There’s one thing that everyone agrees on in the global financial crisis – fear is now ruling the markets.
After Monday’s massive shares sell-off, markets are still volatile today, and banks are still reluctant to lend money to each other. But the cause of the problem is pretty much the only thing anyone agrees on. How to go about solving it is a much trickier proposition.
During the Great Depression Franklin Roosevelt’s famous quote was “we have nothing to fear but fear itself”. Is that still the case? And if it is, how do we go about restoring confidence?
The $700 billion rescue plan for America’s banks was supposed to bring back confidence to the banks, get them lending to each other again, and stop the fear that leads to stock markets plunging. But it hasn’t worked. So what needs to happen now?
Should all countries’ governments guarantee bank savings as has happened in Ireland and Greece to stop people withdrawing their money? What about the banks themselves? The British government is reportedly considering buying stakes in British banks to inject some much needed funds. Is that the right approach?
What about in your own life – when you’ve been suffered a lack of confidence, how have you clawed it back? Has it been by people backing you up, standing by you in the face of difficulty? How much do the basic principles of psychology and human emotion apply to what’s happening on the markets?
And today we also want your stories – tell us how you’re being affected by the global economic crisis. Is your business being affected? Have you lost money on the share market? And what are you planning to do over the next few months, or even years to stop the fallout? We’ve heard from plenty of Americans who’ve already been affected by home foreclosures and job losses. Today let’s hear from other parts of the world too.
RSS feed
BBC World Have Your Say 
I have to say that there is not much too restore confidence at this time…But to let the markets, CLEAN themselves out of all of the “POISON APPLES” sorry for the term….
For the plan of action:
1)Install a global action of duty on the regulations.
2)Get rid off cronies that would do harm to the markets.
3)Punish the “criminals” who benefit from the misconduct of the markets.
4)Put money into the economy.
I’ll make the comment (somewhat cynically) that it’s not a bad time to be a student. I don’t have nearly enough income to be in any way involved in the stock market (except for the fantasy stock exchange on Facebook – and that doesn’t count). My tuition is paid for, I’ve still got a few months until I need to worry about a full time job, so as far as the economic crisis goes, I’m protected by the university bubble. And right now, it’s kind of nice.
A commitment by the world community to work together in the search for a lasting solution might greatly improve confidence–Europe seems to be in danger of succumbing to a siege mentality among the individual nations. Perhaps also the volatility of the markets will correct itself as governments do become involved, even if in a haphazard manner…
We restore confidence by TAXING THE RICH. The western world (the rich industrialized nations) have the highest concentration of wealthy people in the history of human civilization. Bill Gates’ wealth now exceeds the economic output of all but the 18 wealthiest nations.
This enormous wealth MUST be re-distributed. I am appalled and shocked that there is little to no discussino of this. Bill Gates (by example) has become rich NOT because of his “genius”. He came from welath and was enormously lucky to be in the right place at the right time with the right mix of absolute ruthlessness and greed. He stole ideas and used people to create a monopoly. Although ts hard to deny the utility of Microsoft it is equally senseless to applaud the accumulation of wealth that his monopoly has provided the lucky few.
Similarly paying actors and actresses 20 million dollars a film as if they are “sunglular” talents remains astounding.
None of the above even inlcudes the thousands of day traders and stock brokers and real estate moguls who have made millions of gambling on the backs of the rest of us.
The world (accelerated from the Thatcher Reagan years) has been turned upside down with greed trumping manufacturing and debt trumping savings, with the attendent dissolutino of the family and the community in favor of divorce and the shopping mall.
We must re-distribute wealth. We are all brothers adn we have all shared in wealth creation. Let the wealthy start re-paying their debt to society.
hello everyone,
well restoring confidence is far away.
The markets had an accident and now they are being operated on to reduce the effects produced by the wounds.After reducing the blood clot the doctors(Economist) have to think about recovery.Then after months of recovery they might think about restoring the similar confidence.
So its better to think about recovery first .Then then if they can bring back the golden days we can think about restoring the same confidence.But i am quite sure restoring confidence will not be easy and people will now have to think 10times before investing.
When your security guard fails to protect your belongings when burglary occurs,it is difficult to trust him.
Thank you
Abhinav
First and foremost we need a President who can come on TV speaking in a clear and confident voice explain that the underpinnings of Capitalism and the economy is sound. Too bad President Bush is not that man….not even close. If he spoke the Stock Market would drop to levels not seen since the Great Depression.
Next everyone of the Wall Street “Masters of the Universe” who make hundreds of millions of dollars must be made to put their money into the stock market with all of the profit going to the American Taxpayer but the tax liability belonging to the Wall Street “Masters of the Universe”.
Money must pour into the Market to show confidence and that money must come from all who worked on Wall Street and made millions. It is time for them to belly up to the bar or forfeit their money entirely. They caused this crisis and it is their responsibility to fix it. We know who these people are and they must be held to account NOW but share NONE of any potential profit. That profit belongs to the American Taxpayer.
@Kelsie
We have the mechanism it is called the G-7 but Europe has no coordinated Central Bank or system. That needs to be developed.
I have never used a bank relying on Building Societies throughout my life. I saw the enormous profits banks made at the expense of their customers and did not want to be part of that.
I am disgusted that those who have caused this crisis are not called to account, instead are given multi-million pay offs.
If injecting tax payer’s cash into the system is supposed to solve it, what about those who will yet again profit? Will it be the taxpayer?
I am now tending to think let them sort it out, they started it. They way things are going we’ll end up nationalising Iceland!
The $700 billion rescue plan for America’s banks was supposed to bring back confidence to the banks, get them lending to each other again, and stop the fear that leads to stock markets plunging. But it hasn’t worked.
*GASP*
Lies!!! Bush said it would work!
Check your facts, or make up new ones 😉
According to the BBC News, the government’s response to their plan to use taxpayer’s money to bail out a flawed business model is to gag taxpayer’s.
Unfortunately for them, they won’t be able to gag voters at the General election.
