Rarely has one seen the entire global leadership of the financial world, so utterly clueless. The leadership comprising of the elected officials, finance/treasury heads, central banking heads, regulatory heads, Company Board of Directors and CEOs – all seem completely lost!
They say one thing, do another…talk about being globally coordinated, then do things in isolation…swear by ‘free market’ principles, only to violate them the next day, they agree to vote on a plan…and then reject it, only to approve it later…,bailout one bank, but not the other. In the mean time, the markets keep tumbling…trillions of dollars worth of market cap is just vanishing in thin air!
Everyday, there are parallels being drawn to the ‘Great Depression’. Everyone, including the leadership is in denial…This was not supposed to happen! Over the past seven decades, we have seen a World War, a Cold War, Oil Shocks, 9-11, and on and on. Over this period mankind has survived one great crisis after another, including the possibility of M.A.D. (Mutually Assured Destruction – that doomsday scenario so commonly speculated; especially at the height of the Cold War). Even during these darkest of dark times, it felt that someone had some control. We may have not liked the direction of that control, but at least someone was affecting it.
This current financial mess was not supposed to happen! But it did…The modern world was supposed to have a robust system of monitoring, checks and balances. There were safety factors, reserve ratios, rate cut options, liquidity injections, and an array of other weapons in the armory of the leadership to combat such problem. The CEOs having precipitated this crisis, by amongst other things their ‘greed’ and ‘aggressive business practices’, had many options to limit the damage…but either they were embroiled in their own stubbornness, or just totally oblivious?!
One thing is for sure – right now ‘we the global population’ are losing this battle; and losing it badly! We had lessons learnt from the ‘Great Depression’, the 1980s crash, the Asian crisis of the 1990s, the dotcom crash and the WorldCom/Enron saga. And yet we got completely blind sighted. We have probably the most qualified US Treasury Secretary and yet he seems as lost as everyone else! Just recently we had a comprehensive Sarbanes-Oxley regulation that was supposed to force ‘companies’ to disclose their risks & exposures in a proactive fashion. European banks (which haven’t been immune to this problem) had spent years coming with BASEL II regulations to do a better job of ‘risk management’ and yet we end up with this? Has the ‘system’ failed so miserably? Or the companies creating this mess were so terrific at ‘hiding’ their actions? Or the ‘system’ was so utterly totally incompetent?
The current scenario is more like a global pandemic – the kind of massive epidemics that use to ravage cities prior to the 20th century. So called ‘experts’ and doctors use to try various things, but to little avail. Often times, their ad hoc methods (in those days, detailed causes of many of these problems were not known…) creating more damage.
How did this happen? That is going to be a multi-trillion dollar question! But who knows where the ‘Dollar’ will be after all this is over? And where will be the Euro and the Yen be? It might be safe idea to now refer to everything in gm/kg of Gold (Ounces/Pounds for those who prefer not to use the metric system). ‘Experts’ and ‘Pundits’ of the modern capitalist system have discussed ad nauseam the current problem and the only thing I can gather is that they are as confused as the leadership and everyone else.
Maybe some day, we will know what happened! Clearly that day is nowhere near! Till that day, all we can do is wait and wonder…what exactly happened? And why?
[You might want to read these related posts, ‘The Illiterate 21st Century Consumer’ and ‘US Financial Crisis – Who Is To Be Blamed’ ]
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