NDFs dropped to 9,910 per dollar from the day’s high of 10,100, which implied a nearly 5% depreciation in the currency, as spot moved to 9,590 from 9,625.

The Singapore dollar was steady around 1.4685 per dollar as traders awaited the central bank’s semi-annual monetary review on Friday, when most analysts expect the current gradual tightening policy stance to be eased.

The ringgit came off a 13-month low of 3.5080 per dollar, while the peso clawed back half a% from a low of 47.80. Still, dollar funding costs stayed high in Asia despite the deep and joint rate cuts by the Federal Reserve and central banks in China and Europe, hitting levels as high as 7% for overnight funds.

Analysts also remained cautious on the medium term outlook for risky assets, with little sign yet that the global credit crisis had stopped claiming more victims and markets. "Dollar/Asia will continue to move higher," said Peter Redward, head of Asian strategy at Barclays Bank. — Reuters with D. A. B. Nepomuceno

crappypants

October 10th, 2008, 09:03 AM

2012
plant your camotes now.

LordCarnal

October 10th, 2008, 10:11 AM

With the stocks going down, isn't it the right time to buy stocks?

As in lots and lots of stocks?

Then if it will go up again, then you sell your stocks and voila you have a profit!

:)

Weina

October 10th, 2008, 10:28 AM

it's easy said than done. ok it's easy if you have enough funds, if you have run out before the crisis has started and you're stashing cash right now and you have a crystal ball to know if bottoms been reached. If not stay away!!! Anything can happen right now!!!

johnnyS

October 10th, 2008, 01:50 PM

johnnyS

October 10th, 2008, 01:51 PM

I don't think we are anywhere near the bottom...yet...

With the stocks going down, isn't it the right time to buy stocks?

As in lots and lots of stocks?

Then if it will go up again, then you sell your stocks and voila you have a profit!

:)

Weina

October 10th, 2008, 03:40 PM

It seems that people generally seem to think that the U.S. is the problem, and that the rest of us are suffering because of U.S's problem.

We need to realize that all the countries in the world, including China, experienced unprecedented growth in the last 10 years BECAUSE of U.S. The "irrational exuberance" that was exported all over the world.

Thus, the rest of the world shares the same financial problems as the U.S. We are ALL in this together...

China is a BIG problem. Just look at their stock market. It will affect us all, including Philippines.

p.s. the hundreds of millions and some billions from China and Japan to Philippines will dry up...

now this is getting funnier and this would be my last post about this as this is going OT (OFF TOPIC) already.

Then who do you think created this mess now? Other country not the US? Seems it is only you playing blind and dumb to this real issue. What has china to do with this US mess? Did china created this mess of the US? Did other country created this mess?

And of course, i know economies of all countries are interrelated but the crisis has started due the GREED, TAKE NOTE GREED of those few americans only! If not because of them we or the whole word would not be suffering from this mess. And look at just what some of them are doing. They even have the face to indulge themselves still with luxuries despite what they have caused this world already tsktsktsk...super kapal!

What a nice way to spend taxpayer's money. AIG is in the right direction. Lol.:cheers:

AIG execs hold $440K post-bailout retreat

Top executives at the failed insurance giant AIG spent more than $440,000 at a company retreat days after the federal government bailed out the company with $85 billion in taxpayer funds.

American International Group (AIG) paid the exclusive St. Regis resort in Monarch Beach, Calif., more than $200,000 for rooms — some costing as much at $1,000 a night — as well as more than $150,000 in meals, according to released documents an testimony during a hearing of the House Committee on Oversight and Government Reform Tuesday on Capitol Hill.

"Less than one week after taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation," said committee Chairman Henry A. Waxman, California Democrat.

The invoice also included almost $25,000 in spa and salon charges for pedicures, manicures, facials, massages and other services.

"If a company is drowning and you're going to spend that kind of money, that's crazy," said Rep. Elijah E. Cummings, Maryland Democrat, at the hearing's morning session. "The American people are paying for that."

No current AIG officials are scheduled to testify at the hearing, though two former company chief executives Martin J. Sullivan and Robert B. Willumstad, are scheduled to appear Tuesday afternoon.

Lynn E. Turner, a former chief account with the Securities and Exchange Commission, told the committee that, based on known evidence, executives at AIG or other failed Wall Street firms shouldn't be criminally charged for their actions that lead to their company's financial demise.

"I don't think you send people to jail for making bad biz decisions," said Mr. Turner, who was one of two witnesses who testified at the hearing's morning session.

But he added that if evidence later reveals that company officials were aware of illegal activities and kept quiet, "Then yes, a little time behind bars might be warranted."

Eric R. Dinallo, superintendent of the New York State Insurance Department, told the committee that the industry and regulators should have detected signs earlier that Wall Street practices were detrimental to the overall health of the industry.

"It is the case that a lot of us... got wrong what was going to be the default rates, which our global economy hinges on," Mr. Dinallo said.

AIG only avoided collapse in September with a $85 billion Treasury loan, stock market losses began to plummet, prompting the Federal Reserve to inject $180 billion into the global market.

The company's failure was followed by the most significant Wall Street downturn since the September 11, 2001 terrorists attacks, prompting the Congress last week to approve a Bush administration plan to spend $700 billion to help rescue failing financial institutions.

The deal gave the government an 80 percent stake in AIG, the right to remove senior management and to veto payment of dividends to shareholders as ways to protect taxpayers.

The hearing was the second in two days that the Oversight Committee held to explore the lead to the recent Wall Street crisis. On Monday, the committee heard testimony that Lehman Brothers doled out more than $20 million in bonuses to top executives just four days before the investment giant declared bankruptcy and accelerated last month.

As i've been saying here the world (especially us here in taiwan) is now being poisoned by the toxics of both countries, US toxic financials and china's toxic foods.

And if you really like to worry about china then that's your business. I can't help you with that. I already gave you an example of a place in china that at least haven't realized any bubble yet in real estate. Other's i don't know the real situation what i just know is that it is not the same with the US so it would not of course suffer the same fate. See your news is not going out yet. Maybe it is too insignificant, under controllable situation or non existent at all.

barukdok

October 10th, 2008, 04:26 PM

What kind of land did you buy, exactly?
Was it titled?
Does it have road right of way?
etc. etc.
Very interesting strategy you have there.
I was always interested in fruits (the ones you eat), and this may be an interesting investment as well as hobby.
HOw did you buy it so cheap per square meter? How large?

Was it titled?
it's a tax declaration but ready for titling. however, the seller and i had a memorandum of agreement that i'll only pay the balance (on a monthly basis) once all the papers are ready for titling the land and i can start using the property after paying the down payment (20%). that way both parties will process the papers as quick as possible. this is a good way to protect myself as a buyer. if the lot doesn't get titled (which is unlikely after checking the papers), i still have possession of the property. the other details i cannot divulge ;)

the titling though is quite a tedious process but can be hastened if you get the assistance of someone who's experienced in this particular task.

but yes, there are titled properties priced at P20 per square meter but they're upland (so better check if they fall in a watershed or are alienable and disposable).