Heres an idea, why don’t they act and operate in a manner which will EARN the confidence of investors and individuals? Heres another method to restore confidence which everyone is clammoring for but which seems to be conveniently ignored… it starts with “R“, ends with “egulation“. Or we can just continue to ignore that and just toss more money at the matter… Thats working…
I can only speak for the USA. The only way to restore confidence in the markets is to replace the Republicans and Democrats with Libertarians and Greens. Another way to restore confidence is to arrest and put on trial those responsible for the mess.
Your question is: “How do we restore confidence?”
The question should be: “How do THEY restore confidence?”
What amaze me about this whole situation is that nobody is held accountable for this mess. There were people in the stock markets and bankers that profited for the whole de-regulation of the financial system and provoked this mess. The governments -comprised of public servants- allowed this to happen. And they want a fairy-tale/miracle/whatever solution and that the rest of the people have confidence in them again. PLEASE!!!
The problem of this world is that very few people are held accountable of their actions. Moreover, very few people accept their mistakes and wrongdoings.
What we need now is an apology, a punishment, and insurance that it won´t happen again.
While people are correct that there should be regulation, especially of the American NYSE and other markets, you have to look at the other factors that are working against the $700Bn plan.
The main one is that the American economy as it stands right now is in the tank! Look at the job figures – that had nothing to do with the ‘bail-out’. It is a normal economic down-turn in the US, of course this isn’t helping.
The American economy needs a boost – not that you know it, eh? But people were looking at that 700 Bill as the thing to get things back to what it was – not what it was meant for. The 700 Bill is to free up credit and will be used that way – if you want confidence back – invest in US jobs, re-regulate the markets.
If you look at what Republicans are saying right now – they will freeze all fed spending – if you want the US economy to go into a Depression, that is the way to do it. And that will effect the rest of the world.
Just like with everything else in life, people want something and want it right now, like little children. Things take time, and it’s time people stop the instant gratification mentality.
How you’re being affected by the global economic crisis?
I think that the effect in my country will be visible in the next couple of months. For sure revenues from Mexicans in the U.S. will be less than other years and they will decrease over next year.
The dollar is up, so everything will cost more, since we import a lot. And let´s see what happen with the oil industry and the gas price.
Luckly I don´t have any debt. I plan to spend in the basics and save the rest for the storm that is comming.
Invest in real people. Not corporations, and not CEOs, but real people. The kind of people who work hard to put food in the belly, a roof over the head, and clothes on the back. The kind of people who struggle to pay the bills with two incomes. The kind of people who do not know if they can realise the American dreams of owning a home, sending their children to college, and retiring. Invest in them, with a real investment that will have real results. Free welfare for corporations will only fatten already fat wallets.
words: 96, characters: 523, posts today: 1st
Insure don’t purchase. charge the premium to fit the risk and penalties that encourage truth, like jail
time. institutions will sort out the trash quickly if the incentive are high.
Political B.S. is what got us here in the first place.
Word smith may make it sound good but it still stinks.
We in America are listening to one of the best medicine men that the rest of the world can afford.
@Roberto Carlos Alvarez-Galloso and Luz Ma-
You both have it right, in a manner of speaking. Throwing money at the problem is just a temporary measure, a Band-Aid, a tournequet. It must go much deeper – institutional investors must return to invest in the market, big players in financial markets, like Warren Buffet, have to make a public showing of putting their confidence back into the financial markets to lead the way for the rest of us small fry, with our measly 401k plans, 529 college plans, and IRAs. Buffet has done so, with a bit of spash, but I haven’t heard much else from others in a position to lead the way.
Moreover, money doesn’t just disappear – it changes hands. Those who raped and pillaged and plundered the financial houses, and reaped the rewards, should be held accountable, in both civil and criminal courts, for thier misdeeds. No matter that some may escape criminal penalties – at least in the USA, proving the same facts in a civil case requires a lesser evidentiary burden (viz., OJ Simpson’s acquittal of the criminal charges in 1995 did not prevent a $30 million civil verdict, with the jury finding him actually responsible for the murder of Ron Goldman). So – what goes a long way to restore confidence in any system is that those responsible be held to account for their misdeeds.
@ Steve –
To be sure, there are some that expected intant market correction, and all good things do take time. However, I believe there was at least some confidence that the bill would calm the waters, and it seems, in the short term, to have chuned them instead.
@ steve
I’m reminded of the Queen song “I Want It All” —
I want it all
I want it all
I want it all
And I want it now
Under the Giants Thumb.
Please don’t think that the populous of the world caused this theft of not only the money we spend but the world and the freedom had to live in it within a sane mind. Power mad individuals ruin and dominate the Earth.
Teach a being a world to say and think to exist . Then tell them how to live in it to obtain only what is allowed them to own. Perpetuate the crimes to keep citizens under thumb never having the resources of time, thought or to congregate and make provisions for change and you have what is the world today. Compound it with ignorance and self denial assuring that generation after generation they will be forever subjects of obedience and degenerates of the human species.
Give them a GOD that they will not see their selves, their own ability. Let them worship the government, loyal to the death unknowing the abuse of their governments cultivation, enslavement, the very formation and orchestration of their society. Give them religions and respect for their degradation. Play all the sadistic mind games of subordination. Continue to be the savage beast devouring the humanity that is produced. Feed them dreams of empty rewards while they are alive and teach them they will be rewarded after they die for their enduring sufferings. Give them unfathomable fears and create taboos so they will crave the ability to doubt themselves.
The markets, in fact businesses themselves, aren’t built on trust. They are built upon predictable risk for given potential margin of profit. As soon as sufficient money changes hands, a few more money houses go bust, and the markets drop a bit more, the game will once again be worth the candle.
g
How do we restore confidence? I think the media has a very big role to play in restoring confidence afterall it’s their report that sows the seeds of fear in the heart of the investors and traders alike. I am not saying that they should report what does not exist but it is possible to put a little positive spin on their business reports to boost confidence. Many people respond to what the read and see.
The best way to restore confidence is to continue going about one’s business, but with extra caution and frugality. If governments would tell the truth, that now more than ever is the time for austerity in all financial dealings, rather than advertising cosmetic boosts to a system that has failed, people would understand what must be done. The remedy is frugality and caution, and confidence might be restored if people can accept this.
