The news about the collapse of quite a few financial institutions in the United States has really shaken up the economy of the US and this has reverberated throughout several other economies, all sound and hale till this latest breakout. Imagine the biggest insurance company in America, AIG (American International Group) needing to be bailed out by the Federal Government to the tune of something like $72 billion, which sent Wall Street into a frenzy because they felt that the national government should not spend all that for one single company. And before that Leh-man Brothers which was a venerable institution that Americans and clients from across the globe wouldn’t think twice before going into business with. And before that, just in March of this year, Bear Stearns, another investment bank that was an institution in Wall Street teetered precariously in the brink even as J.P. Morgan Chase announced a bail-out.
Actually, this was the second such debacle for Bear Stearns in recent years. The first was pretty recent, in the second half of last year, less than a year before they succumbed to the fall. They got mired in the US subprime mess, and though they struggled to present a healthy financial picture of balance-sheet liquidity, panicking clients pulled out fast. No matter how much J.P. Morgan was willing to sink in, $30 billion in funding, backstopped by the US government, the individual clients could not be calmed and liquidity became all too real.
If you stopped to look at how an 85-year old investment bank can be brought to its knees with panic calls from customers, none of them big enough to challenge the bank’s liquidity individually, it’s really quite scary. Collectively, these customers were able to undo 85 years of trust, integrity and professionalism that Bear Stearns labored to build up in the jungle that is Wall Street. And the clincher was when banks refused to extend short-term funding to stem the customers’ pull-out.
More venerable names have already been included in this short list, names like Merrill Lynch, Fannie Mae (which was likewise bailed out by the US Federal Government), etc. The boom and bust culture in foreign markets like Wall Street are really much too exciting for tamer markets like ours. We cannot afford another crisis like the one that hit Asian shores in 1997, one that took us several years to recover from, one that we enjoyed all too shortly before we are faced with the threat of another one.
The US subprime mess started out as a benign case of bad home loans, but it has morphed into something that smacks of a very bad case of recession. This could very well happen here. Then, too, the collapse of investment banks can also threaten our very economy. If these investment houses operate on far less capital requirements that commercial banks need, maybe there should be stricter regulations involved so that high risks are avoided. Put simply, these investment banks gamble with borrowed money, so if their risk-management system is not too sound, it could be in serious trouble. Then, the people who have entrusted their money to these investment banks are in serious trouble as well. Prospective investors, especially those with excess liquidity now due perhaps to recent retirement or sales of real properties should be very wary and selective when choosing where to put their money. Hedge funds, equity capital markets, futures – know these products well, and know your investment managers well enough before you entrust your well-earned money with these investment banks.
Let’s take a musical break
Enough said for dismal economic news. It was a nice break that we had when we set out for a nice dinner show at the Manila Hotel the other Friday to watch Petula Clark, courtesy of Ovations Production’s Renen and Cel de Guia.
The Manila Hotel show, produced by Beth Tagle, was packed full of enthusiastic music lovers. I was pleasantly surprised to see families, parents (baby boomers I presume) with young adults in tow, occupying big tables, enjoying the sumptuous dinner of beef or salmon before the show commenced at 9 p.m. My wife Baby and I braved the horrific traffic on the way to Manila Hotel, it being a Friday night and a rainy one at that, and I suppose all the others present at the concert did, just to watch Petula Clark in person, to include my TV show (Motoring Today) co-host Pocholo Ramirez and wife Ellen.
The Tenors took opening stage that night, and it was a pleasant experience watching these gentlemen on stage. I have never had the pleasure of attending their previous concerts before (all produced by Beth Tagle, I think) so it was a pleasant surprise. Though, by their own admission, only Joey Lina was a real tenor, all three acquitted themselves in perfect harmony. To start with, their choice of songs was impeccable-Amor, Cuando, Cuando, Begin the Beguine, There’s a Kind of Hush etc. I could see Pocholo Ramirez’ eyes twinkling with delight at every song. Though most were not in my era, we enjoyed the songs immensely. By their own admission too, they have not gotten paid for singing their lungs out during these concerts-all were fund-raising activities. Kudos!
Then came the main event, Petula Clark herself. She was one of the biggest hits in my time and I couldn’t pass the opportunity. Frankly, I had some reservations about the quality of Petula’s voice. After 40 years of belting it out, something’s got to give.
When she emerged for her opening number, she calmed my fears. Though visibly older, she still had the lung power, and she had the crowd singing along with her in her mostly familiar repertoire. Yes, after four decades the timbre somehow mellows, but we were still amazed at the voice that captivated millions all over the world. She sang hits from the movie Finian’s Rainbow, and she sang This is My Song which Petula said was a Charlie Chaplin composition. I didn’t know that. We all applauded Don’t Sleep in the Subway Darling and Smile which are both dear to Filipinos’ hearts. Actually, she hardly took a rest, except for a quick break when she called on the Tenors and sang along with them. At the end of the concert, after a full hour and a half of lovely songs where she still hit the high notes that reverberated across the tent that was the concert hall, she was ready for the finale. You guessed it right, it was Downtown, which is easily one of the all-time favorites in the Philippines. And this of course brought the crowd to its feet. It was like re-living a bygone era of songs that had good lyrics, of melodies that stayed in your head and in your heart. The sixties and seventies, as far as I am concerned, were glorious eras of music, and Petula Clark figured prominently here.
Thanks Petula. And thanks Renen and Cel for a lovely evening. Watch out for forthcoming artists from Ovation Productions.
Memories…and More
I’m glad our readers keep them coming. This one’s from Peter Tsai: “I enjoy your series kasi not too many people bother about such things. Though I’m not that old, my father asked me to contribute this to your series: Sa radyo noon, madalas yung commercial ng Posporong Gitara at Kiko Baterya. Madalas din naming marinig yung Bataang Matamis na ang nagvo-voice ay isang ngongo, sidekick ni Johnny de Leon.”
Yup, I remember those vividly. People have discarded their matches now in favor of those disposable lighters, but Gitara brand matches were ever present in all households. And who could ever forget Ngongo! And the household name - Johnny de Leon.
Thanks again and keep them coming.
Mabuhay!!! Be proud to be Filipino.
For Comments: (e-mail) businessleisure-star@stv.com.ph