Sunday, December 18, 2016

The Best Stock Market in Southeast Asia is a Brazen Systematic Price Destroyer!

Prices are information.  Prices signify fundamental information that facilitates economic calculation necessary for individuals (as consumers, as producers, as traders, as speculators) to conduct commerce. Stated differently, in economics, prices function to coordinate demand and supply towards their equilibrium or to a level of balance. Or, prices clear the markets by reducing discrepancies: shortages or surpluses.

So when prices are regulated, controlled or manipulated, the economic coordination mechanism of prices becomes distorted, impaired and or dysfunctionalPrices, thus, do not reflect on economic conditions. So instead of the market clearing process, price distortions enhance or magnify on economic imbalances.

The sad fact is that even experts (PhDs, MBAs, CFAs and etc…) do NOT seem to comprehend this BASIC level of knowledge.

Hence, manipulation of prices has even been cheered upon or celebrated.

The PSE proudly announced that a magazine awarded them the “best stock market in Southeast Asia

This only shows that the “institutional” magazine has been totally unaware or clueless of what’s going on, or they have been “nudged” to consecrate deception and fraud, or perhaps cheating for them represents virtue.

Yet this is what constitutes the “Best stock market of ASEAN”
 
On the left represents the massive afternoon pump that climaxed with a mark the close pump or where “water into wine” last December 13. The loss of .26% magically turned into a .17% gain due to the incredible 29.86 points or .43% price inflation administered during the market intervention or the meet-up phase.

On the right is the blatant pump and dump that occurred last December 15. The PSEi plunged in the morning. But since stock prices cannot be allowed to fall, the afternoon delight pump went in motion. Unfortunately, index manipulators got a shock, instead of a closing bell pump, some decided to use the price increases from the afternoon pump to stage a dump at higher price levels! Karma!

Notice. Almost every afternoon there will be a massive coordinated pump. It is at the end of the day's transition where either pump or dump is used.

Here is this week’s breakdown of marking the close in points: Monday -4.34, Tuesday +29.86, Wednesday +3.58, Thursday -29.21 and Friday +7.6

The aggregate pumps for the week totaled 41.04 points or .6% of last week’s close at 6,850.71.

The aggregate dumps for the week amounted to 33.55 points or .49% again of the closing values of the previous week.

Total pump and dump at 74.59 points constituted a stunning 1.1% of the previous week’s close.

The Phisix fell by 2.73% this week or by 192.5 points.

This only shows that the pumps and dumps have only kept the headline index from revealing the true extent of volatility being experienced by the PSEi today.

Yet what has caused this volatility? Price distortions as evidenced by media’s pronouncements of the Phisix as the “most expensive stock market in Asia”

This is happening day in AND day out—only in the Philippines!!!

This week’s closing pump and dump has been a lot smaller, or may I say meeker, than last week’s 131.76 points or a shocking 1.9% of the December 9 closing price at 7,043.16. Total pump that week was 113.91 points with a net weekly pump (total pump minus dump) of 94.62 points. Yes, the headline index posted a weekly gain of 2.27% or a rise of 156.42 points. This means that 60.5% of that week’s advance was about painting the tape via marking the close!

End of the day quotes actually conceal on the outrageous deliberate price deformation or systematic price destruction of the markets.

For instance, December 16’s -.7% PSEi close, which was accompanied by a mere +7.6 points “marking the close” pump, could be a product of a failed either pump or dump operation.

 
As one would note, the property and holding firms had massively been pumped at the close (top window).

However, dumps on other big ticket issues, mostly reflected on the industrials and financials, contained or subdued or neutralized those pumps (top lower window).

There were more dumps than the pumps. The indicated issues have only been from .5% and above differentials (between prices last quoted during regular trading and the prices during the runoff to the close)

It’s a sign that either manipulators have lost coordination with each other or collusive power has eroded, or that selling pressure had been so intense that “targeted” operations were needed to bolster the headline index.

Both property and holding firms were mainly boosted by Sy owned companies.

The numbers for the two have been staggering.

The 2.2% pump on SMPH constituted 72% of the day’s 3.04% gains. SMPH closed the week up 2.13%. This means that over 100% of the week’s performance was mainly due to the last 6 minutes of meet up/market intervention phase. So the entire week’s performance can be considered as irrelevant as only last 6 minutes of Friday’s determined SMPH’s weekly performance.

