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Crisis Management, Immigration, and Devolution
By mlq3 Posted in Daily Dose on September 5, 2008 638 Comments 4 min read
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It’s an interesting time to be in the UK, where the Mother of All Parliaments, the House of Commons, has been roiled by infighting and discouraging economic news.

The Chancellor of the Exchequer ignited a firestorm of protest last week: see Chancellor Alistair Darling warns slump could be the worst for 60 years, precipitating a slump in the Pound Sterling and a furious debate over whether he acted irresponsibly or not. In many ways the entire thing -including debating whether government ministers ought to be blunt or Pollyanna-like in their official statements, the reliability or unreliability of official statistics, the question of whether the chief executive should take the fall to prevent the decimation of the party- sounds eerily familiar and because of that, oddly comforting.

The Brits are working through issues not very different from our own and it seems to be there isn’t all that much of a difference between the way British and Filipino politicians are trying to do damage control: orare ignoring public opinion altogether while politicizing previously relatively partisan-free civil service institutions.

The Times in a recent editorial (which came at the heels of the paper’s report that a sacking was in the offing), The twilight of Sir Ian Blair, looked at the controversial head of Scotland Yard and took him to task in all-too-familiar (for Filipinos) terms:

His responses are by now well practised. He believes that near-constant pressure to quit is an occupational hazard to be shrugged off if not actually ignored. And he believes mutinous disloyalty from senior colleagues is an inevitable result of radical reforms of which he is fiercely proud.

The trouble for Sir Ian is that his reforms have not made him indispensable. Nor can he be sanguine any longer about the calls for him to go. His support from the Association of Chief Police Officers and the Home Office has crumbled: his contract will not be renewed in 2010. This makes him a lame duck not only in the view of his many critics, but in fact. If his record were spectacular, this newspaper would back his bid to stay in office until the 2012 Olympics and beyond. Unfortunately, it is not.

What sets the British media apart from our own is the deeper sense of memory, whether institutional, national, and personal, that the media, the politicians, and commentators have. For example, Libby Purves in Why did Alistair Darling choose 1948? points out a fascinating detail, concerning 1948 as a watershed year for Britain despite postwar austerity:

The disreputable anomaly of plural voting was abolished – previously university graduates could vote in two places, and business owners had an extra vote at their place of work.

The odd thing of course being that there are frustrated middle and upper class Filipinos who continue to think plural voting might be a good thing.

The business and finance media, too, write clearly and informatively, something hardly ever seen at home. The Business Editor of The Times pens an analysis: This slowdown has a long way to go yet — so just look forward to the sales. And there are short, but richly informative reports that contextualize the economic news. An article Is the party over for pubs? points out British pubs are closing at the rate of four per day and also ties in the various economic trends (crashing property prices, increasing food and labor costs, etc.) into the uncertain future of a British institution.

In Britain 2028: we need ten new cities, please, Camilla Cavendish looks at the immigration policies of the UK, something that ought to be of interest to Filipinos living and working here.

Just today, Gordon Brown to increase Holyrood’s tax powers focuses on the great Labour project of restoring the Scottish Parliament and increasing its powers over taxation and budgeting: again, this ia a debate erupting in Britain which should be interesting to proponents of Federalism.

Update: Only Blair could save Labour now provides an insight into how more “mature” democracies factor surveys into the political situation, and how past and present leaders can add and detract from their party’s future prospects.

A great pleasure is reading the obituaries published in the British papers. See K.K. Birla: industrial tycoon and philanthropist.

 


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  1. The higher the net income the higher the equity in other words they are directly proportional.
    paying dividends are ways of increasing leverage,because you can borrow more.

