Nationalization? Maybe.

(A brief update)

Lately, I have been lurking around just two places on the web: twitter (username: blueblooded) and Paul Kedrosky’s blog (paul.kedrosky.com). Twitter has unexpectedly been… entertaining. It’s perhaps one of the easiest ways of receiving various information from various people about various subjects. Not to forget it’s the quickest way to blog.  Quite a convenience for people like me who tend to be lazy bloggers most of the time.

Paul Kedrosky is a regular on CNBC. A very smart man who enthusiastically gives me and thousands more our daily dose of interesting readings. He is a research consultant for Ten Asset Management and a senior fellow at Ewing Marion Kauffman Foundation.

I’ve also been busy reviewing for the CFA (just about to move to the 5th book, just after 2 months and 3 more left for the 2 remaining books and review), but the pace at which I’m going, fast as it may be, is enough to scare me. I may be reaching the 250-hour minimum suggested review time but it doesn’t quite bode well for me that I’m finishing a book, on average, in less than 2 weeks when each should at least take three. The current book I’m on, I began reading just exactly a week ago.  And now I’m down to reviewing the last chapter and I’m ready to move on.  It’s one thing to understand the concepts, it’s another to retain them along with the eerie collection of formulae that are slapped to everyone studying for the exam. Somehow. I take comfort knowing that I did understand pretty much everything I’ve read and I have enough time to review and master everything. I hope to be very well prepared come June. Let that be my gift to myself.

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Remembering the Heroes

As we grow up, our definition of what heroes are or who they are in our lives is modified.  Some look up to their dads, some to their partners, and some even to political and socially-figures in their countries as life heroes.  Meanwhile, there are those who take a more social definition of it and look at firefighters, at times the cops, and more importantly the soldiers fighting in wars to be members of the same group.  But have a trip down memory lane, from 10-15 years ago and none of what has been said above would apply.

As kids, our world revolved around skilled, powerful, and masked men- ginormous or regular-sized, who wore jumpsuits of different colors.  Thanks to the Japanese, we managed to find more than a simple pasttime but more reasons to shout out loud at home as our favorite characters transformed from being humans just like us.  And thanks to my friend Niq’s post on her blog about MMPR, nostalgia got me digging up the past and scouring all over the net for photos most familiar to us and would easily remind us how much we loved these shows.

2008: The Year That Was.

I’m sure it’s not just me.

As I watched the millions of people in Times Square count down the remaining moments of 2008 on New Year’s Eve, I felt a sense of excitement just like they did too.  Just like I did last year. And the year before…and the year before that. It wouldn’t be insane to think that it is innate for people to feel a sense of new hope as one year draws to a close, every single year.  Whether it is with fireworks or in a bar with friends or just staying home being accompanied by Carson Daly as the world counts down with New York, we choose to be optimistic. Of course it is no guarantee that the optimism would come realized, but between being positive and negative it just makes perfect sense to choose the former.  Whatever our hopes are, we always look forward to a better year or even just a good one particularly when what we just had revolved around broken dreams, shattered hearts, and quiet and uneventful moments.  It is human nature to seek for more. More money, more friends, more luck in love; better job, better relationships, better life.  I’m sure there were so much more hopes and prayers sent out to the winds with the departing 2008.

GM: B for Bankruptcy, not Bailout.

This issue with General Motors has been ongoing for weeks now and seemingly the most obvious solution is similar to what banks and non-bank financial institutions received- a bailout. Today, the US Senate agreed on a $25billion loan to GM to save the company. The loudest argument against non-bailout is the spiral effect bankruptcy/failure has not only to GM but also to thousands of its suppliers who run the risk of similarly filing for bankruptcy if GM is allowed to fail. Following the huuuge job cuts pending the failure are the big sums of money that would certainly be needed to support the families of people who lose their jobs and to meet benefit obligations- health care, pensions, etc.

