The casualties of the Lehman collapse are popping up, one by one.

First, the Philippine economy. Socioeconomic Planning Secretary Ralph Recto now has a worst-case scenario forecast of 4.7 percent to 5.5 percent for gross domestic product for the year, down from an already revised 5.5 percent to 6.4 percent.

You know already that two of the nation’s biggest lenders, Metropolitan Bank & Trust Co. and Banco De Oro have hits on their portfolio. Rizal Commercial Banking Corp. (RCBC) today also revealed its exposure to Lehman. Together, the three banks have set aside $120 million in provisions—meaning there’s cash made available for any write down in the future.
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Now it’s no longer just a rumor. The US Fed is bailing out American International Group with an $85-billion package (you read that right). Apparently, AIG is indeed too big to fail.

I tried to camp out of Philamlife chief Joey L. Cuisia’s office this morning (well, I really meant sit really demurely in the lobby) just in case he has time to talk to a lowly journalist. Understandably, however, he was up to his ears with teleconferences and board meetings with this new development, but I’m on call the whole day.

Some thoughts that come to mind: Wall Street’s latest convulsions show there might be more casualties out there and all that’s part of the restructuring happening in financial markets. I’ve heard the phrase “the market corrects itself” too many times that it hardly means anything anymore. Now, I think the great white economists might not be speaking in tongues, after all.

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Like dominoes, the effects from convulsions in the US financial system will begin unraveling and regulators, investors and market players are hoping there will be more pieces left standing than those that are toppled over.

Late breaking news that the Federal Reserve is now considering providing a bailout package for American International Group is providing a soothing balm to Wall Street, especially after the company was downgraded yesterday by major ratings agencies. We will know more as the day unfolds whether the “unnamed source” in Bloomberg’s report has just given markets an early Christmas gift.

Because Lehman Brothers, Merrill Lynch and AIG are all complex financial companies, the reckoning may take months, not days. AIG’s dilemma, in particular, has had everyone’s knickers in a twist because its demise will hit every big Wall Street name and is expected to have huge ramifications all over the world. Government economic managers are largely expected to talk about this issue during their mid-year economic briefing at the Shangri-la Plaza in Makati at 10 a.m. today.

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The Brad Pitts of the world couldn’t have unglued me from Bloomberg television and my computer since yesterday, watching every little blip of news regarding the debacle happening in Wall Street and thinking about the ramifications locally.

Unlike Lehman Brothers, it seems that American International Group (AIG) has friends in high places. So far, it has been allowed by regulators to raise another $20 billion by borrowing from its subsidiaries and no less than Federal Reserve officials have asked Goldman Sachs and JPMorgan Chase to set up a $75-billion facility to stave off a crisis at AIG.

Gov. David A. Paterson of New York said the magic words: “It’s a systemic risk.” Meaning he thinks if the government let’s AIG fail, this could shake the entire financial system. Having said that, the government has shown reluctance in bailing out any financial firm using public money, of course, so expect more creative means to help out financial companies in trouble.
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Wall Street giant Lehman Brothers has fallen, Merrill Lynch has sunk into the arms of Bank of America and traders smell blood from global insurer AIG. Who’s next?

The New York Times has called this one of the most dramatic days in Wall Street’s history. The whole thing brings ominous tidings, says Fortune magazine. Expect more dramatic articles in the coming days as the media is whipped up into a writing frenzy.

Lehman employs around 3,000 staff in Asia and everyone must be on pins and needles waiting to find out what will happen to them. On the local front, only AIG among the big names mentioned in the news today, has a big consumer base in the Philippines, Philamlife being a member-organization of the insurer. (UPDATE: My local source says Philamlife has its own financial resources and will not be affected much by AIG’s troubles. I am waiting for an official statement from the company.)

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Here’s a little plug for a personal finance seminar that’s totally recommended by MoneySmarts

Do you want a better life for yourself and your family? Are you tired of having too little and not enough? Do you want to achieve a more prosperous life? Then it’s time for a change!