    Ha?”

    scratch my comment: I leave it to the three year corporate lawyers(3 years might mean 12 quarterly board meetings)
    and the CPA/ phd/dba / Dean

    I am out of your league,di nako sasali, I might be displaying my (ano ba tawag dun)epistemic arrogance

  2. if you declare your equities as dividends, specially cash dividends you are actually deflating the assets of the corporation.. third parties who relied on the solvency of the corporation by presenting so much “equities” on its books only to find them gone because they have been distributed to the stockholders as “cash dividends”, that is fraud and laws on securities consider it an illegal corporate act.

    just argue your point mr, cat. you should not resort to “ad hominem” it does not add up to your credential as financial expert and a topnotch CPA who still have that anacrhonistic view that CPAs protect the public from fraud. They sometimes shield and become instrument of fraud also. 🙂

  3. kg,

    we are just discussing this for discussion’s sake. nothing personal and i take no offense from your comment/response. 🙂

  4. Accenture:

    “Only in RP or P.I. Andersen was SGV’s parent company. When Andersen was dissolved in the U.S., SGV associated itself with Accenture.”

    sorry kung mali,pwede sumilip sa wikipedia.

    per wikipedia:

    “Accenture originated as the consulting division of Arthur Andersen, which Arthur Andersen and Clarence DeLany founded in 1913 as Andersen, DeLany & Co.”

    “On January 1, 2001 Andersen Consulting adopted its current name, “Accenture”. The word “Accenture” is derived from “Accent on the future”. Although a marketing consultancy was tasked with finding a new name for the company, the name “Accenture” was submitted by an employee from the Oslo office named Kim Petersen, as a result of an internal competition. Accenture felt that the name should represent its will to be a global consulting leader and high performer, and also intended that the name should not be offensive in any country in which Accenture operates.”

    as to supremo’s comment:
    with all due respect,sorry if i have to double check:

    “As of 2008, Arthur Andersen LLP has not been formally dissolved nor has it declared bankruptcy. Ownership of the partnership has been ceded to four limited liability corporations named Omega Management I through IV.”

  5. JCC,

    The cat is a she,sometimes i call her cathy.

    sanay na ako dito.

    ty for not taking offense sa coment ko(tactless ako)I hope you won’t take offense on this one as well.

    the thing you mentioned about cpas can work for corporate lawyers too.
    If there are rotten eggs in the accounting profession,there are rotten eggs in the law profession as well.With your 22 years as a trial lawyer and three years as a corporate lawyer you t know what I mean.

    I still take it as the exception rather than the rule.

    I am not taking sides,just my two cents.

  6. “if you declare your equities as dividends, specially cash dividends you are actually deflating the assets of the corporation.”

    and what are dividends supposed to be?
    is it not the division of an asset among shareholders????

    point of clarification,your honor..

  7. KG,

    absolutely.. you are right there. if you read my book it is all about lawyers and judges, the whole kaboodle that will not make one’s mother proud…

    now i can understand the “ad hominems” from “Cahty” the Cat… that could be menstrual-related flare ups!!! 🙂

  8. KG,

    from surplus earnings, yes, you can declare dividends…. but equities from my legal training is what the stockholders have put up as a capitlization of the corp… or after say a year of operation, it earns another million… this one million earning can be declared dividends, or the company may plow this earning back as capital by declaring them stock dividends.

    the original capitalization of the corporation plus the newly plowed back one million are equities of the coporation or its capital… and are coporate assets not freely subject to dividends declaration…

    again excuse me if i am wrong…. and that is the reason why I want “cathy” to educate me but she won’t. 🙂

  9. if you declare your equities as dividends, specially cash dividends you are actually deflating the assets of the corporation.. third parties who relied on the solvency of the corporation by presenting so much “equities” on its books only to find them gone because they have been distributed to the stockholders as “cash dividends”, that is fraud and laws on securities consider it an illegal corporate act.</blockquote.

    Because you are making a fool of yourself. You are contradicting whatever you have said in the previous comments.

    bibigay ko na korona mo pagkadum dum king.

    Paniwalaan mo na kung gusto mong paniwalaan.

  10. Karl (at 11:57), i don’t think it’s absurd since credit card companies [aka ‘lenders’] do pay for credit investigation of prospective credit card holders [aka ‘borrowers’]. They do so because they believe that it is important to know a person’s credit worthiness before lending money to that person. Shouldn’t the same logic apply in the relationship between bond holders [aka ‘lenders’] and the bond issuers [aka ‘borrowers’] ?

