Had a trip top China for about 10 days, during the month of May. Sorry if you guys missed me...hehhe....will be posting something for the news organisations more substantially in the near future.
All in all, the trip was fantastic. We went to three cities- Beijing, Wuhan and Xiamen. We were treated like royalty by the Chinese government and I thank them from the bottom of my heart.
Thursday, May 27, 2010
Friday, May 7, 2010
Why didn't anyone see this economic crisis coming?
I had tuned in to one of the local talk shows in The Bahamas, and the host was on about the economic crisis and why hadn't anyone seen it coming- particularly the economists and business persons. It wasn't the main focus of the show that day- from what I heard- but it was a side remark, to the main point of why persons can still start up their businesses, even in these challenging times.
I would like to work with the first assertion and state that, yes; persons did see the crisis coming. The question to be asked rather than why didn't anyone see it coming; is why did folks not listen to the people who had something to say on the matter?
I can remember about four years back, sitting in a discussion seminar with my very distinguished professor at the time, Dr. Jonathan Hopkin. We were discussing the global economy and how he was in the process of selling his house, after we had reviewed literature two days in advance on economic and welfare regulation. During that same period, I was reviewing Central Bank policy in conjunction with financial deregulation- in particular regard to U.S. Federal Reserve rate policy and The Securities Exchange Commission's financial deregulation policies in the mid 1990's - for another distinguished professor of mine, Dr. David Woodruff- and then it all clicked!
The global economy was out of whack and in disarray. I knew then that the financial services sector was way more advanced an out of control than anyone without the training had anticipated. It was that awesome. While creating money out of thin air was bad enough- abusing the money multiplier theory, by loose lending policies with adjustable rates (e.g., housing market adjustable rates)- and the expansion of sophisticated financial products that weren't ever attached to the products of services that financial peddlers promoted them as. In addition to the loss of structural employment, due to advanced technologies making the worker obsolete and a shift in production to Asia and to some extent Latin America, all of this signified that North American and Western-European economies were on non-productive, welfare spend to consumption foundations that were bound to collapse.
My eyes were opened, so to speak. I never saw the economy or the world the same way I had before that epiphany, ever again. I went on every rooftop, to every kitten and Rastafarian and every website that dared to broach the topic about the state of the economy, proclaiming; "repent, for the end is near!"
So too were other, more notable and respected voices asking for structural economic reform in the domestic and global economy, for example, Nobel Laureates Paul Krugman and Joseph Stiglitz as well as Dr. Nouriel Roubini, a.k.a "Dr. Doom", for his incessant ranting on the collapse that nobody saw coming.
Nobody listened. Nobody wanted to listen. Persons were labelled as out of the loop, trouble makers and/or smart lipped, naysayers that always fussed allot about nothing. It was all bad news, you see?
In addition, the money created during the boom was lucrative- even after the crisis, to hear of Investment Bank CEO's spending 15K on a wall sconces and 10k on waste paper basket's, a piece, to adorn their multi-million dollar offices, is enough to make you think of the type of money that bought influence and the thinking behind the persons who were spending that money.
I admit one thing: I didn't see the crisis' contagion being so severe. The subsequent ripple effect around the globe in non-financial services sectors, yes. But, the ironic circumstance was having the leader of free-market capitalism, The United States of America, having their credit markets frozen due to the fear of risk of exposure to complex financial products, is something no one could have predicted- who would have thought it could happen?
Another thing was that not only were Investment Banks in North America and Europe using the same financial products, but they were also globalising them- e.g., the sale and re-sale of credit default swaps and derivatives from North America to Russia, from Russia to Spain, etc.
More importantly, as the crisis got bigger, credit dried up because no one- post Lehman Brother's collapse- was willing to risk exposure to persons and institutions that were involved in risky trading. Then market went into a panic- exacerbated by the U.S. political cycle- and wealthy consumers in North America and Western Europe, started spending less because they held back consumption and the home equity market began to collapse (good move Dr. Hopkin), coupled with larger losses in employment, which caused manufacturing in Asia and Latin America to decline, causing more job losses in the other respective regions.
In light of all of this, the good news is that this certainly is a time for planning and for innovative, strategic thinking for new and existing businesses as the rebound happens. The morning after, is always the best and brightest time for a fresh, new start. Busts are followed by booms spurred by innovation, imagination and creativity. While money is still hard to come by, thinking about what you can do when things get better, isn't.
However, while some would sell you a pipe dream on the idea that a recession does not have to mean a recession for you, reality states that the odds that the recession would not be for you is very slim.
Moving forward, after we have made note that some aren't prepared to listen to persons who have a penchant for being right too soon, I still would encourage persons to consider all factors on the table, because lives are depending on it. Lives have been lost already, and in my humble submission, lost unnecessarily and neglectfully so.
When we speak in terms of The Caribbean with lobbying for a risk sharing mechanism for foreign reserves in order to smooth government revenue in the event a crisis happens again, it's serious. When we speak of a plan to contain and fight inflation, based on U.S. dollar interest rate movements and the impact it has on oil and other minerals, it's serious. When we speak of flexible, coordinated and responsive Central Bank policy throughout the region, it's serious.
In terms of The Bahamas, when we speak of tax reform as a way to create sustainable, supplemental industries that would make The Bahamas less dependent on American consumers that are themselves dependent on a falsely inflated economy, in addition to tax and other reforms that fortifies the middle class, gives support to small and medium sized businesses while strengthening employment, it's serious.
So, here we have it again, people- of even a small voice like this humble author- are speaking for identifying reform and change. Will the people who have the power to do something act in a meaningful way?
