Capitalism and Greed
It is immensely exciting to witness the near capitulation of Fannie and Freddie for it bears the following implication:
a. The US brand of capitalism is not insulated from disaster - the US will no longer be able to stand on a economic ethos high ground and preach the 'goodness' of their brand of capitalism
b. Much of the failings can be attributed to greed and human nature. The US financial systems have their internal checks and balances, but human greed cannot be easily checked nor balanced. How can we prevent financial institutions from leveraging to the tills, when everyone is doing the same?
The current de-leveraging process will take years to unwind, and the excesses built up over the last decade will take as much, if not more time to work off.
Expect the worst and hope for the best.
3 comments:
It's just human isn't it? Taking more risk just means that the upside is more as well. But the thing is that even when the crunch has come, those who started it all have already earned enough.
The ultimate losers? The middle class masses.
Hey, just to let you know that I've added your site to my S'porean blogroll for easy access. Cheers!
Hello CK,
Well unless these financial institutions are bailed out by the government, then the common folks will bear the burden of those failures. Politically, it is immensely unpopular and so far, in the US, the shareholders have been punished.
The transmission of these bank failures will ultimately affect the common folks and many may lose their jobs as a result. Hopefully individuals are not as leveraged as those banks which failed, because in the current environment, it pays to be a net saver.
Anyways, thanks for adding me to your blogroll. We should meet up one of these days ;-)
Take care and have a great week ahead!
We had a company meeting with senior management coming down to boost morale. Haha, with many sales people leaving, it seems that we have seen the bottom yet.
Anyway, unlike Singapore, the politicians in the UK are more accountable to its people. I don't think the the British can be easily persuaded to take the bitter pill, which of course is bad in the long run.
No probs on the blogroll. Like you said, we should meet up! Are you in Central London? If so, we can meet up one of these weekend for a cuppa. Just let me know. Cheers!
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