When they Sneeze we Catch a Cold

 

Is a stock market crash in the U.S. possible amid economic recovery?

That's not farfetched at all.

Among the most influential investors in America today are Warren Buffett, John Paulson, and George Soros. Their investing acumen has helped them amass billions of dollars and millions of followers.

With the stock market trading at record highs one would think they’re still buying U.S. stocks. But even as the New York Stock Exchange is up 165%, and the most important stock market indices are keeping pace—the S&P 500 has climbed more than 210% and the Dow Jones Industrial Average has increased 175%—it appears that the most visible and vocal billionaire investors are turning their backs on U.S. stocks. Are they preparing for a stock market crash in 2015?

Over the last couple of years, Warren Buffett’s holding company, Berkshire Hathaway, has been dumping its exposure to American stocks that rely on consumer spending.  Over a two-year period, Buffett’s holding company sold off 96.8% of its holdings in Johnson & Johnson. Berkshire Hathaway also junked its holdings in Kraft Foods Group, Inc. In the second quarter of 2012, Warren Buffett’s holding company held 58,826,390 shares; two years later, it held just 192,666 shares. That represents a 99.7% sell-off. The Procter & Gamble Company is still one of Warren Buffett’s top holdings. In just two years, Warren Buffett has dumped 11.5% of his holdings in Procter & Gamble.

It appears that other well-known billionaire investors are seeing a major correction and shedding their once-heavyweight U.S. stocks, too.

Billionaire investor John Paulson’s hedge fund, Paulson & Co., is unloading certain U.S. stocks, including JPMorgan Chase & Co., Family Dollar Stores, Inc. and The Sara Lee Corporation.

Billionaire business magnate George Soros, chairman of Soros Fund Management, sold his holdings in several banking giants in the first quarter of 2014, including JPMorgan, Bank of America Corporation, and Citigroup Inc.

Despite the stock market’s record run and Washington’s assurances that the economy is getting better, some of America’s wealthiest billionaires aren’t convinced. In fact, their recent actions suggest some sort of market crash is on its way.

And if the U.S. stock market is in the doldrums, it is highly possible that the Philippine stock market will be adversely affected as well.

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He rocks the Big Apple

 

Pope Francis's recent visit to the United States, capped by a meeting with President Barack Obama and an address before the United Nations, appears by most accounts to be a resounding success.

Nowhere was this most in evidence than in New York City, where thousands waited patiently for his motorcade to pass. On a few occasions, the Pope even stopped to kiss babies and children afflicted with serious illness. 

New Yorkers, after all, are used to seeing famous people and celebrities in their midst and are too focused on their jobs to bother lining up to catch a glimpse of the Supreme Pontiff.

But it appears that Pope Francis has really touched people's lives with his humility and simplicity as well as his candid statements and out-of-the-box stand on many issues confronting the Catholic Church at this time.

If anything, the warm reception for Pope Francis could signal a renewal of trust in the Catholic faith amid reports of scandals and shenanigans by some priests and prelates.

In stark contrast to the warm welcome accorded to Pope Francis by Americans, the visit of Chinese President Xi Jinping to the United States went largely unnoticed by the American public.

While the visit was intended to strengthen faltering Sino-US relations in the aftermath of certain issues, including island-building by China in the South China Sea, it is doubtful if the Chinese  President made much of a dent in fostering closer ties as he came across as arrogant and haughty, an attitude  born out of China's economic superpower status and consequent intensified military build-up.

If Pope Francis gets a rousing welcome in the US and China's President Xi Jinping a chilly one, then Americans must really know who their friends are, and who are not.  

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Can it Transform?

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The Bureau of Customs is one of the two largest revenue-collection agencies of the national government. But it operates under a dark cloud of suspicion, since those who deal with it invariably say that they are forced to agree to under-the-table deals with corrupt officials and employees for their shipments to be released.

 

Reforming the Customs bureau has been in the agenda of every administration for as long as we can remember. The latest effort to do this, through legislation, is not very promising. 

