The bad news
US Congress rejected the $700 Billion bailout plan. All over the world Stocks are falling like crazy. IT stocks too are of no exception. There seem to be a panic a couple of hours ago then the decision was reached.
Culprits
Well, Democrats and Republican can throw mud as convincingly as they want but one fact still remains, they FUCKED up big time. The congress as a whole made that decision and they should be lynched for making
that decision whatever their excuses maybe. US presidential election event may be partly to blame too. Politicians today are too cocky with their ideals that they won’t bulged a bit for a compromise. I listened to Hilary Clinton on CNN the other day when she’s talking about the bailout plan. Her stand is that bailout plan should cover more grounds other than the credit market, it should also include morgage etc etc. It seems that Mrs. Clinton too (a democrat) is against this policy. Well, she seem to get what she wanted.
Now the whole world suffers.
WTF do I care?
Well, you should. I am a Filipino but this mess made by US Congress will affect everyone of us too around the world. Let’s simplify it so we’ll understand this whole fiasco: When US banks fail, they made the financial market jittery. When investors get nervous, they get their money out of the market because their investment is at risk. When another investor sees and feels that others are bailing out, they too bails out. Its like a house of cards, when 1 card falls, more or less everything follows. When everybody starts bailing out, money gets depleted. When there is a short supply of money banks tighten their loans and other credit to investors and ordinary people like us. When we can’t get money out of the bank, we too panic. Repeat the cycle and you get my point.
Here in Philippines, major banks like Metrobank and BDO invests too on foreign markets. I heard in the news a couple of hours ago that they too are exposed to US banks (specifically the Lehman Brothers). So when our major banks get hurt, city in Philippines like Davao’s development will also be affected. No developments mean no jobs. No jobs mean no food on the table. In the end, we all suffer.
The good news
But inspite of all this, I can also see good things happening! First, oil prices have gone down. I like this one the most. Why is it going down? Well, because investors are bailing out, a lot of them got their money out on commodity such as the oil. At least, those bastard oil companies are getting beat up too. Second, investors will me looking for alternative investments to dump their money into. Where? Europe is unlikely. Its slowing down too. Asia? Bingo!Asia seems to be a proper place to pour out the money. We still have tons of mineral
resources, Cost of living is still low, cheap labor and the list goes on and on.
Conclusion
There’s much to be learned here. I learned that investors are just ordinary people who just happen to have lots of money. They still get shit scared everytime. I also learn that when people don’t work for the good (like those congress did), something really bad will happen and everybody pays for their mistakes. Lastly, I learn that by nature, we don’t learn from history. We have Dot Com bubble in 2001, the asian financial
crisis in the 90’s…heck we have a bubble every 10 years or so. And we still fall on the same trap every time.