While I do admit and agree that GM’s, perhaps including Ford’s and Chrysler’s failures, pose some level of systemic risk, bailing them out (in the meantime) does not relieve them of the inefficiencies that currently exist in their systems. Receiving the bailout funds would only permit them to continuously fund their insanely quick cash burnout rate. For the 3rd quarter, GM used a whopping $6.9bn or $2.3bn a month while Ford reported the figure $7.2bn.

Wines for the Holidays

I am not a big fan of wines but a feature on the CNBC website roused my interest and I thought I’d copy its contents here. Just for keeps.

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“Since Thanksgiving is an American holiday, I’m going with American wines for the most part. And even at Thanksgiving, there’s no predicting exactly what will be on the table, so we need versatile, light- to medium-textured wines that will match with the 10,000 mains and sides they’re likely to encounter.

First, a Pinot Gris from Washington State or California, like the Willamette Valley Vineyards 2007 Pinot Gris ($16). A bit tart, a bit spicy, very fruity and crisp. And then, shoot me for being predictable: Pinot Noir. Let’s pull J Vineyards & Winery 2005 Nicole’s Vineyard from Russian River Valley ($42). Again, a touch of spice – the Thanksgiving meal can be so “same-old, same-old” from year to year, you need to wake it up – but mostly great cherry fruit on the silkiest pillow imaginable.”

The Artist

November 12 marks my third month of finding my luck in landing a job in the financial industry. While there are million others going through the same experience as me, it’s utterly difficult to take consolation in that while I see others continuously leave their marks one firm after another. It has been more than two years since I graduated with my undergraduate degree. Since then, I’ve made a lot of decisions, which at times I doubt were the best ones I’ve made. Certainly there are perks one could take out of those experiences. I’ve also believed for some time that things happen for a reason. However, it is particularly difficult to dig deep for reasons when one deals with frustrations.

When you’re in that very moment of disappointment, of frustration, of questioning, you very well know that answers could only arrive in time. That no matter how much you seek for them, it is the unfolding of events that help you figure things out. Piece by piece, the events let you understand why so and so happened. But in the meantime, you are stuck. You could try to make sense of things but comfort is never completed unless they are matched with often unanticipated events and experiences that help you confirm your initial beliefs.

Rally, rally, rally?

So what’s new in the market this week? Not much on the overall state of the economy but some can be picked up from the specifics relating to it. Yesterday, the Federal Reserve cut its rates by 50 basis points to 1%- simply what the market expected. If this was of any use, it simply prevented a bigger drop in the stock market that could have followed if the Fed refused to follow expectations. From a credit market standpoint, there’s not much to be gained from such a cut. Yes, perhaps it widens earnings potential for banks or prevents a deflationary environment. But it still does not quite solve the problem of liquidity. On the contrary, it potentially reduces it. As people find higher earnings from investing in bonds and stocks, particularly that a lot of the latter have been beaten heavily lately, they tend to move in that direction. That doesn’t include those who remain fearful, and thus keep their cash under their beds. I might be missing the point in not seeing the value of a rate cut, if any; so please let me know if I did.

Market Trading: Currencies, ETFs, and then some.

Monday marked the 2nd time that the week began on a positive note, after last week’s record rally of 936.42. And yesterday and today also marked the 2nd time that the rallies were followed by plunges. It was another 514-point decline to the Dow, bringing the index to its 5-year low. Intraday trading even saw the Dow fall as much as 698 points just moments before the closing. Only shows you that last week’s high was indeed a simple bear rally. The bottoming is not yet over.

Everyone’s fearsome right now of the looming recession or one that’s already begun. Demand for commodities have declined, even from China, which reported a GDP growth of just 9.0, way below the 9.7 expected. And that’s a single digit growth rate for you. BHP Billiton, Australian-based steel company, reported negative outlook on the demand from China.

