Global recession, where are the positives?

The Jakarta Post , Jakarta | Mon, 04/13/2009 1:54 PM | Business

http://www.thejakartapost.com/news/2...positives.html

With the wave of negative news on the economy, the reality is sinking in that the global recession could be a deep and long drawn out affair. The pain is all too evident as the world economy adjusts from a long boom cycle, fueled by debt, ultimately translating into asset bubbles, to a bust in the financial system, a drop in asset values and a severe global contraction and de-leveraging to work out the excesses.

The financial system is suffering a crisis of confidence, banks have shrunk in size, and as the banks tend to nurse their wounds, much needed circulation of funds in the economy is slowing down to a trickle.

At the street level, people's savings have shrunk in value, earning power has declined and in some cases has become non-existent.

One could go on with this somber picture. But the purpose of this column is to see whether there are any positives coming forth from this painful economic saga. In other words, whether there is any good coming from this very difficult situation. The negative list is easy to set out. The positive one is a bit more challenging.

One is increased global coordination. Despite differences on emphasis and timing regarding more stringent financial sector regulation over fiscal stimulus policies, and more nationalistic policies with regard to employment and access to national markets, there is a generally more uniform response to these global problems. Governments are shoring up their banking systems through capital injections, in some cases, through outright nationalization.

Those economies with large amounts of toxic assets in their banking systems are going further and planning to set up institutions to take out the bad assets, so the banks can recover more quickly.

Despite differences in timing and emphasis, governments are talking to each other and seeking a more coordinated approach to this global problem. The recent G20 meeting was an example.

Two, is lower and more affordable prices overall. High oil and commodity prices have fallen to more affordable levels, at least temporarily, before the much awaited recovery kicks in and raises prices up once again. It is hoped that there will be sufficient time before they get back to past peak levels so that alternatives and more innovative ways can be sought to make us less dependent on non-renewable commodities. This downward trend is reflected in lower valuations of assets and firms.

The drop in oil prices is also helping governments lighten their fiscal burden as the burden of oil subsidies falls and allowing them to divert much needed funds to other areas.

Third, is improved efficiency at both a company and personal level. There is a much needed harder look at what is essential and to prioritize.

This has the benefit of eliminating clutter and sharpens one's focus going forward. This also eliminates waste and excesses, which is becoming increasingly more important with environmental pressures. This internal hard look also forces companies and individuals to become more efficient and have a longer time horizon than we are used to.

Fourth, consolidation, brings a stronger sector. Over leveraged and thin margin companies will have to face the ultimate decision of closure or, in some cases, being bought out by larger and stronger companies. This is the market's creative destruction phase in play, with a clean up of the sector's deadwood.

It is a way of rewarding prudent and forward-looking behavior, for instance, for the less leveraged and more competitively positioned companies. Consolidation has yet to happen, but some companies are already thinking and eyeing acquisition and merger opportunities.

Fifth, accepting recession as a necessary part of the business cycle. Although economists like to plan for long-term steady growth, human nature means excesses are hard to avoid and do occur. Some argue that recessions are a necessary part of the business cycle. It cleans up excesses, deflates asset bubbles to more appropriate valuations, focuses attention on efficiency and the long term.

Finally and ultimately, the biggest positive, is that recession provides mother nature a much deserved rest, with us taking less from her natural bounty and hopefully allowing her to recuperate in areas where replenishment is possible.

It is when we focus on the environment that we are really forced to consider the long term. John Maynard Keynes, the economist, famously said that in the long term we are all dead.

But he had no children and, for those of us that do, we need to remind ourselves that our children and their offsprings live on. As we recover, we need to remind ourselves of the need to try to be more responsible about our future. The long run is something we cannot afford to lose sight of.

Rencana Kebangkrutan Jatuhkan Saham GM
Nurul Qomariyah - detikFinance


Foto: Reuters
New York - Saham General Motors (GM) langsung terpuruk jauh menyusul keluarnya laporan bahwa pemerintah AS telah memerintahkan raksasa otomotif itu untuk mempersiapkan kemungkinan kebangkrutan pada 1 Juni mendatang.

Saham GM merosot hingga 16,18% menjadi hanya 1,71 dolar. Kejatuhan harga saham itu terjadi sesaat setelah New York Times menuliskan, Depkeu AS telah meminta GM untuk mempersiapkan kemungkinan kebangkrutan sembari memperjuangkan restrukturisasi diluar pengadilan. Sehingga jika restrukturisasi gagal, GM bisa langsung minta perlindungan kebangkrutan.

Berbeda dengan saham GM yang terus terpuruk, saham-saham perbankan justru semakin mengukuhkan posisinya di Wall Street. Investor berharap perbankan akan melaporkan kondisinya yang membaik, termasuk raihan labanya. Investor sebelumnya sudah mendapat petunjuk dari cetakan laba Wells Fargo yang cukup mengejutkan.

Saham-saham perbankan yang menguat antara lain JPMorgan naik 3%, Bank of America naik 15,4%. Setelah perdagangan usai, Goldman Sachs mengejutkan investor dengan mencatatkan laba yang melebihi ekspektasi pada kuartal I-2009. Saham Goldman tercatat turun 1,5% setelah sempat menguat hingga 5%.

"Pasar menyambut dengan gembira. Tidak banyak perbaikan pada bank, namun mereka tidak akan mati. Bank-bank ini kembali ke jalannya," ujar Les Satlow, manajer portofolio dari Cabot Money Management seperti dikutip dari Reuters, Selasa (14/4/2009).

Sementara pada perdagangan Senin (13/4/2009), indeks Dow Jones tercatat turun tipis 25,57 poin (0,32%) ke level 8.057,81. Indeks Standard & Poor's 500 naik tipis 2,17 poin (0,25%) ke level 858,73 dan Nasdaq menguat tipis 0,77 poin (0,05%) ke level 1.653,31.

Boeing menjadi salah satu saham penahan kenaikan indeks Dow Jones. Prospek yang suram membuat saham produsen pesawat AS itu turun 5,1%.

Perdagangan berjalan cukup moderat, di New York Stock Exchange mencapai 1,48 miliar, sedikit di bawah rata-rata tahun lalu yang sebanyak 1,49 miliar. Sementara di Nasdaq, transaksi mencapai 1,84 miliar, di bawah rata-rata tahun lalu yang hanya 2,28 miliar.