Tuesday, September 30, 2008
The plumetting of stock markets and, in general, of economic markers of all types, continues. While in Europe, the various authorities (UK, Germany, BENELUX, European Comission) have been fast in reacting: nationalizing any bank that could cause any trouble before it does, right across the ocean in Washington D.C., they cannot reach to any effective agreement: some talk of such measures being "socialism" (they are not: socialism would be to nationalize the reposessed homes for the good of the people) and seem panicked about the idea of getting even moe indebted (sorry guys: if you want to live above your possibilities, debt is the only possible option - it is incompatible with a strong dollar though).
And it seems that at least till elections, that are not just presidential but also congressional (what explains maybe the restlesness of so many politicians), and maybe till the very investiture of the next President and Congress in January, we are going to watch a headless USA that is unable to face economical disaster with some determination. I'm not judging here if the proposed measures are better or worse, enough or too little... just that the inability to do something, whatever, by the World's 1st power (as of today) makes everybody extremely nervous - and with good reason.
Shares therefore fell yesterday some 2.4% in Europe (before the failure to pass legislation in Washignon became known but after nationalization efforts this side of the ocean were widely known) and 7% in New York, in what has been claimed to be the worst single-day fall in many decades. Asian markets also fell some 3% and I expect European markets to fall today as well, moreso on light of new oil price rises.
Nevertheless there are some that are still buying and expanding, like the Bank of Santander, of the Spanish magnate E. Botín (surname meaning "bounty" if you wish to make a word-play) was buying the still valuable assets of nationalized British bank B&B. But guess you have to be a true shark to get any profits amidst all this chaos.
But whatever the case with the ailing economy and stock markets... what was yesterday in the mouth of nearly every journalist on TV was that the lack of leadership the USA is showing, as well as the most pernitious effects that Reaganomics (mad deregulation) have caused in its economy are causing many leaders around the World to question the leader position of the North American republic and the goodness of its ultra-liberal recipes. Even in such a pro-Atlantist media as the BBC, commenters were suggesting that, unless the new US President changes things a lot, the very role of the USA as first global power is seriously compromised. Comparisons with the fall of the Soviet bloc were not absent either.
Will keep commenting. This crisis is far from over.