Market Watch: 10/16

Recently, a big range of movements on the Dow has become typical. Last week saw the Dow move within a 1200-point range after the worst week ended lower by as much as 21%. Monday’s rally was easily wiped out by the two days that followed after hedge fund redemptions, lower economic figures reported and fear continue to surround the markets.

Today was another busy day. The Dow played within an 800-point range- from being down by as much as 400 points early in the day only to rally in the last hours of trading to finally settle higher by 401 points. S&P and Nasdaq expectedly followed suit with 4.25 and 5.50 percent increase, respectively. Interestingly enough, the VIX recorded another all-time high when it peaked at 81 points before settling at 67.61. It has a lot to do with the puts and calls that are being traded, and the contracts expiring within the next few days. It’s something I still have to educate myself a lot with.

Long (Market) Update

And it’s another down day today. Surprise. Monday’s big rally, rising by 936.42- the biggest ever- almost got wiped out after yesterday’s drop of 76 points and today’s tenfold drop of 733.08 to 8,577.91. NASDAQ fell by 150.48 to settle at 1,628.33 and S&P also headed south by 9% to close at 907.84. Some facts: Monday’s rally is the biggest since the spring of 33 and last week’s more than 2000 point drop was the biggest since the summer of the same year. The volatility index, VIX, which basically reflects people’s fear of the market shoots up again to 69.25 after two days of hovering under 60.

People attribute the drop to two main things: hedge fund liquidation as well as the negative retails figured taken from the Fed’s Beige Book released earlier today. In this crisis, hedge funds are some of the biggest casualties and more of them are expected to go out of business in the coming days. As investors seek to get their money back, hedge fund managers scramble to take their positions out, in effect, creating an oversold market. Monday’s historic rise, people say, is still not the beginning of another bullish market. It was simply a bear rally.

Part 2: Georgia responds

This was an article written by Georgian president Saakashvili presumably as a response to yesterday’s column by Medvedev. Also from the FT.

Moscow’s plan is to redraw the map of Europe

Published: August 27 2008

Any doubts about why Russia invaded Georgia have now been erased. By illegally recog­nising the Georgian territories of Abkhazia and South Ossetia, Dmitry Medvedev, Russia’s president, made clear that Moscow’s goal is to redraw the map of Europe using force.

This war was never about South Ossetia or Georgia. Moscow is using its invasion, prepared over years, to rebuild its empire, seize greater control of Europe’s energy supplies and punish those who believed democracy could flourish on its borders. Europe has reason to worry. Thankfully, most of the international community has condemned the invasion and confirmed their unwavering support for Georgia’s territorial integrity and sovereignty.

Our first duty is to highlight Russia’s Orwellian tactics. Moscow says it invaded Georgia to protect its citizens in South Ossetia. Over the past five years it cynically laid the groundwork for this pretence, by illegally distributing passports in South Ossetia and Ab­khazia, “manufacturing” Russian citizens to protect. The cynicism of Russia’s concern for ethnic minorities can be expressed in one word: Chechnya.

This cynicism has become hypocritical and criminal. Since Russia’s invasion, its forces have been “cleansing” Georgian villages in both regions – including outside the conflict zone – using arson, rape and execution. Human rights groups have documented these actions. Moscow has flipped the Kosovo precedent on its head: where the west acted to prevent ethnic cleansing, in Georgia ethnic cleansing is being used by Russia to consolidate its military annexation.

Part 1: Russia talks back

This appeared in The Financial Times yesterday Aug 26 and was written by Russian president Dmitry Medvedev

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Why I had to recognise Georgia’s breakaway regions

Published: August 26 2008

On Tuesday Russia recognised the independence of the territories of South Ossetia and Abkhazia. It was not a step taken lightly, or without full consideration of the consequences. But all possible outcomes had to be weighed against a sober understanding of the situation – the histories of the Abkhaz and Ossetian peoples, their freely expressed desire for independence, the tragic events of the past weeks and inter­national precedents for such a move.

