---Ancient Chinese curse
Queue a history class in Greater Tomorrow Secondary School, Benin City, Nigeria, date 29 September 2108. The teacher is discussing with the students about the factors that led to the global economic crash of the early 21st century. One word keeps cropping up in his monologue, greed.
A few hours ago the US House of Reps did what this blogger considers to be the wise thing and refused to pass a bill supporting a $700 billion get-out-of-jail card for the financial institutions which are facing ruin. Within a few minutes of the results of that vote, Wall Street shares tumbled almost 700 points, which would be the biggest one day loss ever if that happens, a stock market crash if I ever saw one.
Earlier in the day the British FTSE took a severe battering as Bradford & Bingley, one of the UK's largest mortgage lenders was nationalised by the government. The FTSE in total lost a value almost of the equivalent of £64 billion in one day!
I don't have much more to say at the moment as this story is still developing, but it is all too easy to fall for the 'cheap' (and arrogant) blackmail posed by some bankers in saying that if the markets are allowed to crash that we would all suffer. If that is the case, then so be it. It was convenient for them to party when the cash was flowing and life was good. Back then they demanded governments not interfere with them but on the contrary let 'market forces' determine the course of the economy. Now that things are rough they are suddenly demanding that government steps in to bail them out. Rubbish!
Personally I support the House of Reps decision for the simplest of reasons. The $700 billion get out of jail card would have just been a stay of execution. If UK shares could loose £64 billion (approximately $128 billion) in one day, then how far can a 'mere' $700 billion really go? A depression is around the corner, and my gut feeling is that there is scarcely anything that can be done about it.
Recommended reading: Lessons for Nigeria