Every man and his dog would have known by now that we are living in challenging times.
While many jaws would have dropped last month when a certain country put up a spectacular show (which probably cost its taxpayers billions of dollars), jaws would have dropped back onto the floor on the news of the sick children among its citizenry.
The strong political message sent to the world last month – which prompted our very respected statesman-cum-mentor to proclaim that the country was an “old power” being awakened – has now been replaced by a familiar message that sent many scampering to their grocery shelves or fridges.
That’s one front we have to contend with. It’s serious business on the other front.
Whistle-blowers might have been drowned out by noises of tons of optimists more than a year back when the world first heard about these words – “sub”, “mortgages” and “prime”. Not many people would have been too interested about it since this had nothing to do with their insurance or investment-linked policies. As this little monster slowly engulfed the financial system in a country far, far away, there was this sense of “it won’t happen to us and won’t affect us” – very much like the war in
Until last week, the words “Lehman Brothers” might have meant some uber footballer major cash-rich English football club signed. The more astute ones would dismiss it as another Bear Stearns thingy (the more British among them would think it’s another “Northern Rock”).
The interesting thing in this digital day and age is how Internet search engines were – a week later – probably straining at the high traffic as frantic fingers typed in “Lehman Brothers”, “AIG” and “financial meltdown”. Within a week, the usually quiet office premises of one major insurance company here was greeted with a long queue of people who might have been hit hard by the torrent of news.
Notwithstanding how certain things have to be tightly policed here, people queued up in droves (and in panic) to “cut their losses”. It isn’t a cheap deal that they have queued up for. They were forgoing considerable amounts of the money they would have been entitled to if they didn’t “cut their losses”.
At the same time, this insurance company might have spent a sizable amount of their budget (probably shafted under the category “unexpected expenses”) on advertising. They were merely appealing for calm and an “insurance company run” was somewhat averted.
On the other end of the spectrum we have a group of people whose hearts sank the same rate as the markets plummeted. “Kena burnt” was a common refrain now because some big boys got scared and moved whatever they owned (i.e., assets) somewhere else, leaving the rest stranded.
Meanwhile, in the land of the free, we see a nervous group of people trying to put as many of their fingers as possible to the dike (which is threatening to burst any second). They actually have a solution, but it is a very costly one. While the amount bandied about is already astronomical, there are some bright sparks who believed it wouldn’t be enough to solve the problem. But their voices are small compared to the cacophony of voices emanating from some Hill somewhere. Ultimately, these hundreds of billions of dollars would have to be borne by the taxpayers of this country (land of the free). There is a high chance that they won’t be paying for it in the near future, but somewhere down the line, they (or their children) would have to foot the bill.
Now, assuming that this debate isn’t settled by this week (like what these nervous people intended), fragile things we call “the stock markets of the world” will continue to give a group of people heart-attacks.
Oh adding to all of these, there are some countries who are basically saying, “Hey Sam, you started this mess. You pay someone to clean it up. It’s not our problem.”
This is actually fine if the world’s financial markets are independent of each other. Unfortunately, with the amount of “incestuous” relationships going around during past two years of “boom time”, no one’s really that sure that Major Financial Institution in Country A is NOT linked to Major Financial Institution in Country B.
Is it a coincidence that it has been quiet so far in the two other major continents?
No one knows what is really going on other financial institutions of this world. If anyone of them starts to sneeze or go “down under” while the debate rages on and people just continue to gawk, we may just be staring at the dreaded “D” word in its face (we’re just a few “seconds” shy of the “R” word actually).
And when the “D” monster strikes us, the humble sweet potato will become one of those new commodities we will trade in.