Not all of the world’s nations have their own statehood. Many exist happily within boundaries shared with other nations. The Russian Federation is an example of largely harmonious coexistence by many dozens of nations and nationalities. But some nations find it impossible to live under the tutelage of another. Relations between nations living “under one roof” need to be handled with the utmost sensitivity.

After the collapse of communism, Russia reconciled itself to the “loss” of 14 former Soviet republics, which became states in their own right, even though some 25m Russians were left stranded in countries no longer their own. Some of those nations were un­able to treat their own minorities with the respect they deserved. Georgia immediately stripped its “autonomous regions” of Abkhazia and South Ossetia of their autonomy.

The War in Georgia

A friend posted a link as his status on facebook leading to an editorial written on the Wall Street journal by Georgian president Mikheil Saakashvili about the ongoing war against Russia. I thought it is something worth sharing.

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The War in Georgia Is a War for the West

As I write, Russia is waging war on my country.

On Friday, hundreds of Russian tanks crossed into Georgian territory, and Russian air force jets bombed Georgian airports, bases, ports and public markets. Many are dead, many more wounded. This invasion, which echoes Afghanistan in 1979 and the Prague Spring of 1968, threatens to undermine the stability of the international security system.

Why this war? This is the question my people are asking. This war is not of Georgia’s making, nor is it Georgia’s choice.

The Kremlin designed this war. Earlier this year, Russia tried to provoke Georgia by effectively annexing another of our separatist territories, Abkhazia. When we responded with restraint, Moscow brought the fight to South Ossetia.

Ostensibly, this war is about an unresolved separatist conflict. Yet in reality, it is a war about the independence and the future of Georgia. And above all, it is a war over the kind of Europe our children will live in. Let us be frank: This conflict is about the future of freedom in Europe.

No country of the former Soviet Union has made more progress toward consolidating democracy, eradicating corruption and building an independent foreign policy than Georgia. This is precisely what Russia seeks to crush.

Somebody save me.

That list below is what has been preventing me from writing more entries, as much as I wanted to. With my thesis supposedly due today, this is certainly going to be (another) typing day (just as yesterday had been one , too). I might as well continue with that by writing here as I take my break. With a little over a week left before all those things on the list need to be done, unfortunately, I can only cross out two of them- learning flash and the class directory. And I don’t think I’ve even accomplished much of that. I’ve learned just enough to begin the presentation we’re showing for the graduation. I certainly don’t have much time to write so much, so let me make this another ‘random thoughts’ entry.

1. Starbucks’ new drink, Sorbetto, is yummy. Pretty indulgent just like pinkberry. Having worked so much yesterday, I decided to treat myself to one mango sorbetto after finishing my cup of coffee at 9pm. What’s good about it is that it has just the right level of mango taste. I am not a big fan of the fruit so anything excessive (what is considered normal by 99.9% of the world) is a no-no for me.

2. I fucking hate clumsy people. I feel like I’ve always had bad luck with roommates (except for the last one I had and the person living in the other room in my current apartment). I don’t give a shit of you snore so loud it sounds like you’re choking but for crying out loud, CLEAN UP. As if it’s not enough that he’s such a _______ ______-______ (don’t even try to figure out- the number of spaces don’t correspond to what those 3 words are supposed to stand for). Geez.

3. I am torn between being sad and being happy about leaving California. Three more weeks (I think) and I bid farewell once again to people, to places, to CA life. Things haven’t really been my cup of tea (or need I say milk tea? lol) but they’re not bad either.  Add to that the scary feeling I have given I am still jobless (and seriously don’t have time to even apply for jobs).

4. I am wondering when or whether to go back to the Philippines sometime late September or October. While it would be more than awesome to stay here in the US, I certainly don’t think staying in IL will be much fun considering I’ll be a home body, looking for a job day and night, with no car to drive (and no fuckin driver ’s license to use for driving in the first place!!!) and no friends to hang out with. My aunt lives in the suburbs so going out ain’t going to be easy (well, the mere fact that I’m living with my aunt is gonna make it difficult for me to go out).