On a psychological note: remember Captain McWhirr from Conrad’s “Typhoon”? His way of coping with and bringing everyone safely through the storm was to carry on doing the little things, to stick to the routine that people tend to abandon in a panic situation. Just keep doing, and do it austerely.
How do we restore confidence?
So is this a confidence game ,a con game?
What is the point of confidence, if there isn’t any basis for such a believe?hollow confidence won’t solve anything.Time to get real ,
trust has rightfully disappeared.
The whole enron economics, smoke and mirrors pyramid selling game has yet to play itself out .The Japanese had a banking disaster and have not recovered even after more than 15 years,so the worst is yet to come.
The Germans despite their labour law problems at least base their success on the “REAL” economy and are in a good position to bounce back quickly.
i believe that the markets need time to recover.it’s too early to say………………i am positive
So… this must be the New World Order we were hearing so much about.
The problem with these grandiose plans to shape the future is that the future doesn’t care about your plans, and any program to restructure the world’s economies will result in completely unforseen consequences. The best we can hope for is some international agreements to keep the worst of the sharks out of the pool while the rest of us try to make it to solid ground.
Personally, I’ve been treading water for about 3 years and it’s getting a little old.
What’s needed it to get rid of the emphasis on short term profit and replace it with a plan for long term growth. How to achieve this? Well, deregulation got us into this mess, so what’s the opposite to that? Oh yeah…regulation.
I have a relative who went to the United States as a teenager he slept on the floor of a single room shared by his mother father and brother ,within 8 years he was a millionaire,why because he could borrow money with little or no collateral to start various businesses and buy real estate.
The guy only bought his million dollar house in a gated community after he had earned the money ,not before. Right now he has money in the bank and has recently purchased a second home in california and some farmland.
Due to the financial crisis rags to riches stories will become less common. Somebody with an idea and the willingness to work hard will find it harder to succeed .
There’s a lot of gloating going on too.Mostly capitalism is snickered at by folks who think we are watching its death-knell.Well,nothing could be farther from the truth.Capitalism is merely shedding skin.It’s its moulting time.Afterwards it comes out stronger and better.
Tell the truth,on this globe there isnt a better system.So,much of the fear is unwarranted.Sure,money is being lost,but none in the west,I daresay,will come anywhere near the poverty in places such as Haiti or Darfur.So,my advice is better couched in German:halt das maul!Otherwise rendered as shut your gobs oh ye of little faith.Free-market aint dead;long live capitalism!
I am pretty sure the chances of restoring the economic confidence is about as good as the chances of ending a pregnancy. The child represents a global population that we can’t sustain. The indecent act was created by extending credit. How much confidence do you have that we will end the pregnancy by continuing the offensive act?
The first thing that needs to happen is the hypocrisy has to be removed from the markets. People who caused this mess need to be on the street with out jobs and homes. There can never be a business too big to fail. Last, if people didn’t understand the ramifications of their investment, then they must be allowed to learn the market way.
I think this crisis is affecting every where! look at a situation where a company makes an offer to provide a service and when the public accepts the proposed offer,by agreeing to pay and actually individuals paid for the said service – the service has never been provided.There has never been any communication about the same and in my view and perhaps opinion, its using this money to fight is way back.
I mean how would some company, come collect money from individual households and keeps you waiting without any communication?
Now the dollar rate has gone good but prices of food is still high.
The business of speculation by the bulls and the bears should never be forgotten for this purpose at the stock exchange.
There should be an action plan in place to combat or counter the current situation!
I think this is just a phase in Ameria’s history. It is my hope that things will get better in no time.
Mary from Nigeria(Naija).
After watching Richard Fuld’s (Lehman CEO) testimony I think that if Congress makes ALL those “Masters of the Universe” put all their hundreds of millions into the Stock Market and forfeited all profits but have to pay capital gains taxes confidence would be restored.
Personally I don’t care if Mr. Fuld and his ilk have to live in a cardboard box over a subway grate.
There is not one economic thing that we (individuals or governments) can do to restore confidence in our global markets, and I believe the actions of multiple governments validate this credence. What we have here is an epic play–“economic tradegy of a common world”–playing itself out on the international stage. Until we learn to take monetary issues in lighter strides and have a good laugh at this ‘once in generations’ episode, we will continue to be overwhelmed and uptight–and by definition, fearful. Let’s pork fun at how money has turned us upside-down, and then our perspectives will be realigned.
Americas bank debts are conservatively now twice the 700 billion and the figure wont stop there.
As the debt is riddled throughout both producers and consumers , this just cant help but bring it crashing down . Brown will have to raise the bail out but this doesnt in itself get the thing moving again .in any way like before .
This is the big one and out of this we,ll either see war or revolution
One more thing. AS I see the CEO’s getting chastised, I can’t help but to remember that it was the government that encouraged the misdeeds of the private financial and consumer sector. Entering a recession, our president told us to “spend our way out of it.” The system set up to result in wealth being pooled into 5% of the population? The gove3rnment sent us cash produced from thin air and told us not top pay off bills or save it, but to spend it on “big ticket items”. The legislators have been awful parents.
To answer the question~
I’m in the business of making teeth – crown and bridge, gold and porcelain, etc. – and although it’s true that people will always need teeth this is NOT a recession-proof trade.
There are times of the year when patterns of demand are predictable, like at the end of December when everyone wants to use their insurance while their deductibles have been paid. Didn’t happen last year.
Business normally picks up in September after dentists come back from vacation and students return to school. It ain’t happening.
Right now I’m not sweating my job, but I AM working on the side to pay for my gas and not one penny is going in the bank.
It’s catch 22/ Confidence works by everybody involved having as much information as possible to make a decision. Markets forces work by one side of the trade thinking they have better or more information than the other. Confidence can only return if information is freely available, but that destroys the potential for returns and so money will flee the market. But as banks no longer trust their own information they lack the confidence to enter the market.
How can confidence be restored? Learn the lessons of the past. Do not rely on the financial institutions to self-regulate. Require honest accounting from all. Reward honesty. If someone tells you that investing in stocks is not a gamble, laugh. When you gamble in Las Vegas, the best you can do is break even. A small gamble, if you stop gambling at the right time, will provide a small gain. A large gamble, a large gain if you get out of the game at the right time. Everyone else loses.
