The last few weeks have been interesting.We have been seeing stories in The New York Times, The Financial Times, The Wall Street Journal which we would normally have associated with the emerging markets rather than the developed world.
Europe is in a state of disarray.The European Union which was supposed to bring prosperity and create a market bigger than the United States finds itself on the edge of a cliff . The question remains " will she or wont she" the she being Chancellor Merkel. Will she put Germany's resurgent economy at risk by continuing to pump money into the economies of nations whose spending habits mirrored that of countries in Latin America in the seventies and eighties ? Unfortunately if the Chancellor pulls her finger from the dyke, it will likely start a possible tsunami of defaults, not just among the PIGS ( Portugal, Ireland,Greece, Spain) but possibly Italy as well. Also the financial institutions in the better managed economies will not escape and will take huge hits as well and it will likely be beginning of the end of the Euro. The IMF, the ECB, and the governments concerned all are scrambling to protect the banks rather than letting them swallow the bitter medicine as they recommended the Asian governments do during the late nineties.
The United Kingdom in the meantime is enthralling the world with its drama, which could perhaps be called the The Last Days of the Murdoch Empire. The cast of characters include a strong willful patriarch who starting with a newspaper in a small town in Australia, went on to become the most powerful media baron and kingmaker in a number of countries. The supporting characters include his son and heir apparent, second wife decades younger than himself, a flaming red head, the head of the ruling political party , the law keepers (rumored to be have been wined and dined) who while resigning insisted that they were not the only ones, after all the politicians used to meet journalists more frequently than they did. Adding a bit of mystery was the unexplainable death of the whistle blower. The only thing missing is a hint of sex, but then the show is not over yet.Keep watching the space.
In case you were not titillated, you had the former head of the IMF's peccadilloes with the hotel maid- whether by consent or force remains to be seen. In the meantime, he is once again being regarded as a possible candidate to be the next President of France. On the other side of the border you have the Prime Minister of Italy in his seventies trying to inherit Hugh Hefner's Bunny crown with his bunga- bunga parties.
Across the pond, you had the sub-prime crisis about which many books have been written. This was followed by biggest Ponzi scheme in history and the insider trading scandal. Where were the regulators and the auditors?
With that over, you now have the world's biggest economy together with the rest of the world being held to ransom by the two political parties to see who will blink first. We would all like to think that at the last minute there will be a compromise, but in the meantime it continues to be a cliff hanger. This is supposed to represent the best of democracy and a two party system ?
These are the countries, the politicians and bureaucrats who come to emerging markets and tell us how we should free the markets in terms of currency flows and trade, we should allow democracy and be more transparent and do something about corruption. Yes we have our share of problems, scandals, corruption, unexplained deaths, dynastic politics and so on, but perhaps we are better off muddling our way through. After all the Asian countries ( including India in the early nineties) while going through the financial crises bit the bullet and moved on and since then have made a remarkable comeback. Perhaps it is time the roles are reversed and the developed world look closer at the developing countries and learn from them.
Europe is in a state of disarray.The European Union which was supposed to bring prosperity and create a market bigger than the United States finds itself on the edge of a cliff . The question remains " will she or wont she" the she being Chancellor Merkel. Will she put Germany's resurgent economy at risk by continuing to pump money into the economies of nations whose spending habits mirrored that of countries in Latin America in the seventies and eighties ? Unfortunately if the Chancellor pulls her finger from the dyke, it will likely start a possible tsunami of defaults, not just among the PIGS ( Portugal, Ireland,Greece, Spain) but possibly Italy as well. Also the financial institutions in the better managed economies will not escape and will take huge hits as well and it will likely be beginning of the end of the Euro. The IMF, the ECB, and the governments concerned all are scrambling to protect the banks rather than letting them swallow the bitter medicine as they recommended the Asian governments do during the late nineties.
The United Kingdom in the meantime is enthralling the world with its drama, which could perhaps be called the The Last Days of the Murdoch Empire. The cast of characters include a strong willful patriarch who starting with a newspaper in a small town in Australia, went on to become the most powerful media baron and kingmaker in a number of countries. The supporting characters include his son and heir apparent, second wife decades younger than himself, a flaming red head, the head of the ruling political party , the law keepers (rumored to be have been wined and dined) who while resigning insisted that they were not the only ones, after all the politicians used to meet journalists more frequently than they did. Adding a bit of mystery was the unexplainable death of the whistle blower. The only thing missing is a hint of sex, but then the show is not over yet.Keep watching the space.
In case you were not titillated, you had the former head of the IMF's peccadilloes with the hotel maid- whether by consent or force remains to be seen. In the meantime, he is once again being regarded as a possible candidate to be the next President of France. On the other side of the border you have the Prime Minister of Italy in his seventies trying to inherit Hugh Hefner's Bunny crown with his bunga- bunga parties.
Across the pond, you had the sub-prime crisis about which many books have been written. This was followed by biggest Ponzi scheme in history and the insider trading scandal. Where were the regulators and the auditors?
With that over, you now have the world's biggest economy together with the rest of the world being held to ransom by the two political parties to see who will blink first. We would all like to think that at the last minute there will be a compromise, but in the meantime it continues to be a cliff hanger. This is supposed to represent the best of democracy and a two party system ?
These are the countries, the politicians and bureaucrats who come to emerging markets and tell us how we should free the markets in terms of currency flows and trade, we should allow democracy and be more transparent and do something about corruption. Yes we have our share of problems, scandals, corruption, unexplained deaths, dynastic politics and so on, but perhaps we are better off muddling our way through. After all the Asian countries ( including India in the early nineties) while going through the financial crises bit the bullet and moved on and since then have made a remarkable comeback. Perhaps it is time the roles are reversed and the developed world look closer at the developing countries and learn from them.
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