Forecast in 2023 - it is going to be hard, but there are plenty of opportunities

Every generation needs a revolution - an entrepreneurial revolution

Crisis that toppled Credit Suisse Bank

It is going to be difficult.  Consider the external environment:   Ukraine Russia war, global climate change disasters:   earthquake, super typhoons, global energy challenge, bank runs in US and Europe

After 3 bank runs in US:  Silvergate, Silicon Valley and Signature, came Credit Suisse Bank, the oldest and 2nd biggest in Switzerland  It was bought by UBS, the biggest Swiss bank for only $3 B plus.  The $50 billion credit facility offered by Swiss National Bank failed to stave off bank run for CSB.  

What was bad, the deal zeroed $17 billion of bondholders.    Switzerland image as haven for world wealth would become uncertain, and certainly no longer the citadel, safe haven for your hard earned money

The net effect of this is the lose of faith and trust on the banking system world wide, and this is bad because bank is the core of capitalism and without that trust.  

Not to be left behind and shivering due to scandals like CSB is Deutsche Bank.   Just like CSB:  accused on ML cases, tax evasion, etc.   

Thus what are we going to do -  languish suffer and wait for cards to fall due to this banking crisis.  Certainly not.   We need to be entrepreneurial.

1.  There are problems to be solved  - poverty, credit, global change, waste management, energy

2.  Opportunities -  occasion to make money and create more wealth.  Take note that China minted many billionaires during the pandemic

3.  Leadership opportunities to solve the worldwide woes

4  There are industries that recession proof:  energy, shelter, clothing, food, and health care, tourism, transportation, hospitality

We see many opportunities to save and earn more money:   solar lamps, rider type lawn mower for maintenance, excavator for one of our processes. 

It is not over for the whole world   

Habang may buhay, may pag asa, may negosyo.  May pag yaman

Habang may buhay  

Will bank faiure contagion spread in US and elsewhere in the world

Every generation needs a revolution - an entrepreneurial revolution

In March alone there at least 2 bank failures with at least $100 billion in assets:  Silicon Valley  ($300b) and Signature Bank ($100B)

What is interesting to note is that SVB failed despite being liquid.   The trouble was with investment decisions.   Since it could not lend out its huge liquidty on hand, it invested in long term bonds (govt and private)  at 1.5%  The culprit was the high interest rate imposed by Fed whose recent rate was up to 4.75%.  It is possible that the  rates can go up further

Now there is inverse relationship between bond prices and interest rates.   High interest rates depresses long term bond prices   Investopedia - inverse relationship between bond prices and interest rates

Now the prices of bonds held by SVB declined in prices and therefore the bank incurred losses, depressing its stock prices.  This worried the  depositors who went into a bank run  SVB had to sell its bonds at fire sale further worsening its PNL

"Bonds have an inverse relationship to interest rates. When the cost of borrowing money rises (when interest rates rise), bond prices usually fall, and vice-versa.

At first glance, the negative correlation between interest rates and bond prices seems somewhat illogical. However, upon closer examination, it actually begins to make good sense.

KEY TAKEAWAYS

• Most bonds pay a fixed interest rate that becomes more attractive if interest rates fall, driving up demand and the price of the bond.
• Conversely, if interest rates rise, investors will no longer prefer the lower fixed interest rate paid by a bond, resulting in a decline in its price.
• Zero-coupon bonds provide a clear example of how this mechanism works in practice

It is possible in the country financia institutions like banks insurance companies, pre need companies and other banks have this dire situation.   And may have incurred paper losses further exacerbated by low investment rates and inflation

There is no substitute for good decision and wise management 

Computing for bond prices

Bank	City	State	Year	Assets at time of failure (nominal)	Assets at time of failure (inflation-adjusted, 2021)	Ref.
Washington Mutual	Seattle	Washington	2008	$307 billion	$386 billion	[3]
Silicon Valley Bank	Santa Clara	California	2023	$209 billion	$209 billion	[4]
Signature Bank	New York	New York	2023	$118 billion	$118 billion	[5]
Continental Illinois National Bank and Trust	Chicago	Illinois	1984	$40.0 billion	$104 billion	[3][6]
First Republ

Oil spill off MIndoro from Empress Princess poses threat to burgeoning tourism in Palawan and Panay??

Every generation needs a revolution - an entrepreneurial revolution

Oil spill off Mindoro

Containing the oil spill

The oil spill off Mindoro recently bearing 800 metric tons of fuel, is rapidly spreading and is spoiling the pristine beaches and water at our famed great beaches and waters.  While cruise ships are flocking to Boracay and Palawan, each tourist estimated to be spending $100 per day during the visit, the tourist attractiveness at the said sites:   San Vicente, Boracay Taytay can go down to zero

Al ready there are cancellations from tourists to Mindoro

Even Verde Island one of the  famous dive sites is imperiled

Our  hope for economic recovery after pandemic and efforts to attract tourists is going to naught

All ready blame is being pointed to the  regulatory agencies by the investigating bodies and some members of these agencies are recommended to be suspended.  Indeed why so much negligence, lack of effectiveness happen despite a huge bureaucracy with bloated salary expense.  Trouble is there are so many agencies involved in regulating ships in the country:   MARINA, PCG etc.  

One silly oil spill is alll that it takes to spoil the  countrýs competitive advantage in a flash