There are rumours that President-elect Obama will announce a plan this week to rescue the ailing auto industry in the USA.
The question is: if so, will that provide a "floor" to the current crisis?
The answer is "Yes". However, that will not mean that the crisis is over. It will simply mean that the crisis won't get any worse. At least for the USA.
What that means for other countries remains to be seen. My own feeling is that it will not make that much of a difference to global sentiment, so that the crisis could continue getting worse in other parts of the world, if other governments do not take other actions to support their own economies.
What the world (and the US) is waiting for is not simply the rescue of the auto industry, important as that is.
What the world is waiting for is steps that will safely unwind the all-encompassing bubble of unregulated hedge funds, derivatives and their ilk, worth $1,144 Trillion at the end of September! That bubble should never have been allowed to come into being in the first place, and came into being only because of the irresponsibility of US lawmakers who not only repealed the Glass-Steagall Act but also then refused to regulate hedge funds and derivatives.
Till there is recognition that leveraged betting is what has created this problem, and till there is a resolution of that, there will be no progress with really resolving the crisis.
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Saturday, November 22, 2008
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2 comments:
Hello Dr. Guptara,
Thank you for your site, ususally to get an opinion from someone of your stature would take a trip to Switzerland an appointment and a long talk with a receptionist. Thanks to the Internet I guess.
As introduction I studied at L'abri many years ago, workded in politics for a US Senator and have been hurt in the Markets.
This is just some thinking as to "What in the World Happened"?
Inventions leading to the 25-28 market boom... Radio 1920, Ford auto, light electricity, sound pictures, and more. what went wrong is simple Human reactions did not take it in stride which created a Roaring Twenties exhuberence then bust,the great depression. They drove to the poor house in an automobile listening to the radio on their way to the talking pictures then went home and listened to a guy Lambardo phonograph.
Examples of positive inventions but leading to "Irrational" exhuberence:
http://www.youtube.com/watch?v=_3akmjrrDD8&feature=related
http://www.youtube.com/watch?v=oaYMxK9v7JU&feature=related
http://www.youtube.com/watch?v=VM3JEUk6Q2s
first talking picture 1927
http://www.youtube.com/watch?v=iKU43kD1Dmo&feature=related
Automobile
http://www.youtube.com/watch?v=RK-gVb5wKO0&feature=related
Thinking of the HUMAN RACTIONS to these inventions and how speculators on Wall Street reacted, over exhuberence then the Crash.
Compare that to the reaction to the Internet and the feeling of ever increasing proserity and the exhuberence that lead to the 2008 Crash.
This Opinion is probably simplistic, that it was an unregulated reaction to life changing inventions that lead to both crashes.
Thomas Edison speach from movie Edison the Man.
It's a troubled world filled with doubt and uncertainty. You say we men of science have been helping it. Are our children going to approve of what we've done? or are they going to discover to late that Science was trusted to much, or that it's finnale tiumph is man's own distrution? Some of us are begining to feel that danger.
But it can be avioded, I once had two dynomos that needed regulating, a problem of balance and adjustment. I feel that the Wworld today, presents much the same problem the dynamo of mans God given inginuity is running away with his equally God given humanity these two can and should be put into harmony as the Great Designer intended, it can be done what man mind can conceive mans character can control. then we needn"t be affraid of tommorrow, and can go forward to more light.
Harry Maynard, Florida
Hello Dr. Guptara,
Thank you for your site, ususally to get an opinion from someone of your stature would take a trip to Switzerland an appointment and a long talk with a receptionist. Thanks to the Internet I guess.
As introduction I studied at L'abri many years ago, workded in politics for a US Senator and have been hurt in the Markets.
This is just some thinking as to "What in the World Happened"?
Thanks, Harry Maynard, Florida
Inventions leading to the 25-28 market boom... Radio 1920, Ford auto, light electricity, sound pictures, and more. what went wrong is simple Human reactions did not take it in stride which created a Roaring Twenties exhuberence then bust,the great depression. They drove to the poor house in an automobile listening to the radio on their way to the talking pictures then went home and listened to a guy Lambardo phonograph.
Examples of positive inventions but leading to "Irrational" exhuberence:
http://www.youtube.com/watch?v=_3akmjrrDD8&feature=related
http://www.youtube.com/watch?v=oaYMxK9v7JU&feature=related
http://www.youtube.com/watch?v=VM3JEUk6Q2s
first talking picture 1927
http://www.youtube.com/watch?v=iKU43kD1Dmo&feature=related
Automobile
http://www.youtube.com/watch?v=RK-gVb5wKO0&feature=related
Thinking of the HUMAN RACTIONS to these inventions and how speculators on Wall Street reacted, over exhuberence then the Crash.
Compare that to the reaction to the Internet and the feeling of ever increasing proserity and the exhuberence that lead to the 2008 Crash.
This Opinion is probably simplistic, that it was an unregulated reaction to life changing inventions that lead to both crashes.
Thomas Edison speach from movie Edison the Man.
It's a troubled world filled with doubt and uncertainty. You say we men of science have been helping it. Are our children going to approve of what we've done? or are they going to discover to late that Science was trusted to much, or that it's finnale tiumph is man's own distrution? Some of us are begining to feel that danger.
But it can be avioded, I once had two dynomos that needed regulating, a problem of balance and adjustment. I feel that the Wworld today, presents much the same problem the dynamo of mans God given inginuity is running away with his equally God given humanity these two can and should be put into harmony as the Great Designer intended, it can be done what man mind can conceive mans character can control. then we needn"t be affraid of tommorrow, and can go forward to more light.
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