Canada
HI . I would be confidence in this global financial crisis, when I know how to spends my individual money properly, with blessed leader in my country which respects justices of his subject,geographical location of my country which had a natural giving resources from God , secury of my county and HOPE FOR GOD can all give me an assurance about this common-man crisis.
After WW2 Germany outlawed the politics that had threatened the world and destroyed the German nation, they outlawed Nazism, also known as Corporate State Fascism; and now it is time for the US and the world to outlaw Conservatism because of what it has done to the world economy.
Bring back the Brittan Wood system,Gold must be re-established as the only international currency among nations.Nations have to rewrite their social contracts with their citizens.Nationalizations of natural’s resources.World standardization of accounting by worldwide implementation of one accounting system (software),create one world body to standardize,regulate & audit accounting practices around the world.To eliminate any theory of private investment,any new technology,innovation,sciences or any other form of advancement for mankind must be initiate by government not private investors who are in direct conflict with public safety vs. returns of their investment like Hitler & his SS. Today’s tyrants are the dividend lovers of this world who are shortsighted on returns over social, collective & human concerns threw regulations not deregulations.Eliminated past inter-government treaties that strip away,limited governments to protect & benefit their citizens over share holders’ values.
God is great & funny I saw Socialization of Capitalism live on CNN last week ,
This New World Order & Its financial systems is a Joke
May God bless this New World Order
In only God I trust
Ex-Gatekeeper of the lost free world
Fear is the current replacement for confidence, and reflects both real dangers and loss of the sense of predictability, maybe even the having finally hit the bottom of our addiction to materialism and the delusion of happiness as a function of possession(s). Confidence is a byproduct of taking the right actions.
So first of all we have to understand that all change is loss and must be grieved. People have to do grief work and that means that we need leaders who will say to us, yes, we are in a deep mess here, and yes your affluence is about to wither. Acceptance is the first step and we need leadership in that regard. Here in the United Stupid of Addiction, McCain and Palin are NOT the ones for that.
Once we have gotten our heads around the facts of our new econ system (because it is here, now), then we need to take actions to conform with that reality.
First, is get out of the stock market if you can. It is NOT going to bounce back because this crisis is about the failure of greed, which WE ALL have willingly made the foundation of our system. Expecting it to rebound fast is insanity.
Second, and here’s leadership again, we need to re-establish ours, THE US) economic system on a new energy industry and a redefined health care industry. They will drive reshaping and refounding just about everything, but it will take time and the sort of political will existing in the Democrat party here now, not the Republicans.
Third, the rest of the world and especially the EU, needs to get organized so that the US cannot again screw things up for everyone else. After all, economics are manifestly developing a global system. In addition, the US has to learn some cultural lessons — above all that the Great Individual won’t cut it any more. Actually it never has, but myths die just about last in a faltering society. Out of control American cultural individualism prevents too many of us in a crisis to see that collaboration per se has energy we need to move forward.
What all powerful individual needs other people? And of course the current world financial crisis scares the devil out of folks here, and their all too human response, at least in the Republican Party, is to glom onto the past (clue: looks like John McCain and Sarah Palin), attack the truth and work harder at the old ways.
But the US is too caught in its own denial to do that alone. Time has come for the European experiment in collaboration to assert itself and say that the world needs global financial regulations and that they could be built on top of the EU.
A tall order, I know, but who else is there to do it?
Those ideas ought to keep us busy for a while….
Hi WHYSers,
I am not much of a financial anything, but it appears that this business of speculation in such a fractious world economy might be at the root of the problem. At what point does the speculating end and common sense kicks in? As I understand it, there is an especially wide variance (in its most basic, I mean) between capital and credit. Core values of honesty, trust and practicality would seem like a good place to start restoring confidence under such circumstances. Exactly how that is done? Well, I believe it was Robert Peston who said last week (?) that the media have to engage in responsible reporting on these sensitive issues, at this time. They must only give the facts as well as encourage solutions (advocacy journalism? my emphasis!) in order to stop the haemoragghing.
Ninety plus percent of home owners in America are still paying their mortgages on time. The problem is the Derivatives market which is like a totally unregulated insurance program. No rules/laws exist about how much reserve cash must be held to issue a policy and policies are traded like stock and bonds. 70 trilion dollars worth of derivatives were issued from banks that could not cover the losses. The housing market just triggered the losses. These complex investment schemes must be outlawed. They are the problem!
Harrison Hall – Portland Or – USA
I think that the only way to restore confidence is to continue with our work in our life, continue buying products and continue paying all our duties. To contribute with our Flow Money to the global economy.
We do not have to fear. We need to avoid run out of money in the banks. I think that the crisis is only induced to get down the share of stock to make the rich people richer buying lower shares. This crisis will be end when the US elections are finished. Everything it’s going to be all right.
I have all my savings in United States and I live in México. I have confidence in the United States and I think that nothing is going to happened who have to fall will fall but it is a natural cycle.
The irresponsible policies of government regulators AND large economic institutions was criminal:
Officials and landers acted against the interest of the people depending on their judgement, and no one stopped them. They must stand trial or else.. How can I ever trust a word they say???
To whom it may concern,
I believe that the solution is for people to stop fussing. Yes the situation is bad, but worrying about something you cannot change makes it worse. I don’t think that confidence can or will be restored until the economy is stabilized.
My advice for people is to start living within their means instead of outside them. Decide what are necessities, food, house, car, etc, and what are extravagances, new computer, new car, CDs, etc. Keep track of your expenses for a month; it is a big eye opener. Stop using credit cards completely. Use cash or check and be aware of how much money you have in your checking and savings. Before you make any big purchases make sure you have enough money first for the purchase, second enough money to keep you living comfortably for at least a year after subtracting the purchase price, and third ask yourself whether or not you need the item or not. In this market you need to consider every purchase, no matter how small, extremely carefully. People can’t afford impulse buys anymore.
I believe that the government may help the banks, but I do not believe that they can or will help everyday people who are struggling. It is the individuals responsibility to help themselves.
