Crisis Management, Immigration, and Devolution

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.


Manuel L. Quezon III.

638 thoughts on “Crisis Management, Immigration, and Devolution

  1. to mang jcc: Good manners???? Huh???

    Hindi naman kayo siguro napikon 👿 because I pointed to your statement about retained earnings/stock dividends, considering I offered something for free —– titles of books and where to find them for free.

  2. Master Yoda: I really don’t pay attention to how a $7-an-hour can get a mortgage for a $500K house.

    But I suspect Leytenian (and a few others) can tell you that with $55-an-hour-equivalent, one can ramp up to owning five houses whose 2007-assessments were in the $340K to $630K range.
    Sabi nga ni Dolphy, ‘Hindi baling medyo sablay, basta original, di ba?’

  3. We all know there are numerous problems in Wall Street and many financial institutions. I am very grateful that many experts like HVRDS and cat are posting in Manolo’s blog.Many comments have been posted on what’s going on in stock markets, etc. However, the local and international Juan de la Cruz like me are waiting for comments on how we can save our meager 401Ks and a few stocks which have been decreasing in values for several consecutive months. My financial adviser said to stick to what we are doing. But my gut feelings says do something else. What do you say. our expert business co-bloggers?

  4. Pilipinoparin,

    Coming recession, even depression:

    Sell the financials (high interest scenario, not much intermediation), hold technology stocks (will be the first to pick-up upon recovery) , and buy shares in companies producing basic commodities (necessities even in a down economy).

    Fine print: I lost a bundle in Citibank.

  5. Citicorp is up 25% today but down 16% since start-2008.

    Pilipinoparin: Firstly about your 401K —- take full advantage of the matching contribution from your company. Be sure to contribute enough into your 401K to get all of the matching “free-money” that your company contributes.

    Your 401K’s should be in mutual funds anyway and these funds should have a built-in divesification in them.

    Do you really have enough time to time the market? If you don’t, then a mechanical approach is your only choice, namely what percent to have in cash, percent in USA-stock-funds, percent in international stocks, and percent in bonds. If you still have 15 years to go before retirement, don’t bother with bonds but aim for 5% to 10% in international stocks.

    BUT above all else, protect your day-to-day cash flow, i.e. stay employed.

  6. Pilipinoparin: if you believe in “value-investing” and wish that you have shares of Warren Buffett’s Berkshire-Hathaway but don’t because of Berkshire current price-per-share, then ask your financial adviser about LUK. Leucadia National.

  7. People in this blog think that because they post without the “blockquotes”, they can claim originality in their ideas where the truth is, everything they mouth and they write were also copied from someone else without them consciously knowing them.

    Some modicum of admiration should be bestowed on people who posts with quotes than that those who claim that their ideas were original, “though may kaunting sablay”.

    The tabula rasa proponents consider the mind as blank prior to experiences. The mind at birth, regarded as having no innate conceptions and all that comes to his consciousness were copied from nature and their philosophies from others. The ability of people to reconstruct those knowledge in some other forms do not make them originals. The fact that they were able to present the summation of their learning through times with some discreet erudition do not belie the basic truth that their foundational knowledge were copied from someone else, may they be from their parents, siblings, friends, pastors and lastly, their teachers.

  8. Better than the usually unproductive hand-wringing and the Monday-morning quarterbacking about what is currently happening in the world of finance and economics, it is good to read here about positive things that can be done to protect each of us who are after all personally affected by all this, whether we are in the US or in other foreign countries.

    What to do with our personal individual resources – whether in our pension funds like 401(k)s or its government version, or as deposits, or as short-term liquid investments.

    Granted that this would be relevant essentially to those outside of the old homeland. But the mention of 401(k)s tells us of the pervasive extent of the markets, whether equities or otherwise. After all, many of us who are in employment or were employed have this. One old stat figured that about 70% of those employed in the US are invested in the markets through their pension funds.

    Thus, self-directed pension funds should be re-examined for more diversity vis-à-vis one’s time horizon. And to remember that purchasing individual stocks, regardless of how currently profitable those stocks may be, radically limits diversity. Mutual funds were mentioned, which typically should be where the bulk of these pension funds are parked or warehoused. And to remember that one does not have to go through those now infamous brokers because there are loads of no-load funds where one can go to and invest directly. And invest cheaply.

    And of course, assets/resources held as real estate, especially as residential, are another story. In the Bay Area alone the median value of a house has dropped about 30% over a year’s time. So if one is still able to keep up with payments, one needs to a take a deep breath, sit back, and hope for the best. We have been through this. At the turn of the 90’s, this same area also suffered similarly.

    Good luck!