Does it have road right of way?
yes it has a road right of way. never, ever, ever, ever, ever, ever, ever buy property that doesn't have road right or way or has tenants. check the papers (tax dec, title) if it has road right of way. of course, you can always ask for RROW from the adjacent lot, but this has to be annotated on the other title.

I was always interested in fruits (the ones you eat), and this may be an interesting investment as well as hobby.
i have to treat this as a serious business and investment, both in the long, mid and short terms. and yes, fruits (like mangoes) are also a good option. but consider this for the long term: land in RP is getting scarcer while demand is ALWAYS going up, owing to our growing population, so expect the countryside to change in a few decades. that P50 per square meter lot can be sold for P500 per square meter some day. ask your elders.

HOw did you buy it so cheap per square meter?
why cheap? because it's agricultural land, and i avoided "canvassers" or those who mark up lot prices by as much as 500% and sell these to city dwellers like me. to find this great deal, i had to work my butt off, visiting one town to the next. yes, it's better to knock from door to door to get the price straight from the horse's mouth.

but i tell you, if you look at the countryside, there's hectares upon hectares of land that are unused and whose owners are willing to sell because they need money (most common reasons: illness of family member, want to enjoy proceeds, etc.) and their children are not interested in tilling the land and have opted to work in the cities. i've scoured for lots from one municipality to another and it's nearly the same story.

How large?
here's a tip: if you buy agri land, buy at least 1 or 2 hectares (at P50 that's P1M; at P35, that's P750k; at P20, that's P400k!). better yet go for at least 5 hectares because in the long-term plan, big developers who are into land banking opt for raw land that's at least 5 hectares. for more than 5 hectares, get a partner to avoid CARP.

i'm encouraging people here to invest in raw land because raw land is useful in times of crises (and i'm sure this wouldn't be the last crisis we'll have in our lifetime). and it's a good way to diversify one's investments.

so what happens to our equities investments?
don't touch anything leave it for the long-term (if you've invested in RP equities) because you didn't lose any number of shares, just the value, in time, the markets will recover. how long we don't know. if you've previously been doing dollar-cost averaging, don't stop. stick with this strategy, which many investment gurus (suze orman, etc.), advise even when the markets are bearish or crashing. waiting for the bottom is hit and miss because the markets move at the speed of light. again, think long-term.

one last word: this isn't the time to panic. be level-headed, and plan your investments properly, taking a holistic, diversified, long-term view. and never forget the basics of investing.

barukdok

October 10th, 2008, 04:33 PM

Now is the best time to invest in agriculture, I started in goat raising and in just a short time the stocks double (the goats). I also started KAMBY'S MEAT SHOP ATBP. now that almost everything is falling apart our outlet demand is steadily going-up. Thanks, to fellow OFW who continuosly pouring in remittances but be resourcefull enough to help our family get into something productive. SME is the true backbone of the economy so lets share even in small ways.

you're the man!

i agree that a huge part of OFW money must be poured into SMEs or micro-enterprises, including agriculture, instead of being splurged on "doodads" such as cellphones, mp3 gadgets, hair care(!).

i'm also planning to raise goats. hope you can give me a few tips. i'll PM you :cheers:

johnnyS

October 10th, 2008, 05:07 PM

Yes, you are absolutely right.
The greedy ones are only in America. There is no greed in China, Europe. Certainly not in our Philippines!!!

now this is getting funnier and this would be my last post about this as this is going OT (OFF TOPIC) already.

Then who do you think created this mess now? Other country not the US? Seems it is only you playing blind and dumb to this real issue. What has china to do with this US mess? Did china created this mess of the US? Did other country created this mess?

And of course, i know economies of all countries are interrelated but the crisis has started due the GREED, TAKE NOTE GREED of those few americans only! If not because of them we or the whole word would not be suffering from this mess. And look at just what some of them are doing. They even have the face to indulge themselves still with luxuries despite what they have caused this world already tsktsktsk...super kapal!

.

RonnieR

October 10th, 2008, 05:09 PM

Weina, pls. continue posting to this thread.

We are all concerned on the economic situation of the world. Of course, people might have different views but we all agree that GREED and lack of financial controls contributed to this mess. Everyone knows who started the trouble.

johnnyS

October 10th, 2008, 05:11 PM

Thanks for sharing.
I will look into it.
I am not so much focused on selling it a multiple of original investment, becuase it may take 10 to 20 years, and we need to think about opportunity cost of locking our cash in land.

THus, I was more interested in generating some reasonable income from the land plus having fun and exercising while doing it.

I think I am going to spend my weekends wondering nearby towns from now on.

Was it titled?
it's a tax declaration but ready for titling. however, the seller and i had a memorandum of agreement that i'll only pay the balance (on a monthly basis) once all the papers are ready for titling the land and i can start using the property after paying the down payment (20%). that way both parties will process the papers as quick as possible. this is a good way to protect myself as a buyer. if the lot doesn't get titled (which is unlikely after checking the papers), i still have possession of the property. the other details i cannot divulge ;)

the titling though is quite a tedious process but can be hastened if you get the assistance of someone who's experienced in this particular task.

but yes, there are titled properties priced at P20 per square meter but they're upland (so better check if they fall in a watershed or are alienable and disposable).

Does it have road right of way?
yes it has a road right of way. never, ever, ever, ever, ever, ever, ever buy property that doesn't have road right or way or has tenants. check the papers (tax dec, title) if it has road right of way. of course, you can always ask for RROW from the adjacent lot, but this has to be annotated on the other title.

I was always interested in fruits (the ones you eat), and this may be an interesting investment as well as hobby.
i have to treat this as a serious business and investment, both in the long, mid and short terms. and yes, fruits (like mangoes) are also a good option. but consider this for the long term: land in RP is getting scarcer while demand is ALWAYS going up, owing to our growing population, so expect the countryside to change in a few decades. that P50 per square meter lot can be sold for P500 per square meter some day. ask your elders.

HOw did you buy it so cheap per square meter?
why cheap? because it's agricultural land, and i avoided "canvassers" or those who mark up lot prices by as much as 500% and sell these to city dwellers like me. to find this great deal, i had to work my butt off, visiting one town to the next. yes, it's better to knock from door to door to get the price straight from the horse's mouth.

but i tell you, if you look at the countryside, there's hectares upon hectares of land that are unused and whose owners are willing to sell because they need money (most common reasons: illness of family member, want to enjoy proceeds, etc.) and their children are not interested in tilling the land and have opted to work in the cities. i've scoured for lots from one municipality to another and it's nearly the same story.

