Yawn....
What a boring topic to begin with. I apologize if it is not approppriate to start discussing on this topic.
However, it is a topic that caught the attention of almost everyone in the globe right now. Take a cab and I'm sure that the driver will not bother to explain to you on what will happen to the world in the future. Strings of job losses, business failures, rising level of crime and maybe suicide rate, rising foreclosures, etc. Those are scary pictures that is easy to be associated with this kind of period.
So, I can't neglect its importance, even though I'm not an economist or someone who is already successful and proven that all of you may have known.
The problems affecting US is already happening and it has begun long time ago. Of course there are various opinions of its real cause and the exact moment it started, but, it already showing its true picture to several organization as big as Fannie Mae, Freddie Mac, Bear Stearns, Washington Mutual, AIG and Lehman Brothers, etc., in the US, and not to mention several other big names in Europe, Japan, Britain etc, and the tendency for more to come is still exist.
It is trillion US dollar worth of problems acting like cancer.
Beginning with the housing bubble, leading to the creation of complicated financial instruments, and leading to the problems related to subprime mortgage meltdown, and then the exposire on collateralized debt obligations (CDOs) and credit-default swaps (CDS) and no one can surely tell on what more to come.
As the financial institutions are facing increasing write-downs, which erodes their capital and damaging its balance sheet, so as confidence to the systems. Mainly in US, even banks are not willing to lend to each other (even after Central Banks cutting of rates to boost liquidity and consistent cash injections) amidst the fear of counterparty risks. Then, how can they lend money to the public, to the business, and functioning as the engine of growth as it supposed to be.
When US government chosen to let Lehman Brothers (one of the oldest and the largest Investment Bank) to fail (resulting in them filing for Bankruptcy Protection or Chapter 11), the flight for safety and rush for exits was clearly seen around the globe; and that point, the financial world is witnessing the real beginning of a major catastrophe.
Wall Street, led other bourses around the globe such as FTSE, Nikkei, Hang Seng and DAX in showing to the future generations about how the "bear" looks like. Trading halt in several bourses such as Russia, Bovespa (Brazil) and Indonesia are to the extreme level.
Efforts by major government to arrest the decline as the market confidence is nowhere to be seen, and it is not yet clear even after G7 and G20.
Almost everyone in the market is looking at the past crisis for comparison; Black Monday (October 1987 ) up to the Great Depression 1929.
...Its really tiring...I can't continue..
So, the world is in crisis. But....
No one can tell what is going to happen next, how worst it will be and how long it will take.
At this juncture, positive mind is the most valuable assets a human being should have. Negative thoughts will lead to panics. Panics will lead towards doing things that you may regret later on.
And regret will not help anyone.
No matter what the problems are, no matter how severe it will be, the thing that matters most to me is that we need to avoid doing things that will affect ourselves in the long-run; and we need to be looking for opportunities as there are plenty of them during this kind of period.
So, from now onwards, lets think and act on the positive actions that we can take to ensure that we will emerge as winners.
"If it does not kills u, it will make you stronger"
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