Auto Bailout

Looks like the Federal Goverment is bent in helping the big three (now becoming the "small three"). I think the goverment can't let these companies go bankrupt as this will definitely affect the devastated US economy. There are some people who think that these three should be saved. They said that if the US goverment spend billions of dollars in Iraq and Aghanistan, helping other countries, why not spend money in helping its own people. By not helping these big three will result in unemployment. So why not helped them to avoid adding percentage in the rising unemployment rate?
Another problem in this bailout is the stand of the Unionist. They don't want pay cut to be implemented now to be realligned with Japan job pay. I think they want it only after 2010.

Let's pray that they find a common ground to work it out and come up with win-win solution to the problem.

On the other side, stocks are up today. I have MEG shares which I will be selling even if I will only earn a few bucks. I am still on my plan of buying shares come February 2009.

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Pacquiao Fight

National hero done it again!!!
Pacquiao won the match with the golden boy. It's a mismatch from the very beginning. They said Dela Hoya is too big for "Pambansang Kamao" but Pacman proved them wrong, mismatch is the other way around.
Pacman definitely affects all components of Filipino life. From individual to national politics. According to PNP, there are no crime incidents happenned during the fight. Maybe all bad elements are glued on the TV. That's a good news!
The bad news? Politician put Pacman on top of their duties. Let's see... Atienza... congressmen... tsk tsk tsk.

Back to economy: What is the effect of this fight to our economy? Let's pray Pacquiao spend his millions in the Philippines not in other countries. But that his money anyway.

Recession History

1929 - 1933
- Great depression.
- Unemployment rate is 25%.
- GDP contracted by 28%.
- Banking system collapsed. absence of bank
deposit insurance at the time caused catastrophic
erosion to household wealth and consumption.

1973 - 1975
- Lasted a longer-than-average 16 months with 9% unemployment rate.
- Cause by surge in oil prices.

1981 - 1982
- Lasted a longer-than-average 16 months with 10.6% unemployment rate.
- Cause by high interest rates due to the desire of Fed chairman
Paul Volcker to drive inflation.

1990 - 1991
- Mild recession.

2001
- Mild recession.

2007
- According to National Bureau of Economic Research (NBER), US recession started December of 2007. It is the time when significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators.
- The economy has shed 10.3 million jobs.


Average time of recession - 10.4 months
End of recession - Middle of 2009

Landslide and Stocks

I've been to bicol (Camarines Norte) last week and it is raining like hell! Landslide and damaged detours are everywhere! There is a landslide near our home that covered the whole road. It took 2 dump trucks and a bulldozer to clear the road after 4 days! Boy, the goverment of Camarines Norte would be known for their being too slow to respond on such events! But with good luck, we came back to Manila in one piece :)

4 days without information of what's going on in financial market (what a rest!). I kept thinking how my stocks are doing and a whole market as well. Not surprisingly, it is still the same. With news about bailout, credit crunch philippine politics - all sucks!

Stocks these days are going landslide, but as Buffet said, "It's time to be greedy when others are fearful".

Mumbai Blast

Yesterday (November 27) there was a terrorist attack in Mumbai, India. More than 100 people died as a result of this attack. The event did not affect trading in US although a lot of American are doing business in India.

Today at PSE, stocks are a bit lower, I don't know if it is an after effect of this attack. PSE gain for the past 4 days due to Wall Street rally as goverment news of bailout on car industry and bargain stock buying. I hope the rally would continue until January next year.

As for stock buying, I think waiting until February next year will be a good idea. The market is not yet stable and it will catch up around April next year [based on my fearless forecast :) ]


http://ultiref.blogspot.com

Citigroup Rescued?

It is another good news that federal goverment injected billions to ailing citigroup. The news pushed up stocks for a few days now. Still it is not enough to save the whole company. They are now planning to sell some of their subsidiaries like the wealth management. It is not a good news to us, filipinos but that's how things are, some times we hit the bottom.


http://ultiref.blogspot.com/

MEGAWORLD Shares

I am banking on MEG shares. 'Bought 40K shares initially but will be buying until end of next year. I am in long term trading, hopefully I made the right decision.

I bought its shares because I believe MEG has a lot of potential to be one of the best company here in the Philippines like Ayala :). If you happen to go to The Fort, you'll know what I am talking :).

Investing at PSE

World market are not doing well. It's a worldwide financial crisis. Philippines is also affected. Do you think it will be alright to buy stocks? What do you think is the best stocks to buy these days?

Philamlife - AIG

I read in a news that it might be out for bid and Yunchenco group is having a thought of putting a bid for it? I don't know how they will manage the company after CAP scandal? Tsk tsk tsk... They never learn...

Philippine Financial Market

As of today, Philippine financial market still not been able to recover from the onslaught of US credit crunch. Although, stocks gain some positive points but still not a good sign of better days. I still watching how the market would react to some positive news.