  9. some people also in this blog were looking for “knowledgeable” posts about investment strategies and advice on how to ride the maelstorm of financial crisis only to juvelantly reveal that he has some investment portfolio where he lost money from.. the obvious message is “hey guys, I am a biggie, not a small time blogger at all”.

    I love leytenian who said she has lots of money, but she does in it a very direct way… walang patumpik tumpik… 🙂

  10. Pinoys here in Michigan are not a little bit worried of the economy. They leave the worrying to Americans who are less better off than them. But even the Americans who are not better off still go to camp every weekend where they fish and hunkered over choritos and beer. Pinoys do the same. On weekend before winter time sets in, camping grounds are full, and their best anti-dote to economic crunch is to chit-chat with their friends over meals of Filipino food and pass the nights with glee inside canvass tents equipped with the amenities of the house the left. I complain about not being able to drink a cup of coffee from a “canteen” or “losa” cups because everyone else have brought plastic cups.

    You want to recreate a rustic environment where you sleep inside the tent where some pebbles and sand were underneath your flesh but even that is gone. because everyone else has an airbed.

    Or you want to lit a fireplace with some flint stone, but that is not even possible because everyone else has a match or a lighter.

    The only thing that makes it a real camping are the tall trees, hilly topology and the wide inland lake in the site.

    Fast forward that camping ground to this blog. Let us save us our sanity by going camping. Don’t worry about 401k, investments and everything. Leave your worries behind you. Be a believer.

    “Do not store up for yourselves treasures on Earth,” where there are moths, rust and thieves, but in heaven, because, Jesus said, “where your treasure is, there your heart will be also.”

    Meantime, even during economic crunch, make it a habit to smile. 🙂

  11. about retirement funds whether it’s an employer sponsored 401K plan, Individual Roth IRA or Regular IRA, SEP IRA ( for self employed like me) ..

    Most of these retirement funds are diversified anyway thru mutual funds. Do not worry if share price will decline. The number of shares is the most important. Keep investing instead ( dollar cost averaging) It’s the right time to buy more shares at low price.
    You did not invest that money for daily needs. You invest that money for your retirement. Don’t panic… and do not withdraw it. It’s not the smart thing to do…
    Hold on and wait for a bit especially to those are nearing retirement.
    Suze Orman: Where to put your money now

  12. Mr. Market goes on holiday….

    Why is it so hard to understand the simple workings of the “free market”

    Price Information that leads to Price Discovery is the fundamental underlying principle that drives the mechanism…. What happens when almost all sellers do not trust the product across the board in financial markets excepting – precious metals – gold or government treasuries?

    You will have prices dropping like a rock. That means there is almost NO Market.

    That is when the selfish and savage form of market place comes to play. The Pope called it savage capitalism when speculators drove down exchange rates in the emerging markets that had no safety breakers and safety nets. People died.

    That is why the governments of the U.S. and the U.K. banned short selling of financial stocks across the board.

    The government is the safety breaker and ultimate safety net.

    Without it It is a one way spiral to disaster….

    When the markets are in a more stable state then off course short selling is a benefit….

    But the markets are almost in a state of total collapse.

    Now government will try to stabilize then hope the markets recover but if it does not the government then will set the price.

    In the 1930’s the Fed failed to pump money into the system after many banks had failed and dried up liquidity…

    That is why the fed and other Central banks pumped in liquidity into the markets where the private sector did not want to participate.

    The message is clear to the market players… Be not afraid for I am with you….Next to God that is the State.

    That is why the financial based stocks are generally all moving upward.

    In the 1930’s financial capitalism was just making its headway. Overproduction in the physical sectors of the economy led to surplus capital that led to speculative activity that brought down banks.

    This time around the financial sector has grown so many more times over. Money making money in the U.S. adds 20% to the U.S. economy while manufacturing only adds 10%. Financial capitalism is now collapsing. It was only a question of when before it would happen. Now the government is going be the biggest buyer of distressed assets. That is what a command economy is based on. Whether temporary or not is not the issue.

    “But it’s no use whining (sorry, Senator Gramm) about the prospect of a financial rescue plan. Today’s U.S. political system isn’t going to follow Andrew Mellon’s infamous advice to Herbert Hoover: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” The big buyout is coming; the only question is whether it will be done right. ”

    Paul Krugman, NY Times

    For those that do need to touch their savings or investments to live for the next few years. Forget it is there….

    It is now everyman for himself. Only the individual will know his particular situation in life.

    For the male of the species… Use the head above the shoulders.

    For the female of the species…the only way one will be able to think properly to honestly try to have an orgasm by oneself or with ones partner. Try either clitoral or through the G-spot. It would be best if it would be by both….

    That way one can move away from the visceral…

  13. The Zen moment in the U.S.

    Congressional Leaders Stunned by Warnings

    Article Tools Sponsored By
    Published: September 19, 2008

    WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

    Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

    “When you listened to him describe it you gulped,” said Senator Charles E. Schumer, Democrat of New York.

