Illustration courtesy of Y-not

This email is supposedly from a financial consultant in Dubai. It has been making the rounds:

Recession is coming. Make your own judgment. Don’t panic! Do what is wise.

The recession looks very eminent [sic]. It is really time to take proactive steps to avoid a painful time in the next two years, which is how long the recession is expected to last.

Suggestions:

1. Don’t take any loans; don’t buy homes, properties with loans, or even cash. Keep as much cash as possible.
2. Pay off as much of personal loans, private loans, as debt collection will be hastened.
3. Sell any stocks you can even at lower prices.
4. Take money off from Trust Funds.
5. Don’t believe in huge sales forecast from customers, be extremely prudent, lowest inventories, reduce liabilities.
6. Don’t invest in new capital.
7. If you are selling homes/ properties/ cars, do it now, when you can get good prices, they are going to fall.
8. Don’t invest in new business proposals.
9. Cancel holiday plans using credit cards.
10. Don’t change jobs, as companies will retrench based on ‘last in first out’.

Stay cool, wait, and if you took all of the above actions and more, you probably will be better off then many. This is not a rumor.

Bear Stearns is the first of many banking and financial institutions that will start falling in the not too [sic] future. If Bear Stearns can fall, so can JP Morgan, Citibank, HSBC, and the whole world. US economy falls, the rest will crumble.

India and all those self economies [sic] will be the most protected, but not gullible. Europe may be a little stronger, but not China, another giant place! Malaysia will see significant impact.

Be alert and pass this to your friends!!!

Notice how cleverly misinformation has been woven with good ol’ natured advice like “pay off as much debt,” and “be extremely prudent.” After I read the email, I sat back in amazement at how it initially seemed to be merely warning readers to get ready for tough times, but in the end the tone turned turbid by implying that the fall of Wall Street will result to the end of the world and Armageddon.

Fact is, Bear Sterns HAS fallen, but JP Morgan, Citibank, HSBC and the whole world is still standing. Yes, the US is already teetering in a recession—and that means at least two quarters of negative growth.

Let me explain that a little bit. Economists are very economical when it comes to words. When they say the economy grew 1%, the figure seems downright depressing. But that still means the economy grew. Products and services churned out are larger in number compared with previous periods. A negative growth on the other hand means the economy has shrunk, and therein lies the problem of a recession.

The common forecast right now among analysts is that it will probably take the US at least two years to start crawling back up, but whether or not Asia will get dragged in the mud all the way is, amazingly enough, still an open discussion. Five years ago, the word “decoupling” from the US has not been invented, and now, there’s a hint of color that says Asia will get hurt, but not as bad as if this crisis happened 10 years ago.

There’s another interesting aspect to this crisis, as pointed out to me by new Chartered Financial Analyst of the Philippines president Vandermir Say. It appears that the more wealth you have, the more pain resulting from the crisis.

The more exposure you have to exotic derivatives, investment banks, stock and bond investments, the more pain you will be suffering—at least in the short-term. Perhaps ye gods are leveling the playing field a little bit between the haves and the have nots. Whatever is happening, my good friend and artist friend from high school said it best: We don’t have these things in the hinterlands where we live. I don’t own stocks; I don’t have big money in the bank. What recess I know means snacks!

That’s the spirit! Prepare for the worst but hope for the best. Letting the dirty R word result in fear brings recession even closer.

Meanwhile, the INQUIRER.net has created a special site on the current global financial crisis for readers who want to read everything related to it. There’s a timeline to help you put everything in perspective. Click here for THE FINANCIAL CRUNCH.

Photo courtesy of Viewmaker.

(This is a guest post from Cat, another blogger who is based in the US.)

We have to categorize the Filipinos in the United States to better understand the effects of the financial crisis on their lives.

The Overseas Foreign Workers are better known as working visa holders with work authorizations that expire in three years; renewable for another three years. The corporations that hire them can sponsor their green cards within the period of the validity of their working visas. From OFWs, they become permanent legal residents.

With the financial crisis, the dreams of getting employment-based green card sponsorships may not materialize especially if the sponsoring corporations are affected by the financial meltdown. If they cannot get the green cards within the maximum six years of allowable legal stay, the working visa holders are expected to go back to the Philippines or look for other means to become legal residents.
[Read the rest of this entry »]

Photo courtesy of Endless Studio

This is a guest post from Karen Galarpe, who also writes for our entrepreneurship blog Open for Business:

I went out one morning to pay my Social Security System contribution. Since I am self-employed, I pay my contributions myself to the banks. BDO, the bank I have an account with, does not accept SSS and Philhealth payments, so I have to go to other banks.