How large?
here's a tip: if you buy agri land, buy at least 1 or 2 hectares (at P50 that's P1M; at P35, that's P750k; at P20, that's P400k!). better yet go for at least 5 hectares because in the long-term plan, big developers who are into land banking opt for raw land that's at least 5 hectares. for more than 5 hectares, get a partner to avoid CARP.

i'm encouraging people here to invest in raw land because raw land is useful in times of crises (and i'm sure this wouldn't be the last crisis we'll have in our lifetime). and it's a good way to diversify one's investments.

so what happens to our equities investments?
don't touch anything leave it for the long-term (if you've invested in RP equities) because you didn't lose any number of shares, just the value, in time, the markets will recover. how long we don't know. if you've previously been doing dollar-cost averaging, don't stop. stick with this strategy, which many investment gurus (suze orman, etc.), advise even when the markets are bearish or crashing. waiting for the bottom is hit and miss because the markets move at the speed of light. again, think long-term.

one last word: this isn't the time to panic. be level-headed, and plan your investments properly, taking a holistic, diversified, long-term view. and never forget the basics of investing.

licoan_kings

October 10th, 2008, 06:40 PM

Yes, you are absolutely right.
The greedy ones are only in America. There is no greed in China, Europe. Certainly not in our Philippines!!!
I beg to differ on that statement!

leechtat

October 10th, 2008, 07:34 PM

I don't think we are anywhere near the bottom...yet...

^^ i must agree.. so let's all stay away from the mess as of now.. but i am thinking of buying some in november...

the us started this mess, and the bail-outs shall place us all in the abyss... dump the dollars guys..

johnnyS

October 10th, 2008, 11:21 PM

If I am thinking what you are thinking....I was being sarcastic...

I beg to differ on that statement!

johnnyS

October 10th, 2008, 11:27 PM

Not so fast on the dollar.

Whether the U.S. started this mess, or this mess started from the U.S. (two very different meanings), there is huge risk aversion worldwide.

This means that the dollar will be strong, at least in the short term. Are you looking at dollar trends vs. the euro (15%), aussie dollar (20%), brit pound (15%), korean won (30%)...including pesos (13%)?

Analysts think this strength will continue through the middle of 2009 at least, with crude oil prices expected to drop to even $50 per barrel.

I don't think people should dump dollar for a while...

^^ i must agree.. so let's all stay away from the mess as of now.. but i am thinking of buying some in november...

the us started this mess, and the bail-outs shall place us all in the abyss... dump the dollars guys..

-TC-

October 11th, 2008, 02:05 AM

http://biz.yahoo.com/ap/081010/wall_street.html

Stocks end wild session mixed, Dow falls 128
Friday October 10, 7:48 pm ET
By Tim Paradis, AP Business Writer

Wall Street ends mixed after week of massive losses

NEW YORK (AP) -- Wall Street capped one of its worst weeks ever with a wild session Friday that saw the Dow Jones industrials gyrate within a 1,000 point range before closing with a relatively mild loss and the Nasdaq composite index actually ending with a modest advance. Investors were still agonizing over frozen credit markets, but seven days of massive losses and the possibility of further government support for the markets tempted some investors late in the session.

The Dow lost 128 points, giving the blue chips an eight-day loss of just under 2,400, or 22.1 percent.

The average had its worst week on record in both point and percentage terms. The Standard & Poor's 500 index, the indicator most watched by market professionals, posted its worst weekly run since 1933.The latest loss also means the Dow is down 40.3 percent since reaching a record high close of 14,164.53 a year ago, on Oct. 9, 2007. The S&P 500, which reached its high of 1,565.15 the same day, is down 42.5 percent.

Investors suffered a paper loss for the day of about $100 billion, as measured by the Dow Jones Wilshire 5000 index. For the week, investors lost $2.4 trillion, and over the past year, the losses have piled up to $8.4 trillion.

But there were signs Friday that some investors believe the market is near a bottom. On Thursday, selling accelerated in the last hour of trading. The Dow was down 221 points at 3 p.m. but closed down 679 points an hour later. On Friday, the Dow was down 468 points at 3 but rocketed 790 points and was up 322 points just after 3:30. It then sold off but closed down only 128.

And the Russell 2000 index, which tracks the movements of smaller company stocks, had a 4.66 percent gain Friday; small-cap stocks are often first on investors' shopping lists when they think a market turnaround is at hand.

"Nobody wants to miss the bottom," said Anton Schutz, president of Mendon Capital Advisors, who said of the Dow's performance, "I view it as a victory that we only finished down 100."

Some investors may have been placing bets ahead of the weekend meeting of officials from the Group of Seven nations, who gathered in Washington to discuss the economic meltdown. One of the potential remedies expected to be reviewed at the meeting is for governments to guarantee lending among banks.

"Everyone is hoping for really good news that can invigorate some buying and break this credit freeze, but your guess is as good as mine as to whether that will happen. I think people are desperate for action," said Jon Biele, head of capital markets at Cowen & Co. "It truly is remarkable to watch what's happening."

Still, Friday's widely mixed finish was proof that Wall Street still has a long list of troubles, and trading is likely to remain volatile when the market reopens on Monday.

"This kind of volatility in the market tells you that there are huge disagreements among investors about what the fundamentals are, about what the outlook is," said Ethan Harris, managing director and chief U.S. economist at Barclays PLC.

The hair-trigger mentality of the market -- a reflection of the intense anxiety on the Street -- was evident from the opening bell. The Dow fell 696 points in the first 15 minutes, recovered to gain more than 100 before that first hour was over and then turned sharply lower again. It spent much of the session with a deficit between 300 points and 500 points, regaining some ground and then falling again -- until the last hour, when the average had swings spanning hundreds of points that took the Dow up as much as 322.

Investors have shuddered the past month over a credit market that remains frozen, posing a threat to the economy by making it harder and costlier for businesses and consumers to get a loan. But Friday's gainers included financial stocks, the ones most decimated by the credit crisis.

Harris said policymakers likely will continue to do what is needed to revive the credit markets. Actions taken so far by central banks, among them the Federal Reserve, have included increased lending and interest rate cuts.

"The deeper problem is not the stock market drop but the freezing up of the credit markets and that's the root problem and they have to keep applying the antifreeze until it works," Harris said.

The major indexes' sharp swings Friday were likely exacerbated by the computer-driven "buy" and "sell" orders that kicked in when prices fell far enough.

"Fear has been running rampant all over the Street. Fear and greed, that's what rules the Street. I think the carcass has been stripped to the bone," said Dave Henderson, a floor trader on the New York Stock Exchange for Raven Securities Corp. "The mood, it swings with the market. When we went positive, the euphoria down there was awesome. It's like at a football game."

The Dow fell 128.00, or 1.49 percent, to 8,451.49. At its low point Friday, the Dow was down 696.68 at 7,882.51, some 600 points above its low in Wall Street's last bear market, 7,286.27, reached Oct. 9, 2002. It crossed the line between gains and losses 32 times during the session.

Its close was the lowest since April 25, 2003.

Market index stats again told how horrific the run has been on Wall Street:

-- The Dow lost 1,874.19 points, or 18.2 percent, during the week. Its dismal performance outdid the week that ended July 22, 1933, which saw a 17 percent drop -- and back then, during the Great Depression, there were six trading days in a week.

-- The Dow has fallen for eight straight sessions -- the longest losing streak since the eight days of declines following the Sept. 11, 2001, terror attacks, when the blue chips lost 1,038.12, or 10.8 percent.

-- It's been the worst run for the Dow since the nearly two-year bear market that ended in December 1974 when the Dow lost 45 percent.

