A woman shopping in a supermarket bought two pints of low-fat milk, a dozen eggs, a quart of orange juice, a head of lettuce, a can of coffee and a pound of bacon. The man behind her said, “You must be single.”
The woman was puzzled, because there was nothing in her shopping cart that indicated her marital status. Curious, she asked the man, “You are right, but how did you know?”
The man replied, “Because you are so ugly.”
Scientists have discovered a food that diminishes a woman’s sex drive by 90 percent. It is called wedding cake.
At a party, a guest asked my wife, “Why are you wearing your wedding ring on the wrong hand?” She replied, “I married the wrong man.”
My wife had always wanted to marry a seismologist because, she says, size does matter. Alas, I have just been downgraded.
My daughter asked, “Is it true, Dad, that in some parts of India a man doesn’t know his wife until he marries her?” I replied, “That happens in every country.”
My spouse said, “I never knew what happiness was until I got married, and by then it was too late.” She also said that all women’s problems are due to men, For example, MENtal illness, MENstrual cramps, MENtal breakdown, MENopause, GUYnecologist and HISterectomy.
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For months, I have been bearish of Wall Street and last week, even more so. My worst fears were realized when mortgage lender IndyMac Bancorp Inc. was shut down at 3 p.m. after depositors withdrew $100 billion. The Federal Reserve regulators took over the bank and transferred it temporarily to the Federal Deposit Insurance Corp. FDIC said 10,000 customers could lose up to $500 million in uninsured deposits. The failure, the most expensive since 1984, could cost $4 billion to $8 billion. FDIC will try to find a buyer within a month in order to minimize customer’s losses.
IndyMac had assets of $32 billion and deposits of $19 billion.
The FDIC chairman said, “There will be increased failures but it will be within the range of what we can handle. People should not worry. People with uninsured deposits up to $100,000 will get their money back.” In the meantime, customers will have access to their funds by ATM, debit cards and checks. Over the past two years, the shares dropped 95 percent, so the writing was on the wall. IndyMac lost $184 million in the first quarter and was expecting a bigger loss for the second quarter. This is the fifth bank to fail this year and in all, FDIC had to take over 127 banks with assets of $22 billion.
The news sent Freddie Mac and Fannie Mae down 50 percent in early trading amid fears that they could stay afloat.
Treasury Secretary Henry Paulson made some optimistic comments and the shares recovered about half their losses but are 78 percent off their highs. These two government mortgage lenders do not deal in billions but in trillions, $5 trillion to be precise. That represents 50 percent of all of the nation’s home debt, so failure to help them would spell total disaster to the housing market and plunge the economy into a deep recession.
Paulson has just announced that Congress will put its weight behind the Fed and lend each company up to $2.25 billion at 2.25 percent. There will be certain conditions so as to protect the taxpayer, but this will come as a relief to the market, which should open higher.
Nervousness caused the shares of Lehman Brothers to drop another 17 percent, bringing its total decline this year to 78 percent. Last Thursday, Lehman Brothers stunned the market by announcing a second-quarter loss of $2.8 billion. All the other banks were affected, JP Morgan fell 3.9 percent and Goldman Sachs, 4.5 percent. Lehman has been hurt by a sharp slowdown in its fixed income business, a series of write-downs and hedge strategies that backfired. The bank plans to raise $6 billion, $4 billion through the sale of common stock and the balance through preferred stock.
GE announced second-quarter profits down six percent, slightly more than expected, but the shares were little changed. GE said it would sell its Japanese consumer finance business for $5.4 billion and wanted to spin off its lighting and appliance businesses. I find this a little surprising, as these are the products for which they are known.
The oil prices made yet another high on Friday in intraday trading, reaching $147.27 before closing at $145.08. This is bad news for all countries that import and any move through $150 would have a negative psychological effect. The dollar fell against the yen and the euro. Gold jumped almost $19 to $963.20 an ounce. The trade deficit improved one percent to $60 billion. The trade deficit with Saudi Arabia, Indonesia, Nigeria and Venezuela hit a record high of $17.9 billion in May.
Most Asian markets followed the decline on Wall Street, and the Philippine Stock Exchange index (PSEi) was no exception. Our market had another down week except for Manila Electric Co., which has had a sustained recovery lasting seven days. The only good thing that can be said was that gross turnover was light and declined to P1.5 billion. Clearly, at these levels, investors are reluctant to sell. On Monday, the PSEi opened lower but closed higher on the bailout of the US mortgage lenders.
Inflation at 11.4 percent is among the highest in Asia and with the price of oil rising steadily, the peso has weakened to 45.65 to the dollar. Most analysts are expecting it to decline further. The inflation rate in Zimbabwe is now 165,000 percent so somebody will probably try to Mug Abe.
Property shares have been battered on fears of defaults by overseas Filipino workers, but I don’t think this is a serious problem. Remittances this year are still on an uptrend and families receiving dollars are now getting about 10 percent more than they did six months ago.
Because of an 85-percent rise in the price of steel, all property companies have raised their prices by at least 10 percent. It is too early to tell whether this will affect sales significantly. If the central bank raises the benchmark by only a quarter of one percent, it will be of little consequence.
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As usual, Latinas dominated the Miss Universe contest, and traders watching it made a record number of mistakes. They sold my wife by accident.
Previous columns:
US in Bear Nanke market – 2008/07/08
Bear market in Dow is imminent – 2008/07/01
Are we in a panda market?– 2008/06/24
Bearbull strikes oil – 2008/06/11
Petron is still cheap – 2008/06/03
