From America is for sale Expo 2009
Video from NBC Los Angeles
The art of economics consists in looking not merely at the immediate hut at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups—Henry Hazlitt
In the face of this crisis, how much money has the US government thrown to “save the system” so far?
CNBC has this tabulation…
``Try $4.28 trillion dollars. That's $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources.”
Incredible. $4.28 trillion +++ as the days go by! And that's about 30% of the US GDP.
Makes you wonder who's gonna pay for all these and how one can be bullish on the US dollar, except when considering the recent spate of the deleveraging process-which is a short term dynamic.
Table below as of November 18, are CNBC’s estimates (see article)…
Here are 3 of the ten, courtesy of CNBC.
Original Cost: $288 billion
Inflation Adjusted Cost: $3.6 trillion
Original Cost: $416.7 billion
Inflation Adjusted Cost: $851.2 billion
Original Cost: $111 billion
Inflation Adjusted Cost: $698 billion
(Pictured: Pres. Lyndon Johnson and Sen. Richard Russell)
Check CNBC slideshow for the write up and the rest of the other largest taxpayer bill
(Hat Tip: Mr. C. McCarty)
``Whenever you see a successful business, someone once made a courageous decision.”-Peter Drucker
In spite of the jitters of a market meltdown, the Phisix alongside
By the way, among the 7 markets we monitor as possibly forming a bottom as discussed last week in Stock Markets As Indicators Of Recession, 2 are definitely out of the list as
In the past when the
Besides one notable action seen in the market internals of the Phisix has been that the greatly reduced degree of losses have been backed by SHARPLY reduced volume as shown in Figure 5.
Figure 5: PSE: Reduced Peso Volume Equals Diminishing Selling Pressures!
The bullmarket of 2005 to 2006 haven’t been accompanied by large volumes, which means much of the ascent was “unnoticed”. Peso volume improved only during late 2006 until mid 2007 (green line). As the credit crisis unraveled Peso volume has dramatically fallen along with the recent bear market (red line).
Note: it is common to see falling volume in a bear market, as buyers go on a strike. However, a differentiation is that when the scale of market declines substantially eases accompanied by volumes drying up significantly-signifies as diminished degree of selling pressure.
Lately we have had two occasions where the market’s Peso volume shriveled to a little over Php 1.1 billion on 2-3 points of decline. The last time the Phisix did the same activity was in September of 2006 which eerily seems to reveal of a similar pattern as today’s; except that the difference is that today’s action seems to be the enlarged version of the 2006 episode as shown in see figure 6.
Figure 6: stockcharts.com: Phisix 2006 Redux? Divergences to Continue?
When the Phisix reached its second bottom in September 2006 the Peso volume shrank by same degree (gold arrow in Figure 5), the following months saw the Phisix sprint by over 40%.
This is not to suggest that the Phisix will do the same sprint given the global conditions but we can’t write off a material improvement in the Phisix once we survive the seasonal weakness of September, which may imply that we can have a yearend rally barring any shocks.
Moreover, the red vertical line shows how the Phisix appears to have departed from its peers, neighbors and the
As an aside, the prospect of a vastly improving Phisix might yet in itself reverse those foreign fund flows by attracting money from international investors looking for yields enough to offset the forcible liquidation dynamic. For example, the “Mrs. Watanabes” or the housewife currency trader who could be representative of some segment of Japanese savers with a war chest of US $5.04 trillion (New York Times) could be one of our prospective momentum investors.
Remember too, that the Philippines is still in a negative real rate environment (statistical “inflation” rate is higher than policy rates, bond yields or economic growth rates) which is why we think that credit growth has been expanding aside from the improvement in the Phisix in the face of slowing “inflation”.
Figure 7: Wall Street Journal: Housing Bottom Still A Year Away
Markets, functioning as forward discounting mechanism, usually prices in 6-9 months ahead of the event, suggest that most of the world markets will probably hit the bottom by the first semester of 2009, which gives further boost to our hypothesis that 2010 will see the Phisix take off under the Philippine Presidential cycle.
Overall our general message is not for us to run away and hide but to take opportunities to earn from possible seasonal trends aside from positioning for the eventual recovery of global markets possibly in 2009.
You want to see how dire it is in the
Detroit News says a house in an impoverished area was sold for only $1 or about 45 Pesos! (Squatter rights here, as I previously know of, costs nearly 500-1000x more!)
Not only that the house took 19 NINETEEN days in the market for it to find a buyer, and worst, the seller a bank has had to throw in $10,000 just to get the home sold (commission, bonus and fees)!
Amazing!
“This house at 8111 Traverse in
This only goes to show how desperate it is in many parts of the
But in the currency markets, the floated story is different--the Philippine Peso is said to be weighed by US led global slowdown.
Oh really? Maybe our “poor” is now “wealthier” than the poor over there? At least they are not drowning in debt to reach such state of desperation.
And for a little hyperbole...maybe too they can afford better to buy houses over there?