AIG Philippines

Yet another casualty?
Is AIG Philippine affected by the current woes of its parent company? According to financial experts, if it is traditional insurance operations like property, casualty, auto and life insurance to annuity and investment services, they are insulated and AIG still have the capability to pay claims.

It is also a very positive news that federal goverment release 85 billion dollars emergency loan and allowed to use 20 billion from its subsidiaries. This move is due to the fact that disorderly failure of AIG could further hurt delicate US economic situation.

The question now is, with AIG parent company's situation, how big is the impact to AIG Philippines?


My other blogs:

http://unhappyemployee.blogspot.com/
http://pagsamba.blogspot.com/
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BPS - Basis Point

BPS is a unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

The relationship between percentage changes and basis points can be summarized as follows:

• 1% change = 100 basis points, and 0.01% = 1 basis point.

So, a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points.

Exciting the Market

Other countries are now pumping in fund to money market. Japanese goverment injected 2.5 trillion yen in hope of strenghtening its economic outlook. Can the Philippine goverment do the same?

2008 US Financial Crisis

Lehman Brothers - Investment bank. Undermined by bad bets on real estate.

News:
Lehman Brothers said in a statement early Monday that it plans to file for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. The 158-year-old investment bank had been undermined by bad bets on real estate -- the value of its shares declined 94 percent this year.

Merrill Lynch - Wealth management company. Suffered bad real estates bets.

News:
Bank of America plans to buy Merrill Lynch in an all-stock $50 billion deal, pending approval by federal regulators and shareholders of both companies, the bank said in a statement. The transaction is expected to close in the first three months of 2009.

Freddie Mac and Fannie Mae- Mortgage finance company. Suffered in the subprime mortgage crisis.

News:
This month, the U.S. government took over mortgage finance companies Fannie Mae and Freddie Mac. That was Washington's most dramatic attempt yet to shore up the nation's faltering housing market, which is suffering from record foreclosures and falling prices. That plan calls for the government to run Fannie and Freddie until they are on stronger footing.


Bear Sterns - Investment bank.

News:
Bought by JP Morgan Chase and Co.

Stock Market Tumbled

Today asian stock market dived as a result of continued fear on US market slowdown and problem with Lehman Brothers and the credit crunches due to subprime mortgage which affected Freddie Mae and Fannie Mac. Nekkei 225 index, Hong Kong stock index, South Korea's Kospi, Taiwan benchmark, Australia and New Zealand all suffered negative points.

Philippine Stock Exchange Index (PSEI) suffered one of its biggest negative points as it sheds more than 100 points to its present index. Trading is a bit gloomy in this weeks tradings. Although, oil prices is down (about 97 per barrel) but fear and speculation on US economy affected Asian market especially the Philippines. Coupled with low peso rate againts the dollar, prices of imported products would definitely go up. Inflation for this month is as high as 12% which prompted the goverment to re-assess its economic target for this year.

How To Beat Inflation

Inflation is the number one enemy of our savings. It is the reason why our 500 pesos today might cost only 250 pesos in the future. Inflation eats our investments. If for example you want to save 1 million pesos in 5 years but the inflation is 10 percent, your actual savings is only 900K.

So how to beat inflation? According to experts you could beat inflation it two ways:

1. Save more than what you are saving now. If you want to save 1M in five years with inflation of 10 percent, you should save 1.1 M so that you will have 1M in five years.

2. Invest your money in stock market. It is risky but it is usually have a high returns. If you are a new player, expert says that you can go for a mutual fund instead. It is less risky since mutual fund is manage by professional fund manager.

My other blogs:

http://unhappyemployee.blogspot.com/
http://pagsamba.blogspot.com/
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Philippine Best Online Broker

I am trading stocks using an online broker. The broker is owned by one of the biggest bank here in the Philippines. I don't have other account in other broker as it would be difficult for me to track my stocks.
I just started in stock market, I don't know which is the best online broker in the Philippines. I asked my friend who has a lot of experience in an online trading, he told me that citiseconline is the best online broker (for him) since it is faster in terms of updating its quotations and gives a lot of advises to its client. I also check citiseconline before I started buying stocks but was discouraged since I need to deposit to their account and it will be a bit complicated (for me) to widthdraw fund. Opening account from my broker is easier for me since I just need to open an account to my name and nominate a settlement account (also to my name, which I already have) where I can widthdraw fund. With these things in perspective, i opted not to use citiseconline.

Here are some of the online brokers that I know:

1. http://www.citiseconline.com.ph
2. http://www.abcapitalonline.com
3. http://www.bpitrade.com
4. http://www.firstmetrosec.com.ph


My other Blogs:

http://pagsamba.blogspot.com
http://unhappyemployee.blogspot.com
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Stocks

I bought Petron (PCOR), DM Consunji (DMC), Tanduay (TDY) and Unioil (UNI). Are they good stocks?

Bear Market

I'm very new in stock market. I bought some stocks of Petron. My collegue told me that I should wait until early next year to buy stocks. Should I listen to his advise or should I go ahead and continue buying?