-- Since hitting their record highs a year ago, the Dow has lost 5,713 points, or 40.3 percent, while the S&P 500 is off 665.90 points, or 42.5 percent.

Beyond the Dow, broader stock indicators were mixed Friday.

The S&P 500 index fell 10.70 or 1.18 percent, to 899.22. The 18.2 percent drop for the week was the S&P's steepest decline since the week ending May 21, 1933; its worst loss was in 1929, when it fell 19.9 percent. The index lost 200.01 points for the week.

The Nasdaq composite index rose 4.39, or 0.27 percent, to 1,649.51. For the week, the Nasdaq lost 297.88, or 15.3 percent.

The Russell 2000 rose 23.28, or 4.66 percent, to 522.48. For the week, the Russell fell 96.92, or 15.64 percent.

Decliners led advancers 2-to-1 on the New York Stock Exhange, where consolidated volume came to a record 11.2 billion shares, compared with 8.14 billion traded Thursday.

Most major central banks around the world slashed interest rates this week after continuing problems in the credit market triggered concerns that banks will run out of money. Analysts have described the mood on trading floors this week as panicked at times, with investors bailing out of investments on fears there is no end in sight to the financial carnage.

A stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and those that remained opened were hammered. The rout in Australian markets caused traders there to call it "Black Friday."

European stocks sank Friday, with Britain's FTSE-100 falling 8.85 percent, German's DAX declining 7.01 percent, and France's CAC-40 ending down 7.73 percent. In Asia, the collapse of Japan's Yamato Life Insurance caused already nervous investors to pull even more money out of the market -- the Nikkei 225 fell 9.6 percent.

An index considered to be Wall Street's fear gauge reached record highs on Friday in another sign of massive investor anxiety. The Chicago Board Options Exchange Volatility Index, known as the VIX, rose to an all-time intraday high of 76.94 Friday. The VIX, which usually trades under 50, tracks options activity for the companies that make up the S&P 500.

Still, prospects of further government help and, perhaps, attractive prices helped parts of the financial sector show signs of life. Big national banks were among the gainers, including Bank of America Corp., which rose $1.24, or 6.3 percent, to $20.87. Some smaller banks also rose, including Fifth Third Bank Corp., which advanced 67 cents, or 6.9 percent, to $10.40.

Not all financials enjoyed a bounce, however. Morgan Stanley Inc. fell $2.77, or 22 percent, to $9.68 as investors worried that even with a major investment from Japan's Mitsubishi UFJ Financial Group the company was still facing troubles. Meanwhile, Goldman Sachs Group Inc. fell $12.55, or 12 percent, to $88.80.

Financials were most prominent among the stocks that rose in the S&P 500, though technology stocks generally advanced. Apple Inc. rose $8.06, or 9.1 percent, to $96.80, while eBay Inc. rose 77 cents, or 4.8 percent, to $16.73.

Investors appeared unfazed by final results arriving in afternoon trading from an auction Friday that set the price of debt issued by now bankrupt Lehman Brothers Holdings Inc. at 8.625 cents on the dollar, down from a preliminary estimate of 9.75 cents.

The auction was for credit default swaps, which are contracts used to insure against the default of financial instruments like bonds and corporate debt. Traded in a $60 trillion, unregulated market, many of the instruments have fallen sharply because of their ties to bad mortgage debt. Those big losses and nervousness about who holds what CDS has made financial institutions hesitant to lend to one another. The auction could help the market determine which companies are most at risk from CDS losses.

AP Business Writers Joe Bel Bruno, Sara Lepro, Madlen Read and Dan Strumpf in New York contributed to this report.

barukdok

October 11th, 2008, 02:34 AM

-TC-

October 11th, 2008, 02:59 AM

With the stocks going down, isn't it the right time to buy stocks?

As in lots and lots of stocks?

Then if it will go up again, then you sell your stocks and voila you have a profit!

:)
@LordCarnal, I'll answer you as a veteran market observer and player.

With the stocks going down, isn't it the right time to buy stocks?

Yes. I'm normally a momentum investor but times are different now. I'm temporarily going contrarian. Fear is now my friend. This fear as measured by the VIX Index (CBOE Volatility Index) was at all time highs this past week. It was a good buy signal for me so I started getting into some local stocks yesterday.

As in lots and lots of stocks?

No just some.

Remember not to use up all your ammunition in one go. Keep some bullets for later. Don't expect to always get it right. You have to pick stocks wisely and selectively. Go for blue chips which will usually be the first ones to recover from a carnage. With blue chips, you can put a tighter cut loss price (e.g. -10%) to protect yourself. And you have to follow it! If you are a newbie, get some advise from a professional and ask him/her to guide you on this as this won't be easy.

Then if it will go up again, then you sell your stocks and voila you have a profit!

What goes down, will go up again so you can make money in times like this.

jvl

October 11th, 2008, 07:58 AM

^I have to second the motion.

Agriculture is a good alternative alright. Especially now that the typhoon season is over.

Good luck to your endeavors guys!

crappypants

October 11th, 2008, 07:59 AM

it's good for ofws to buy farm lands instead of taxis, jeeps, sari sari store, which are dead end investments and are not really productive for the whole economy.
the more people plant, the more food prices will go down .
When shit hits the fan, those gadgets will be worthless . Survival and basic needs such as food and water will be paramount.
having said that who can help me find an agricultural land where it's still relatively cheap and there are no NPAs. What agency is there to help farming ignoramus persons get started?

jvl

October 11th, 2008, 08:08 AM

^Farming is quite a hands-on job in terms of management. But if you like to farm, you can also help in the daily routines.

Better to get land near where you are based so that you can easily monitor your business.

You have to be able to define the type of agricultural business you want (animal herding, fruit crops, fish culture, etc.) to be able to select a piece of land to suit your needs. Consider some points such as the cost of labor, fertilizer, transport, etc. before you start.

Is this already OT? :)

crappypants

October 11th, 2008, 08:12 AM

c0kelitr0

October 11th, 2008, 08:36 AM

johnnyS

October 11th, 2008, 08:51 AM

Iagree. We should buy non-depreciating assets.
And about really chap and no NPAs. I couldn't agree more.

it's good for ofws to buy farm lands instead of taxis, jeeps, sari sari store, which are dead end investments and are not really productive for the whole economy.
the more people plant, the more food prices will go down .
When shit hits the fan, those gadgets will be worthless . Survival and basic needs such as food and water will be paramount.
having said that who can help me find an agricultural land where it's still relatively cheap and there are no NPAs. What agency is there to help farming ignoramus persons get started?

johnnyS

October 11th, 2008, 08:52 AM

What about converting a farm land into a shallow pond for shrimp/fish? Is this dirty biz?

crappypants

October 11th, 2008, 08:57 AM

I was thinking of going into sugpo farming for export as they are very expensive overseas.

dancethingy

October 11th, 2008, 10:02 AM

Can the italian rice variety, risotto, be grown in the Philippines? Im sure there's a niche in the market for risotto.

johnnyS

October 11th, 2008, 10:40 AM

Remember? We are talking agriculture because of the impending WORLDWIDE DOOM?