5. I’ve been a work slave the past several days and I am just fucking tired. My only breaks are lunch, dinner, and the “overextended sleeps”. Konti na lang; I’ll get there. I can’t wait to get to the finish line.

Thinking about all these things certainly is gonna put me on the brink of insanity. Now back to work.

PS I need to see The Dark Knight to relax. I need a haircut. And I need to do some malling.

Child Musings at 3.

For some people, being branded childish is such a slap on the face. But for the others, it is nothing but a mere empty label. It hasn’t been only once, or twice, or thrice, or even ten times that I have been branded such. At 23, people expect a certain level of maturity, if not complete maturity. Yet at 23, I find myself still chuckling and getting hysterical at the shallowest of things, some of which perhaps only a 5-year old kid would appreciate. While I do get reminded at times that there is some growing up that needs to be done, some things that need to be caught up on, I still can’t help but indulge in the frequent moments of childishness.

I am often called crazy but after giving it some thought, it then makes me wonder- am I crazy because I am wild, ridiculously and thoughtfully funny, and just plain out of my mind? Or am I crazy because of my already apparent childishness and clumsy, gibberish thoughts? I am not writing for the plain reason of defending myself but instead to make sense of all this, if indeed it is possible. You meet me the first time, I am completely silent (although that is slowly being changed). You meet me the 2nd time, I become more open. You meet me the 3rd, 4th and 5th time, depending on the circumstances, you can probably already have the ‘good’ impression many people have of me.

Key Economic Trends

Here yet again is an article from Dr Habito’s No Free Lunch column that appears every Monday in the Philippine Daily Inquirer, talking about 10 economic trends that serve as good measures as to how the Philippine economy is doing at the moment, after 6 months. A good way to check if we are still following or at least close to the “7.3% ” growth reported for last year. I think I will be doing this quite regularly from now on. This way too, I get to follow his columns, which I’ve always wanted to do.

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10 key economic trends

By Cielito Habito
06/29/2008

TODAY we reach the halfway mark for this current year 2008, and everybody knows it’s been a challenging year for the Philippine economy so far. Based on most recently available data on the economy, below are 10 key indicators that provide a good picture of how the economy has fared this year so far:

1. Prices are rising rapidly. The inflation rate has already hit double-digits outside of Metro Manila (10.2 percent), with food showing the steepest price rises, at 14.3 percent nationwide. Surging oil and food prices have been the primary culprit, and while this has been a global phenomenon, this gives little comfort to the average Filipino whose wages are being left even farther behind by the soaring cost of living.

7.3 or 7-3?

Following is an article by Dr. Cielito Habito, former NEDA Director (and professor) published in the Philippine Daily Inquirer 3 months ago regarding some concerns expressed over the reported 7.3% GDP increase for the year 2007, which was one of the highest in the Asia Pacific region. This is a bit long but it’s worth a read.

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Is our GDP growth overstated?

First Posted 03/16/2008

A GOOD NUMBER OF ECONOMISTS AND financial analysts I know continue to scratch their heads over the reported 7.3-percent GDP growth of our economy in 2007, which made us the fastest growing economy in our neighborhood last year. Have we Filipinos become so unaccustomed to success that we find it hard to believe it when it comes? Or is it that we Filipinos have become so accustomed to deceit and lies from the government that it’s hard to believe information coming from their direction anymore—statistical data included?

Well, in the case of the recent data on the growth of the Philippine economy, there appear to be compelling reasons to question the reliability of the numbers we have been getting lately. I have mentioned in past columns the continuing work being done by former Neda chief Felipe Medalla to analyze data on our gross domestic product (GDP) over time. A key finding he makes is that the trends in these data have been in direct contradiction to the data that actually feed into it. I will cite just two instances here.

