With the record one-day decline in the US stock market, American consumers must now face a reality check. The long running good times may not be over but is now subject to tests of reality. Economists have been amazed at the continuous growth in US stock prices over the past years.
The technology stocks or the stocks of companies supposedly of the New Economy, have exhibited spectacular appreciation in value even if some of them have yet to earn their first penny in net income. Up until last week, it was enough to mention Internet in a business plan for a company with dot com in its name and it will no longer be wanting for financiers. Now, venture capitalists will be more discerning in looking for companies with real technologies. We are just being reminded that the old fashioned rule still applies: capitalism requires profits, bankable profits. Not just pipe dreams.
Well, the market drop may cool down America's overheated economy. Sales of high ticket items such as new cars, new homes and expensive vacations will probably feel the first impact of this reality check.
Up until last Friday, American consumers were mindlessly spending their paper profits only to see these profits vanish in a mist of smoke at the trading floor. The correction may turn out to be a healthy one for the American economy. Economists are already getting worried about the rise of deficit spending, about consumers borrowing heavily for today's bills. That one day drop will probably sober up a lot of people, which should be healthy in the long run.
As for us, the bloodbath at the New York stock market and tech heavy Nasdaq has predictably been reflected in the already battered Philippine Stock Exchange. Still reeling from the BW scandal and the lack of confidence in the national leadership by foreign fund managers, the local stock market promises to be boring as we enter the Holy Week. Favorable corporate reports should have helped some blue chip stocks, but it is near impossible to fight negative sentiment.
The way I see it, the down market should give people with funds the chance to accumulate selected blue chips. The current correction should be good for everyone. Even for the Philippines, foreign fund managers cannot ignore some of our major blue chips in a balanced portfolio of Asian stocks.
Psychology is an important factor for market recovery. Maybe if we tried our best to see the positives of our country and economy even if we have to discount the leadership, we may yet snap out of our psychological depression. We owe that much to ourselves.
Reader Jorge Gil Angeles e-mailed his comments on phone billing practices. He is right in saying that some of these practices cause a lot of confusion and distrust. Here is his e-mail.
There should be a law that allows all -- local/international -- telecom companies to bill only within 60 days from date of calls. If we think of consumer protection, it should be just after the month being billed. But, there is such thing as inter-company toll charges. After the prescribed period, the phone company cannot bill a call anymore. This could lessen the racket of these companies, minimal NTC supervision and better consumer protection.
They are using the billing practice of credit card companies which is not applicable in their kind of business. Unlike a phone call, usage of a card is evidenced by a purchase coupon which can be tracked. If a bank can prepare a monthly statement correctly, why can't a telephone company? Volume? Then, they can apply the Meralco method. Print statements by groups. One group can have their bills during the first week of a month; the next group the following week, etc.
Here is something more for the NTC to look into and do something about quickly.
I am breaking my usual practice this year of staying in Metro Manila while everyone else hies off in all directions. I have decided to drive up North this year, to La Union, Vigan and then to Baguio. I may live to regret leaving Manila at this blessed time and opting to fight it out with the crowd in Baguio and the traffic jams on the MacArthur Highway in Pangasinan and Tarlac. But I have just about had it with the pollution-laden air of Metro Manila. Maybe the fresh air in the Ilocos provinces, if not in Baguio, will do my lungs some good.
I have also long wanted to see Vigan and its postcard pretty Hispanic-era streets, not to mention the Vigan longaniza and pakbet. The main attractions in the birthday parties of businessman Romy Reyes, one of the Tuesday Club regulars at Edsa Plaza, are precisely the longaniza and the pakbet. I just have to taste them right there in Vigan.
Besides, I already threatened to visit Vigan three years ago on invitation of Governor Chavit Singson but I failed to make it. This time, I promised the Governor I will not "make Indian" again.
The Lakbay TV feature of Vigan was the impetus that made me plan on this trip. Come to think of it, watching all those travelogues on Lakbay TV makes me want to go all over the country at once. They make it seem so painless and fun. Besides, we have to contribute our bit to domestic tourism.
So, if I miss my deadline for Monday's column, it is probably because I decided to jettison my laptop computer from my luggage, in favor of a pile of paperbacks and magazines I had long intended to read. All I know is, as soon as I reach Baguio, I shall park myself in the guesthouse we will be staying at, and stay there up to Easter Sunday.
Happy Easter to all of our readers.
This being Holy Week and all, here's a joke forwarded by Kat Legarda about, well ... heaven.
While a woman was waiting for Saint Peter to greet her, she peeked through the Gates. She saw a beautiful banquet table. Sitting all around were her parents and all the other people she had loved and who had died before her.
When Saint Peter came by, the woman said to him, "This is such a wonderful place! How do I get in?"
"You have to spell a word", Saint Peter told her.
"Which word?" the woman asked.
"Love."
"The woman correctly spelled "Love" and Saint Peter welcomed her into Heaven.
About six months later, Saint Peter came to the woman and asked her to watch the Gates of Heaven for him that day. While the woman was guarding the Gates of Heaven, her husband arrived.
"I'm surprised to see you," the woman said. "How have you been?"
Oh, I've been doing pretty well since you died," her husband told her. "I married the beautiful young nurse who took care of you while you were ill. And then I won the lottery. I sold the little house you and I lived in and bought a big mansion. And my wife and I traveled all around the world. We were on vacation and I went water skiing today. I fell, the ski hit my head, and here I am. So, how do I get in?"
"You have to spell a word", the woman told him.
"Which word?" her husband asked.
"CZECHOSLOVAKIA"
(Boo Chanco's e-mail address is boo@pinoycentral.com)