  11. I am not questioning that they do not use third party credit risk raters if it is already being done by the same guys fitch,moody’s etc. by the issuer.

    I only got the idea that the issuer pays for them based on your blog.

    further reading tells me a lender may hire them agencies for a fee.(sorry about that)

    my only question now is:if it is the same process done by a credit risk assessment company to asses the ability to pay,does it matter who hires the third party, protect as long as they have the ability to pay???

    unless your source/link is implying that moodys ,etc are subjective depending on who hired them for the risk assessment.

  12. Maiba tayo:

    They say that bpos can thrive because of the crisis:

    If that is the bright side,the dark side is this.

    Some accounts may close shop too.

    example:the account I handled:Washington Mutual . WAMU is rumored to be auctioned.
    300 or more people will be looking for jobs elsewhere anytime soon.

  13. Karl, yes your last sentence (at 10:04am) is precisely the point, plus the fact that the credit rating agencies info cannot be independently verified.

  14. Solution to financial crisis: blame the Democrats 🙂
    “The current headache begins and ends with ideology, namely that of former Fed Chairman Alan Greenspan–an acolyte of Ayn Rand, a free-market absolutist, a true believer in the evils of regulation. Many of the present headaches point directly back to the decisions made by the Greenspan Fed. Sure, there is plenty of other blame to go around: an unengaged president, a clueless Congress, a hapless FDIC, a compromised OFHEO, and Phil Gramm–but the biggest and most accusatory finger points directly at Easy Al.”

    http://phoenixwoman.wordpress.com/2008/09/15/republican-solution-to-financial-crisis-blame-the-democrats/

    If Phil Gramm authored the deregulation bill. He might be the only one to reverse it. 🙂 But his bill is only second to Greenspan. Lowering interest rates at seller’s market?

    http://www.youtube.com/watch?v=ZkJDux898uE&eurl=http://thinkprogress.org/

  15. jcc: A corporation does not have to issue stock dividends in order for retained earnings to be considered part of shareholder equity. The verbage in Wikipedia should be adequately descriptive:

    In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. .Similarly, if the corporation makes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings.

    Retained earnings are reported in the shareholders’ equity section of the balance sheet. Companies with net accumulated losses may refer to negative shareholders’ equity as a shareholders’ deficit. A complete report of the retained earnings or retained losses is presented in the Statement of retained earnings or Statement of retained losses.

    http://en.wikipedia.org/wiki/Retained_earnings

  16. Blame the Democrats for the mess..

    Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999 by the Gramm-Leach-Bliley Act signed by President Bill Clinton.

    🙂

  17. Leytenian, the bill was passed when both houses of the US Congress were under Republican control. The main proponent, Phil Gramm is a Republican (and a supporter of McCain). Sure, Bill Clinton should probably have vetoed it, but i think ‘blame the democrats’ given the fact that George W. Bush (a Republican) has been President for almost 8 years already is a stretch.

  18. This began in 1999 when Bill Clinton and the Democrats in Congress repealed the 1933 Glass-Steagall Act. It allowed the Dems to turn Freddie Mac and Faniie Mae into their own ATM. This Act could have prevented this mess we are in now. It worked from 1933 to 1999. 🙂

  19. to jcc: You’re in the US… a local public library should have “Accounting for Dummies” and “Reading Financial Reports for Dummies”. Both are good. Heavy-duty reading (can give you a headache) will be Also “Needles Financial And Managerial Accounting” by Belverd Needles (which is a college/MBA textbook).

    This will put you to sleep but it really is very useful — Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean.

  20. my two cents, what was the economy during clinton years? what is like now under bush? that should settle it. blaming clinton for everything when something goes wrong is termed as republicans’ “clinton fixation”. get over it! bill is not in the white house anymore, bush is!

    it is like blaming erap for every mess that happened after edsa dos, and gma claiming credit for all that is good.

    this is from someone who is not even sa tate. just thinking outside of the box.

