Connect-the-dots

In today’s news, ASEAN OKs rights body in charter. Last Sunday’s Inquirer editorial had come out in support of the proposal.

SWS: Satisfaction ratings for VP de Castro, 3 others stable.

Since 2000, more than 1,700 civilians killed, wounded in terror attacks, mostly in Mindanao. This means more casualties than, say, Indonesia. Then 1,000 families evacuated; 130 MILF, Abu forces face arrest but Warrants vs beheading suspects on hold.

Appointments merry-go-round: Palace names Defensor bank board director. There’s an interesting account of behind-the-scenes lobbying in the Palace, to retain or be given jobs: see Last-minute lobbying stalls Cabinet revamp:

Reyes, who is now on his fourth Cabinet post since he was appointed defense chief in 2001, earlier appealed to the Chief Executive during cocktails at the Palace after she delivered her State of the Nation Address last July 23…

…Also Monday, Commission on Higher Education (CHED) chairman Carlito Puno said in an interview at dzMM that it is still not yet clear whether he would indeed be replaced by National Economic and Development Authority (NEDA) director general Romulo Neri as disclosed by the latter on Friday.

Court junks Trillanes bid to attend Senate sessions (and not even allow him to work from his cell? See also Judge shuts out Trillanes) In the Senate, Villar unfazed by ouster threat over choice posts but Villar and Pimentel will meet on committees. A potential compromise involves Loren Legarda as Blue Ribbon Committee chairman. John Nery says the proposal’s worth a closer look. Meanwhile, President wants to have Sen. Santiago serve in the International Court of Justice: Santiago willing to give up Senate seat for ICJ.

Things are proceeding more smoothly in the House: 2 House Arroyos get committees for aiding de Venecia. In Uniffors thinks Reyes’ appointment and that of the President’s son, Mikey, as House Energy Committee chairman, points to a previous working relationship between Reyes and the President’s son. Uniffors also connects the dots between the appointment of Heherson Alvarez as mining czar, and the designation of the President’s brother-in-law, Ignacio Arroyo, as chairman of the House Committee on Natural Resources. See also More House officials appointed.

Also, apropos of my question concerning solar power (in yesterday’s entry), San Miguel eyeing solar power as alternative energy for facilities. Meanwhile, Water officials monitor levels in 3 major dams. See the Inquirer editorial on weird weather, and its effects on the energy situation.

Economics news: BIR misses VAT collection target for 1st five months (see Jan-May VAT take is 23.2% short also). Meanwhile, Strong peso cuts debt payments government says, but read Tony Abaya’s column which explains why this ain’t so:

It is not just the exporters who are hurting from the strong peso. The 50 or so million Filipinos who depend on monthly remittances from their relatives working abroad have lost some 18 percent of the peso proceeds of their dollars, compared to two years ago.

So have the enterprises that depend directly on tourism: hotels, restaurants, tour guides, resorts…

…[A] strong peso – and its twin, a record-breaking stock market – benefit only a small group of people: Players in the stock market and foreign portfolio managers who speculate with hundreds of millions of dollars, hiring no more than a couple of secretaries and messengers, but who will not hesitate to stampede out of the economy at the first hint of trouble, as they did in 1997.

The overwhelming majority of the population suffers from the strong peso.

Theoretically – and I underline that word – a strong peso makes oil imports, our biggest single import item, cheaper. But in reality, it doesn’t. The Shellane cooking gas that we used to buy at P495 in 2005 now costs P550 per canister. Our household consumed 54 kwh less than in the previous month, yet our Meralco bill is higher by P2,311.80. And premium gas is now more than P40 per liter. Of course, it is all due to the price of oil going past $75 per barrel, but it does take the sheen off the strong peso.

Theoretically, the strong peso makes our foreign debt and its servicing smaller. P20 billion less for every dollar that the peso appreciates, it is said. But only if we actually make a substantial payment in the here and now, which is doubtful considering that the government is strapped for cash and cannot even meet its tax collection targets.

To crow about the strong peso and the record-breaking stock market, as President Arroyo does, and to be annoyed when told that it is harming the economy, as she is, makes one wonder where she got her doctorate in economics.

Add to this, Average monthly bill for water to rise 24%. In his blog, here and here, Philippine Politics 04 has been covering the rise in electricity rates.

also, State lawyers to meet Marcos son on Lucio.

Jonas Burgos-related news: Jonas hearing focuses on car plates while Jonas looked at me for help, says witness (see Witness tells how 4 men took away Joe Burgos son also).