It has even been worst with SM. SM was deep in the red and was pumped back to unchanged for the day. That’s a remarkable 2.3% market intervention pump! SM closed the week up .15%. This means that due to the last 6 minutes, SM -2.3% miraculously transformed to a weekly +.15%. All it takes is the market intervention (meet up) phase to shape the week’s performance.

It’s best to understand that both SM and SMPH command a market share weight cap of 19.5% as of Friday’s close! See why the need to push these two to offset the rest?

All these shows that for the manipulators, the headline index is the only thing that matters, hence these frenzied pumps.

And all these prompt for some critical questions: Why not just cut down trading time to half an hour? Also why not cut trading days to just half an hour in one day? Or why do the Philippines need a stock market at all, if prices are not allowed to function?

Just a side note. Some of the elites have been rumored as having provided support to their own stock/s. And such has been perceived by many as having positive significance. This is what has been seen. What has been unseen is that the maneuvering of prices of stocks translates to a wasteful employment or unproductive use of resources (which could have been better used for value added activities, say business expansion, enhancing or improving operations or business process, innovation, and etc…). Yet this hasn’t been about buybacks, but about price pumping. Example, see what happened to BW.

It also shows of the hubris or conceit that markets can be permanently controlled—the King Canute syndrome. It equally exhibits unhealthy actions, i.e. to prioritize the artificial propping up of stock prices may actually have been meant to shield or camouflage entropic or degenerative dynamics being nurtured within the company/ies—owned by the elite. Remember, the defunct and once Wall Street darling called Enron

As an ardent disciple of the markets, it is likewise sad for me to see how stock markets have been perverted and corrupted. Stock markets are presently being used to bolster egos (Forbes wealthiest profile) and as means for implicit redistribution of wealth, enabled and facilitated by the BSP’s trickle down policies, in favor of these elites, instead of, as instruments for society’s capital accumulation (which is the stock market’s essential theoretical function).

Let me be clear, this is NOT a sweeping or wholesale censure or indictment of all the elites, there are numerous respectable and humble entrepreneurial elites out there whom have made their wealth in the service of consumers.  Market entrepreneurs are my heroes (but this is beside the point). Present developments even tell us that some big named tycoons seem to know their limits, which is very laudable. Yet some others may have seen the BSP’s silver platter to them as a perpetual political privilege or an entitlement, hence, the possible and alleged stock market price fixing pumps.

Back to marking the close.

I have similarly come to understand that even non-manipulators have now been adjusting their trading positions to attempt to benefit from such routine ‘end-of-the-session spikes’. This shows how people are malleable to evolving conditions. That’s the good news.

But here’s the bad news.

More importantly, it also shows how people’s perspective of the markets has likewise evolved.  Considering that such has now been seen as “normal”, the adoption to such changes reveal of the intensifying grotesqueness of the price distortions and the escalating degree of mispricing, from the gaming of the PSEi index.

Moreover, revoltingly, people are being conditioned to see fraud and deception as normal and legitimate!

Best stock market in SEA through daily price fixing? That’s not how markets work. It is a shame on the PSE for using technicalities to promote egregious mispricing.

Equally, for tolerating such price destruction process, such should be a disgrace for PSE regulators—the SEC and BSP.

Corrupt means leads to corrupt ends.

Nonetheless, since all actions have consequences, purposive distortions of the economic and market process will have its due…quite soon enough

Yet in the fullness of time, people will likely blame the markets rather than the institutional leadership for the latter’s misguided and depraved actions. And this would be unfair

With epic history is in the making, it is the future, and not the present glorification of bubbles, that will pass judgments on present activities.

Wow, BSP Chief Sees The Rise of Populist Politics/Retreat from Multilateralism as Scary Developments, Scary Stuff for 2017!

In this Issue

Wow, BSP Chief Sees The Rise of Populist Politics/Retreat from Multilateralism as Scary Developments, Scary Stuff for 2017!
-Factors Influencing Populist Protectionism
-The Role of the US Dollar Standard
-BSP Independence, Really?
-Sleepless Nights From FED Rate Hikes????
-The BSP’s Addiction to Asset Bubbles
-Chaos Theory: Surging Bond Yields, Fourth Drop in BSP’s US Treasury Holdings and Falling OFW Remittances
-Internal Fragilities as Prime Risk Factor; Free Lunch Politics
-The BSP Chief as Economic Model


Wow, BSP Chief Sees The Rise of Populist Politics/Retreat from Multilateralism as Scary Developments, Scary Stuff for 2017!