Thank You,
The American congress is behind all of this financial just look at the history of events before the great depression. Speculation caused a run on the banks and the rich bought all the failing banks for cheap. Consolidating wealth in the hands of the few. We are being stolen from by the people who caused this new trouble. Media is to blame as well! None of you will demand that the congress and the current administration get removed and prosocuted.
Hello there,
Where I live, in Seattle, USA, it’s really business as usual. Even though Washington Mutual, the bank that “failed” just the other day, was founded and based here, I really don’t see it effecting much of anything. The other major employers such as Boeing and Microsoft are not only making a profit, but are still looking for more people to fill jobs. Also, our home prices were never really effected either.
The price drop for my home was only about 5% and the local market has already recovered with homes selling for more than they did during the so called “bubble”. It’s a little disconcerting to hear the entire US portrayed as though it’s the next Great Depression, because it isn’t.
Even if some places are falling on hard times, and even that is dependent on what industry you’re talking about, the vast majority of people are doing as well as they ever have. Retailers such as Nordstrom (an upscale department store chain) are still seeing their profits grow and spending might be a little more conservative, but as we start ramping up into the Christmas shopping season, I think people will be more willing to part with their hard earned cash. All of the people I know are still going on vacations across the world, still buying new consumer goods such as TVs, laptops, iPods, etc, and still planning on doing all of the things that they have always done.
So when you ask “how is the ‘economic crisis effecting you'”, I would have to answer that it isn’t. Although CNN and Fox News like to make us think it’s the apocalypse, the reality is that I don’t know one person who’s lost their job, home, or car, and I doubt that I will.
Hype: that’s the word of the year, in my opinion.
Thanks for your time,
To restore immediate confidence, i think governments should collectively guarantee rescue packages for banks as soon as possible. The banks made the mess but its the ordinary person who is paying the price.
You haven’t mentioned the taboo subjects that are a major part of the weakness of the US economy that have helped cause this crisis:
1. Years of uncontrolled military spending which is corrupt and wasteful has crippled the US
2. distribution of wealth into the hands of a smaller and smaller percentage of the US population
-Vincent – You haven’t mentioned the taboo subjects that are a major part of the weakness of the US economy that have helped cause this crisis:
1. Years of uncontrolled military spending which is corrupt and wasteful has crippled the US
2. distribution of wealth into the hands of a smaller and smaller percentage of the US population
This financial meltdown is like when a husband and wife have separated because of infidelity. Perhaps, they will get back together and share a house. But it will take years until they trust each other. And things will NEVER be the same again.
I am a working class mom with two daughters living in Portland and I have no confidence whatsoever in my government or the financial system because it is clear they are not interested in the lives of regular people beyond how we effect them. I have never owned a home and if I stayed I would never. Healthcare and education are and have been so expensive that families cannot get ahead without debt- not for extravagance, but for basic needs. Our entire system is stacked against working families. As far as anyone I know is concerned we are left on our own to sort this mess out individually, while the executives rush to protect each other. We are left out of the loop.
i’m a russian student and i must say that although ordinary people are still distant from the crisys here it is only due to the fact that most of them do not trade stocks in the market . the historical experience that russian people have warns them of such things. this to some extent helps russia to remain what the government calls as “the island of stability”. however, in my opinion it is not far for the crisys to spread from financial sector to the real sector and that’s when people will really feel the effects of the crisys.
i have personally been affected by the crisys. i completed an internship program in one of the biggest russian banks this summer, i worked in the debt capital market department. i was just about to get a part time job when the scale of the crisys suddenly increased affecting the russian market and the job vacancy i applied for was closed.
I’ve tried TWICE to raise this question, which strangely has been passed over by the mainstream media themselves:
What is the role and responsibility of the media in this crisis of confidence.
Here’s what I sent to your blog – apologies if you’ve already read it:
1. I haven’t seen ANY media coverage of the role of the MEDIA in the current economic crisis.
More specifically: where did the 90% of Americans who forced their congressional delegates in marginal constituencies to oppose emergency restructuring of the frozen credit markets get their idea that the plan was simply to ‘bail out’ the greedy bankers who they thought were responsible for the crisis?
Why the media’s ‘bail out’ rather than, say, ‘emergency heart surgery to restore circulation in the US economy’? Why almost no emphasis on the new regulation proposed to address the post-’Big Bang’ deregulation that was the real root of the problem (along with the fact that bank CEOs and most politicians and media commentators simply didn’t understand the new deregulated high-tech globalized markets)?
Markets just maximize investor returns within the rules – it was the rules, or lack of them, that was the problem, not the whizzkids who developed clever pyramid schemes within those rules.
As with Northern Rock in the UK, the media coverage was itself a large part of the ‘crisis’. Joe Public or Joe Sixpack couldn’t understand the complexities of the problem, and fed by simplified media versions playing everything for maximum drama (or even melodrama) turned a complex technical problem with part of the banking system into a self-confirming crisis of confidence in the overall ‘real’ economy.
This literally ‘made’ a better story – but is that all that matters in the media? Is it just a game, like fancy derivatives trading? The responsibility for this mess goes rather wider than Wall Street.
2.
(Or, in a nutshell: Careless talk costs jobs)
Elizabeth C, above, makes a compelling point – living within our means! That seems like such a practical solution. However, in the in the international credit driven economy, where success is measured in terms what you might be able to afford, at some future date, the boundaries between commonsense and fanciful preoccupations have been erased ages ago!
hello,
during this economic catstrophe lets remember former british prime minister John Major’s words when everything was going haywire. He quipped “lets go back to the basics”. The same applies in this economic slump world wide too “lets go back to the basic principles of economics” – that is, spend from what you earn.
Also remember Eric Froms famous quip that every individual has to answer himself “TO HAVE OR TO BE”…added to this mahtma gandhijis famous quote “nature has provided for everyones need but not for his greed”.
Summing this all up – lets follow a lifestyle that isn’t dictated by marketforces in every sphere but live according to the needs arising at different times with ones own limitations in mind.
At micro level if these dictums apply to individuals, then application by institutions and policymakers at macro level is the only solution to come from this deep deep muddled world economy has plunged into .