Risoto... sounds elitest in the fact of doom and gloom.

Just joking.

Can the italian rice variety, risotto, be grown in the Philippines? Im sure there's a niche in the market for risotto.

Lucentino

October 11th, 2008, 11:54 AM

johnnyS

October 11th, 2008, 03:35 PM

Anybody here with some thoughts on our nation's huge debt?

How it might affect our stockmarket and currency in the face of this world crisis...

queetz@home

October 11th, 2008, 03:58 PM

How come we never get actual updates regarding the PSE Index now?

barukdok

October 11th, 2008, 04:22 PM

^^ farmlands are what i have :D i've leased them out to tenants on short-term basis ;)

my long-term plan is to build my retirement home on the edge of the rice paddies like those i've seen in Bali :D

that's sounds great :cheers: i'd like to retire that way too.

by the way, what kind of agreement do you have with the tenants? make sure the tenants don't go against you and cry CARP. the Dept. of Agriculture "sides" with the tenants and have a way of making it difficult for you when you plan to sell that property. but if you know the DAR people, that would be ok, i guess.

barukdok

October 11th, 2008, 04:24 PM

What about converting a farm land into a shallow pond for shrimp/fish? Is this dirty biz?

it depends if you have access to water. but i heard the Dept. of Agriculture is particular about certain breeds and processes because some shrimps carry disease.

barukdok

October 11th, 2008, 04:33 PM

^^I want fruit crops as I love fruits. :colgate:
wouldn't cost of labor be cheap? I'd also want to have a house built on the property.
I see alot of hectares for sale in the province Quezon, but i hear it's notorious for NPAs and revolutionary taxes. :ohno: that's a turn off for potential investors.

we actually share the same concerns. if you have militant friends, it would be good to talk to them. even cebu has NPAs but they move around, and jump to the neighboring island, depending on military activity. i asked a friend of mine na minsan umakyat regarding this concern, and she told me to just be calm should they approach and shouldn't be a threat to them (such as threatening them of informing the military). they usually target foreigners or abusive businessmen, especially those who deprive tenants of land. it helps to know someone from the movement so you can drop names.

honestly, i'm more worried with drunken istambays and criminals than the NPAs.

anyway, as to your fruit farm, the best place to start is with the Dept. of Agriculture. They have different fruit crops and seedlings you can choose from. also they should have manuals, guidelines or seminars for growing particular crops.

as to finding land, if your family has roots in a particular province, start there. the closer it is to a central business district, the better for your market. consider travel time, road network and industries nearby.

i suggest you visit the areas yourself and look for good terrain. then ask the local folk if someone's selling land. it's impossible no one's selling since some rural folk have urgent financial needs and all they have is land, some of them with lots of it.

if you find the price too steep, go on with your search outwards. the farther you are from the town or village center, the cheaper the land. i tell, you, this is an eye-opening experience, but it's never boring. in fact it's quite fun looking for land. it can get tiresome though, so you should plan your trips. just don't get too excited or get discouraged. remember, you're trying to do business with a land owner.

if there's property you like, ask about the papers and try to get a copy. this time you should consult a lawyer or broker you trust to check if the papers are in order.

barukdok

October 11th, 2008, 04:52 PM

Anybody here with some thoughts on our nation's huge debt?

How it might affect our stockmarket and currency in the face of this world crisis...

i was wondering: if the nation defaults on our debt payments and declare bankruptcy, who will bail us out?

johnnyS

October 11th, 2008, 05:18 PM

We don't want to depress ourselves more than we already are.

How come we never get actual updates regarding the PSE Index now?

johnnyS

October 11th, 2008, 05:24 PM

The only outfit available is the IMF. The last time they did this was in 1997 during the Asian currency crisis.

I am just worried, though, that although we are "not exposed (according to GMA)" to subprime mess and lehman (as if subprime and lehman were the only problem the world is currently facing), if the whole world is having problem with liquidity, wouldn't they want their money back to their own countries when the bonds are due? Effectively pulling money out of Philippines?

This is one key problem facing Korea right now. ANd their currency tanked 30% in TWO WEEKS.

If this happens, Philippines can't borrow more... which means... yes....doom doom doom!

Anyone out there who can tell me I am dead wrong by giving some specific reasons?

i was wondering: if the nation defaults on our debt payments and declare bankruptcy, who will bail us out?

dessertfox

October 11th, 2008, 08:50 PM

you're the man!

i agree that a huge part of OFW money must be poured into SMEs or micro-enterprises, including agriculture, instead of being splurged on "doodads" such as cellphones, mp3 gadgets, hair care(!).

i'm also planning to raise goats. hope you can give me a few tips. i'll PM you :cheers:

You may try some e-learning course on Goat Raising as well, and see for yourself if you will feel inclined to go into this venture. You will learn also a lot from the Goat Raiser Group since you will be provided with so many good references or download it from the site. The group discussion there is already an actual account of so many cases in raising goats.

Many inter-cropping farmers in Mindanao incorporate Goat Raising since they use to save a lot with fertilizer, using manure of Goats as organic fertillizer.

http://202.91.163.73:8080/elearning/

I found this to be interesting e-courses that is very helpful, though you have to wait sometime for their response.

You have also a choice to enroll in FGASPAPI seminar usually being held at DAR, you may inquire with Mr. Ben Rara its president of the group.

Hope this could help you somehow, I don't have yet the expertise in the field but the passion is there and my family and relatives as well as our workers now enjoys having this productive entrepreneurial activity. Thanks for KAMBY'S is now having a good run while our goats now find a paradise with ample varieties of forage since our farm is in the highland part of Laguna.

barukdok

October 12th, 2008, 02:26 AM

We don't want to depress ourselves more than we already are.

:lol:

dancethingy

October 12th, 2008, 09:00 PM

Remember? We are talking agriculture because of the impending WORLDWIDE DOOM?

Risoto... sounds elitest in the fact of doom and gloom.

Just joking.

hmmmm... i don't believe in classifications. To label arborio rice as elitist because it is rare and mostly eaten in Italy is not fair. Tinawon rice has been grown in the cordilleras for thousands of years, well two thousand, and its being sold for over 500-750pesos per kilo in the United States. Does that make tinawon rice elitist? i cooked 500grams of arborio rice yesterday and it fed 8-10 people. Growing a variety of rice like arborio in the Philippines would make risotto dishes cheaper for culinary fans. I agree that risotto is not a familiar dish to a lot of Filipinos and many would probably find it not so palatable, but to have a taste for something different and not so available is not so bad is it? that is if one thinks of elitism as bad? Which i kinda do.

I love to eat and try all types of cuisine. Im sure im not the only one. I love my monggo-tinapa dish as much as i love my prawn and asparagus risotto :)

by the way, goat meat risotto may be a good mix. It's all about making things cheaper for all Filipinos. So everyone can have a try whenever they want to.

-TC-

October 13th, 2008, 03:27 AM

http://business.inquirer.net/money/features/view/20081012-166055/Buffett-style-investing-shines

Buffett-style investing shines

By Ma. Salve Duplito
INQUIRER.net
10/12/2008

VANDERMIR C.T. SAY started investing when he was 12 years old. That was 22 years ago. He recalls picking stocks the way he would play darts.

