A tyrant... is always stirring up some war or other, in order that the people may require a leader—Plato
In this issue
The Militarization of the Philippine Government, Pumps and Dumps Account for 90% of the Week’s 1.08% Gains, Xi Jinping Put and Global Short Squeeze
-The Militarization of the Philippine Government
-90% of the Week’s Phisix Gains From Mostly PUMPS and DUMPS, How This Will Backfire
-Asian Currencies and Stocks Surge on Xi Jinping Put and Wall Street Short Squeeze
The Militarization of the Philippine Government, Pumps and Dumps Account for 90% of the Week’s 1.08% Gains, Xi Jinping Put and Global Short Squeeze
The Militarization of the Philippine Government
At the behest of President Duterte, the military will take control of the Bureau of Customs (BoC)…
From the Inquirer (October 29, 2018): Armed Forces of the Philippines (AFP) would be taking over the operations of the Bureau of Customs (BOC) temporarily due to unmitigated corruption at the agency. In his speech during the thanks giving party of former Foreign Affairs Secretary Alan Peter Cayetano in Davao City, Duterte said the military would run the corruption-hit bureau while all of its employees were on floating status
However, such decree was a unilateral decision made that bypassed the DnD chief…
From the Inquirer (October 31, 2018): Defense Secretary Delfin Lorenzana said Wednesday that he was not consulted by President Rodrigo Duterte on his decision to place the Bureau of Customs under military control. “No. Wala. It’s just the decision of the President,” he told reporters when asked if the President talked to him before the announcement over the weekend.
The militarization of the bureaucracy has been broadening. The list now includes the BoC.
From the Inquirer (November 3, 2018): Eight retired military and police generals currently serve in top government posts. These are Delfin Lorenzana as defense secretary, Hermogenes Esperon as national security adviser, Rolando Bautista as social welfare secretary, Roy Cimatu as environment secretary, Eduardo Año as interior secretary, Eduardo del Rosario as housing secretary and Task Force Bangon Marawi chair, Rey Leonardo Guerrero as customs commissioner and Isidro Lapeña as director general of the Technical Education and Skills Development Authority.
The published justification or the given reason is that “they deliver”…
From the Inquirer (November 1, 2018): Duterte, who continued to defend former Customs Commissioner Isidro Lapeña and Lapena’s predecessor, Nicanor Faeldon, said he had appointed former military officers to his Cabinet because they were the one who delivered. ost of my Cabinet secretaries are already military men, why? I do not have anything against the bureaucracy, but the bureaucracy takes a long time to deliver. It will take you forever [to implement projects] because they’re fond of debating,” he said, speaking in a mix of Cebuano and English.
Has bureaucratic efficiency been the genuine reason for the militarization? Or could there be others?
Prior to the BoC’s takeover, the President appealed to the military
The military may have blown its chances of initiating real change in the country when it returned power to politicians after helping oust unpopular administrations, President Duterte said on Wednesday.
“Kayo rin ang may kasalanan niyan (It’s your fault). You have had your chance to really change the country but you did not,” the President said in a speech at the awarding ceremonies for artists at Malacañang.
“You in the military, listen to this. You have maybe staged so many coup d’états, mutiny and everything. The problem with you is, every time there’s a successful revolution, you returned power to the people. Power emanates from the people, remember, not to the few,” he said, apparently referring to the February 1986 EDSA Revolution that toppled dictator Ferdinand Marcos and the so-called EDSA 2 in 2001 that forced president Joseph Estrada to step down. The Armed Forces of the Philippines (AFP) played a key role in both civilian-led uprisings.
He said the country’s politicians were backers of oligarchs or were themselves the “rich people who… were able to maintain their alliances with government to milk more money.”
“So next time if you want a revolutionary government or if you want… Sleep on it, think about it, and not just surrender and salute whoever you want to salute,” he said in a mix of English and Filipino.
What do you think he means by the last paragraph: “So next time if you want a revolutionary government or if you want… Sleep on it, think about it, and not just surrender and salute whoever you want to salute”? Or Duterte’s call for action to the military?
