Tuesday, December 02, 2008

The world economy is in crisis

I know the world economy is in crisis.

It’s hard to imagine there are many people who don’t know this. Yet today, when the US government confirmed that the country had been in recession since 2007, the markets plummeted and the brokers and analysts interviewed all said it was this “news” that triggered the further decline. Am I missing something here? Aren’t these folks supposed to know more than we do about what’s going on in the markets? Are we to believe that they were hoping to read this morning that the US economy had been performing above expectations? What medications are these people taking? And we’re supposed to trust our money and our future financial security to these people? If there was ever an argument for more government regulation then the behavior of the banks and marketeers in recent months is more than evidence enough. World governments have flushed the banks with cash that they refuse to loan, brokers, dealers and investors worldwide seem to be running around in a state of panic selling, selling, dumping … they appear to have no confidence whatever in the house of cards they helped construct while the rest of us are left to do what? Stock our cellars with canned goods and bottled water and await the plague of locusts? I’d be interested in knowing your thoughts.



Anonymous Anonymous said...

As the wise king had inscribed on his ring, "This, too, shall pass."

There is really not much we can do. When elephants fight, the grass suffers, goes the African saying.

I was just reading a book by Galbraith I can recommend: "A Short History of Financial Euphoria" (Penguin). He sums it up well.

7:52 PM  
Blogger Christina said...

This is so true! Take AIG for instance. Bailed out and then went to a spa for a few hundred grand. Yet, institutions don't want to loan to the small fries.

I don't know, don't get me started. What is a person to do? ; )

That book sounds interesting that ralphnoble is reading.

Thanks for the visit. This is a wonderful blog.

12:45 AM  
Anonymous Anonymous said...

The economy's in crisis since noon,
Shall marketeers realize it that soon?
Ordinary people learnt the rules at school,
Yet buyers and sellers act like a fool.
We've been told about recession,
And traders simply see statistics' regression.

3:44 AM  
Blogger C N Heidelberg said...

The first parts of this article are interesting and sort of address whether these financial guys know what the hell they are doing (they don't): http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?print=true
(Later in the article it gets a bit irritating to follow as there are names flying around as if you know them, etc.)
The book it talks about sounds pretty interesting, too.

9:49 AM  
Blogger C N Heidelberg said...

Here's the link again, doesn't look like it turned out in my earlier comment:

9:49 AM  
Blogger Berlinbound said...

Dear CN: I just finished reading the article you suggested. I'm familiar with the author and "Liar's Poker" becasue I was living in NYC at the time it came out.
This article is a very engaging account of the origins of the current crisis and confirms my fears that the market is run by people who have no idea what they are doing or what they have done and could care less.

Thanks very much - I'm passing it on to friends.

12:35 PM  
Blogger Rositta said...

Well the shit hit the fan while I was in Greece and couldn't do a whole lot about my teeny weeny stock portfolio that now even smaller. As your previous commenter said, this too shall pass. Meanwhile I'm stocking up on wool so I can at least knit, forget water and food lol...ciao

3:34 AM  
Blogger headbang8 said...

I've never worked in finance, but I've worked in the corporate sector for a number of years.

Anyone who says that government is inherently wasteful, and private enterprise is not...well, I don't know what planet they grew up on.

Yet we still refuse to believe how unsound our entire system is. Those responsible constructed a house of cards because it could be done quickly, easily, and reach a considerable height. From a distance--our distance, the distance of the man on the street--it might even look like it wasn't made of cards. though we had our suspicions.

Alas, now that the cards have collapsed, those responsible want to repair the house of cards. But they still build with cards.

Why? Maybe they don't know how to do anything else.

And economy based solely on supplying each other with goods and services, grows slowly. It would be a profound shock to need to return to it. Perhaps those responsible can't even imagine what it would be like.

10:37 PM  

Post a Comment

<< Home