Tuesday, 15 November 2011

The Philippines' bipolar disorder

Business Mirror

BIPOLAR disorder is a condition in which people go back and forth in excessive shifts of mood between periods of very good energy, thinking and behavior or to feel extremely irritable, moody and depressed.

The “mood swings” between mania and depression can be very quick. And unlike ordinary mood swings, the mood changes of bipolar disorder are so intense they interfere with the ability to function. Common signs and symptoms include feeling unusually “high” and optimistic or feeling hopeless, sad, or empty. The cycles of bipolar disorder last for days, weeks, or months.

The conversation and hand-wringing about the outcome of the Pacquiao-Marquez fight ignores one important fact: Pacquiao won. The Pacman pocketed the $20 million and the WBO championship belt is still around his waist. Nothing else matters very much, if at all, even if it was a close fight.

Yet it cannot just be left at that, maybe because of a national bipolar-disorder condition. The “manics” are dancing on the street that Pacquiao proved once and for all that he is better than Marquez; the “depressed” cannot believe that Manny did not knock Marquez out in the first round.

But this bipolar disorder is not limited to fight fans. Investors on the Philippine Stock Exchange (PSE) are the same.

In September the PSE Index was down 8 percent. In October the PSEi was up 8 percent. That was a huge swing in prices or “mood,” if you will. Tens of billions of pesos came out of the market in 30 days and that same tens of billions of pesos went back into the stock market. Absolute depression turned into absolute optimism literally within days.

Those mood swings have not stopped. “Europe has solved its debt problems—Buy, Buy, Buy!” “Europe has not solved the problems—Sell, Sell, Sell!” It’s crazy and by crazy I mean it is time for psychiatric help and a reality check.

The European debt problem is never going to be “solved.” A solution will evolve as part of a long process over an extended period of time. During that time, there will be periods of increased concern and periods of less concern.

Further, no one has yet spoken or written about the effects on the Philippines. I know. I read and listen a lot.

So, why the wild swings in stock prices? Bipolar disorder fueled by bad analysis and bad information. It is like the US television newscaster, obviously an “Occupy” supporter, who practically screamed, “It’s an incredible global event now, taking place in a thousand countries.” Even including the micro nation of The Kingdom of Talossa headed by King John (no relation unfortunately), there are less than 200 countries on planet Earth.

We have stock-market investors reacting to every word from Europe while not knowing in the slightest what it means to the Philippines.

But this bipolar disorder is not limited to the stock exchange.

It seems that every day we are told the Philippines has high electricity rates. Ok already! I know. I get a Meralco bill every month, too. But absolutely everybody knows if the Philippines had lower electricity prices, we would have to build another airport just to accommodate all the foreign businesses that would move here.

A major cost for the call centers is electricity. I know. I ran one. But the Philippines is the “call-center capital of the world.” If power rates were the factor, Uzbekistan, whose rates are one-third of the Philippines, would be the “call-center capital of the world.” But they aren’t because nobody speaks English in Uzbekistan. Just maybe low power prices are not the answer to increased foreign investment.

And if high power rates kill businesses, how can Filipino companies like San Miguel and Shoemart that spend huge amounts on electricity continue to be very good at turning in profits? Maybe they have a super secret magic-power supply they haven’t told the experts about. Or maybe they run their companies balancing high power costs with low real-estate and rental expenses and more attractive labor costs. Too bad the foreign companies have not figured out how to do that.

Normal people usually are competent enough to balance the negatives with the positives. They try to anticipate changes, both good and bad, and then adapt. They also know that the storm will not last forever, and neither will the sunshine. They go about their daily lives confident they can create positive and favorable outcomes in spite of problems that arise. They plan for the best and prepare for the worst.

There is a high risk of suicide for people and nations with bipolar disorder.


E-mail to mangun@gmail.com and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.

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