My Sacred Place

I used to fear being alone. The notion that I wasn’t liked or that I wasn’t likable enough kept running in my mind. I tried to change myself, perhaps even unnecessarily. The issue of being socially detached, of being in my own world concerned me deeply. Many times in the past, I ate alone. I shopped alone. I even went to movies alone. I couldn’t care less before, until I thought I was being too “detached”. It was the notion that being alone is a taboo that got the best of me. I always clung to the idea that one always has to be with somebody else.

However lately, I see myself in the same situation yet again. I eat by myself. I work by myself. I do stuff by myself. But things seem to have changed. The issues that I had to fight with in the past have been replaced by some level of understanding, of ease, of complacency. Hours and hours I spend reading, sipping what looks like a bottomless cup of iced coffee, staring at different people, listening to (and silently following) songs that randomly play in my iPod, even playing racquetball and working out – all of them give me a new sense of ‘me’. Of being by one’s self and of being ‘free’.

Whinging Statistics

I can sense the intense pressure creeping up my spine. In 2 months’ time, I will be done with school. Finally done with school. And it only points to one thing- getting a job. I came here in the States with so high hopes, with so much expectations. Even some air of arrogance, thinking it should be easy for me. After all, I am smart, pursuing my graduate degree, went to top-tier universities… how hard could it be? Well, it IS hard. I guess I am still to completely prove it. I can’t say that I have made a looot of applications. Some people I know have submitted 30-40 applications for an internship and got only a few call backs. I probably haven’t even sent out more than 15 applications total. Who am I to complain? I shouldn’t and cannot complain. It is partly something I realized recently (and as weird as it sounds to say this, I realized it after watching the movie ‘The Devil Wears Prada’). Whining does not get me anywhere, doing something does.

As frustrating as it may seem, receiving rejection emails, one at a time (sometimes two in a night), can and should only push me to do so much more than what I’ve done before. I am in no position to complain. I haven’t sent an application to all companies out there, have I? No. True, I have my own preferences of where I want to work, company-wise and geography-wise but if it means having to send multiple applications to the same firm for different positions just to gain entrance to that company, then why not? Maybe it is one way. Maybe it IS the way.

‘Sweet ‘these’ are made of dreams’

Two dreams I had within the past week stuck in my mind. One got me excited and the other one got me somewhat scared and worried. About 2 days ago, I dreamed getting a haircut again. It was just 2-3 weeks ago that I did. And yes, this was the one that got me excited. Well, it was the thought of having a new (good) look. You can’t blame me, can you? Especially looking at the fact that I usually don’t cut my hair until 4-5 months after I last had it. Every single time I do get it, it makes me feel much better. I look good. (Okay, this is the end of vanity for this post.) Anyway, it always rouses my curiosity as to what these dreams mean. Perhaps even without scientific verification (or is it even necessary?), I do hold some form of belief in these random interpretations you find on the net. Maybe because, sometimes they do have a semblance of accuracy and logic. So here’s what I found out about my haircut:

To dream that you are cutting your hair suggests that you are experiencing a loss in strength. You may feel that someone is trying to censor you. Alternatively, you may be reshaping your thinking or ambitions and eliminating unwanted thoughts/habits.

Everybody’s free.

The graduation yesterday inspired me to look back to this song and listen to its message again.

Everybody’s Free (To Wear Sunscreen) by Baz Luhrmann

Ladies and Gentlemen of the class of ’99, If I could offer you only one tip for the future, sunscreen would be it.

The long term benefits of sunscreen have been proved by scientists whereas the rest of my advice has no basis more reliable than my own meandering experience…I will dispense this advice now.

Enjoy the power and beauty of your youth; oh nevermind; you will not understand the power and beauty of your youth until they have faded. But trust me, in 20 years you’ll look back at photos of yourself and recall in a way you can’t grasp now how much possibility lay before you and how fabulous you really looked… You’re not as fat as you imagine.