Financial Crisis: The Philippine Version

**jpdm** · October 29th, 2008 01:55 PM

--Well, the fall of the peso although related is a separate story from this financial crisis.

--The depreciation of the peso is the result of the financial crisis abroad and the declining local stock market...

--BSP assured the Pinoys that our banking sector is very strong, despite again our PSE is experiencing a beating because foreign investors are unloading their investments here..

--But fear gripped the PSE when BDO lost alot of money due to its exposure to Lehmans..

--it seems perhaps, a portion of our financial sector is indeed VERY vulnerable to to financial crisis in the US..

**jpdm** · October 29th, 2008 02:03 PM

Originally Posted by uls

Tidus is a survivor.

He has killer instinct.

His loved ones will not go hungry.

His loved ones are lucky they have him to depend on.

Speaking of killer instinct, do you think ULS that AIG, Lehman, Morgan Stanley have killer instincts too?

Please answer, then I will ask a follow up question. Because Im very fascinated of our explanation of the natural selection theory.

Can we apply it with this raging global financial crisis?

**tidus1203** · October 29th, 2008 02:06 PM

The banking sector is strong in the sense you don't have to worry about your deposits unlike in the US. The stock market is irrelevant to the real economy since its just money flows. If there are sellers then it falls but that does not mean if the stocks fall the company is in bad shape already. I think we have to distinguish the two.

**jpdm** · October 29th, 2008 02:18 PM

Originally Posted by tidus1203

The banking sector is strong in the sense you don't have to worry about your deposits unlike in the US. The stock market is irrelevant to the real economy since its just money flows. If there are sellers then it falls but that does not mean if the stocks fall the company is in bad shape already. I think we have to distinguish the two.

But when the company's shares fall, it diminishes the value of the money put up by investors right?

Will it not affect somehow the performance of the company?

Or it has no effect at all?

**tidus1203** · October 29th, 2008 02:28 PM

No the money has already been placed during the IPO. The stock market is already secondary market, so its between the buyers and the sellers and has nothing to do with the company. WHile no company wants to see its stock price fall it really won't affect them on an operational standpoint. Like sa Jollibee tuloy pa din ang business, pero the stock is tanking.

**jpdm** · October 29th, 2008 02:34 PM

Originally Posted by tidus1203

No the money has already been placed during the IPO. The stock market is already secondary market, so its between the buyers and the sellers and has nothing to do with the company. WHile no company wants to see its stock price fall it really won't affect them on an operational standpoint. Like sa Jollibee tuloy pa din ang business, pero the stock is tanking.

But it dampens investors confidence di ba?What if investors will damp say Jollibee shares, what will happen to Jollibee?

Will it affect their operation or expansion or plan in the future?

**tidus1203** · October 29th, 2008 02:44 PM

Nothing. The person who bought the stock lost money, but Jollibee will not lose money and will continue to do its usual business and people still line up to buy food. There are many ways to raise money and issuing shares to the public is just one of them, if people are not interested in your shares you can always go the usual financing routes of bank financing or trying the debt market and raise money there instead.

**uls** · October 29th, 2008 02:50 PM

Originally Posted by jpdm

Speaking of killer instinct, do you think ULS that AIG, Lehman, Morgan Stanley have killer instincts too?

Please answer, then I will ask a follow question. Because Im very fascinated of our explanation of the natural selection theory.

Can we apply it with this raging global financial crisis?

i know where you're going with this but i'm still gonna answer your question

Lehman and AIG got into trouble for different reasons.

First, AIG became the biggest insurance company in the world coz sobra galing ang former chairman/CEO na si Maurice Greenberg.

He is a very shrewd businessman.

You cannot build the world's biggest insurance company if u don't have killer instinct.

What brought AIG to its knees was a small London unit.

That London unit wasnt selling traditional insurance products. That unit was into derivatives. It sold credit default swaps. They made bad bets. It screwed up bigtime.

---

Lehman Brothers. 4th largest investment bank. Bankrupt.

---

Now, you may ask, if they are so great, why is one of them gone, and the other getting bailed out.

ANSWER: They screwed up. They are no longer fit. They have to be taken out.

Instead of focusing on them, look at the survivors. The fittest. The top of the food chain.

JP Morgan, Goldman Sachs

**tidus1203** · October 29th, 2008 02:55 PM

^^Exactly! They are no longer top dog that is why they were eaten. They made mistakes, they were not competent enough, and thus they need to fail. Same with the US car makers (this being Tsikot lets talk about cars), they are incompetent, they are making mistakes, their costs are too high and now the Japanese and Koreans are eating them. Survival of the fittest. Now the US automakers are asking Uncle Sam to help them from being eaten alive

**jpdm** · October 29th, 2008 02:57 PM

Originally Posted by uls

i know where you're going with this but i'm still gonna answer your question

Lehman and AIG got into trouble for different reasons.

First, AIG became the biggest insurance company in the world coz sobra galing ang former chairman/CEO na si Maurice Greenberg.

He is a very shrewd businessman.

You cannot build the world's biggest insurance company if u don't have killer instinct.

What brought AIG to its knees was a small London unit.

That London unit wasnt selling traditional insurance products. That unit was into derivatives. It sold credit default swaps.

---

Lehman Brothers. 4 largest investment bank. Bankrupt.

---

Now, you may ask, if they are so great, why is one of them gone, and the other getting bailed out.

ANSWER: They screwed up. They are no longer fit. They have to be taken out.

Instead of focusing on them, look at the survivors. The fittest. The top of the food chain.

JP Morgan, Goldman Sachs

Thus, even those who have killer instinct succumb to their folly right?

That they are in fact vulnerable too. That they have a weakness too.

That's why they need help right?

Now, do you think the US Federal government is right in helping AIG and other ailing banks in the US?

Do you think the US made a mistake using a socialist like method of solving the financial crisis by coming up with a bailout plan?

How come a "survival of the fittest" type of explanation cant be applied to the US response to financial crisis there?

How come Uncle Sam rescued its financial giants (dominant species)? because perhaps the Federal government succumbed to the pressure of those people who wants these companies to survive?

Focus on the fittest?

In the end they will be at their feet also....when everything collapsed if the US government had refused to intervene...