What does it take to become a millionaire? To become a millionaire, you have to think like one! This is the premise of the upcoming seminar entitled “Developing a Millionaire’s Mindset” featuring two of the country’s most inspiring speakers – Francis Kong and Chinkee Tan.

This seminar is aimed at professionals and entrepreneurs who want to take their finances to the next level – the multi-millionaire level. The seminar has been moved to October 16, 2008, 1:30-5:30pm.

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Would you pay more for a bag made from rags designed by Rajo Laurel but created by poor mothers in Antipolo, or nicely designed Green Leaf katsa bags made in ac family-friendly factory in Paranaque, or health and beauty products that do not use chemicals harmful to the environment or tested on animals?

That the calculus is not as tough as the thousands of dollars premium Honda Accord Hybrid owners pay for earth-friendly wheels is obvious. But the brains behind these products hope that the result will be the same: consumers get a warm, fuzzy feeling for being socially responsible.

What’s the price tag you can live with for being socially responsible?
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When a mother makes her children drink a bottle of toilet bowl cleaner and then drinks the same poison herself afterwards, is it the mother’s fault, society, or government’s?

Is she to blame for not finding another way to put food on the table when her construction-worker husband cannot send home money, or is it the fault of society that is apathetic to the plight of people who are suffering? Or can this sin be placed solely on the shoulders of the government, for the failure of its cash subsidies and other fixits to bring hope to the poor?

I remember hurting this way when Mariannet, a young girl, hanged herself last November 2, 2007 because she was desperate about life itself.
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(Part two)

Career planning is an integral part of personal finance because it has a direct impact on the size of paychecks we bring home. Successful careers don’t just happen because we wish for them, says Augustus J.V. Ferreria, senior executive vice-president of Generali Pilipinas in an interview. Successful careers have to be planned.

Ferreria advised using Stephen Covey’s “begin with the end in mind” motto for career planning. “People normally have a career cycle where every so many years, you want to move. For example, I have a 5-year career cycle,” he says.

The idea is to think about what you want to happen to you every five years and plan accordingly. Say, if you’re in your 20s, you decide that by age 30, you’re a senior manager, vice-president at age 35, senior vice-president at age so and so. You can also decide to be your own boss at age 30. That works too.
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I barely blinked as I watched videos on Youtube of this “gentleman grafter,” as he is called by Vanity Fair, selling peelers on the streets of New York and in the process probably make more money than your average New Yorker.

Courtesy of Get Rich Slowly, I also found this amazing May 2006 piece by Howard Kaplan on Joe Ades where he said:

At the end of each day he returns with his gear to a commodious three-bedroom apartment on Park Avenue, the home that he shares with his present wife, Estelle. (In spite of the polished ways of the patterers, their typical abode was the “vagrant hovel.”) Then it’s out again for an early dinner in a style unheard of in London Labour. Six nights a week, accompanied by Estelle, he hits some of the biggest-name restaurants in town—Elio’s, Jean Georges, Milos, Centolire. He never has trouble getting a table. In the soft light his hands glow pink from the half-hour hot-water-and-nailbrush treatment he performs as part of his evening toilette.”

Yeah, and you thought he was poor.

If you’re stuck in a career, 10 minutes invested in watching Joe Ades pitch his $5-peeler will teach you a few things about making sure your career—whether as a salesman, office worker, admin guy, entrepreneur etc.—brings home the biggest bacon you can find.

Some lessons from the Joe Ades business school on the streets of the Big Apple:

1. do something you love to do and sell something you believe in,
2. know your craft in and out,
3. find the best mentors and learn from them,
4. keep reading books for personal improvement,
5. be willing to get your hands dirty and work really hard,
6. don’t underestimate little things like good manners (in Joe Ades case being a “gentleman” from the suits he wore to his well-cared for fingernails), good hygiene or small amounts of money.

(Part two of career planning tomorrow.)