MOB-9447889527
I love the statement often made that, “people borrowed irresponsibly”. What happens when people “borrow”. They buy stuff and services. What that does is employ people. If people who don’t have money stop borrowing then they stop buying, which creates more people who don’t have. That means more people who stop buying, and the circle continues. This statement represents people who only look at one side of the balance sheet.
The big problem is that people A) don’t make enough to satisfy their needs. B) need more then are satisfiable. C) When they become satisfied they will assume they can safely want more. It is a parasites life really.
The same conundrum when it comes to aid to certain cultures. Don’t provide the aid and they starve to death. That seems inhumane. Provide the aid and they see it their right to procreate and expand the problem. That seems irrational. So do you enable artificial growth or appear as a cold hearted devil? There never seems to be an in-between.
The way to restore confidence starts with throwing Conservatives out of office.
Bush and his Conservative cronies have always used fear-mongering to get their way in politics, like the way they used the threat of WMDs in Iraq, and now that the public needs confidence Bush just looks like “the boy who cried wolf”, he has no credibility!
We need to to punish Conservatives at the polls, vote them out of office and vote in moderates.
@Tom D Ford
Looking back at the roots of this crisis it was NOT Conservatives but Liberals with their feel good agendas that wanted everyone owning a house no matter that they could not afford one and had no ability to repay the loan.
When it became obvious that a crisis was at hand Barney Frank and Maxine Waters both noted Liberals blocked any reforms.
Dogma, politics, rational thought and the truth all seem to be mutually exclusive.,
Despite what i;ve said earlier , I think we need to know there is always a positive in the negative ..
The going to the wall of many peoples investments ..( I think my family will loose perhaps £2million by the time this is done ) is perhaps the price we need to pay to learn that we cannot incesssantly turn nature into commodities 1/2 of which are useless and toxic ,and enslave a 3rd world to produce them in sweat shops.
This could lead to a more enlightened world community, based on co operation .
If this is the death of anything ,let it be the death of unbridled consumerism ,degredation of the planet and the wages of those who have got fat leading us down this dead end road.
Dividend lovers will get away with the pots of gold again, once & for all CAPITALIST doesn’t not work, it is time to start thinking outside this failing New World Order. It is time to search for Social justice or failing civilation, civil unrest, anarchy & chaos are to come as the working class realized how the pirateering financiers’ fame & famous are now bust at their expense with nothing in return accept the inheritance mess of incompetence by dividend lovers greed utopians capitalist to the middle class.
May God bless this New world Order & its Financial systems
In only God I trust
Ex-Gatekeeper of the lost free world
Dividend lovers are the true tyrants of this world
As a Canadian Citizen, I demand my government to nationalized our natural resources , major industries such as energy , communication , foods & void any inter-government past treaty protecting dividend lovers interests, re-establish gold as the only world wide accepted currency and most and for all before anarchy hits Canadian Cities rewrite a fair social contracts, first step is to rebuild & renationalize Canadian cross-country railway system once the greatest system in the world in order to transport Canadian vast resources for Canadian by Canadian.
May God bless this New World Order & Its financial systems
In only God I trust,
Sincerely,
Ex-Gatekeeper of the lost free world
The individuals and their constituents who own the banks (Government) can turn on or off the flow of money at the tap. It is not a welcomed aspect to have the economic system come to a stand still. The owners of the banks are a predator creating poverty, servitude and are devouring their prey.
The income of the majority of the world’s citizens is devalued and depleted to the existent that loss is incurred just to make ends meet. Through the withholding of money the cycle of profit and debt is suspended for the working class of the Earth’s nations. The very few, very rich, get richer and less people own less of the world’s wealth.
Money is the Gene out of the bottle. With enough money, the people who want it are made to preform what the very rich will. Be mindful that the greatest business of every country on this Earth is the government of the country you reside in.
Confidence can be restored if the C.E.O.s, who created the crisis are put under investigation and there is an effort to reform the market,returning to the “basics” ofbusiness and ridding the markets of speculators?
What seems to be missing from the conversation is that regulation caused this crises the banks were
told by the body politic. Lend to these persons so that they can purchase a home, then they set about
regulating land so that there was a short supply. And the price of the home rose 1000% from 1970.
Now the person owning the home saw all that money and refinanced taking the equity and spent it.
The market itself has continued to struggle because the regulation caused the spread among the working
class from $8.00 per hour to $ 100.00 per hour a spread like that is not sustainable. And then you have
the political weight of media they were riled because there sunshine boy Al didn’t win so they spent
eight years of constant drum beats on how they were cheated, and how Europe was now the new
power house. So here we are if you don’t like the way free enterprise works Russia has lots of open
land to north and a shirking population. As for over populating the earth there 6.5 billion people on
earth if you gave each person a square of land five feet by five feet it would cover a space just seventy
five miles by seventy five miles just a dot on the surface.
It will be nice to find out later today the price at which the UK government value the various UK banks, which will clearly be a lot less than the market highs of last year. I hope it helps to provide a floor.
Many people are calling for the punishment of those who caused/aggravated the crisis by providing false information on the financial state of their institutions, etc. I believe the FBI is looking into this, and that’s a good thing. However, it’s even more important that laws be set up preventing these people from ever being involved in banking or high finance in future.
I had to think about this when I saw Mr Trichet, current head of the European Central Bank (ECB), meeting with the leaders of Germany, the UK, France and Italy, to decide among other things, how heads of failing banks could be prevented from walking off with bonuses, etc.
As it happens, Mr Trichet was treasury director at the French finance ministry in the early 1990s, when France’s largest bank, the Crédit Lyonnais, nearly went bankrupt. Mr. Trichet was later charged with helping to conceal the full extent of losses run up by the bank. He somehow escaped punishment for this and was, instead, was promoted head of the ECB.
The other day I read about a report claiming that cynicism is damaging democracy. I wonder if that also applies to humour: quite frankly, it’s hard to keep a straight face. The literary minded get an extra bonus here, when they realize that “Trichet” is pronounced the same as “tricher” in French = to cheat.
Aside from removing the obvious gangsters from the scene, one thing that would increase my confidence is if I had the feeling that someone in government is still keeping an eye on the big picture. Take Iceland, a country on the brink of bankruptcy. None of its allies have found it in their hearts (or brains) to come up with the 5.5 billion dollars needed to prevent this (at a time when the US has apparently been able to pull 700 billion out of a hat). So Iceland has turned to Russia.