It's easier to fool people than to convince them that they have been fooled
—attributed or misattributed to Mark Twain

Will 2017 redound to ‘sleepless nights’ for the highest paid government official (Php 13.957 million in 2015)?

Factors Influencing Populist Protectionism

Interviewed by Barron’s Asia, the BSP governor Amando Tetangco sees “scary developments” anchored on populist politics, retreat from multilateralism, protectionism and Fed rate hikes in 2017. The interview was republished by the Zero Hedge: Central Banker Sees "Scary" 2017”

As always, the BSP uses the attribution bias or to suggest that risks from external factors—rather than from the internal developments—could impact the Philippine economy.

Some Q&A quotes (Bold mine)

Q: These populist winds are blowing though the U.S. as much as Europe these days. Has that affected how central bankers operate?

A: Yes, with this rise of populist politics, this talk about protectionism. These are scary developments, it’s scary stuff. As you mentioned, a few European countries are having elections either this year or next year, Italy and Austria just voted out the traditional politicians. Then France in the middle part of next year. And then you have, of course, the pronouncements of the newly elected U.S. president. How will he move from rhetoric to implementation? It is still up in the air and, as a result of that, it’s affecting business planning and financial market behavior.

In noting of the above, the BSP chief goes on to recite statistical talismans on the low exposure by the Philippine economy to external dynamics, particularly trade and investments, so as to downplay such risks. The impression limned has been that a closed economy is better than an open one. Yet contrastingly, he discusses of the risks from a retreat in multilateralism. So which is which sir???

Nonetheless the emphasis on the risk to BPOs:

if Trump actually pursues what he said during the campaign, there could be an effect on the BPO (business-process outsourcing) sector in the Philippines. But the jobs that are being performed here are not in direct competition with America or jobs many American workers want to do”

Let us put it this way, jobs exported overseas have hardly been about indirect competition or “jobs many American workers want to do”. Any nationalist may claim that all jobs lost overseas are potential jobs for natives. Yet there is some superficial truth to such claim.

Hence, the BSP chief’s defense of domestic BPOs would signify a red herring.

Instead, outsourcing, which accounts for as services exports, like merchandise exports are a complex issue.

The present form of international merchandise and services trades are products of a mélange of various forces. Such includes free market traits of technology induced innovation, comparative advantages and division of labor. These factors are evident through the establishment of international supply chain networks.Apple’s iPhone should be a wonderful example of trade through “specialization”.

But yet these forces are subordinated to the US dollar seigniorage and the US Fed’s easy money policies, the main drivers of today’s geopolitical economy.

US domestic regulations such as labor mandates such as minimum wages also play a role.

The Role of the US Dollar Standard

The essence the US dollar standard is that FED issues bank notes while the US banking and capital markets issue credit instruments in exchange for goods and services produced elsewhere. Helped and bolstered by the Fed’s easy money, the outgrowth has been the financialization of the US economy or growing share of the finance industry to its economy.

Financialization represents the conversion of economic assets into tradeable financial instruments

Analyst Charles Hugh Smith has a better definitionFinancialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage. Another wayto describe the same dynamic is: financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation. (bold original)

Said differently, because of the seigniorage privilege, US produced financial credit instruments, and through globalization, sold or exported these in exchange for goods produced by the world.

The US dollar seigniorage through financialization has allowed the US to operate on what French economist Jacques Rueff once wrote as the secret of having deficits without tears*,

It allowed the countries in possession of a currency benefiting from international prestige to give without taking, to lend without borrowing, and to acquire without paying. The discovery of this secret profoundly modified the psychology of nations. It allowed countries lucky enough to have a boomerang currency to disregard the internal consequences that would have resulted from a balance-of-payments deficit under the gold standard.

*Jacques Rueff, The Monetary Sin of the West p 23 Mises Institute. Mr Rueff then was referring to the Bretton Woods Gold exchange standards which benefited the US.

The hollowing out of say “manufacturing jobs” in the US has been mainly because of this subsidy to Wall Street. Why make and sell goods when one can sell papers and earn more?

Besides, credit booms artificially inflate everything for a while, thus the change in production structures.

Nevertheless, the abuse of money has spawned significant real world consequences.

Or the inflationism from US dollar standard has only resulted to bubble cycles everywhere. And the bust phase of the bubbles has caused significant economic hardship for the average citizens. And such prolonged economic stagnation has only spurred the current wave of (nationalist-protectionist) populism.