  21. wow. past threads are really accounting/economics/law heavy posts! my head is spinning. never seen this much spirited discussion. believe me my brother and sister are economic and accounting (also cpa) grads from UP respectively and some relatives/friends are lawyers too. thought i heard it all. my mistake.

    I tried to convince them to view some of the posts here and they just shook their heads. they didn’t really said why, and I didn’t bother to ask. and some of you questioned why i think filipinos are the best! shame on you!

    this is very educating. learning from my fellow pinoys na sa tate. internet is great. thank you al gore! lol 😉

  22. Let’s talk about solution: The United States can possibly expand the quota of skilled immigrants. The demand for skilled workers has been there since 2005. This will kick- start home sales. Bringing well-paid, skilled workers to the United States such as our many pinoy nurses and therapists ( for example) would generate additional demand for homes and help get some homes off the market. Not even for sale but for rent so that owners can pay mortgages.

    I have talked about this to many of my lawyer friends last year. The housing market has lost it’s price stability because it was sensitive to employment and population. In orlando, there were not many skilled middle income earners migrating to the city but low income hired by disney, universal , sea world and the hospitality industry.The baby boomers will only start its demand for housing in 2009. The problem I see in my city is that the county has not stopped permitting builder’s to build. My god… I can drive around town and I can still find new subdivisions being built. It creates more supply and no one is capable of buying except for those who are in the healthcare industry.

    The New Orlando Medical City will not open in 2010. It remains under construction for the largest VA hospital in Florida, the Burnham Institute and the new Medical University. The medical city will definitely replenish all the housing supply in Orlando. This city will create over 20,000 jobs within the vicinity and ripple effects of smaller businesses close by.
    In my calculation, I need to have some cash and buy 10 foreclosures at the end of 2009 , fix it up, rent it for a year and sell it for profit. Then go home to Philippines… 🙂 that’s my plan.

  23. If I would vote for Obama? NO.. I would say send those people back to their homeland in Africa or South America and replace them with skilled filipino workers who are willing to contribute to the system by paying taxes and not take advantage of food stamp, housing subsidies and healthcare.
    Pinoy is the best…
    from the Philippine Island.. hahaha : )

  24. This began in 1999 when Bill Clinton and the Democrats in Congress repealed the 1933 Glass-Steagall Act. – Leytenian

    As i mentioned (at 10:59 am), in 1999 it was a Republican -controlled Congress. The proponent, Phil Gramm, is a Republican. Furthermore, Fannie Mae and Freddy Mac are just collateral damage in a deregulated financial system, not the main story. As John Quiggin comments over at Crookedtimber.

    …the failure of Fannie and Freddie is only part of the much bigger part of explicit (Bear Stearns) and implicit (Treasury handouts for all) bailouts for the whole sector. The reasons these firms got into trouble are only a marginal part of the story. – John Quiggin

    Since Quiggin made that comment last week, other private entities like Lehman and AIG have joined Bear Stearns. The crisis demonstrates the failure of financial deregulation, i.e. it’s a case of Market Failure more than ‘Government Failure’ (although government failure is part of the story since they were the ones who defined the rules under which the market operates).

  25. This began in 1999 when Bill Clinton and the Democrats in Congress repealed the 1933 Glass-Steagall Act. – Leytenian

    As i mentioned (at 10:59 am), in 1999 it was a Republican -controlled Congress. The proponent, Phil Gramm, is a Republican. Furthermore, Fannie Mae and Freddy Mac are just collateral damage in a deregulated financial system, not the main story. As John Quiggin comments over at Crookedtimber.

    …the failure of Fannie and Freddie is only part of the much bigger part of explicit (Bear Stearns) and implicit (Treasury handouts for all) bailouts for the whole sector. The reasons these firms got into trouble are only a marginal part of the story. – John Quiggin

    Since Quiggin made that comment last week, other private entities like Lehman and AIG have joined Bear Stearns. The crisis demonstrates the failure of financial deregulation, i.e. it’s a case of Market Failure more than ‘Government Failure’ (although government failure is part of the story since they were the ones who defined the rules under which the market operates)..