Now: Iceland is home to a NATO base dedicated to preventing Russian submarines from entering the Atlantic (this is apparently the only way in for Russian subs). I don’t mean to sound dramatic, but what is going to happen in Iceland and between Russia and NATO when Russia decides to call back the favour?
“How do we restore confidence?”
“We”? what have “We” got to do with it?
How do “They” restore confidence?
Getting on the next flight to Mars might help.
The vast majority of us don’t own any shares, so who gives a rats’? Let it all go down the girgler and just ignore it or sit back and enjoy the greedy rich people freeking out. Frankly Scarlet …..
We need to return to economic basics. It is ludicrous to think that we even need wall street and even more so to think that we need to prop up our banking system. The steps taken have not worked because the banks are not worried about failing. A capitalistic system cannot work if we are not allowed to fail. AND we need to return to basic financial responsibility. We don’t need credit. Credit is the problem. We are being spoonfed a series of lies while executives (think AIG) are continuing to milk the system. At my house we would starve if I had to operate with the same outlandish investment practices that drives wall street. Wall street should be a reflection of what we are doing not the other way around. I suggest that everyone remove their retirment resources from the investment engines and let them fail so that we can regain control of our own resources. As long as we give them control they will squander our money as they have already shown.
I am so fed up with the BBC flapping on and on about the ‘global financil crisis’ (or Africa!!) there are other things going on.
How many times an hour are you saying ‘global financial crisis’?
I used to respect the World Service but this amateur narrow crazy reporting is just terrible and am switching over.
As far as I am concerned it is upto individuals to be aware of what amount is guaranteed by the government, stop the nanny state stop this nonsense!
Terrible terrible reporting.
Instead of reacting to failed and collasped systems, Governments should use some foward thinking to protect the weakest members of our society from the base extremes of the Capitalistic ideal – pure greed.
We elected our Government body and they should get their heads out of their ideals, come back to reality to actually do some governing by putting regulations in place.
As an example the health system here in the US is broken.
In a Capitalistic free for all, health insurance companies are using all their brain power to find new ways to collect premiums and not provide needed services. This to ensure that they are as profitable as possible.
There are many politicians here who are still waiting for unregulated Capitalism to fix our broken health system. Hopefully they have learned something from this current economic crisis.
It is lazy and destructive to let our economic systems govern all aspects of our lives.
There are many failing systems out there that need a different approach.
With all this talk of western governments in trouble and bailing out their banks, what about smaller countries, like Ukraine. Moldova, or the Cook Islands? How are the small and often ignored by big press countries feeling the impact of the financial crisis?
The health system is not broken in the US it just dose not work the way some think it should.
Health care is a personal problem you cant constantly attack your body with idiotic ideas and expect to
be put wright by a doctors.
again Insure, Insure, Insure, Insure, Insure, Insure, don’t by junk make insurance a permanent part of
banking,
assess and assign risk and make the premiums fit the risk
Politicians are in the business of making short-term decisions for votes. Why should taxpayers bail out a failed banking business model supported by lax government regulation? The billions poured into the markets are a waste of taxpayer’s money. Cheap shares have a habit of getting cheaper.
Capitalists and capitalist democracies have been raping the poor in their own countries and the poor around the world for the past 200 years.
no one cared.
Now, when the middle class and the rich look likely to be affected we are getting panic.
Restore confidence…?
The better question would be: “How do we pull the wool over everyone’s eyes so we can continue conning the masses for another 200 years”
Remember, you vote, you wanted this system… so you get what you deserve.
fred edwards should save him self such a horrid life trade places with some of the people trying to get in
to this country, like those from Mexico, China, or maybe Cuba that land of equality. They need some
strong backs to rebuild.
How do we restore confidence?
Do time, my good old chap!
Security is earned, not given.
You destroy it then you have to crawl back.
I do sorry for those nameless statistics.
YE! Please, in this life you are own nothing; you barrow.
bjay connotation with accent.
Put a stop to the madness by simply “pulling the plug from the wall” in other words; stop all trading and close down the stock markets of the world, NYSE, NIKKEI, DAX, etc.. and send traders home for a week or to to cool off, reflect, meditate if necessary and give them the time to come to their senses!
It’s blatently obvious that the economic down turn is reaching centrifugal, if not vertiginous dynamics parallel to those of CERN’s Large Hadron Collider!
Simply,in reply to Kesler,the danger is that if you crush the rich,in the short or long run,you also crush the poor – I think history shows this to be true – you also stifle initiative,which psychologically,as well as economically,enriches.
Finally,how can people comment – it’s even worse than trying to find an ambulane !
Only political leadership can do it.No one visible has the staure to inspire and lead.Current efforts are like trying to bandage a wouded lion on the run.Great dangers often produce great leaders ,an FDR or WC figure is desparately needed to reasure the people and that is an Olympian task.Bush should be silenced as his insipid comments are enraging . the US Congress as expected arising from its self serving torpor are opportunisitc and demonstrate the ignorance and venality of the body..A delicate balance must be sruck between granting extraordinary power to the few and guarrantees of a free society to the many.Technical solutions are essential but not sufficient by themselves.Germany in the 1930’s provides evidence of the peril of a mis-step..”Those who do not know history are doomed to repeat it” Santayana
FDR spent more money then all the presidents before him and only WW2 saved his bacon His mother
wrote him a check every month he could not live on the pittances he received as president.
Hello Hello.
Whose confidence? ours. No way, we are condemned to take what comes. Under any circumstances things should be corrected now with the massive input of monies from most affected Governments. Still not enough? What the …………have the overpaid managers been doing, using there knowledge to invent more and more complicated ways to make excessive profits. The picture on the wall, tax payers correct all.
John in Germany
The injection of taxpayer’s hard-earned money by the government to attempt to instill confidence in the market has not worked. World markets closed red last night.
Europe
Brown calls for “Europe-wide funding scheme” for banks;
Evans-Pritchard: who is going to bail out the euro?