I usually go to RCBC Savings Bank on Visayas Ave. (near front of Montessori) because there’s hardly any line there. I think the last time I paid there was July. As of then, it was still free to pay your SSS contributions over the counter. For the next months, I went to East West Bank and UCPB (depends on where I am that day). On this particular day, I went again to that RCBC Savings branch. And the male teller said they’re now charging P10 just so I can pay my SSS contribution over the counter!
[Read the rest of this entry »]

(The other week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were very kind and replied and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

By Froilan Bulaong

I’m 33, working in the field of IT here in Singapore. I have two kids, been working abroad for almost a year and my decision to work in Singapore is due to the fact that I believe I can afford to give better things in life to my family since I’m earning 10 times what I was earning in the Philippines. Some say that OFWs are not patriotic, but in my case, I have so many attempts to have a career in my motherland but sad to say, it never happened.

Emerging economies like China, India, Vietnam, Korea and others in Latin America, are doing well. Things like these happen. In the past, we already had worse problems. It’s just a matter of being prepared and learning new ways and techniques in investments.
[Read the rest of this entry »]

A letter for you. Photo courtesy of Sifah

(The other week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were very kind and replied and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

By Leo Obrero

My family and I live here in Norridge, Illinois since 1994. I migrated to the USA in 1978 and had worked for several companies from factory to office work like most of our kababayans before me. Then in 1984 I was hired by the United States Postal Service as a clerk inside its processing and distribution center here in Illinois. I started as a letter sorting machine (LSM) operator.

After eight years of stressful skirmishes with this LSM, I bid out. I moved to another section working in graveyard shifts for sixteen years facing the same pigeonholes every night. But thank God I had this job. I can proudly say that had it not been for the USPS, I would not be able to retire with financial stability.
[Read the rest of this entry »]

(Last week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were very kind and replied and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

Marikit Diwa, from Brunei

I’m 37, working in Brunei. I went overseas for work early last year. Money was too good to pass up despite the fears about leaving the comfort zone. I agonized over the decision for weeks though, but in the end, money was too tempting–some three times over my pay in my old job. Plus, free housing, even utilities water, power and best of all, it’s tax free!

I work for a newspaper so I get to hear all the horror stories about the credit crunch, high food prices, oil, the Wall St. mess like I have a front-row seat. I have money in a unit investment trust fund (pure equity, so tough luck). So, that’s on top of my worries every time markets fall because of all those things. I checked an online site daily on how I much I gained when the market was really doing well. But when stocks started falling for a time, I didn’t check daily anymore because it just worries me. Now that stocks are really down, I can’t help but check. It’s like a road accident. You can’t look away.
[Read the rest of this entry »]

Photo courtesy of 2create

(Last week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were very kind and replied and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

By Jennifer, from the USA

I’m in my mid-30s, married with one kid, and working full-time in a big consulting company. I have been working in the US for almost seven years now (not counting the time I was still a Manila-based consultant but had US projects). I have been a legal US resident for these seven years.

The financial crisis definitely poses concerns, but personally, not to a point of panic. I think that it has effects on everyone in different ways at varying levels, depending on their circumstances. Lending or credit would have major impact on small business owners, or homeowners needing loans, and non-homeowners who hope to have a home.  401k is affected by the tanking and fluctuating stock markets. It is also likely that investors may freeze or withdraw plans for future investments. In my personal circumstance, these are not a big worry at this time.

[Read the rest of this entry »]

(Last week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were very kind and replied and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

by Ross Delgado, from the USA

I have been here in US since 2001. Like most Filipinos, I came here armed with nothing but hope for a better life. I never planned on living here the rest of my life. I was to make more money in less time and get the hell back home. At least that was the plan.

You see, I had three wonderful kids that I had to leave. I go back home every one or two years to see them.
[Read the rest of this entry »]

(Last week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were very kind and replied and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

By Raquel Erhard, Germany

I am a stay at home mom with two girls, ages 4 and 6. My husband works in a bank here in Germany, a country I’ve been calling my second home for more than seven years.

Whenever I think about the global crisis, I tend to focus on the positive side. The news here in Germany is that the financial fall in the US will not be felt greatly because we have enough reserves, etc. etc. I have a feeling these are all big talk simply to reassure the masses. Well, I am trying not to panic since I dont see my husband panicking. And I’m being very positive in saying this — but I am also hoping that prayers would help the Philippines. There might be other effective methods, but am sending more prayers.

[Read the rest of this entry »]

(Last week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were kind enough to reply and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)

By Edwin Jamora, USA

I have just recently quit my job as director of finance in one of the largest housing authorities in the United States with over 3,000 employees. I’ve been unemployed since July 2008; however, I have just accepted a job in Chicago as director for one of the largest development corporation dealing with housing tax credits, asset management and property investments. I expect to start very soon.

My parents, very religious, took the church’s “go and multiply” advice by heart and made parenting an algorithmic Fibonachi, that’s why there’s 11 of us in the family. We lived in the barrio and could not find opportunities in the Philippines because at that time, they’re all reserved for the rich, the powerful and the conios. So, I paddled my boat to the land of apples and honey. I’ve been working in the United States for over 21 years now.
[Read the rest of this entry »]