Overseas, Second South Korean hostage killed while Germany may end ransom payments for kidnap victims. In Indonesia, Indonesian Radical Leads Campaign on Anti-Terror Police. In Malaysia, Elite Malays and Mixed Marriage. In Thailand, Clashes in front of a royal advisor’s house irk the junta. In Japan, LDP failure in election to change Japan’s political, economic outlook. This is interesting: Pig disease hits southern Vietnam (in light of a similar outbreak here at home: Execs say hog cholera in Bulacan under control).

Nouriel Roubini’s Blog asks, Are We at The Peak of a Minsky Credit Cycle?

Specifically, the crucial macro question that we should ask ourselves today is whether we are at the peak of a Minsky Credit Cycle. Or as the UBS economist George Magnus — an expert of financial instability – put it: “Have we reached a Minsky moment?”

Hyman Minsky was an American economist who died in 1996. His main contribution to economics was a model of asset bubbles driven by credit cycles. In his view periods of economic and financial stability lead to a lowering of investors’ risk aversion and a process of releveraging. Investors start to borrow excessively and push up asset prices excessively high. In this process of releveraging there are three types of investors/borrowers. First, sound or “hedge borrowers” who can meet both interest and principal payments out of their own cash flows. Second, “speculative borrowers” who can only service interest payments out of their cash flows. These speculative borrowers need liquid capital markets that allow them to refinance and roll over their debts as they would not otherwise be able to service the principal of their debts. Finally, there are “Ponzi borrowers” cannot service neither interest or principal payments. They are called “Ponzi borrowers” as they need persistently increasing prices of the assets they invested in to keep on refinancing their debt obligations.

The other important aspect of the Minsky Credit Cycle model is the loosening of credit standards both among supervisors and regulators and among the financial institutions/lenders who, during the credit boom/bubble, find ways to avoid prudential regulations and supervisions.

Minsky’s ideas and model fit nicely the last two US credit booms and asset bubbles that ended up in a recession: the S&L-based real estate boom and bust in the late 1980s; and the tech bubble and bust in the late 1990s. But the experiences of the last few years suggest another Minsky Credit Cycle that has probably now reached its peak. First, it was the US households (and households in some other countries) that releveraged excessively: rising consumption, falling and negative savings, increased in debt burdens and overborrowing, especially in housing but also in other categories of consumer credit, an increase in leverage that was supported by rising asset prices (housing and, more recently, equity). We know now that many sub-prime borrowers, near-prime borrowers and many condo-flippers were exactly the Minsky “Ponzi borrowers”: think of all the “negative amortization mortgages” and no down-payment and no verification of income and assets and interest rate only loans and teaser rates. About 50% of all mortgage originations in 2005-2006 had such characteristics. Also, many other households (near prime and subprime borrowers) were Minsky “speculative borrowers” who expected to be able to refinance their mortgages and debts rather than paying a significant part of their principal.

In his column, Adel Tamano says there’s a way to define who belongs to the opposition:

First, the following three broad issues will determine one’s true political leanings: (1) Corruption; (2) Charter change (Cha-cha); and (3) Human Rights or extra-judicial killings. Obviously, a senator who claims to be with the opposition but refuses to push a Senate investigation on Joc-Joc Bolante, “Hello Garci” and Jose Pidal, the top three corruption scandals according to our surveys during the elections, is not an authentic oppositionist. Similarly, a GO senator who supports Cha-cha prior to 2010, against the obvious sentiments of the Filipino majority, will be shown to be a phony. In the same vein, a GO senator who refuses to take the administration to task over its lousy human rights record should rightly be viewed as an administration hack.

It is your actions that determine your opposition status, not your press releases or comments to media. That said, the choice of Senate president, alone, cannot determine one’s status as opposition or administration.

Second, another more exact method of determination of the real political sentiments of the GO senators is to see if they will remain true to their campaign promises, specifically the 10-point program of the GO. This 10-point program was approved by the GO candidates and was the basis for the policy statements and debates during the heated election period.

An interesting thing about Connie Veneracion‘s columns is her clearly enlightened view towards parenting. In her column today, she discusses what se sees as the merits of an untraditional approach to education.On a related note,see The Myth About Boys by David von Drehle.

I can only dream department: Chin Wong writes about running applications directly from a flash drive… But apparently Apple is behind in this department.

In the blogosphere, David Llorito asks some interesting questions. A Nagueno in the Blogosphere demonstrates how executive leadership is undertaken.

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