It is seven days that we are in USA. These seven days had also shook the stock markets all over the world. USA is in turmoil. While the campaign for the election of the new president on November 4 is on peak with all news channels covering every bit of what the candidates say and do plus something more that makes it spicy, the Washington DC is under fire with the financial collapses that never happened in the history of US. The 158-year-old Lehman Brothers failed and Merrill was sold to Bank of America. The government provided an $85 billion bailout for AIG. And, the officials have proposed to purchase the troubled mortgage assets of financial firms, a move that could cost $900 billions or more. Wall Street is suffering the worst financial storm since the Great Depression. I along with many have a question. Why was Lehman not bailed out, when the government did help sale of Bear Stearns to JPMorgan Chase and the effective nationalization of mortgage giants Fannie Mae and Freddie Mac?
When Man Mohan government decided to waive off the loans amounting to Rs 60,000 or more of farmers, many considered that as one for vote bank and as a disincentive to the honest farmers who had paid back. When the government still goes on granting huge amount to support sick and loosing PSUs such as HMT and HEC, I get critical. I think all waivers and financial supports must go with some condition so that the same condition doesn’t get created again. The beneficiaries must start working hard and don’t take this benevolence as their rights.
How should I feel, when US is bailing out its mega private companies for their misdeeds through taxpayers money amounting in trillion? Will the executives at the top who amass a lot of asset through different perks, huge salaries and remunerations be asked to part with some? Will they continue to draw the same even after the survival fund from the government? Where were the regulators who would have blown the whistle in time to avoid the present situation? Why the discrimination?
All Americans and perhaps the people, particularly investors world over are worried, as what happens in USA affects the rest of the world too either immediately or on long term. Russia’s stock markets had been among the hardest hit by recent financial turmoil. European and Asian markets can’t remain insulted.
Unfortunately, I hardly understand this capitalism. How can you go on living on credit without building the capability and intention to payback? How long the banking system keep on deceiving itself by loaning 100% for buying the houses and cars to the people with no capability to pay back?
It is unfortunate that many countries are following the American models and its people try to copy all that happens in USA. Will they be ready to face similar collapses too?
$700 Billion Bailout-Revival Counteraction