Dynamite Economy 3.3 What has Happened

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
www.cts-ideas.com tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
Dynamite Economy

Sep 17, 2008, within the last 50 hours, two out of four top investment banks AND one of world largest insurers collapsed. This is not the beginning, neither do we see a pause in sight. It is just a moment in a long sequence, a rapid sequence, a rapid sequence without a pause, a rapid sequence of Dynamites detonating, spare no country, spare no industry, spare no leaders, differentiate not poor or rich man, hurting every social fabric.

Within the last 100 days or so, fifth ranking investment banks together with two largest mortgage companies fallen. Oil prices hit the predicted mark of $120 on May 5, 2008, struggles for survival started to be felt around the world, strikes of transport workers, airlines cut operations are some indicators.

Even with such time window for rethinking, elaborate deliberation, free from official position, the former Federal Chairman, Allan Greenspan, both US Presidential candidates, only state what is already obvious to all – greatest disaster in 100 years, worse than The Great Depression, etc, without analysis, never mind about causes, impacts, solutions. The criterions for rescue considerations, were poorly uttered …..

From the following reports, we see that economists, bankers without basic understanding of market, economy, made wrong statement, almost all of the time, even late into events.

2007 March 14, “Subprime alone won't sink Wall Street bankers” “SUBPRIME CRASH: It may not be fatal, but it can be painful” USA Today, Lehman Bros, told investors during its quarterly earnings call that its exposure to such loans is minimal. That came a day after Goldman Sachs reported strong quarterly results despite any troubles in its subprime mortgage business.

2007 May 17, “Bernanke Believes Housing Mess Contained” Forbes reported.

2007 July 18, “Same Old Ben with a Dash of Subprime” Forbes reported Ben Bernanke concern subprime

What has becomes obvious are:
1. Three out of top five investment bankers already failed.
2. Immense sum of well governed sovereign funds that equivalent to the labor product of one full year of labor by 11 million Australian work force, or the highly skill to sell double the number of 737 jets since 1968, is going to poured into the market, without adding one jobs, without producing any goods and services.
3. Before this, smaller token of such injection, already escalated commodities prices to a level that pull the carpet under all business survival – Oil prices exceeded $120 that whole world felt physical choked.