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The Global Economy's 'Lame Duck' By Pablo Ouziel
Editor’s Note: The American sub-prime financial scandal continues to reverberate through U.S. equity markets sending after-shocks and fear through economies from Europe to Asia.
In this guest essay, sociologist Pablo Ouziel examines the prospects that abuses in the U.S. economy could spark a worldwide recession:
In regards to our “global economy,” one is better off reading Dostoevsky’s The Gambler and saying to himself, “at the present moment I must repair to the roulette-table,” than listening to George Bush deluding himself about the fact that “while there is some uncertainty, the financial markets are strong and solid.”
The truth is, our global markets have become a “lame duck” and all we can do is wait for the next disaster to shake the corrupt foundation on which things have been run.
As Hugues Rialan, managing director in charge of discretionary asset management at Robeco France, puts it, "if they [financial institutions] had a much more transparent communication, we would not have all the bombshells, or rumors of bombshells, that we're having today, with all the negative implications for the market."
The fact remains that people are reluctant to utter the word depression, and therefore all we are left with are the words of all those experts who created the mess in the first place.
Just before ending 2007, York professor Peter Spencer, chief economist for the ITEM Club, warned us; “I don't think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park."
What has unraveled before our eyes since then, is a grim picture which threatens the very way in which we think of our “wonderful democratic societies” and their “solid financial structures.”
We started 2008 with a series of announcements which should have shaken even the most faithful of believers in the goodness of our political and financial institutions.
We recovered from our New Year celebrations with legendary Wall Street guru and chief investment strategist of Pequot Capital Management, Byron Wien, telling us he expected oil to move between $80 and $115 a barrel, corn to rise to $6 a bushel, and gold to reach $1,000 an ounce.
By Jan. 7, David Rosenberg, Merrill Lynch’s chief North American economist, was informing us that “according to our analysis, this [recession] isn't even a forecast any more but is a present-day reality."
Then the bad news kept rolling in, Goldman Sachs predicted that Japan was in danger of following the U.S. into recession later in 2008, and The Bank of Japan announced that annual growth in bank loans was the slowest in nearly two years.
Rolls Royce followed, informing us that 2,300 jobs would be cut as part of a cost-reduction program.
Job Creation Crisis
By Jan. 14, recruitment companies Michael Page and Hays were reporting hiring freezes in the City of London, and John Philpott, economist at the Chartered Institute of Personnel and Development, was saying; "We expect this year to be the worst for job creation in a decade.”
.
.
.
In this guest essay, sociologist Pablo Ouziel examines the prospects that abuses in the U.S. economy could spark a worldwide recession:
In regards to our “global economy,” one is better off reading Dostoevsky’s The Gambler and saying to himself, “at the present moment I must repair to the roulette-table,” than listening to George Bush deluding himself about the fact that “while there is some uncertainty, the financial markets are strong and solid.”
The truth is, our global markets have become a “lame duck” and all we can do is wait for the next disaster to shake the corrupt foundation on which things have been run.
As Hugues Rialan, managing director in charge of discretionary asset management at Robeco France, puts it, "if they [financial institutions] had a much more transparent communication, we would not have all the bombshells, or rumors of bombshells, that we're having today, with all the negative implications for the market."
The fact remains that people are reluctant to utter the word depression, and therefore all we are left with are the words of all those experts who created the mess in the first place.
Just before ending 2007, York professor Peter Spencer, chief economist for the ITEM Club, warned us; “I don't think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park."
What has unraveled before our eyes since then, is a grim picture which threatens the very way in which we think of our “wonderful democratic societies” and their “solid financial structures.”
We started 2008 with a series of announcements which should have shaken even the most faithful of believers in the goodness of our political and financial institutions.
We recovered from our New Year celebrations with legendary Wall Street guru and chief investment strategist of Pequot Capital Management, Byron Wien, telling us he expected oil to move between $80 and $115 a barrel, corn to rise to $6 a bushel, and gold to reach $1,000 an ounce.
By Jan. 7, David Rosenberg, Merrill Lynch’s chief North American economist, was informing us that “according to our analysis, this [recession] isn't even a forecast any more but is a present-day reality."
Then the bad news kept rolling in, Goldman Sachs predicted that Japan was in danger of following the U.S. into recession later in 2008, and The Bank of Japan announced that annual growth in bank loans was the slowest in nearly two years.
Rolls Royce followed, informing us that 2,300 jobs would be cut as part of a cost-reduction program.
Job Creation Crisis
By Jan. 14, recruitment companies Michael Page and Hays were reporting hiring freezes in the City of London, and John Philpott, economist at the Chartered Institute of Personnel and Development, was saying; "We expect this year to be the worst for job creation in a decade.”
.
.
.