Some Reflections on the Recent Financial Crisis
The “Disastrous Effects of the – Financial Crisis” section of the .. 62),” akin to dividing the pot in a game of poker: some players win and .. a guarantee of Lehman's obligations from the date of the agreement until. Opinion Global financial crisis. Start preparing for the next financial crisis now what in a crisis. “War games” would be a useful adjunct to this. The financial crisis timeline had 33 key events during that year. Banks were playing a huge game of musical chairs, hoping that no one.
To the extent that they are united, they are united in stupidity, wedded to blanket austerity that will make matters worse not better. And they have yet to tackle the issue that lay behind the crisis in the first place, the imbalances between the big creditor nations such as China and Germanyand big debtors like the US.
In the circumstances, it is hard to be wildly optimistic about how events will play out. The reason for that is simple: Japan's growth prospects are poor. So are America's, which is why bond yields will remain low in what is still, for the time being, the world's biggest economy. Whatever it means for financial markets this week, 5 August will be remembered as the day when US hegemony was lost. All this is terrible news for Barack Obama.
He has not delivered economic recovery. The US is drowning in negative equity and foreclosed homes. No president since Roosevelt has won an election with unemployment as high as it is today.
Fiscal policy will be tightened over the coming months as tax breaks expire and public spending is cut.BTS Dating Game♥
The Federal Reserve only has the blunt instrument of QE with which to stimulate the economy, and will only be able to deploy it after a softening up process for the markets that will take several months. On top of that, Obama will now be branded as the president who presided over the national humiliation of a debt downgrade.
Not that the Europeans should get too smug about this, because what we are witnessing is not just the decline of the US but the decline of the west. One response to last week's meltdown was the announcement of talks between the G7 — the US, the UK, Germany, Italy, France, Canada and Japan — but while this would have been appropriate 20 years ago it is not going to calm markets today.
Some Reflections on the Recent Financial Crisis
Holding a G7 meeting without China today is like expecting the League of Nations without the US to tackle totalitarianism in the s. There is no happy ending to this story. At best there will be a long period of weak growth and high unemployment as individuals and banks pay down the excessive levels of debt accumulated in the bubble years.
At worst, the global economy will be plunged back into recession next year as the US goes backwards and the euro comes apart at the seams. The second, gloomier scenario, looks a lot more likely now than it did a week ago. Because there is no international co-operation. There are plans for austerity but no plans for growth.
Even countries that could borrow money for fiscal stimulus packages reluctant to do so. Because players often do not have the interstellar credits - abbreviated to ISK, also the official abbreviation of the Icelandic krona - they need to expand their fleets, an enterprising player created a bank that would accept deposits and lend to players who would pledge assets, like their spacecraft, as collateral.
The bank was a success. According to its website yes, it has oneEbank accumulated about 8. That was far more than it was able to lend out - there were around 1tr ISK of outstanding loans.
Somewhere along the way Ebank's top executive, who went by the online handle Ricdic, apparently decided to cash in. According to CCP he took deposits, which he then sold for real cash to gamers on a sort of black-market exchange separate from Eve. CCP kicked Ricdic out of the game.
And Ebank has temporarily shut down while its board of directors yes, it had one of those too, just like a real bank tries to sort out the mess. Depositors, meanwhile, appear to have pulled 5.
It's not clear how much of that virtual money was "embezzled" and now needs to be found, somehow, by Ebank. But if the Eve chatter is accurate, it could amount to 10pc of deposits withdrawn. That could wipe out whatever capital was used to fund Ebank's loan book.
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As in the real world, that would spell insolvency. And here's where the Ebank story may have implications for real-world bankers, regulators and users of financial services. It's not the first virtual bank to run into trouble - something similar happened in Second Life, which is governed by United States law. The thing is, in Eve's virtual universe, there is no financial regulator. Nor does any resolution authority, like the Federal Deposit Insurance Corporation, exist.