The Customs Modernization and Tariff Act (CMTA) is among the priority bills of the Aquino administration. But the proposed measure is not moving fast. Last we checked, it is now pending at the plenary of the House of Representatives under House Bill No. 5525. A Senate counterpart, under Senate Bill No. 168, is also pending before the Ways and Means Committee.

So there's a clamor for drastic reform of the Customs bureau not only from local businessmen but also foreign entrepreneurs doing  business here.

Members of the Joint Foreign Chambers are urging the Senate and the House to immediately pass the CMTA as they say this would make the country’s customs administration respected globally for its honesty and efficiency.

 “In today’s fast-changing global economy, the Philippines must modernize its customs administration to keep up with changing international standards, to make customs valuation and inspection procedures more transparent and predictable, and to implement automated procedures,” the JFC said. 

Modernizing Customs, it is believed, would make Philippine agriculture and industry competitive in foreign markets especially with the integration of the Association of South East Asian Nations (Asean) by the end of this year.

We agree completely. Customs reform is imperative since big-time smuggling appears to be going on despite the Aquino government's mantra of the daang matuwid or straight path. 

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WE'RE BEAUTIFUL

In the gem of the film "Heneral Luna", there’s a poignant scene in which the bodies of General Antonio Luna and his military aide were shown being dragged like fallen gladiators by their killers, the men of Emilio Aguinaldo. It is a symbolic snapshot of the "Spoliarium", the most famous painting of the general’s brother Juan Luna which is in perpetual exhibit at the National Museum.

But before that, most touching was the segue to Jose Rizal’s execution at Bagumbayan from a scene depicting another painting of Juan Luna, the "Parisian Life", showing a trio of Filipino patriots led by Rizal admiring the beauty of a woman (some say a prostitute) probably waiting for her date in a café in France.

That many Filipinos are now familiar with "Parisian Life" has everything to do with the brouhaha that accompanied its “rescue” and “repatriation” from foreign hands by the Government Service Insurance System (GSIS) under the previous administration. The GSIS got a lot of flak at the time for purportedly wasting its members’ money in buying "Parisian Life".

Now, the decision of the director of "Heneral Luna" to include the "Parisian Life" scene in his movie masterpiece is a testament and tribute to how valuable the painting is to us Filipinos insofar as revisiting and learning from our history is concerned. Setting aside the defense of the GSIS that paintings are valuable investments, was "Parisian Life" really worth the money used to bring it home to the Philippines?

As an answer, I’m not even touching the argument that the price paid by the GSIS for "Parisian Life" was paltry compared to the billions of pesos that have been squandered and will be squandered by inept and corrupt and government officials. Suffice to say that our heritage as a people is priceless and worth preserving so the future generations of Filipinos, including those whose parents have already migrated to other countries, would know who we are – warts and all.

We may not be perfect and, hell yeah, even dysfunctional, but we nonetheless are beautiful.

Dos Palmas Redux

                                                           

The recent kidnapping of two Canadian tourists, a Norwegian resort manager and a Filipino woman from a popular resort island off Davao City underscores once again the fragile peace and order situation in southern Philippines.

The immediate impact of this latest kidnapping incident is to discourage both local and foreign tourists from going to areas where their safety cannot be guaranteed. Since we have been promoting travel and tourism as a key component of our economic development program, this would no doubt have an adverse impact on the government's tourism projections. 

It’s not just tourists who are expected to shy away from visiting Mindanao. Investors keen on setting up enterprises in our southern shores will also think twice about putting their money in areas where they are likely to be harassed or intimidated by criminal syndicates and armed rebels.

The government is engaged in a continuing peace process with the Moro Islamc Liberation Front. Kidnapping incidents such  as this also threaten the attainment of peace in Mindanao that is the sine qua non for sustained economic growth and social development in the entire island.

The government appears to be trying to downplay the kidnapping as an isolated incident, which it is. We can expect the military and the police to launch operations to go after the perpetrators and possibly rescue the hostages unharmed, but these operations also contribute to the public perception that the government is not in control of the situation. Tourists and investors, not to mention residents, want to be safe from any threats to their well-being.

We urge authorities to leave no stone unturned in securing the freedom of the four hostages. Those responsible for this dastardly act should be relentlessly pursued and placed behind bars where they belong.  

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