When you consider all that’s been happening and put it on a short timeline, it’s amazing that we’re still seeing so much coordinated effort internationally. This is great. No one anywhere wants global markets in chaos. It’s a good sign, in a way, that there is so much financial cooperation (at least that public knowledge is privy to).
But this last week has seen a couple of new developments: namely, the fact that the crisis is showing signs of having hit both China and the Gulf region. Will this make a difference? You bet it will. But I’m not sure exactly what difference yet.
It has me wondering whether the financial crisis could lead to greater political crises. Sure, in theory, it could. The food price problems of the summer started on that route. What could it be this time? I’ve seen one article in a local newspaper raise the question as to why the bankers responsible for this mess aren’t being charged as criminals.
It’s a fact that the US banks basically created their own private “market” for the exchange of off-balance-sheet entities in order to gain more profits.* Was this illegal? I am sure it is in someone’s books. It’s certainly devious, non-transparent, and basically, sort of, like lying.
As the crisis unfolds and hopefully cools down, we will see more and more of this kind of analysis, I imagine. Expect books rehashing the past two years on the shelves of Borders and Chapters in droves.
What do you think? How bad can this get? Do you agree with Nouriel Roubini? He certainly has no personal motive for screaming that the sky is falling.
*You can read more about this in David Smick’s The World Is Curved (2008).
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