Or present form of populism represents a backlash against the invisible redistribution scheme that favored, or that continues to subsidize the “establishment”—banking system, central banks and governments.

A splendid example of the consequences of US seigniorage financialization has been the Financial Crisis of 2007-2008. The US finance industry sold or exported subprime mortgages to the world but mainly to Europe’s banks. The effect was that European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009 as estimated by the IMF (Wikipedia)

And bailouts and rescues (through zirp, negative interest rates, QE/PPP/TLTRO) of the establishment have been carried over today with little real economy progress. Hence years of economic stagnation has led to an evolution towards radical politics.

Also US dollar seigniorage and financialization has led to the rise of credit based wholesale finance (the Eurodollar system, repos, swaps, swapoptions and other forms of derivatives) which risks central bankers have little appreciation of.

BSP Independence, Really?

Yet it has been a curiosity to see Mr. Tetangco assert that the BSP has remained “independent” of the government

So far this administration, just like the previous ones, has essentially left monetary to the central bank and I believe members of the executive have a good appreciation of the importance of independence of the central bank. At the same time, I think the BSP also built up a good reputation and remains credible. 

The huge unannounced bond buying operations or domestic version of QE imposed by the BSP in 1H 2016 in support of sinking government revenues has signified a sign of “independence”??? [WOW. Silent Stimulus Confirmed: The BSP Launched a Massive Bond Buying Operation in 1Q 2016!!! December 11, 2016]

Truly???

Team Tetangco has been lucky because almost everyone have been too short sighted to see through the BSP’s actions. And also, almost everyone have been blindsided by the artificial boom boom boom, and presently, political controversies from the actuations of the leadership.

But what has been new? The route the BSP has taken has signified as the same episodes encountered by many others (Japan, US, Europe) whom are now experiencing its diminishing returns. In fact, easy money has been a path that has led to 1997 Asian crisis. Yes, nothing has been new. It’s just the beneficiaries or the objects of bubbles that have changed.

And importantly, the BSP has bankrolled the system (banks, media, academe and politics) to keep stealth redistribution out of the public’s knowledge reach. Yet eventually, truth will be out.

As for credibility and reputation, this represents “a pat in the back” characterization that describes current conditions…and not conditions under severe stress.

Changes in conditions affect perceptions. This shows why mainstream economics has all been about salesmanship, sales copywriting and marketing couched on economic variables and statistics.

Sleepless Nights From FED Rate Hikes????

Now to the gist.

Q: When you look ahead to 2017, what keeps you awake at night?

A: Short term, the Fed rate hikes -- the timing and the magnitude. Of course, this would be related to the policies that the new U.S. administration will adopt. Medium-to-long term, the retreat from multi-lateralism. That is related to the performance of the global economy - the major and various economies, and emerging markets like China.

Q: Have zero-rate policies outlived their usefulness?

A: Perhaps at some point these policies tend to be less effective. But my own assessment is that this will likely continue for some time to comeRates will stay very low. The thing is we have to be mindful of the financial stability impact of very low interest rates. Corporates and financial institutions can be encouraged to take on more risk. And we will need to monitor that. In fact, a lot of countries are now focusing on the increase in corporate leverage in their economies.

Interestingly, just why should rate hikes by the FED pose any risks to the Philippines, if indeed the Philippines has been “sound” or has sufficient buffer against external risks????

 
In 2004-2006, the Fed increased interest rates by a whopping 425 bps or from 1% to 5.25%. Then Philippine GDP was hardly rattled (see upper window). Yes GDP fell from about 6% to over 3%. But that was it. Domestic GDP even picked up speed when FED hiking culminated.

So what changed today?

In a word: LEVERAGE.

Unlike 2004-2006 present conditions exhibits an explosion of central bank asset and M3 money supply growth (lower window)!!!

So sustained rate hikes by the FED would pull up rates around the world including the Philippines. And this would adversely impact the much ballyhooed ‘domestic demand’!

It’s truly amazing to see experts repeatedly shout “domestic demand”. Domestic demand supposedly should serve as shield against external risks. In 2013, it was forex reserves. Today, domestic demand represents the vogue incantation used—when faced against evil spirits (risks). It’s a defense based on faith, rather than economics.

However, domestic demand just doesn’t fall from the sky. Domestic demand doesn’t appear out of computer screens too. Demand is infinite. But demand to be realized needs to be financed. And the possible sources are through income and or credit or savings.

Do these experts really know of what they speak of?