Yesterday saw a coordinated response to the financial crisis as central banks across the globe from the US to Europe and China cut interest rates in efforts to stave off global recession and restore confidence in the markets. However, the Irish Independent reports that the measure has failed to arrest the slide in European shares.
Following Britain’s £400bn rescue plan announced yesterday, the FT reports that Gordon Brown has called for the rest of the EU to follow suit with a “Europe-wide funding scheme” to be discussed at the EU Summit next week. However, writing in the Telegraph, Ambrose Evans-Pritchard calls into question whether the eurozone is capable of a British-style rescue plan: “There is no EU treasury or debt union to back up the single currency. The ECB is not allowed to launch bail-outs by EU law. Each country must save its own skin, yet none has full control of the policy instruments.”
Evans-Pritchard also notes that the crisis is testing Germany’s commitment to the euro: “One can sympathise with Berlin. But sharing debts with Italy and Spain was implicit when they agreed to launch the euro… We have reached the watershed moment when Germany has to decide whether to put its full sovereign weight behind the EMU project or reveal that it is not prepared to do so in a crisis.”
European Commission President José Manuel Barroso has stated that “Europe needs the Lisbon Treaty to tackle the current crisis facing the EU”, according to the Irish Times. Barroso and the French EU Presidency have urged states to complete ratification as soon as possible to end current uncertainty.
Irish Independent Telegraph Evans-Pritchard FT Le Figaro WSJ WSJ-editorial Telegraph EUobserver WSJ Mirror EUobserver AFP FT-Peel Irish Times European Voice CoulissesdeBruxelles Irish Times 2
The current financial crisis should not be used as an excuse to complete the ratification of the EU.
When people voted for the EEC in 1975, they did not imagine that they would become part of a European superstate dictated to by unelected bureaucrats in Brussels.
Banks are still failing, so, what was the point of the government bailout?
Confidence in the markets will return, when people know that there money is being channelled into transparent projects. People will also become confident again, when they know those who are responsible for corrupt, unethical practices are brought to account.
Revolution is a process which could also kick in, if people loose all faith in those running the affairs. You think it won’t happen right…think again!
Natural instincts to do not disappear, just because you have a Gucci suit on and sit in a BMW.
Just look at two basic economic theories…The Prisoner theory and Queing Theory. These two mathematical representations of human action will prevail and these two issues alone will screw it up even further.
World Banking needs to be centralised, no offshore havens, align taxes, forget high risk derivatives ( these are just tools to make bankers rich ). Traditional banking needs to be brought back, NO MORE COWBOYS with their flashy portfolio models please.
PS FORTIS BANK has changed its name to FORTWAS BANK!
Markets are driven by sentiment and you restore confidence by news organization publishing the truth
and all sides of truth. We are reaping eight years news spins. News organizations have forgotten that if
you are carrying the charge you will also pay the same price you have brought on others. Columnist
promulgate what is selling, and this reinforces what the public feels it is in fact psychosomatic.
Chip:
A search on a couple of quote sites and I’ll let betters speak for me.
“Money, again, has often been a cause of the delusion of the multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper.”
Charles Mackay (d. 1889)
The true means of being misled is to believe oneself finer than the others.
Duc de La Rochefoucauld
“There are some people who live in a dream world, and there are some who face reality; and then there are those who turn one into the other.”
Douglas H. Everett
“As long as our civilization is essentially one of property, of fences, of exclusiveness, it will be mocked by delusions”
Ralph Waldo Emerson
“The house of delusions is cheap to build but drafty to live in.”
A. E. Housman
“There is a self-satisfied dogmatism with which mankind at each period of its history cherishes the delusion of the finality of existing modes of knowledge.”
Alfred North Whitehead
“The people never give up their liberties but under some delusion.”
Edmund Burke
“The two greatest obstacles to democracy in the United States are, first, the widespread delusion among the poor that we have a democracy, and second, the chronic terror among the rich, lest we get it.”
Edward Dowling
Finally
“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”
Thomas Jefferson
I don’t think that it is possible to restore confidence in a system that does not deserve it.
This so-called crisis is a good opportunity for polticians to sell their agendas to the public. The Danish Prime Minister Anders Fogh Rasmussen announced Friday that Denmark would be much less vulnerable if we had Euros instead of our own Krone. Bullfeathers!
He has been trying to sell us the Europe package for years. Like the majority here, I am skeptical. I too know about Trichet and the pun on the cab drivers and waiters who bilk tourists in Paris. Berlusconi? How could anybody vote for Berlusconi? Or Sarkozy? Or George Dubya Bush ? Or Sarah Palin?
I did not vote for the Anders Fogh Rasmussen, either. We have an expression in Denmark, which translated roughly means, “One has the politicians one deserves,” but I think that it might be time to call some elections or consider impeachments. Our Parliament spent two days roughing out measures to support banks here, but they only convened on Tuesday for the official opening and they managed to push the bill through in record time on Friday so that they now have ten days of vacation.
Klaus Riskær Pedersen, one of Denmark’s middle-aged entrepreneur-venture-capitalists (and a former member of the EU Parliament for our PM’s party) began a 6- year prison stretch yesterday. That is where people belong if they have made money dishonestly.
And for Heaven’s sake, if you want to talk about implementing Socialism, go for socialized medicine and not bailing out banks and large corporations!
Stangely enough, these crises almost always occur in October.
First the fever must run its course then confidence will revive.
This blog has shown the level of the level of under standing of commerce in the world and it is a sad
comment on the lack of knowledge.
Good comment Shakhoor Rehman
Undoubtedly, there is a considerable lack of grace in promoting the sour grapes or enslavement mentality that humans should live within their means – as a tool of survival – as if survival mechanisms are what is called for as a human being.
If we observe wild animals, we find that the philosophy is much more appropriate to them – for they are not capable of making tools, communicating on a human level in order to cooperate in society, or between different languages – in order to make the decisions/laws to rise above that level of survival mentality.
They must hunt, or wait, and use cunning and predatory tactics in order to survive. But humans are not wild animals despite our genetic similarities.
Humans need less animal mentality and more human mentality to resolve the disputes that keeps “us humans” in poverty, and at each other’s throats over something as frivolous as currency in order to satisfy the needs and many if not most of the desires that humans have – or what’s the point of being human at all?