Firstly, geeks will notice that “Crysis” is an intentional misspelling of Crisis – it is a game, nay, an awesome game. And so is the Financial situation. It is epic. The world was plunged into a financial crisis in 2008 thanks to some Clowns at Wall Street. But the things that drove the crisis started way back in 2001-2003. And the things that motivated the changes in the 2001-2003 period was in turn motivated by things happening during the 1990’s.What a wonderful story, isn’t it? Our world economy is in the hands of Clowns who hardly know what they are doing. That is a brilliant idea! The more clowns, the more happy we will be.
It is difficult to summarize the drama that caused the current crisis. And I won’t do it any justice if I start explaining now. But for some clear-headed, well-balanced information, my top 2 references are:
So, why am I posting this now? This is old news, right? About 2 years old? The Wall Street said that it is complicated to explain what happened but that they won’t do it again. So, what is your problem, you may ask.
Well, here is the thing. Wall Street said one thing, but did something else for the last 10 years or so. They gambled the money of investors “blindly” without thinking or weighing the odds. They screwed up badly with trillions of dollars and started to admit fault when things where catastrophically critical. These investment banks played with the money and capital that they got from investors and other people like fools and sunk their own companies. Some of them are still alive thanks to some “magic” that the US federal reserve did.
So, you expect these companies to learn from their mistakes, right? Ha! You have been fooled. These companies have NOT changed there ways yet, and will won’t change as long as doing such “crap” can make them short-term profits of enormous proportions and as long as they have a “tremendous” lobbying power over the US government. These short-term profits allow the CEOs and employees of these “great” investment banks to walk away with “enormous” bonuses. Why should a trader whose job is to hook up investors with institutions needing investments be paid a gazillion dollars? Is it such a difficult job? Based on what incentive scheme or difficulty rating is he eligible for such preposterous amounts of money as income? These financial engineers make loads of cash for doing some “abracadabra” in their plush offices. But real engineers, who make a difference in this world by building bridges, infrastructure for cities, infrastructure for medical facilities, and building better communication tools (mobile phones/internet), better and safer transportation earn a meager amount compared to the 6 digit or 7 digit (that is a million by the way) paychecks these “financial engineers” make. Nevertheless, the US government tried to massage and gloss over the crisis. In fact, I too believed the media and thought that the crisis is over. It is so NOT over.
The US government is about $14 trillion in debt as of now. They have something called a debt ceiling. If they hit that, which they will on August 2 2011 if they do not make a drastic budget cut/financial overhaul, then the US government has to default on some thing – either social security or defense budget or medicare or something else. And if they do that, then they essentially either don’t pay any of their senior citizens’ pension, or they don’t fund their military and defense operations or so on. See this New York Times article for some enlightenment on current US financial status.
So what now? How am I or you concerned with this. Well, apparently it was someone’s “brilliant” idea to make the economies of all the countries interlinked. Someone thought that that would be swell, and that we can do something. Yeah right. Thanks to this little convenience, if the US economy goes down (read: crashes, rock bottom, worst case scenario) then who knows what happens to the rest of the world! We suffered a reasonably major blow in 2008-2009. Now, that the dirt has settled, it seems there is another load of garbage waiting to pile on us.
So, the bottom line is: Some apparently great companies did some “abracadabra” right from 1990s and are still doing some “abracadabra” now. They screwed up and lost the money, just like how I would do if I went to a Las Vegas Casino. They are trying to say to us that some complicated “magic” happened and that it is under control now. But, just like how old habits die hard, this “gambling” addiction of the Wall Street banks is not going anywhere.
If we are not vigilant and if we DO NOT raise our voices and concerns, these banks will continue to use their lobbying power and screw us again. We don’t want a Wall Street Democracy. Not in US, not in India, not in any place on this planet. We want our money and economic system to be stable and in the hands of responsible people.
Let us bring some sense into the world economy.
DISCLAIMER: This is my opinion and I have the right to express it under freedom of speech and human rights provisions. The purpose of this post is to enlighten people about the current world financial status, and in the process I am voicing my concern about the instability of the world economy. All images are from Wikimedia.