Yet the BSP chief has been engaged in an egregious self-contradiction.

He understands that low interest rates enhance credit risks “we have to be mindful of the financial stability impact of very low interest rates. Corporates and financial institutions can be encouraged to take on more risk”.

But then he seems to think that domestic entities would not fall for the same trap… that’s largely because he is in charge “we will need to monitor that”. This is a showcase of fatal conceit, the assumption that he knows and controls everything. Yet paradoxically he frets over the impact of the FED’s rate hikes to the domestic economy.

In short, the BSP chief thinks that credit risks can happen to any country but the Philippines. Great!

Crisis or negative black swan events happen because hardly anyone foresees its arrival. Or when people think the same, then no one is thinking, thus the unanimity of ignoring risks serves as the psychological foundations of a crisis. There will be no crisis if everyone is cautious. There will be a crisis if everyone is presumptuous and overconfident.

The BSP’s Addiction to Asset Bubbles

And here’s more. The BSP chief is a remarkable zealot of Keynesian free lunches… “at some point these policies tend to be less effective. But my own assessment is that this will likely continue for some time to come. Rates will stay very low.”

Yet such assertion runs in contrast with current developments including the BSP’s own actions.

His 2009 zero bound policies, which spurred 10 months of 30%+++ money supply growth rate in 2013-2014 that diffused into the economy through real prices or CPI at over 4% has prompted for a back-to-back response of policy tightening: the BSP raised interest rates, SDA rates and reserve requirements twice each. He also even had banks undergo stress tests in 2014.

In short, interest rates fought back against BSP policies

Consequently, the surge in inflation combined by the BSP tightening led to the collapse in M3, CPI and a substantial downturn in credit absorption, decline in statistical GDP and stagnated eps growth of PSE firms in 2015.

The BSP honcho then repeatedly warned of deflation risks in 1H 2015. 

By 4Q, the BSP began its silent stimulus operations that accelerated in 1Q 2016.

Haven’t these been signs that “these policies tend to be less effective”???? Or haven’t current events been indicative of diminishing returns for the BSP’s zero bound????

And if the US Fed continues to raise rates while the BSP bolsters “domestic demand” via credit financed money supply expansion directed at the “race to build supply” then just how will this not be ventilated on the peso? 

So just how on earth can rates stay very low????

Chaos Theory: Surging Bond Yields, Fourth Drop in BSP’s US Treasury Holdings and Falling OFW Remittances

Even more, does the BSP honestly believe that only trade and investments are the connections with the world?

Yet I mistakenly thought that Mr. Tetangco embraced the chaos theory*: “This reminds me of how "chaos theory" is often described. As everyone here is aware, CHAOS THEORY is the study of nonlinear relationships where events that appear logically random are actually linked. It is said, a butterfly flapping its wings in the Amazon will affect the time of formation, exact location, and path of a hurricane several weeks later in North America. This "butterfly effect" is formalized in various fields like risk management, that's why this audience knows it, right? It underpins the very framework of Financial Stability used by the BSP but, in its simplest form, it is more commonly referred to today as "contagion".

*Amando M Tetangco, Jr: Navigating thru the waters of change... and butterflies September 29, 2016 BIS.org

 
The nicest part about politics is that one does not have or need to believe in what one would say.

Perhaps chaos theory was merely a tip from the BIS and an opportunity to demonstrate his erudition for ego purposes.

And speaking of chaos theory or the nonlinear relationships, contra to what Mr Tetangco has been projecting, it’s not just the peso, even Philippine 10 year bonds have recently been hit more than the neighbors (upper window).

Granted. This may be temporary.

Also, the updated October US treasury data reveals of what I suspected: “The likelihood is that the UST liquidations intensified as the peso weakened in October and November. And if I’m right, then this amplifies a USD liquidity drain for the BSP.”  [Wow. Philippine November GIR Fell $2.38 billion to February Levels as Forex Position Spiked Anew! December 8, 2016]

US treasury holdings by the Philippine government or by the BSP continued to decline (US .4 billion) last October—although October’s decrease was the least in 4 months.

The BSP claims that 3Q posted a current account surplus. Yet why has it been that GIRs are being stuffed by record amounts of forward book-currency hedges?

Plus more…
 
And yes, after a fiery surge in August OFW remittance (16%) growth rate, October numbers fell back or regressed to negative (-2.8% cash and -3% personal).