Aside from amassing political power through centralization, could this be about legacy?
The President expressed intent to retire in August. He has also undergone clinical tests where he denies having cancer.
Under the present system, if he retires, the Vice President assumes power. If the opposition takes over, the incumbent President’s current actuation may be investigated. He may be tried publicly and incarcerated. So the assumption of a friendly administration is a required condition for him to relinquish power.
But for such condition to occur means an overhaul of the incumbent institutions founded on the 1986 Constitution. And this can only happen through an extra-constitutional move, thus, the call for “revolutionary government”!
Mr. Duterte has repeatedly been threatening to impose a revolutionary government. But without full support from the military, he won’t succeed. So could he be inspiring the military to conspire with him to establish a revolutionary government?
The slippery slope to a neo-socialist state from the political prism: First, a martial law at Marawi City. Then, the closure of Boracay. Now, the militarization of the government. Record fiscal deficits and various draconian controls make up the economic sphere.
As an aside, reports say that mass defiance of established rules has greeted the opening of Boracay. From the Philstar(November 2): “Barely a week since Boracay was reopened, some tourists and business establishments have defied regulations set by the Boracay Interagency Task Force to help protect and preserve the island. Parties, including loud music, smoking anddrinking in Boracay are back, Tourism Secretary Bernadette Romulo-Puyat said, citing reports she received on Wednesday.”
Unintended consequences have begun.
Will Duterte militarize Boracay too?
And why the bypass of the DnD chief? Because the latter has expressed opposition to a revolutionary government? Is the leadership reaching out to would-be supporters in the military of a junta? Or is he buying off support?
And will a militarized Bureau of Customs be used to curb record trade deficits? How? By manipulating statistics? By imposing import controls?
There is hardly any realization of the significance of such gradation.
The Dalai Lama captures the essence of dictatorship through the systematic reinforcement of coercion via militarization.From the Reality of War (bold added)
There are people with destructive intentions in every society, and the temptation to gain command over anorganisation capable of fulfilling their desires can become overwhelming. But no matter how malevolent or evil are the many murderous dictators who can currently oppress their nations and cause international problems, it is obvious that they cannot harm others or destroy countless human lives if they don't have a militaryorganisation accepted and condoned by society. As long as there are powerful armies there will always bedanger of dictatorship. If we really believe dictatorship to be a despicable and destructive form of government, then we must recognize that the existence of a powerful military establishment is one of its main causes
Finally, the great Austrian economist Nobel Prize winner Friedrich von Hayek on socialism’s inherent totalitarianism (bold mine)
But if democracy had to abdicate only from the control of economic life, this might still be regarded as a minor evil compared with the advantages expected from planning. Indeed, many of the advocates of planning fully realize — and have resigned themselves to the fact — that if planning is to be effective, democracy in the economic sphere has to go by the board. But it is a fatal delusion to believe that authoritarian government can be confined to economic matters. The tragic fact is that dictatorial direction cannot remain confined to economic matters but is bound to expand and to become "totalitarian" in the strict sense of the word. The economic dictator will soon find himself forced, even against his wishes, to assume dictatorship over the whole of the political and cultural life of the people.
See? More evidence of the path to a neo-socialist fascist-dictatorship state!
And with the introduction of more economic distortions, unintended consequences of grand scale have only been mounting.
All actions have consequences. The markets and the economy are representative of a dynamic and complex feedback loop process. Time will see through the accelerating ventilation of the repercussions from such unparalleled distortions (bubble government plus bubble economy), as it has already been
After all, there is no such thing as a free lunch. Not in the world of economics.
90% of the Week’s Phisix Gains From Mostly PUMPS and DUMPS, How This Will Backfire
How to generate a rally.
The Phisix closed up by 75.96 points or by 1.08% this week.
However, never will you hear about HOW this has taken place.
In a week abbreviated by two holidays, the output by the national benchmark had been shaped by two pumps and a dump! The net pump during the three days was 68.45 points or 90% of the week’s output!
As usual, such massive price-fixing's main beneficiary has been the Sy Group.
