Cleanse the sytem
The current financial in US is of historic proportion. The last such dip in market confidence, index, creditability, credit availability was way back in 1934. So might its be its once in your life that you will come across such a financial crisis. Also, this is not localized to just one country - the disadvantages of globalization, similar cascading effects of both development and crisis.
Without getting into how dumb were both the lenders and borrowers when they were sub-priming to glory or how dumb were investor bankers who collateralized those bad mortgages or how dumb were investors who bought those CDOs lets think of whats the solution. Actually there is no solution and it is evident with the market continuing to crash even after the bailout plan. The bailout plan of 700 billion not working shows that there is something fundamentally wrong. We should let the market correct itself; its similar to vomiting - a defense mechanism of the system to eject the bad content and cleanse itself. The process will help pick out the bad apples (such as AIG executives who spent a 400 thousand on a retreat after they were bailed out)
The current presidential is one of the keys to solving of this problem. I am not sure if either candidates can do anything different than whats already being done to save the market. But a change in the regime (Democrats winning it) might bring in the required freshness, and the confidence might go up at Wall St.
Now moving to our worries with Indian market. Our fundamentals are stilling strong but what is scary is we are moving away from our conservative nature of saving! The very reason Indian companies have their processes streamlined, their expenses kept to minimum and Indian managers being preferred over other managers is because of our conservative nature. But if we become too liberal with our liberal market and try and take capitalism to its next we will surely end up where many of the developed nations currently are! So dear Indians please tighten your purse strings and go back to being conservative.
Without getting into how dumb were both the lenders and borrowers when they were sub-priming to glory or how dumb were investor bankers who collateralized those bad mortgages or how dumb were investors who bought those CDOs lets think of whats the solution. Actually there is no solution and it is evident with the market continuing to crash even after the bailout plan. The bailout plan of 700 billion not working shows that there is something fundamentally wrong. We should let the market correct itself; its similar to vomiting - a defense mechanism of the system to eject the bad content and cleanse itself. The process will help pick out the bad apples (such as AIG executives who spent a 400 thousand on a retreat after they were bailed out)
The current presidential is one of the keys to solving of this problem. I am not sure if either candidates can do anything different than whats already being done to save the market. But a change in the regime (Democrats winning it) might bring in the required freshness, and the confidence might go up at Wall St.
Now moving to our worries with Indian market. Our fundamentals are stilling strong but what is scary is we are moving away from our conservative nature of saving! The very reason Indian companies have their processes streamlined, their expenses kept to minimum and Indian managers being preferred over other managers is because of our conservative nature. But if we become too liberal with our liberal market and try and take capitalism to its next we will surely end up where many of the developed nations currently are! So dear Indians please tighten your purse strings and go back to being conservative.
posted by Siva at 6:28 PM
0 Comments:
Post a Comment
<< Home