EURO-AMERICAN BANKRUPT COMPANIES ARE LEPERS, ASIANS BE WARY!

Erle Frayne D. Argonza

Leper Companies, Inc. could very well describe the so many huge corporate entities in the West that are now expectantly waiting for some investors to breath fresh life into them. The compass of that search points to Asia as the source of the badly needed ‘smart money’.

What a mess indeed had Western economies turned into, as their respective enterprises have been crashing to bankruptcy levels after liberal policies have become granite rock in them since the Thatcher-Reagan era. De-industrialization, massive loss of jobs, and measly investments in S&T have made elephants out of huge companies such as the once mighty Bethlehem Steel.

“Bankruptcy! Bankruptcy!” would be an apt line in a classic opera production in New York and London, save that even classic opera groups of the West might even go the bankruptcy route. From manufacturing to culture industry, inclusive of Hollywood stalwarts, Western companies are going down the drain one after the other.

Insatiably greedy financiers are of course waiting in the wings to dip their hands into those crashing industries, waiting for the moment to buy them at dirt cheap prices. They did that after the 2nd world war, a war that the global oligarchy created, when they bought so many European factories at rummage sale. Their war chest had been reinforced by slash funds past $3 Trillions circa 2007 yet, so they’re ready for the ‘ukay-ukay’ transactions any time (‘ukay-ukay’ is Filipino term for re-sale of used clothes at cheap dirt prices).

The same financier oligarchs did the rummage buying spree on former Soviet bloc economies’ flattened factories groups, with mafia groups joining the fray for purchase of the rummage sales. At one instance in the early 90s, Russia’s mafia groups owned and controlled 80% of the rummage industries, thus prompting patriotic KGB chekka to replace then incumbent president Yeltsin, a puppet of the financier oligarchs, with Putin.

Asia has been the undisputed driver of the global economy more so when both USA and Europe began burning economically as early as 2007. Logically, the compass of SOS for fresh investments and loans would be Asia notably the China-Korea-ASEAN-India corridor.

The involvement of the Indian group Mittal in purchasing Alcelor of Europe is classic case of Asian buys. Bookkeeping accounts seemed to have served Mittal right then, with the merger not exactly draining down the stock value of Mittal in the bourses. Mittal-Alcelor came to be born as the largest steel producer, churning out a total volume of 100 tons of steel every year (toppling Korea’s POSCO as top producer).

That was then. The times have quite changed in an era when changes happen so rapidly. Western enterprises, notably those of the USA’s and EU’s, are magnets for perceptions of being leper corporations. Getting associated with them could burn down an Asian company’s own par value, and whether the trend could be reversible is something that is tantamount to launching a Herculean PR campaign to reduce negative perceptions owing to buy-ins/mergers.

Enormous window dressings have to be applied to the accounts of the leper companies too so as to sweeten their toxically sour values and make them more palatable to Asian investors. Whether Asia’s negotiating agents are naïve to the window dressings is something worth researching.

Caucasians still have that perception—conscious and/or unconscious—of Asians as “monkeys with no tails” (subhumans) who can be lured into traps without the latter noticing it. Western financier oligarchs led by the likes of the UK-Netherlands royal houses and Rothschild empire will brook no quarters in condescending on Asians who they regard as cattle or eaters worth controlling, subordinating as Mandingos, and short-changing in business transactions.

Such a perception hasn’t changed. Look at how the Indian executives of Mittal et al are perceived in Europe today not just by the oligarchs but by the White executives in their payroll. Why don’t you examine case studies in Western business schools and find out for yourself whether Asian groups are worth studying at all in the West. It’s the same old Victorian perception of racial hubris and arrogance at work!

That may just be what western ‘corporate social responsibility’ is all about: to continue derisively condescending at former Asian colonies by dangling carrots to poor communities in Asian backyards. In exchange, Asian ‘smart money’ moves to the West to ensure that leper companies keep on churning out more funds, with 1% of the profits later to allocated for ‘corporate social responsibility’.

Is that what we can regard as an impeccable fair exchange?

[Philippines, 13 August 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,
UNLADTAU: http://unladtau.wordpress.com,
COSMICBUHAY: http://cosmicbuhay.blogspot.com,
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,
ARGONZAPOEM: http://argonzapoem.blogspot.com]

NY STOCKS LOSES TOTAL $3 TRILLIONS, AND STILL GOING DOWN

Bro. Erle Frayne Argonza

Since the stock markets began to plunge late last year, downturns that began with the implosion of the housing subprime mortgage bubble, over 2000 points were already shaved off from the Dow Jones index, the prime index of the USA’s stock markets. It’s now down to nearly 11,000 points from its best time total of 13,000+ points last year, representing actually a 20% plunge.

Each point in the Down Jones is worth $1 Billion as the roughest minimum estimate, though this may range up to $1.5 Billion, depending on the season of trading. Using the minimum as the yardstick, a 20% plunge from a total of 13,000+ index represents at least $2 Trillion worth of loses. If we were to add the loses in the other indices notably the Nasdaq, the figure can get us up to $3 Trillions loses.

Do note that the figure of $3 Trillions is only a conservative estimate. If we use the same figure to compute for the Global Portfolio loses, and multiply this with the number 6 (US’ portfolio capital flows represent 16% or 1/6 of total global flows, using BIS index), the operation would yield a total of $18 Trillions worth of portfolio investments gone down the drain.

It should be stressed that those loses are now gone forever. The stock market investors should better think of other options at this moment, since the plunge hasn’t ceased yet. Those loses of theirs will not return, rest assured. The plunge, per my forecast, will take a long time going yet till middle of next year.

The alarm bells are now up for a total global financial meltdown, and so every concerned fellow of the planet must make necessary preparations for the worst, whatever the worst could be. Corporate social responsibility or CSR may now need to do some contingency re-assessment and re-adjustment of goals and strategies, in the light of the continuing plunge.

Likewise should states rethink their goals and options, recheck their fiscal situation and re-adjust targets accordingly. There has been so much knee-jerked reactions by state players, central banks included, that must be re-examined, including pumping too much liquidities, rescuing ailing or bankrupt banks the erroneous way, and re-allocating budgets for populist welfare subsidies that would, in the short run, only lead to serious fiscal problems in the short run.

What is surfacing much clearly is that the old tools being applied—to salve the crisis—don’t seem to work as much as expected. The search for sound options is a tough challenging one, and the expectations from consumers, who have already slowed down consumption generally, are intensifying. Let us watch out for more contingent events.

[Writ 26 June 2008, Quezon City, Manila]