Not anymore. For the last decade or so, Vandermir has become a Warren Buffett-follower, investing only in good companies at good prices and buying them for the long haul.

In the last couple of months, amid cascading losses in markets all over the world, Buffett’s value investing philosophy has attracted.

The fact that Buffett, the world’s richest man according to Forbes magazine, has emerged as Wall Street’s knight in shining armor after injecting funds into Goldman Sachs and General Electric a week ago has most likely upped the ante significantly on value-style investing.

And if the sale of Buffett’s first and only authorized biography “The Snowball: Warren Buffett and The Business Of Life” written by Alice Schroeder (editor of Berkshire Hathaway’s layman-friendly annual reports) is any indication, the interest is just heating up. Just days after it hit bookstores in Sept. 29, the book has claimed a top spot on Amazon’s best-selling book list.

Say, the Chartered Financial Analysts of the Philippine’s new president, explains that value-style investing is based on very simple principles. “All we look for are good businesses at good prices,” he says.

What makes a good business? One that you’re absolutely sure will make good money in the next, say, 20 years and run by highly capable management with high integrity. That means you only invest in businesses you understand -- a trademark Warren Buffett philosophy.

In this day and age of extremely volatile markets, the value investor is unfazed because he buys and holds for as long as he needs the investment. He is not concerned about fluctuations. His life is relatively simpler and less harried because for him, Wall Street can wallow in its own toxic securities.

Contrast that with an investor who makes money from trading stocks or bonds and who had to watch his portfolio drop more than 20 percent in the last couple of weeks, asking himself every morning, “Is this ever going to end?”

In fact, Say says, some value investors he knows who have the extra cash are now revving up for acquisitions. After all, prices are low and whether in good or bad times, a good business is a good business.

“In general, what is happening is good for us because the crisis is pushing down prices. My job now is to look for good businesses,” Say says.

Whether in stocks and bonds, Say says good opportunities in the market are starting to emerge. He declines to say what are good buys, but gives tips: Look for businesses that are managed by people with high integrity and find companies that respect the rights of minority shareholders. Those two criteria alone will shorten the list of good bargains out there in the market, he says.

“Right now, Buffett can buy almost anything in the market, but look at companies that he is buying. Goldman and GE, companies that are being run very well … Integrity is important, the goodness of a person is important. What if you meet some guy with no integrity but you can probably make $200 million, you should say no. Why go through all that stress? There are better ways to make money,” he adds.

These may sound like dreamy principles in a day and age where everything is measured by money and returns. But it also uncannily explains why Wall Street is tottering like a drunken lunatic in a suit: Greed is the root cause of the subprime mortgage problem. Even more greed by investment bankers and hedge fund managers blew that out of proportion through derivatives instruments disclosed in legalese language very few understood.

“Buffett and Charles Munger (Buffett’s business partner) have attacked derivatives three or more years ago. Munger said comparing derivatives to a sewer is an insult to sewers. Now in this crisis, what is the value of his advice? Multibillion dollars because what are the key to the problems now? Derivatives,” Say explains.

That said, Say doesn’t see the popularity of value investing to stay for long. “It is the flavor of the year, but if you are asking if it will generally be much more popular than before, I would guess not. Buffett learned from Benjamin Graham more than 50 years ago. It is not a secret; it has been around for a long time. But it has never been a popular style,” he says.

Reading annual reports and understanding what makes a business tick takes a lot of patience. It’s based on analysis, and not a quick tip to make a quick buck by flipping a stock or bond. Adhering to those principles and being disciplined is the hardest part, says Say, because old habits die hard.

“There are a number of value investors here in the country. They are in the minority, as well as with any other market, even in the US,” he says.

And do they make more money than the flippers? Say knowingly smiles, and says, yes, they are wealthy.

The 32-year-old investor tries to emulate Buffett not just in investing but also in the way he lives. Buffett, the shy billionaire who is also called the Oracle of Omaha, still lives in his house in Nebraska that he built more than 50 years ago, doesn’t have a driver, is brand loyal, and highly values integrity. Say uses an old model mobile phone and says his passion is helping people live better lives.

“My clients have been calling me about the book (Snowball) when it came out, and they were very excited about it. It’s like our Harry Potter,” he says with childish excitement.

c0kelitr0

October 13th, 2008, 07:13 AM

that's sounds great :cheers: i'd like to retire that way too.

by the way, what kind of agreement do you have with the tenants? make sure the tenants don't go against you and cry CARP. the Dept. of Agriculture "sides" with the tenants and have a way of making it difficult for you when you plan to sell that property. but if you know the DAR people, that would be ok, i guess.

the one under my name is not too big so it's not under CARP ;) don't worry, we've already "chopped" our lands under several "safe" sizes :D

crappypants

October 13th, 2008, 07:20 AM

hmmmm... i don't believe in classifications. To label arborio rice as elitist because it is rare and mostly eaten in Italy is not fair. Tinawon rice has been grown in the cordilleras for thousands of years, well two thousand, and its being sold for over 500-750pesos per kilo in the United States. Does that make tinawon rice elitist? i cooked 500grams of arborio rice yesterday and it fed 8-10 people. Growing a variety of rice like arborio in the Philippines would make risotto dishes cheaper for culinary fans. I agree that risotto is not a familiar dish to a lot of Filipinos and many would probably find it not so palatable, but to have a taste for something different and not so available is not so bad is it? that is if one thinks of elitism as bad? Which i kinda do.

I love to eat and try all types of cuisine. Im sure im not the only one. I love my monggo-tinapa dish as much as i love my prawn and asparagus risotto :)

by the way, goat meat risotto may be a good mix. It's all about making things cheaper for all Filipinos. So everyone can have a try whenever they want to.

we should also plant basmati rice, i love basmati rice. I wonder if it's the type of soil that makes the difference though on whether it will yield the same type of crop. farming ignoramus here. anyway doesn't planting varieties help with soil nutrient depletion and helps with pestilence prevention.

jvl

October 13th, 2008, 08:50 AM

Guys, I think there is a separate thread for agriculture. I need to know updates/opinions regarding Peso and Stocks since a lot is on the line 'ya know. Thanks!

icarusrising

October 13th, 2008, 09:11 AM

RP shares close 1% higher (http://www.abs-cbnnews.com/business/10/13/08/rp-shares-close-1-higher)
Agence France-Presse | 10/13/2008 12:59 PM

Philippine share prices closed 1.0 percent higher Monday as investors searched for bargains after steep falls last week, dealers said.

The composite index put on 20.95 to close at 2,118.75.

as of 10/13/2008 12:59 PM

johnnyS

October 13th, 2008, 10:19 AM

It's 40.25pesos to dollar now.

But the forecast is general downturn in the peso going forward due to worldwide recession, and expected contraction in remittance from OFWs starting in 2009.

THe forecase is from Bloomberg News.

jvl

October 13th, 2008, 10:35 AM

^Is that a typo or for real?

