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Author Topic: THE END OF ARROGANCE or "Wall Street's Central Values: Avarice and Greed"  (Read 1386 times)
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WhiskeyGirl
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« on: September 30, 2008, 08:44:10 PM »

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America Loses Its Dominant Economic Role
By SPIEGEL Staff

The banking crisis is upending American dominance of the financial markets and world politics. The industrialized countries are sliding into recession, the era of turbo-capitalism is coming to an end and US military might is ebbing. Still, this is no time to gloat.

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He talked about terrorism and terrorist regimes, and about governments that allegedly support terror. He failed to notice that the delegates sitting in front of and below him were shaking their heads, smiling and whispering, or if he did notice, he was no longer capable of reacting. The US president gave a speech similar to the ones he gave in 2004 and 2007, mentioning the word "terror" 32 times in 22 minutes. At the 63rd General Assembly of the United Nations, George W. Bush was the only one still talking about terror and not about the topic that currently has the rest of the world's attention.

"Absurd, absurd, absurd," said one German diplomat. A French woman called him "yesterday's man" over coffee on the East River. There is another way to put it, too: Bush was a laughing stock in the gray corridors of the UN.

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But the ridicule was a new thing. It marked the end of respect.

"Well," Brazilian President Luiz Inacio "Lula" da Silva began, standing outside the General Assembly Hall. Then he looked out the window and said: "He decided to talk about terrorism, but the issue that has the world concerned is the economic crisis." Cristina Fernández de Kirchner, the president of Argentina, said that the schoolmasters from Washington had dubbed the 1994 Mexican crisis the "tequila effect" and Brazil's 1999 crisis the "Caipirinha effect."

Are we now experiencing the "whiskey effect?" But President Kirchner was gracious and, with a smile, called it the "jazz effect."

Is it only President George W. Bush, the lame duck president, whom the rest of the world is no longer taking seriously, or are the remaining 191 UN member states already setting their sights on the United States, the giant brought to its knees? UN Secretary General Ban Ki Moon referred to a "new reality" and "new centers of power and leadership in Asia, Latin America and across the newly developed world." Are they surprised, in these new centers, at the fall of America, of the system of the Western-style market economy?

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The banking crisis in the United States has shaken many things in recent days, not just the chancellor's affection for America and the respect the rest of the world once had for the US as an economic and political superpower. Since the US investment bank Lehman Brothers plummeted into bankruptcy two weeks ago, the financial crisis has developed a destructive force of almost unimaginable strength. The proud US investment banks with globally recognized names like Merrill Lynch and Goldman Sachs have all gone bankrupt, been bought up or restructured. The American real estate market has essentially been nationalized. And the country's biggest savings and loan, Washington Mutual, has failed and been sold at a loss.

In light of the almost daily reports of losses in the financial sector, it seemed almost secondary to note that the disaster had also turned into one of the biggest criminal investigations in American history. The Federal Bureau of Investigation (FBI) is already investigating 26 large financial corporations as well as 1,400 smaller companies and private citizens for possible fraud.


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For weeks, Bush ignored the crisis, insisting on the strength of the market and telling Americans: "Everything will be fine."

In a televised address to the nation last Wednesday, Bush gave his oath of disclosure. He warned Americans that they could face a "long and painful recession" and that "millions of Americans could lose their jobs" unless swift action is taken.

But nothing happened swiftly, at least not at first. The crisis is happening while the United States is in a political vacuum. Bush lacks the power needed for decisive leadership, and his potential successors, John McCain and Barack Obama, seem more concerned about making a strong impression on voters.


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A new America is on display, a country that no longer trusts its old values and its elites even less: the politicians, who failed to see the problems on the horizon, and the economic leaders, who tried to sell a fictitious world of prosperity to Americans.

Hmmm...  Tax rebates, reductions, spend, spend, spend...

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With its rule of three of cheap money, free markets and double-digit profit margins, American turbo-capitalism has set economic standards worldwide for the past quarter century. Now it is proving to be nothing but a giant snowball system, upsetting the US's global political status as it comes crashing down. Every bank that US Treasury Secretary Henry Paulson is currently forced to bail out with American government funds damages America's reputation around the world.

Hmmm... has anyone addressed the problems with this "turbo-capitalism"?  Put in any fixes?  Acknowledged the problem?

http://www.spiegel.de/international/world/0,1518,581502,00.html

There are five parts -

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Part 5: 'One Can See that We Are on a more Solid Base'

Back to Reality

For far too long, the Americans and the British made fun of the Germans for their risk-averse, savings-oriented mentality, says Bernd Pfaffenbach, Merkel's chief negotiator on foreign trade issues. But now the relative conservatism that Germans have shown in financial matters is paying off. "One can see that we are on a more solid base," says Pfaffenbach, who refers to the crisis as a "purifying storm."

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The financial industry -- especially in the United States -- will shrink considerably, while the significance of the real economy will increase. Once again, the government will have to base its supervisory function on the old banker's principle: security first.

Hmmm...  I wonder just how the financial industry shrinks?

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Despite the anger felt toward Bush, there is little enthusiasm in Europe's capitals for the political consequences. The financial crisis will reinvigorate America's tendency toward isolationism, which never quite disappeared.

The triumphalism of the Bush years could easily be followed by the "I'll-sit-this-one-out" years of an Obama administration committed to a strict policy of belt-tightening. If that happens, both old and new Europe will have to demonstrate whether the European Union can rightfully claim to be on an equal footing with the United States.

http://www.spiegel.de/international/world/0,1518,581502-5,00.html

Part 3: Wall Street's Central Values: Avarice and Greed

http://www.spiegel.de/international/world/0,1518,581502-3,00.html


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they'll end up in your family anyway...
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