  26. Solution? I think it goes back to the American peopel or those living in America.

    Bakit ba walang umalma sa kasakiman ng CEOs mga financial institutions.

    Kasi karmihan naman ng tao sa America addict sa pangungutang at kasakiman eh. Tingnan mo na lang yung bumabahang credit cards dito.

    Maraming mg tao na hindi na nakuntento sa isang bahay kaya wala ring nag reklamo sa noong kasagsagan ng subprime. Utang nag utang ng bahay kahit hinid naman pala kayang bayaran.

    Ngayon nalang nag tatanong kung anong ginagawa ng SEC, pero ang magtao rin naman ang may gurto ng deregulation eh.

    Dapat lang mangyari ang crisis na eto. Para matuiruan ng leksyon ang mga tao .

    Even Obama and Mc Cain can not just fingerpoint here. They are very much a part of the problem. Eh yung mga CEO at top executives ng mga bumagsak financial institution ay mg supporter at campaign conributor din nila eh. Hangang nagyon wla pa rin akong naririnig na maganda sa dalwang presidentila candidates na to pagdating sa kung ano ang gagawin nila para maayos ang problema.

    So ang solution nasa mag tao. And it shoudl start by simply learning their lessons. And of course by choosing the right president this coming very crucial election.

    S

  27. “thinking outside the box? yeah right!”

    can’t accept that a pinoy who’s in pinas can come up with something to post? ya right and i’m wrong? 😉

  28. Bakit ba walang umalma sa kasakiman ng CEOs mga financial institutions. – rego

    Hindi totoo iyan. May mga matagal nang umaalma) at nagsasabing bulok nga ang sistema (tulad ni hvrds). Hindi lang sila pinakikinggan.

    [apologies again if double posted]

  29. rego,
    “thinking outside the box? yeah right!”

    It’s crisis management. how do we create demand in housing? what industry is stable and demand more skilled workers at middle income bracket that can afford to buy the inventory homes? the answer is HEALTHCARE..( it’s the most stable job in the US) and obama will cut the budget? what’s left?

  30. One of the more important part of theory is gathering of the facts to support a reality.

    No one who contributes punditry here has gone through the major upheaval in the real estate market in the seventies and with the savings and loan fiasco with the Asian crisis and the present problems.

    Who would remember the Commdore Hotel that was the stepping stone of Trump to fame and fortune. Then his collapse that almost brought Citi bank then down.

    What about the Savings and Loan fiasco…Who would have had the personal experience of seeing a close friend sent to jail for his involvement ???

    All connected to the real estate crash in the early nineties in some parts of the States.

    How many were around when Reagan passed the tax reform Act limiting tax free breaks for investments in real estate????Also deregulating the savings and loan business.

    Yesterday the U.S. Central bank pumped almost a quarter of a trillion dollars in the domestic money markets in the U.S. and the rest of the world through the central banks of U.K. Europe, Japan, Switzerland and Canada. The interbank trade abroad in in the U.S. had virtually come to a halt. In the world it is know as the LIBOR rate. The overseas dollar interbank lending rate amongst banks.
    Other Central banks pumped in money to support their exchange markets and equity markets.
    It has happened recently last year but for it to happen again in the midst of the turmoil was unnerving.

    People were sacred and parking their money in T-Bills even though they would receive no interest .

    One money market mutual fund seized up and marked their NAV as minus a dollar. if money market funds and money market funds on deposits with banks seize up credit will dry up fro banks that have to meet their reserve liquidity requirements. That would have been a catastrophic heart attack. No more circulation of funds…

    Since the dot.com bubble we have watched the migration of asset inflation to other asset classes. But to see credit itself becoming an asset class is something utterly outer space. The off course the oil surge.

    The markets were traveling at warp speed and the regulators were at pulse speed. No match.

    Matter and anti- matter were colliding and no one knew how to stop the chain reaction without affecting the physical economy ….. It is ironic that scientists are experimenting on re- creating the Big Bang….

