Fear is the key

Implications: 1. Greatest ever rescue bid under worst ever circumstances. 2. Challenging time or interesting times the reponse must be swift and on war footing to restore confidence to the people on the street.

Analysis: World is facing a crisis which it should not have had to go through.Why? that the Government in US allowed such CDOs to go through in the first place knowing fully well they were duds is a cause for worry and alarm.The Freddies were allowed to fund such duds is another cause for alarm.Make hay while the sun shines is all good not when the sun burns your face! The home of capitalism having fought Marx is now adopting,nay adapting, the Marx model.How times change! But in times of crisis any model is okay as long as it works. Now is not the time for politics.But thanks to investment bankers and their insatiable greed for this amazing turnaround.

Governments all over the world are alarmed at the turn of the events and are on a firefighting mode.Every economic trick in the bag like interest rates, deposit guarantees etc are being worked.And for the first time after a long time Europe and America are coordinating efforts to tackle the crisis in an earnest way.That augurs well for the world.But will the meltdown stall.

This crisis should have been seen in coming.Bear Stearns should have acted as a trigger.But the opportunity was allowed to pass. But Governments don't act in peace time you need a war to be seen as a hero. And the time has arrived.

Every area of the economy is going to get affected.Australia guarantees bank deposits for next 3 years to instil confidence in the banking system. In India the aviation industry is seeking a USD1 billion bailout package and world bailout packages reach USD 3 trillion, yet none of the executives of the investment banks have felt ashamed to surrender their bonus packages made out of the misery of the common man.Business done, bonus earned, but in the right way? But ethics are not part of business anyway.Human nature ? Executives are paid for taking responsible decisions and an employee for putting through the decisions.In a crisis, first thing, an employee loses the job whereas an executive may(?) lose the job but gets to keep the hefty bonus for their (ir)responsible decisions which lead to a crisis of mega proportions in the first place ! Hand on your heart. 

At the time of Great Depression the world was not that evolved and technology was non existent. Hence the crisis was allowed to boil over. However, now the Governments have all resources at their command and have to act fast. There is no room for dither. Otherwise the world will enter a black hole even before the Haldron is really tested.Common man doesn't have pay for the follies of the reckless.

Healing is a long term process.Trust has been the first casualty.No banker will trust his fellow banker with the same respect.New rules and new firewalls. Common man will never trust the investment banker. A used car salesman is better.

After 1929, 2008 is a year to remember.