The PhiSYx trades at the 7,000-7,100+ range, but SM just hit a milestone! SM’s share of market capitalization reached the second highest in its trading history in the week that ended on October 26! It was the third highest at the end of this week
The last time SM reached its zenith share of a market cap weight of 14.01% was when the headline index rose to 9,041. In short, the push to 9,000 was mainly about the big caps, mostly SM.
Now even at 7,000-7,100 SM’s share of market cap (13.9% October 26, 13.83% October 31) has been narrowing relative to the January record. It shows how SM has been used to save the index!
That’s because many of the index composite issues have not participated in the pumping! For this reason, prices of a batch of issues have reached multi-year lows! Among the top 16: URC and JGS 2014, AEV 2013, TEL 2004, SECB 2014, BPI 2015 and GTCAP 2013!
Price Inequality!
Because of the index pumping on a limited number of issues, market cap weighted 2017 eps of the PhiSYx remains at a whopping 22.12! At 7,140!
See the charade?
The hope is that greater fools join, not only to pump the broader market but also pay for even higher prices for the most expensive issues!
A crucial deterioration in market breadth and peso trading volume accompanied the manipulated push of the PhiSYx to 9,058 in 2017 to January 2018
The distribution of trading activities had been CONCENTRATED towards the biggest market caps while the broader market fell. It exhibits the artificial effects of these price-fixing pumps.
That’s how one gets a big rally and a record.
Brazen manipulation of prices distorts the real value of capital, thus, economic imbalances emerge and accrue from it. The race to build supply is its prime repercussion.
As an example, the decaying volume in the PSE resonates or dovetails with the banking system’s liquidity conditions.
Banking liquidity strains should translate to lesser money available for allocation to the stock market. So the PSE’s market breadth deteriorates as the big index issues absorb most of the available liquidity via rampant price-fixing. Not only should the concern be of the inequality in price-valuations between the favored issues and not, but also growing risks from unexpected developments on issues with grossly exaggerated valuations. As interest rates streak upward, the dearest issues have been the most leveraged!
The Sage of Omaha, Warren Buffett spoke about the significance of interest to stocks in CNBC, “The most important item over time in valuation is obviously interest rates," he said in an interview last year. "If interest rates are destined to be at low levels. … It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield."
Eventually soon this whole façade, pillared by easy money and the price-fixing process, will implode.
Remember, the current leadership is a product of economic bubbles. Because getting something out of nothing has reached the national psyche, popular (neo-socialist) policies resonate with it.
Asian Currencies and Stocks Surge on Xi Jinping Put and Wall Street Short Squeeze
China’s Xi Jinping put on has geared up.
China’s stock markets went on fire as Chinese Communist party leaders signaled a fresh round of stimulus measures. The benchmark Shanghai Composite surged 2.99% this week.
As the USD-yuan approached the psychological threshold of 7, a level that has not been breached since the global financial crisis a decade ago, according to the South China Morning Post, China’s central government sold yuan bills in Hong Kong to stem the fall. As such, aided by the stimulus chatters, the yuan rallied by .8% the most since January
Asian currencies benefited from the powerful rebound of the yuan. All Asian currencies were up mostly from a short squeeze. South Korea’s won, the bruised Indonesian rupiah and Indian rupee rallied strongly by 1.74%, 1.72%, and 1.4% respectively. The Philippine peso was up by .2%. It would have been higher on a regular session
The Xi Jinping Put supported by the massive short-covering spike in Wall Street likewise reverberated in Asia
Led by the fantastic gains in the national equity benchmarks of Hong Kong (+7.16%), Japan (+5.0%), India (+4.98%) and Singapore (+4.86%), 89% of the region’s bourses spiked higher. The region’s average weekly return was +3.07%, which had also been about short-covering.
The US will hold its mid-term elections on Tuesday, November 6. The US Federal Reserve meets in November 7 and 8. Washington will reintroduce sanctions to Iran on November 5.
The likely outcome could be enhanced bidirectional volatility for global markets.
Here is an interesting chart from Bloomberg, chronicling US President Trump’s tweet or embrace or “ownership” of the S&P 500