  31. By the way the U.S. has asked the IMF to make an assessemnt of U.S. fiances in preparation for the establishment of a state owned vehicle to buy some (No one knows how much) the distressed mortgages in the system.

    It might be between $1T – $2T.

    The sovereign wealth funds of the world own almost $1.5 trillion of Fannie Mae and Freddie Mac bonds.

    The notional value of the CDS sold by AIG is even greater than that.

    The amounts here are mind boggling for a forced controlled bankruptcy process.

    I never thought I would see the day when the great depression was almost re -created in substance.

    The Fed is truly today the largest state owned financial institution in the world that is to a great part directing where resources are to go.

    Capitalism and markets are about faith and trust. There is a severe crisis of confidence.

    Governments are guapo once again….

    As far as the Philippine government well that is another story altogether.

  32. Bakit ba walang umalma sa kasakiman ng CEOs mga financial institutions. – rego

    Hindi totoo iyan. May mga matagal nang umaalma) at nagsasabing bulok nga ang sistema (tulad ni hvrds). Hindi lang sila pinakikinggan.- hvdrs
    ————————————————————————

    babalik pa rin sa mga taong katulad nila hvdrs. ibig lang sanihin hindia niola na icommunicate ng maayos ang kanilang pag alma kaya walang nakinig sa kanila. kung titingnan mo ang style nh pagaasta dito sa blog na eto ni hvdrs. its a big turn-off. sino ba naman ang makikinig sa mga taong mayayabang na ganyan.

    katulad din yan ng adovcaies mo at ng mag kasamahan pagtdating sa kabulukan sa pinas eh. l. maganda naman talaga. pero mau nakikinig ba o may napabago ka bang mga tao na nsa kanila dito sa blog maliban doon sa mga datin mo nag kasamahan. wla eh. ang paga aasta mo kasi dito eh its soooo assholic at masyadong pa “holier than than thou” eh. so sino naman ang ganahan lumipat sa side nyo. ;=)

  33. The public (aka “taxpayers”) benefited from sub-prime mortgages by making owning a house more universal. Companies offering more aggressive mortgages also exerted pressure on other mortagage lenders to lower interest rates and initial equity requirements.

    Now the same public are ranting about the govt bailing out companies using taxpayers money because of events which they were party to in the first place!

    Sounds simplistic, but it sounds like blaming the prostitute for getting herpes.

    Personal finance is a personal responsibility. The public, government, business, everyone is partly to blame for this mess.

  34. “katulad din yan ng adovcaies mo at ng mag kasamahan pagtdating sa kabulukan sa pinas eh. l. maganda naman talaga. pero mau nakikinig ba o may napabago ka bang mga tao na nsa kanila dito sa blog maliban doon sa mga datin mo nag kasamahan. wla eh. ang paga aasta mo kasi dito eh its soooo assholic at masyadong pa “holier than than thou” eh. so sino naman ang ganahan lumipat sa side nyo. ;=)” rego

    Well, compare to your posts and comments (which I don’t bother to read because of either wrong spelling or just blabbering incoherently for the most part). Mapatagalog or english mali parin…duh

    My first post, though I’ve been reading mlq3’s blogs more than a year now. I just can’t ignore your self righteous way of shooting commenters. Lumalabas na mas mayabang ka pa nga eh. At least si hrvds may ipagyayabang..Mga post mo wala namang substance.

  35. “Now the same public are ranting about the govt bailing out companies using taxpayers money because of events which they were party to in the first place!” – Carl

    Yes, but many taxpayers did not earn the fat orgination, inspection, and closing fees. These many taxpayers would not have wanted to give mortage loan to a McDonald employee earning $7 hourly for the latter to purchase a 500-thousand dollar home.

    It’s different if say it is a public electric utlility with wide coverage is involved (e.g. the Philippine National Power Corporation) where most consumers are also the taxpayers, and where its continued operation is vital.

  36. This whole financial mess will still happen with or without the Glass-Steagall Act because that law only applies to the US. Most US financial institutions are global. They can do the transactions outside the US.