So what was the forecast for the Peso in the short term? 48-50? Some analyst previously said the Peso-$ will be around 44-47 in the last quarter of the year and no one has revised this forecast.

johnnyS

October 13th, 2008, 11:14 AM

The forecast is 49 by the yearend, and 50 in 2009.

Analysts differ on their forecasts. The one I was quoting was from Bloomberg News.

johnnyS

October 13th, 2008, 11:15 AM

Oops!
TYPO!!

I meant 47.25. Sorry

jvl

October 13th, 2008, 11:43 AM

My feeling for the Peso is quite in that territory as well:
*Last Qtr. 2008 @ 46-49 per $ (BSP cannot arrest the slide)
*Mid 2009 @ 47-50 per $ (BSP should let market forces dictate the value)
*Last Qtr. 2009 @ 49-52 per $ (full-year impact of world economic crisis may be felt / also coming election year might directly affect investor confidence)

OFW money could cushion the impact for the last qtr 2008, but will not be enough. Fewer remittance expected by 2009.

With the stocks going down, isn't it the right time to buy stocks?

As in lots and lots of stocks?

Then if it will go up again, then you sell your stocks and voila you have a profit!

:)

I guess this just happened today:

RP shares close 1% higher
Agence France-Presse | 10/13/2008 12:59 PM

Philippine share prices closed 1.0 percent higher Monday as investors searched for bargains after steep falls last week, dealers said.

The composite index put on 20.95 to close at 2,118.75.

johnnyS

October 13th, 2008, 12:03 PM

I think one important variable in peso is the remittance.

As we put so much hope on the remittance, and if the remittance should fall below what is expected, it could shatter the hopes of investors, leading to a rapid peso decline.

As of now, we are still expecting a record remittance in 2008. As we have seen, huge fluctuations are going on worldwide, and I think there is a chance that the remittance could see a sharp downturn this Christmas season.

I think our gov't should start downplaying the remittance volume for 2008, so that our expection is not built up. And if the remittance should be higher than expected, well heck, we can benefit in the peso strength.

-TC-

October 13th, 2008, 10:58 PM

@LordCarnal, I'll answer you as a veteran market observer and player.

With the stocks going down, isn't it the right time to buy stocks?

Yes. I'm normally a momentum investor but times are different now. I'm temporarily going contrarian. Fear is now my friend. This fear as measured by the VIX Index (CBOE Volatility Index) was at all time highs this past week. It was a good buy signal for me so I started getting into some local stocks yesterday.

As in lots and lots of stocks?

No just some.

Remember not to use up all your ammunition in one go. Keep some bullets for later. Don't expect to always get it right. You have to pick stocks wisely and selectively. Go for blue chips which will usually be the first ones to recover from a carnage. With blue chips, you can put a tighter cut loss price (e.g. -10%) to protect yourself. And you have to follow it! If you are a newbie, get some advise from a professional and ask him/her to guide you on this as this won't be easy.

Then if it will go up again, then you sell your stocks and voila you have a profit!

What goes down, will go up again so you can make money in times like this.

http://biz.yahoo.com/ap/081013/wall_street.html

Dow jumps 936 as governments pledge bank aid
Monday October 13, 4:52 pm ET
By Tim Paradis, AP Business Writer

Dow soars 936 after major governments pledge to support the global banking system

NEW YORK (AP) -- Wall Street stormed back from last week's devastating losses Monday, sending the Dow Jones industrials soaring a nearly inconceivable 936 points after major governments' plans to support the global banking system reassured distraught investors. All the major indexes rose more than 11 percent.

The market was expected to rebound after eight days of precipitous losses that took the Dow down nearly 2,400 points, but few expected this kind of advance, which saw the Dow by far outstrip its previous record one-day point gain, 499.19, set during the waning days of the dot-com boom. The Standard & Poor's 500 index also set a record for a one-day point gains.There were cheers and applause on the floor of the New York Stock Exchange at the closing bell, and trading was so active that prices were still being computed several minutes after the closing bell, longer than it would take on a quieter day.

Still, while the magnitude of Monday's gains stunned investors and analysts, few were ready to say Wall Street had reached a bottom. The market is likely to have back-and-forth trading in the coming days and weeks -- and may well see a pullback when trading resumes Tuesday -- as investors work through their concerns about the banking sector, the stagnant credit markets and the overall economy.

John Lynch, chief market analyst for Evergreen Investments in Charlotte, N.C., said Monday's rally was encouraging but he doubted it signaled the worst has passed.

"My screen is completely green and I love that, but I'm not doing any backflips yet. We still have many challenges up ahead," Lynch said, noting the ongoing strains in credit markets and forecasts for poor corporate earnings for 2009.

Denis Amato, chief investment officer at Ancora Advisors, said it's too soon to say whether the market has started to carve out a bottom and that the credit markets where many companies turn for day-to-day loans will need to loosen for stocks to hold their gains. With the U.S. bond markets and banks closed Monday for Columbus Day, it was difficult for investors to gauge the reaction of the credit markets to actions by major governments.

He said the severity of the selling last week was one possible signal that the market might be nearing a bottom and that the stepped up intervention of the government is a welcome sign for the markets.
"I think we had enough negatives last week that if the government steps in we could have a pretty nice run. Is it off to the races? No, I don't think so. We have a lot of stuff to work through."

The market did appear to take heart when the Bush administration said it is moving quickly to implement its $700 billion rescue program, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help revive the stagnant credit markets and in turn get the economy moving again.

Neel Kashkari, the assistant Treasury secretary who is interim head of the program, said in a speech Monday officials were also developing guidelines to govern the purchase of soured mortgage-related assets. However, he gave few details about how the program will actually buy bad assets and bank stock.

A relatively tame finish to Friday's session and a weekend off gave analysts and investors some time to reassess last week's tumultuous trading. And stock prices that were decimated by frenetic selling are now looking attractive.

Jim King, chief investment officer at National Penn Investors Trust Co., said the fear that took hold of the markets last week was overwrought and could signal that a bottom is near. When selling turns so frenetic that it hits a broad swath of stocks indiscriminately, as it did last week, many market
watchers say a market low is at hand. That creates opporunity, King noted.

"We have exceptional companies at fire sale prices," he said.

Still, King cautioned that any market rebound likely will be choppy.

"Even if this is the beginning of a recovery we're not just going to have up markets from here on in," he said. "We're not through the woods. We think there is collateral damage from this debacle." King pointed to an increase in unemployment and nervousness among consumers that could, for example, hurt retailers and in turn, take stocks lower.

According to preliminary calculations, the Dow rose 936.42, or 11.08 percent, to 9,387.61. The Dow's previous record for a one-day point gain was 499.19, or 4.93 percent, on March 16, 2000.

Broader stock indicators also jumped Monday. The S&P 500 index advanced 104.13, or 11.58 percent, to 1,003.35; it was the biggest point gain ever for the S&P 500, eclipsing the 66.33, or 4.76 percent, jump it had on March 16, 2000. It was the biggest percentage gain for the index since March 15, 1933, when it surged 16.6 percent.

