Those interested in the economy here in the Philippines will note I mentioned a couple weeks back that although noting major seemed to be happening here economy-wise … the stock market is ‘flat’ but not showing any giant losses, the peso/Dollar rate seems kind of ‘stuck’ at about 47 per, two big ‘featured’ US employers here, Intel and Texas Instrument (TI) have scaled back drastically. However I was just up at Clark today and work is progressing well on the huge tech center that TI is building there, so certainly not all the news is bleak.
Home prices still seem on the rise and my bank is actively promoting ‘all in one’ financing packages with 20 year and longer terms, unheard of just a few years back. I do expect that condo prices in particular are going to take a drop. 6 to 20 million and more for a few hundred square feet of floor space in the heart of the “Big Smoke” (otherwise known as Manila) may well stagnate or drop this year. I base that guess on news last night from Hong Kong where homes on “The Peak” (and if you know Hong Kong, no other explanation is needed) have gone down in value 40% in the past six months. Maybe the trend won’t cross the South China Sea, but6 I’m not buying any condos this year, just as a precaution.
Arguably over-valued homes leads me to one of my key points. The strange attitude I see in so many people, especially my own countrymen, that somehow many of us are ‘better’ than anyone else and we deserve more, so we will by God get it. Bob wrote an interesting piece a day or so ago, and my American citizen wife told of her feelings watching the massive “greed fest” the last couple years we were living in the US. Just last night on a US news show was a woman in California who had bought way, way more house than she needed and then lost her ‘service provider’ type job. her comment was, “I’m not going to let this home go to foreclosure, the government must bail me out.” Well, since we are busy pouring our grandchildren’s and great-grandchildren’s money down the rat hole of Wall Street, I suppose if the government does bail her out, fine well and good … but the idea that she is entitled to be bailed out when she clearly bought way more than she could afford just because she feels entitled just sticks in my craw.
The last few years that I worked for the government in Colorado Springs I managed some contracts with companies that were essentially “body shops”. For x amount of dollars per year they would provide a body with certain job skills, like a software engineer, to work on government projects. As a feature of the government procurement laws, these companies had to disclose every hour these ‘bodies” worked and exactly how much they got paid … so I know exactly what a lot of these professional people were actually taking home. The houses some of them bought simply astounded me. No way could a person at their rate of pay ever amortize such a debt in 26 or 30 years. Yet the lemmings leaped over the cliff by the thousands, funding their 4 and 5 thousands show pieces with ARNs and “Interest Only” mortgages and various other sleight of hand tricks, in some cases knowing full well they would never be able to afford the house once the crooked mortgage deals came home to roost. There are times I feel I am a complete stranger in my own country, I don’t even connect with many of my fellow Americans. Life grows steadily stranger as I age.
One the other theme I wanted to touch on today, getting scammed, you recall I s=discussed briefly the Philippine sown little investment bubble that ”popped” over the Christmas holidays … the Legacy Rural Bank Certificate of deposit fiasco.
The PDIC is starting to pay off investors. In so far as they know the extent of the scam, they feel they have enough money to pay them all. I hope so. That’s what Deposit Insurance is supposed to be for. But this one gives me mixed emotions too. If I offer you a scheme where I promise you 24% on your money, and the institution you are investing in makes, on average, 7% on the loans they give out (special discounted loans on used motorcycles, mainly … real blue chip, low risk stuff, eh?), then you shouldn’t walk away, you should run away.
Several fellow expats were involved in helping to float this specious scheme. One,. whose wife was openly selling the paper to all his friends and online acquaintances for healthy commissions herself is absolutely obnoxious about the facts. “Look,” is his response< “the facts of the investment are not important because it is covered by PDIC, so no one will lose.”
Sad. Yes, no one will lose except the PDIC (which is the Filipino people) who should have been quicker on the draw to see the scam coming. Well they weren’t, so too bad for them and hurray for me, I got mine seems to be the prevailing view.
You know who really pays for such a mess? The school teachers, the tricycle drivers and every other wage earners who tries to keep a few pesos in his or her hand long enough to get it to a savings account. The money PDIC pays out in claims comes from taxes on deposits and fees the banks pay, so the more the bank has to pay for deposit insurance, the less an honest worker gets on their savings. I really wonder how some people sleep at night, actually.
Remember what I said the last time I wrote on this subject. You are not a rock star. If you are offered a deal that is “:too good to be true” and pays 5 or 10 times what the going rate for something is … it is too good to be true, and if you grab for the brass ring, you’re no better than the perpetrators of the scheme.
As a signoff, to my retired military/TRICARE readers. beware. Last night I received some text messages from someone who purported to be in Cagayan de Oro and wanted my help in marketing a “TRICARE Clinic”. Most of these clinics are scams, offering to do the work of submitting claims that the TRICARE program clearly makes the retiree responsible for. Several gigantic ones in the Philippine shave blacken the eye of TRCARE and made all Americans living here look like crooks by association.
Don’t buy in to something that sounds too good to be true, in the Philippines or back in the USA and likely you’ll never get scammed.
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There is nothing illegal with a provider agreeing to submit claims to Tricare. However, I would say 95% of all provider groups in the Philippines that agree to process claims do so with the intent of over billing Tricare by four to five times the actual cost of care.
The troubling thing is these groups have been reported to Tricare but they are still certified by Tricare as providers. What message does that send.
Hello Jim, didn’t know you were a reader. Thanks, and thanks for your comment. This blog is not really about TRICARE and other retiree issues, but from time to time they come up. As Jim says, as a TRICARE beneficiary, you can ‘farm out’ the submission od claims, my words may have been unclear there.
But you, the TRICARE member bear ultimnate responsibility for what goes on the forms … and if the provider is making money by “overpricing” as we say here in the Phils so often, then you are a party to a crime. Like Jim, I fervently wish TRICARE would take intelligent action to clean house instead of “kicking the can” down the road. Forewarned is forearmed.
Hi Dave,Some very wise words in your article.There is one thing for sure,as this economic crisis deepens, even more scam and con artists will crawl out of the woodwork,regards Chas.
Thanks, Chas. Indeed. If you wrote a novel about a crook with schemes like the Rural bank Lagacy group, or the huge recent US Ponzi scandals like Bernie Madoff or the recent R. Allen Stanford debacle, the editor would likely reject the story as being too far fetched. But these men, Wall Street insiders, freinds of Treasury Secretaies, consultants to the SEC, etc., just offered people impossible gains on their money, and the lemmings lined up in droves. Most people will just read these areticles and say, “There goes Dave, popping off again” and think nothing more about it, but if I can convince one guy teetering on the brink from dumping his family fortune into a scheme like this, it will be worthwhile.