Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. Archimedes 287-212 BCE Greek mathematician, engineer, inventor and astronomer
Now take that thought and read the article in VANITY FAIR, November 2009, titled WALL STREET'S NEAR DEATH EXPERIENCE starting on page 172.
What you have is men in powerful positions trying to move the world to reach the ultimate pot of gold. But, when the financial system starts to unravel no one can stop it, not even a few powerful men.
As I wrote yesterday, when trust goes out the window, and everyone is scrambling for their cash, all bets are off. It is now survival at the most basic level.
Yes, the instruments are complex and there are words and names you have never heard of, but when panic takes hold and everyone starts withdrawing their CASH, the beginning of the end is at hand.
If ever there was a reason for investment securities reform, better and more comprehensive regulations, transparency and enforcement, than what Wall Street put this country through in September 2008. Oh, they are now all composed and ready to take on the world again, but for a few days, even the toughest of them were plenty scared of failure.
The low level of financial literacy among the members of Congress, the Obama administration, the Federal Reserve Bank's board members and the SEC, makes for a very dangerous situation going forward. That the banks are spending millions of tax payer dollars to lobby Congress and the administration not to put in place the safeguards and regulations that are needed, is only evidence of their greed and stupidity.
The secret to bringing back the domestic economy of the United States does not rest on a bailout or a stimulus package, but trust between lenders and borrowers. When the new lines of the game are drawn and enforcement is put in place, the economy will come roaring back, not before!!!
Stay tuned.
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6 comments:
You're asking for an Act of God, Moneythoughts -- and maybe you're right.
Or - as Dr. Einstein once said: You can never solve the problem at the level of the problem.
So, the question might be: How do we do that?
As one my learned professors once said to the class: The answers are easy, what's hard is asking the right questions.
Summer
A top down approach. That's what's needed. Those at the top must make the proper decisions - and that means they need to know just what 'proper' is. And, obviously, they don't. Or they DO and they're too greedy to do the right thing.
I read an article yesterday stating these are great times for a young person.....they lost little or no money in the stock market....and now they can ride the market up over the next 10-20 years, homes are off 50% in some areas and thus more affordable for these new home owners.
I suppose this is like looking for a reflection in mud.
to Lceel..
You are right. Many in power understand what should be done, but will never promote change because it would affect them negatively. The other group is so idealogical they cannot see a greater picture.
I watched Hannity the other day as he had Roger Moore on (can't believe Hannity let this be on the air). Roger Moore pounded Hannity for his views (such as Hannity believes this financial crisis was caused by individuals buying homes they couldn't afford)
"Looking for a reflection in mud" is priceless!!!
Hannity does not begin to understand what happened if he thinks this whole thing was created by people buying houses they couldn't afford. Don't expect too much from talking heads. Remember what Henry Paulson said about financial illiteracy among college educated people.
I wonder if a lay person with no experience working in the capital markets, such as managing a fixed income portfolio and trading bonds for a brokerage firm on an institutional desk, can understand how fast trust in the market disappeared and panic set in.
If the Federal government does not meet the challenge head on, we are headed down the same road again in the near future. And, each time this financial crisis takes place, it will take longer and longer for the economy to bounce back. Trust is essential for markets to operate, and firms going down the tube does not promote trust in the system.
Read this by Joe Weisenthal: Design the Next Financial Meltdown.
http://www.businessinsider.com/help-design-the-next-financial-meltdown-2009-4
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