CHAPTER 1 TW3 2008: The Year Free Markets Ran Amok1
I am writing from Boracay, with both my feet well-sunk into the powder-textured white sand on the best stretch of beach in the world, located south of the city of Manila. The weather was just nice enough for me to think about what to write for my second essay in The Star (the first was on December 20, 2008, now published as Chapter 101, “Getting ‘Cangkul-Ready’”) as another annus horribilis draws to a sad conclusion. Hence, TW3 2008, or that was the world that was in 2008.
Looking back, it’s hard to summarize a year that blew hot and cold—both rather uncomfortable. The first half of the year reminds me of Malthus’s challenge to the dwindling global supply of resources—oil, food, and other commodities. None foresaw (including me) that the crude oil price would rise so fast from its lows in early 2007 to US$87 a barrel on February 6, 2008, to US$100 on February 19, and then on to a high of US$145 on July 3, only to fall precipitously to US$31 by December 22 (US$44.60 on December 31, 2008). Similarly with crude palm oil: from a low of RM1,893 per tonne on January 30, 2007, to RM3,117 by end-2007 to a high of RM4,330 on March 3, 2008; the highest price reached in the second half of the year was RM3,600 on July 3, before falling to its lowest on October 24 at RM1,390 (RM1,629.50 on December 31).
Name the commodity, and we see similar sharp gyrating trends all within a calendar year. In the same vein, central banks saw the scepter ...