The Coronavirus Pandemic Vs The Global Economy

 

 

The crucial fight for life is not centered between the disease and civilization.  For no doubt it is a shoo-in, and the outcome is assured.  History has shown civilization always wins.  History pages are replete with virulent diseases that threatened to wipe out humanity, and they have never been successful.

 But on another front, the eventual outcome may not be that assured.  What about the fight against the global economy?

 First an irony, the case of the managed and government-controlled economy on one hand, and on the other hand, the mostly free capitalistic economies of the rest of the world.  We know the threat originated from the former, but the devastation and havoc have spilled over to all economies.  We do not like to think the worst that there was malfeasance involved in the spread of the threat.  But it lingers in the mind.

 The global economy froze for a few seconds, before it started plunging on its downward trends.  Then comes wholesale business stoppage and laying off of entire workforces.  Before long, the crunched numbers show the unprecedented collapse of gains slowly and painfully garnered through the years.   And nobody even knows what the end game will be.

 Then some quick and calm reckoning appears on the fore.

 While not much thoughtful studies were expended on the business closures, what escaped in the equation was whether those businesses could even restart once the bigger problems are resolved or mitigated. 

 The answer could be short and straightforward, many of those businesses could never hope to reopen especially if stoppage is substantial or protracted enough.  These are the small business operations which account for the vast majorities in practically all economies.  They could never hope to be able to sustain such short-term losses.

 And worse, because of what we have learned about the kind of capitalist model the entire world is now embroiled in.  Not the traditional concepts of capitalism studied in school but the one unwittingly exposed during the last global financial crisis that saw many big financial companies tumble into the dust of ignominy and oblivion.  Companies like too-big-to-fail Lehman Brothers.

 In a simplified and uncomplicated way, what we learned is that most if not all economic activities are “securitized” and distributed to all parts of the globe via the financial intermediaries.  The case of the sub-prime loans was the most visible and catastrophic.  But was not the dilemma’s entirety.

 What were “securitized” were not just familiar assets, but included even the profit expectations of all businesses, big and small.

 The current strains the global economy is now laboring under may be too onerous for it to hold for long before it is projected to collapse.  There is no security blanket to speak about acting as the roof to protect, when the walls are the ones tumbling down.

 

 

 

Some references:

https://en.wikipedia.org/wiki/Securitization

https://enlightngo.org/language/en/post/8500

 

 

 

 

 

Xavier University - Ateneo de Cagayan: Development Plans

Amid all the bright smiles and implied nods we see, we participate here not only as a small voice, but also as a vestige of a past long gone and maybe forgotten.  We like to add  puny whispers to the thunderous ones that we have heard from avowed stalwarts of the community.  Weighty voices coming from leaders whose reputation and renown have preceded them, giving them more sway and weight to validate their oral judgments. From the beaming captains of local businesses and industries, to the esteemed leaders of local government, to the revered spokespersons of our educational, religious, and social institutions.

 And we see that to a large extent there has been unanimity in thought regarding the very ambitious and drastic development plans the university has deigned to follow.  But we aim to tease and coax from them information about the time and efforts expended by their honored selves in arriving at their conclusions.  Because our small voice only has questions to be asked, rather than more grandiose suggestions to add to the plans so elaborately laid out.

Given the warm reception given the development plans, we are confident that these leaders believe that the city is not only in good hands but in a good place and thus fit and ready to accommodate more developments of the sort we already witness locally.  More tall buildings and malls for mixed uses and by consequence, more traffic.  And we are confident further that these leaders are of this mind because of the results of their actions in their respective fields in this regard.  If this be so, we then proceed with our obviously loaded questions.

Do all this and the results they will necessarily engender address the many factors of the “livability” index that a city or community ought to pay deference to?  Let us count the ways, and begin with the general.

How does all this affect the overall livelihood of the community, especially those already less privileged and in penury?  To business/industry leaders and local government, what has been done in the meantime to address and mitigate the poverty levels under your own specific purview?  Many believe the city has been remiss because of the increasing levels of privation we witness around the city. And many have observed not only here locally but most everywhere else that where developments of this sort are initiated, that one unintended consequence has been that they are exclusionary and thus discriminatory to the less privileged, with regard to where they live and work, and their corresponding access to the new opportunities to be opened.

Has the chaotic traffic and parking situation improved enough to accommodate more?  What about flooding?  Is the general situation getting any better so that we can say that more can be safely added?

What about plans or implementation of zoning of different sectors of the community?  Is local government paying attention to how in general development is moving along?  How to spread development to take advantage of the big size of the city.  The city has the size of almost 450 sq.kms and development is centered on a very small area. A question was once asked if there was a master zoning plan of the city. Is there one and is it being implemented?

Are all these even relevant to a modern age where traditional normalcy has been upended?  Maybe, disregard for all these concerns is the new normal?

Anyway, only the future is the final arbiter of whatever decisions are made in the present.

Made-In-China Motorbikes

So are we still looking with askance at products made in China?

Consider a few facts. The other day the on-line news broke the story about China being now the biggest exporter in the world, finally overhauling leader Germany for the first time. Granted per capita Germany still leads. Also, for long enough China has enjoyed the position of being the 3rd largest economy in the world, outstripped only by leader US of A and second-placer Japan. But it is expected that China will take over the second slot.

And lastly, the news also highlighted the fact that China is also now the biggest auto market in the world with its over one-billion population finding new purchasing power to get into the markets. And the Chinese government stung by the global recession has been focusing efforts on domestic markets to move its excess products.

So are we then surprised that China-made vehicles are finding market niches in other parts of Asia, and the rest of the globe, too?

Here in our little corner of the world, Cagayan de Oro, China-made motorbikes are making crucial inroads rigorously competing with industry leaders like Yamaha, Honda, Kawasaki, and Suzuki. With one overall advantage – price affordability. And where price differentials can range as high as 100%. Thus, a China-made bike could be priced at 50,000 pesos while comparable units of the other brands are going for 100,000 pesos.

Are they comparable or better than the other well-known brands?

Personally, I believe the jury is still out, and thus it remains to be seen. Though China-made bikes have been in the local markets for several years. Some reports have been negative, but admittedly one sees on the city streets some of these bikes still operating decently and looking good.

But credit China for competing very well in the looks and design departments. Take a look at this.






It is a Dayun 125cc, single cylinder but twin exhaust pipes, street bike that sells complete with crashguard and carrier at the back. Carrying a curb net weight of 126kgs, or 277lbs. It sells for under 50,000 pesos (about 1,000 US dollars) where comparable bikes could sell as low as 75,000 to as high as 100,000 pesos.

It is obvious to see that its looks and designs mimic those of the classic Hondas or Yamahas, or the European models like BMW and Triumph, etc. One more expensive model is trumpeted as a BMW look-alike.

And many China companies are competing for these same markets. You see such strange names aside from the one above as Skygo, Longin, Motorsport, PMR, Kimbo, etc.

Some parting words. Remember it was not too long ago like in the 90’s that fledging upstart Hyundai from Korea started marketing cars in the US. Many consumers snickered at its first models. Now it has become mainstream. Same with Kia.

And in the 70's Honda first marketed in the US its 1000cc Civic touting it as the American consumer's "fun second car".

Pretty soon these Chinese models will become mainstream, too.

Just wait and see.