In short, month to month vacillations hasn’t changed anything but has only reinforced the general trend of diminishing returns of OFW remittances. This can be seen in 8 year cumulative 10 months growth conditions (upper window), along with monthly and year to date cash and personal remittances (below).

For those who’d claim that rising USD vis-à-vis peso equals more household spending blarney, here’s theBSP on currency valuation effect of remittances: “The lower US dollar value of remittances in October may also be partly due to the depreciation of major host countries’ currencies vis-à-vis the US dollar, such as the pound sterling and the euro. Remittances from the UK dropped by 5.9 percent in October even as the volume of remittances in original currency (pound sterling) increased by 16.5 percent. The case of Italy, Germany, Greece, and the Netherlands, however, is different, as remittances in both US dollar equivalent and original currency recorded declines in October

So how would cascading OFW remittances stack up with the current account, domestic supply of dollars (GIRs) and the supposedly “impregnable” domestic demand???

Internal Fragilities as Prime Risk Factor; Free Lunch Politics

Finally, it’s not external but internal fragilities that matter most.

Proof? 

The Philippine government just declared free education for state universities and colleges in 2017.

What is great news for populism signifies a HORROR for economics.

Yet how will free lunch welfarism not impact the government’s balance sheets, and consequently, affect the peso and interest rates and the real economy?

At zero price, says Professor Gary North, there is greater demand than supply.

I would modify this to say that at zero price, demand for education will translate into an avalanche. And this will be broadcasted and bragged about as “success”. Naturally! It’s free!

And because of “success”, the government will be forced to expand supply. Otherwise, populism will erode.

Now, up to what extent will the government accommodate the coming explosive surge in demand? Or to what degree will the government wantonly splurge to build supply?

And or, will they expand supply through increased educational service contracting “Expanded Government Assistance to Students and Teachers in Private Education, or GASTPE” so as to include private colleges and universities?

If the latter will be the focus, then will this not only lead to more government deficit spending but also to the skyrocketing of private sector college/university tuition fees?

Yes, private school deficits accrued from the “outsourced” public school students will be covered by, or paid for by paying students through higher tuition fees. I discussed this in the past. [See Showbiz S&P Upgrade & BSP Actions Sends Phisix and the Peso into a Frenzied Blow off Top May 12, 2014]

And with rocketing tuition fees, will this not lead to LESS private sector school enrolment and thereby INCREASE demand for free education?

Moreover, how will free education be financed? By more of the BSP’s monetization? By more borrowings? By higher taxes?

Again, how will welfare free lunches affect the peso and interest rates?

Yes indeed, external risks are factors to consider. Interestingly, the BSP chief seems to have forgotten about China’s bubble.

But no, risks wouldn’t be about contagion.

Instead, risks would be about the exposition of fragility from cumulative domestic political-economic undertakings…such as zero bound induced credit financed economic maladjustments and malinvestments as seen via asset bubbles, massive increases in deficit spending on the warfare and welfare state, the bureaucratic state and the public works.

In short, external factors may serve as trigger to expose internal sins. Even if there will be no external influences, the ramifications of internal sins will surface. All actions have consequences. Hasn’t the peso been saying these?

At the day’s end, attribution bias won’t make domestic fragility go away.

This is what makes 2017 scary stuff indeed!

The BSP Chief as Economic Model

Post script.

Pardon this seeming ad hominem. I doubt if there would “sleepless nights” or would keep the BSP chief “awake at night” as misleadingly illustrated by Barron’s Asia.

The conversation was meant for public consumption which means it needs emotional appeal in order to sell.

Yet the reason Mr. Tetangco would not need to be awake at nights is because he is the main or principal beneficiary of the policies he has implemented.

If he gets reappointed, then the coming years of money printing by the banking system and or by the government should spillover to the BSP’s budget and thus should increase his earnings. This is regardless of the how the real economy performs. Yet just observe that any signs of economic downturn have only prompted the BSP to inflate its assets at record pace. The weaker the economy, the greater the money printing.

But if he opts to retire, then he gets his retirement windfall which should amount to likely hundreds of million pesos.

How can high ranking government officials be sleepless when they are the FIRST recipients of money printing??? Or how can high ranking government officials be impelled to stay awake at nights, when their earnings are considered risk free?????!!!!

Sleepless nights are fated for the most of the non-political entities whose income and earnings are attached to, or dependent on, the performance of the economy.

And the BSP chief serves as a model as to why being a tax consumer today could work as an insurance against an economic downturn….especially under a leftist government.