  37. “These many taxpayers would not have wanted to give mortage loan to a McDonald employee earning $7 hourly for the latter to purchase a 500-thousand dollar home.” Master Yoda

    You’d be surprised, especially if that taxpayer is running for public office.

  38. UP n student

    “Retained earnings are reported in the shareholders’ equity section of the balance sheet. Companies with net accumulated losses may refer to negative shareholders’ equity as a shareholders’ deficit. A complete report of the retained earnings or retained losses is presented in the Statement of retained earnings or Statement of retained losses. – UP n Student

    Reading a wikipedia entry does not make you a genius overnight. “Equity Section” in the accounting entry, (above posted) is used in a loose sense.

    “Equity” from legal standpoint is the capital/assets of the corporation as presented to the whole world/third party….

    In another sense it is the counterpart put up by a borrower to she/can avail of a say $300,000 housing loan, but the house costs $400,000. The borrower will ante-up the $100,000 as his equity and the bank will fund $300,000. The house costs $400,000 with your $100,000 equity.

    It is safe to say that dividends, stocks or cash, can be
    declared only out of “surplus earnings”. If accounting terminology still considers retained earnings as “equity”, that’s where it differs from legal terminology….

  39. Besides, we get the benefit of hindsight now. It’s now easy to see that government should have stepped in when borrowers were made to cash in on their home equity, or borrowers themselves should have exercised prudence just to save for that rainy day when interst rates rise.

    It’s not that the housing bubble came as a surprise. Economists like Stiglitz have already predicted this as early as two years ago.

    But who wants to spoil the party when everyone is enjoying, right?

  40. UP n Student,

    If you are a student from UP its time now that you get your education from your professors. I am very confident that they are competent and will teach you good education, and good manners as well. 🙂

    junk those wikipedia entries.

    equity in finance term as defined in a Microsoft encarta dictionary:

    “part of value paid: the value of a piece of property over and above any mortgage or other liabilities relating to it
    Microsoft® Encarta® 2008. © 1993-2007 Microsoft Corporation. All rights reserved.

    in accounting/securities exchange term:

    equities: stock exchange stock entitling holder to profits: shares of stock in a corporation that pays the holder some of its profits
    Microsoft® Encarta® 2008. © 1993-2007 Microsoft Corporation. All rights reserved.

    you see even in accounting terms, equities are considered stocks where dividends flow, but not the dividends in themselves.

    in law:

    . fairness: actions, treatment of others, or a general condition characterized by justice, fairness, and impartiality
    Microsoft® Encarta® 2008. © 1993-2007 Microsoft Corporation. All rights reserved.

    from jcc’s definition and understanding, you are creating an inequity if your equities in the corporation are declared dividends because third parties who relied on your equities found your equities gone when you distributed them to stockholders as cash dividends. 🙂

  41. I second the motions of Nash and BrianB.

    Hey guys, could we skip the re-takes of Econ101, Financial Accounting II (or whatever its called now in UP), Business Policy, etc. and instead engage in semi-original punditry?

    You could comment as far as where Google takes you, but it defeats the purpose of exchanging on-the-ground views and perspectives.

    Sabi nga ni Dolphy, ‘Hindi baling medyo sablay, basta original, di ba?’

  42. Master Yoda states :
    These many taxpayers would not have wanted to give mortage loan to a McDonald employee earning $7 hourly for the latter to purchase a 500-thousand dollar home.


    ——————-
    Not really true. Most taxpayers are not talangka —- they do not care if a McDonald employee earning $7 hourly for the obtains a mortgage for a 500-thousand dollar home.

    But most taxpayers will say You caused it so you solve it!!! if that $7-an-hour employee goes bankrupt or if the mortgage holder goes bankrupt. The taxpayer would not want to be requiredf to participate in any bail-out.

  43. ‘Most taxpayers are not talangka —- they do not care if a McDonald employee earning $7 hourly for the obtains a mortgage for a 500-thousand dollar home.’
    – UP n

    Its not being talangka. It’s being realistic.

    Such points-of-view and rationalization created this debacle. Please show me how a $7 per hour earner could afford a 500 thousand mortgage???

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