I pray to God that they consider even the most marginal scenarios and set personalities aside, for the common good.
I would like to work with the first assertion and state that, yes; persons did see the crisis coming. The question to be asked rather than why didn't anyone see it coming; is why did folks not listen to the people who had something to say on the matter?
I can remember about four years back, sitting in a discussion seminar with my very distinguished professor at the time, Dr. Jonathan Hopkin. We were discussing the global economy and how he was in the process of selling his house, after we had reviewed literature two days in advance on economic and welfare regulation. During that same period, I was reviewing Central Bank policy in conjunction with financial deregulation- in particular regard to U.S. Federal Reserve rate policy and The Securities Exchange Commission's financial deregulation policies in the mid 1990's - for another distinguished professor of mine, Dr. David Woodruff- and then it all clicked!
The global economy was out of whack and in disarray. I knew then that the financial services sector was way more advanced an out of control than anyone without the training had anticipated. It was that awesome. While creating money out of thin air was bad enough- abusing the money multiplier theory, by loose lending policies with adjustable rates (e.g., housing market adjustable rates)- and the expansion of sophisticated financial products that weren't ever attached to the products of services that financial peddlers promoted them as. In addition to the loss of structural employment, due to advanced technologies making the worker obsolete and a shift in production to Asia and to some extent Latin America, all of this signified that North American and Western-European economies were on non-productive, welfare spend to consumption foundations that were bound to collapse.
My eyes were opened, so to speak. I never saw the economy or the world the same way I had before that epiphany, ever again. I went on every rooftop, to every kitten and Rastafarian and every website that dared to broach the topic about the state of the economy, proclaiming; "repent, for the end is near!"
So too were other, more notable and respected voices asking for structural economic reform in the domestic and global economy, for example, Nobel Laureates Paul Krugman and Joseph Stiglitz as well as Dr. Nouriel Roubini, a.k.a "Dr. Doom", for his incessant ranting on the collapse that nobody saw coming.
Nobody listened. Nobody wanted to listen. Persons were labelled as out of the loop, trouble makers and/or smart lipped, naysayers that always fussed allot about nothing. It was all bad news, you see?
In addition, the money created during the boom was lucrative- even after the crisis, to hear of Investment Bank CEO's spending 15K on a wall sconces and 10k on waste paper basket's, a piece, to adorn their multi-million dollar offices, is enough to make you think of the type of money that bought influence and the thinking behind the persons who were spending that money.
I admit one thing: I didn't see the crisis' contagion being so severe. The subsequent ripple effect around the globe in non-financial services sectors, yes. But, the ironic circumstance was having the leader of free-market capitalism, The United States of America, having their credit markets frozen due to the fear of risk of exposure to complex financial products, is something no one could have predicted- who would have thought it could happen?
Another thing was that not only were Investment Banks in North America and Europe using the same financial products, but they were also globalising them- e.g., the sale and re-sale of credit default swaps and derivatives from North America to Russia, from Russia to Spain, etc.
More importantly, as the crisis got bigger, credit dried up because no one- post Lehman Brother's collapse- was willing to risk exposure to persons and institutions that were involved in risky trading. Then market went into a panic- exacerbated by the U.S. political cycle- and wealthy consumers in North America and Western Europe, started spending less because they held back consumption and the home equity market began to collapse (good move Dr. Hopkin), coupled with larger losses in employment, which caused manufacturing in Asia and Latin America to decline, causing more job losses in the other respective regions.
In light of all of this, the good news is that this certainly is a time for planning and for innovative, strategic thinking for new and existing businesses as the rebound happens. The morning after, is always the best and brightest time for a fresh, new start. Busts are followed by booms spurred by innovation, imagination and creativity. While money is still hard to come by, thinking about what you can do when things get better, isn't.
However, while some would sell you a pipe dream on the idea that a recession does not have to mean a recession for you, reality states that the odds that the recession would not be for you is very slim.
Moving forward, after we have made note that some aren't prepared to listen to persons who have a penchant for being right too soon, I still would encourage persons to consider all factors on the table, because lives are depending on it. Lives have been lost already, and in my humble submission, lost unnecessarily and neglectfully so.
When we speak in terms of The Caribbean with lobbying for a risk sharing mechanism for foreign reserves in order to smooth government revenue in the event a crisis happens again, it's serious. When we speak of a plan to contain and fight inflation, based on U.S. dollar interest rate movements and the impact it has on oil and other minerals, it's serious. When we speak of flexible, coordinated and responsive Central Bank policy throughout the region, it's serious.
In terms of The Bahamas, when we speak of tax reform as a way to create sustainable, supplemental industries that would make The Bahamas less dependent on American consumers that are themselves dependent on a falsely inflated economy, in addition to tax and other reforms that fortifies the middle class, gives support to small and medium sized businesses while strengthening employment, it's serious.
So, here we have it again, people- of even a small voice like this humble author- are speaking for identifying reform and change. Will the people who have the power to do something act in a meaningful way?
I pray to God that they consider even the most marginal scenarios and set personalities aside, for the common good.
Thursday, May 6, 2010
British elections are on...
Almost all polls expect the Tories to win the current British general elections. They lead almost every poll by 7 to 10 percent. Most news outlets support them and only one, out of the 20 odd newspaper outlets, support Labour- with The Lib-Dems garnering support with at least three major newspapers.
Does not look good for Gordon Brown, British PM and leader of the Labour Party.
The Labour Party had a good run.... but, all things must come to an end.
Does not look good for Gordon Brown, British PM and leader of the Labour Party.
The Labour Party had a good run.... but, all things must come to an end.
Subscribe to:
Posts (Atom)