The Nasdaq rose 194.74, or 11.81 percent, to 1,844.25, its 10th biggest point gain; during the dot-com boom, the index soared as much as 324.83 in one day. Its percentage gain Monday was second to the 14.2 percent logged Jan. 3, 2001, the same day that the Nasdaq set its record for a one-day point gain.

About 3,030 stocks advanced on the New York Stock Exchange, while only about 160 declined -- a reversal from last week, when declining stocks overwhelmed the gainers. But the trading volume of 1.82 billion shares was lighter than it had been last week, suggesting there was less conviction in the buying than during last week's selling.

Lynch described the mood among investors as "relaxed" compared to the hysteria of last week's crushing losses.

Wall Street was cheered by word from the Bank of England that it would use up to $63 billion to help the three largest British banks strengthen their balance sheets.

The Bank of England, the European Central Bank and the Swiss National Bank also jointly announced plans to work together to provide as much short-term funding as necessary to help revive lending.

After a series of weekend meetings in Washington of heads of the Group of Seven nations, the gains in global markets signaled that investors found comfort from the actions and pledges coming from government officials.

The surge in stocks comes after a dismal week on Wall Street that erased an estimated $2.4 trillion in shareholder wealth. The Dow, after eight consecutive daily losses that totaled just under 2,400, or 22.1 percent, finished at its lowest level since April 2003, and also suffered its worst weekly percentage loss ever, a fall of 18.2 percent.

Meanwhile, the S&P 500 and the Nasdaq each lost 15.3 percent last week.

Recoveries from past crashes have taken considerable time. When the market crashed Oct. 19, 1987, sending the Dow down 508 points to 1,738.34, the blue chips had lost 938 points, or 36.1 percent, since reaching a then-record close of 2,722.42 on Aug. 25, 1987. It took just over 15 months for the Dow to get back to its pre-crash level, and almost two years to the day -- Aug. 24, 1989 -- to reach a new closing high, 2,734.64.

The Dow has an even larger percentage drop to regain this time. By Friday's close, the average had fallen 5,713 points, or 40.3 percent, from its record finish of 14,165.43 a year earlier, on Oct. 9, 2007. More recently, it has had fallen 2,970, or 26 percent, from its close before the Sept. 15 collapse of Lehman Brothers Holdings Inc., the event that triggered the freeze-up in the credit markets and that sent stocks plunging.

Investors have worried that banks' reluctance to lend to one another would imperil economic activity by making it harder and more expensive for businesses and consumers to get a loan. The mid-September bankruptcy of Lehman Brothers Holdings Inc. exposed major fault lines in the credit market as investors lost money on bad debt. That triggered a tightening of lending conditions.

"Everybody is basically waiting on the decision on where they're going to inject cash," Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York, said of Bush administration officials. He said with the bond markets closed, U.S. government officials are likely holding off on announcement of details about where it might invest money until all major global markets are open.

Rovelli said that a sustainable advance on Wall Street could prove elusive.

"Everybody knew that we were going to have an up day eventually," he said, warning that the rally doesn't necessarily signal an end of the market's troubles.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude rose $3.49 to $81.19 on the New York Mercantile Exchange after oil fell to its lowest level in 13 months last week.

The Russell 2000 index of smaller companies rose 48.41, or 9.27 percent, to 570.89.

Investors in Asia and Europe also grabbed stocks after last week's rout and the weekend moves by governments to bolster investor confidence.

In Asia, Hong Kong's Hang Seng index surged 10.2 percent. Markets in Japan were closed for a holiday. In Europe, Britain's FTSE 100 jumped 8.26 percent, Germany's DAX index rose 11.4 percent, and France's CAC-40 surged 11.2 percent.

-TC-

October 13th, 2008, 11:23 PM

http://business.inquirer.net/money/breakingnews/view/20081014-166266/Wall-St-soars-11-on-bank-rescue

Wall St soars 11% on bank rescue
Reuters
Manila Time 10/14/2008

NEW YORK — (UPDATE) Wall Street roared back from its worst week ever with one of its best single days ever on Monday, as governments pledged to pour cash into struggling banks to restore confidence in a rocky global financial system.

Bargain-hunting investors scoured the wreckage from eight days of losses that had whacked more than 20 percent off the value of the benchmark S&P 500. Health care, utility and energy stocks rose the most in what was the first day of gains this month for the Dow and S&P 500.

Morgan Stanley drove the rally in financial shares, soaring 87 percent after Mitsubishi UFJ Financial Group completed its $9 billion investment in the US bank as US government support helped nail down a critical deal many investors had feared could fall apart. Wachovia climbed 13.6 percent after the Federal Reserve approved the $12.46 billion takeover of the US bank by Wells Fargo & Co.

"The crucial issue for the market has been a lack of confidence and the most recent efforts to ease the credit crunch by governments and central banks have been very positive in terms of building confidence," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

Led by Britain, European governments agreed to multibillion-dollar guarantees for the banking system in moves that may become a crucial test of investor faith in government's ability to reverse the downward spiral.

The US Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank also said they would lend commercial banks as much US dollar liquidity as they needed to ease clogged interbank lending rates. The S&P financial index shot up 10.23 percent.

The Dow Jones industrial average rose 936.42 points, or 11.08 percent, to 9,387.61, its biggest one-day point gain ever and its biggest percentage gain since March 15, 1933.

The Standard & Poor's 500 Index also notched its best single-day point gain, up 104.13 points, or 11.58 percent, to 1,003.35. The Nasdaq Composite Index was up 194.74 points, or 11.81 percent, at 1,844.25, its biggest one-day point gain since January 2001.

General Motors jumped 33.1 percent to $6.51 after reports that the automaker was in merger talks with rivals Chrysler LLC and Ford Motor Co., whose shares surged 20.1 percent to $2.39.

Defensive and consumer staples stocks rose as investors picked up shares in companies generally considered better positioned to weather an economic downturn. Johnson & Johnson rose 12.2 percent to $62.68.

Among tech shares, Apple Inc was up 13.9 percent at $110.26, after Citigroup raised its recommendation on the US technology hardware and equipment sector to "market weight" from "underweight." Microsoft gained 18.6 percent to $25.50.

Energy companies tracked the price of oil higher. Crude oil gained $3.49, or 4.49 percent, to settle at $81.19 a barrel on optimism over the governments' moves to shore up confidence in the banking system. Exxon Mobil gained 17.2 percent to $73.08, and Chevron climbed 20.9 percent to $69.89.

Morgan Stanley shares spiked 87 percent to $18.10, while those of Wachovia rose 13.6 percent to $5.85.

In a sign that credit markets may be loosening up, the cost for banks to borrow dollars, sterling and euros from each other over three months fell. But the US Treasury market was closed for the Columbus Day holiday.

"We've had a nice snapback rally in stocks today as we got that favorable piece of news about the investments in the banks," said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama. "But these gains, this momentum, may not be sustainable. We'll see what happens tomorrow when the bond market reopens."

Trading was moderate on the New York Stock Exchange, with about 1.82 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 2.60 billion shares traded, above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones by a ratio of 20 to one on the NYSE and by seven to one on the Nasdaq.