    As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

    Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

    “The theory that can absorb the greatest number of facts, and persist in doing so, generation after generation, through all changes of opinion and detail, is the one that must rule all observation.”

    Adam Smith

    “Man is an animal that makes bargains: no other animal does this – no dog exchanges bones with another.”

    Adam Smith

  14. to whoever is in the know:

    What is the relationship of the Federal Reserve with the Treasury Dept?

    Are we seeing the hazards of derivatives?

  15. I’m impressed. Halos lahat pala tao dito, rich with their stocks and share concerns….

    Dun muna ako sa ellensville dahil my budget cannot afford hedge funding, derivatives and mutual funds..

  16. What is the relationship of the Federal Reserve with the Treasury Dept? – Anthony Scalia

    The Federal Reserve is like our Bangko Sentral who takes care of Monetary Policy (e.g. money supply, interest rates, inflation rate) including regulation of Banks. The Treasury is more like our Finance Department under the Executive Department.

    Are we seeing the hazards of derivatives? – Anthony Scalia

    Derivatives are financial instruments that are based on the underlying value of another asset. (e.g. loans, interest-rate swaps). These structured investment products that are based on the underlying value of the subprime mortgages, are an example of credit (or debt) derivatives, and are precisely responsible for triggering the current round of collapse. So the answer is yes. The link i provided above (at September 18th, 2008 at 9:39 pm) has more background info on why re-securitization (at least in its current forms) is a bad idea.

  17. leytenian is like BrianB when the both espouses “…sending ‘dem foreigners back ➡ :mrgreen: to where they come from”. 😛

  18. also those foreigners who are in the Philippines marrying young girls, send them back to australia 🙂

  19. The Real hazard of derivatives:

    “Alan Greenspan, the chairman of the Federal Reserve Board, urged that increased regulation of derivatives is not necessary. Specifically, Mr. Greenspan stated that there is a NEGLIGIBLE RISK that the rapid growth in the derivatives industry could require a federal bailout.
    He also stated that derivatives are not any riskier, and may be less risky, than commercial lending. ”

    therefore Greenspan lowered interest rates during the demand of housing to allow people and other derivative experts to play in the market….because it is not too risky. ouch..

    Link to what derivatives is all about:

    And A really simple explanation of the sub-prime mortgage crisis:
    “This means that your “safe” cash deposits – and mine – have been used by our friendly banks and building societies to buy these dodgy investments. We are in for a bumpy ride.”

  20. The free market system is the primary organizing principle of society.

    The exchange system (market) brought forth the creation of money.

    it’s priomnciple application is as a medium of exchange, unit of account and a storagee of value…

    What is its proper definition in our current times?????

    No penis or breast/clitoral exposures allowed….Thoughts from the higher brain only…

    From a hearing held in the U.S. Congress February 2000.

    Congressman Ron Paul asked him why the Money measure – M3 – has been
    growing for the past several years. WHY, If Inflation, which Greenspan
    claims to be trying to control, is caused by growth in the Money Supply, why
    has the FED allowed M3 to grow unchecked since 1992?

    Greenspan replied, “… We have a problem trying to define exactly what
    MONEY is…the current definition of MONEY is not sufficient to give us a
    good means for controlling the Money Supply…”

    Congressman Paul asked “Well, if you can’t define Money, how can you
    control the Monetary System?”

    Greenspan replied “That’s the problem…”

  21. Why Barack Obama will not win?
    I have many reasons
    1. He has not really accomplished anything except to master the art of self-promotion.
    “Obama has prestigious degrees from Columbia University and Harvard Law School, but no significant professional achievements to his name. No businesses or organizations he has founded or managed. No law firm partnerships. No important cases he has tried. Not a single work of legal scholarship he has authored, despite having been Editor-in-Chief of the Harvard Law Review and a part-time law professor at the University of Chicago for twelve years. (This is unheard of in the elite ranks of the legal profession, and calls into question the bona fides of Obama’s professorship.) ”

    Everyone is trying to ignore two facts in this election that play into one another: the Bradley factor and geography.

    2. No northern democrat since JFK has won the Whitehouse because they DO NOT CARRY THE SOUTH.

    2. All the polls are overestimating the ACTUAL VOTER RESULTS. Past experience proves that the most undercounted group of voters in polls are lower income, less educated whites-who are more likely to vote based on racial bias. Past history also shows that people lie in pre-election polling, claiming they will vote for the African-American and then voting for the white guy. This is the Bradley effect-and no one is accounting for it in the polls-and the democrats refuse to acknowledge it. Assuming just a five percent impact from this phenomenon, that would mean Obama’s 3% lead right now is really a 2% deficit, at BEST.

    These two facts make it highly likely that ALL of the so called “battleground” states in the South will go to McCain-regardless of what the polls say. Nevada is reliably republican, is currently leaning republican, and McCain will win there as well. Obama will win in the Illinois/Michigan area, as did Kerry and Gore.

    In effect, the only states REALLY in play are Colorado and New Hampshire. New Hampshire is close, but generally reliably republican.

    This leaves Colorado. The polls say it is “too close to call”. The Bradley effect gives it to McCain.

    And he wins the Whitehouse 🙂

  22. Master Yoda,

    when Arthur Andersen shut down, SGV here tied up with Ernst & Young. to get hitched with SGV, E & Y parted ways with Punongbayan & Araullo

  23. What a very expensive candidate!!!

    The only reason why Bush and Paulson are advancing a plan to bail out the financial debacle with a 700 billion dollar cost to taxpayers is to have a softer landing for the U.S. economy in order to give Republican candidate MaCain some fighting chance in November.

    Then, let them sort it out come January 2009.

  24. When the question on 401k and investments in this turbulent financial crisis was raised, it was just to stimulate opinion, comments or debate on the problems we are having, nothing more , nothing less. Our friend from north of the Windy City maybe out of touch with reality for ignoring the topic. First, if he would try and get involve with his kababayans in his locality, as one commented said, 70% of Americans have retirement investments in one way or the other. Based on this, I am thinking that for Fils, it would be a lot more than 70%, maybe around 90%. I have yet to see a Fil am able to work and yet unemployed for months which means almost all Filams have retirements investments. Whether these are personally managed or managed by corporations is irrelevant. Fils are affected by market crisis one way or another.

    Maaring ‘yong iba kontento nang mamundok, tumingala at magmasid ng liwanag ng buwan at sabihing BAHALA NA! Naniniwala pa rin akong marami sa atin ang magsasabing bahala na is passe! Nasa tao ang gawa, nasa Diyos ang awa.

  25. anecdote re: us presidential elections…

    a good friend’s parents were quite a bit confused. lifelong democrats, but also lifelong residents of a small town in pennsylvania where everyone was white and lower-middle-class.

    their dilemma: who do we vote for? a republican, or a black guy?

    (yes, for a lot of people with their background, this is truly a tough choice, programmed as they were by decades of conditioning)

    the discussion between the two of them, and with their children, went on for weeks.

    last week, they placed an obama sign in their front yard.

    ah, progress.

  26. I really hope mccain wins. screw the immigrants and their petitions for their families to join them.

    i’m curious as to what he means by change given that his party has been in power for ages.

    plus, the fact that he will not live long enough to complete his term means the usa gets a president who once wanted to censor books in the public library. very very entertaining prospect.

  27. Censorship? it depends on circumstances. I won’t allow porno movies, magazines, etc. in kinder, first graders, immature readers’ book shelves. For adults like us, you can put almost anything, we are responsible enough to sort out things.

    I won’t support a man who voted “PRESENT” 125 times instead of “yes/no” in the senate hall in Springfield. (according to an article circulating in the net).

  28. Nash, you maybe right. Mea culpa. It was just to highlight the importance of checking what the youngsters/the immature minds are reading. I think you get my point.

  29. I am curious as to what books Sarah wanted censored. Maybe the librarian she wanted fired for not following her recommendation should sell the story to the tabloids.

  30. according to survey, one out of five democrats will vote for mccain because obama is black… 🙂

    people tried their best not to play the “race card”, but in America, race is always an issue. 🙂

    mccain will win because americans like to live a myth and a fact. there is myth in Sarah Palin’s meteoric rise and there is a fact of mccain’s being beaten up by the vietcongs.

    contrast that with biden and obama. biden is “trapo” in our local language, obama could be attending madrasa school while mccain was being beaten up in vietnam… it may not be true that obama was in madrasa school, but americans are interested to know what obama was doing when mccain was being held captive in vietnam.

    cindy mccain was doing humanitarian work at some period of time and americans were interested in what michelle obama was doing then… these are issues that confront the american public other than the issue of the economy and wars…. this is an interesting election year.

    at about this time during the 2004 elections, Kerry was leading Bush in surveys only to lose to G. Bush.

    but obama and mccain are running neck to neck…mccain with little edge. traditionally, surveys favor the underdog (obama, because he is a democrat challenging the incumbent republicans, bush, mccain, etc), but the surveys now do not show that lead of obama over mccain… so if you reason out by analogy, it will be mccain and palin that will clinch the victory comes november. 🙂

  31. liked reading some of the comments. they are really shining gems. the post itself, is shit. full of links as if this writer does not know anything but post links. so are some of the commenters. suma total: gave me a bad day.

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