- 30 Sep 2008, 12:21
#12399
Salams all!
I gotta say I'm a bit surprised not to see a single article on the ongoing global financial meltdown :-D What happened to all the accountants in the forum?? :-)
Anywys, over the last couple of weeks, our friend Dubya has been working on a financial bailout plan in the USA reportedly worth... hang on now... US$ 700 BILLION! That's right folks, that's Billion, with a B!! Needless to say, most of the lawmakers are not very pleased with this idea, esp as the American taxpayer will have to bear this cost. Given the already shaky economy, and the fact that people are losing their jobs, their homes, and probably their lives due to this mess, this seemed like the final nail in the coffin! And we also have to remember, most of the members of Congress are also due up for election November, and no one wants to be linked to this with a 10-foot pole!
Most of the lawmakers actually came out and opposed the bill, asking why the 'normal' man has to bail out these bankers. The BBC reports the situation as such:
Members of Congress have been dealing with two powerful conflicting forces over the last week.
The first was remorseless pressure from the White House - the argument that the country faced a crisis so profound that unless they approved the government's plans, American capitalism would grind to a halt as funds flowing between the banks began to dry up.
But the second pressure which is much harder to measure came from ordinary voters writing or emailing their own members of Congress angrily demanding that they reject a scheme which is universally perceived here as a bail-out of Wall Street bankers.
They are perceived as greedy, incompetent fat cats who have created this crisis themselves and who are now being allowed to pick the pockets of American voters to fix it.
(Source: http://news.bbc.co.uk/2/hi/business/7643199.stm)
The Congress voted on the proposed bill, details of which are also available on the internet (http://news.bbc.co.uk/2/hi/business/7631321.stm), and the result was a resounding NO!! The plan has now been taken back for 'editing' and will probably be voted on again in the very near future. It will be interesting to see how the second round goes...
Of course, the problem is not limited to the USA. We have already seen a few banks in Europe that have rcvd help from their governments (Fortis, Northern Rock, Dexia, Bradford & Bingley). The issue does not seem to be as bad in Europe so far, but some analysts argue that it only appears to be so, as the European govts are putting up a facade of all being well...
So, what is the root cause of all this? IMHO, it is greed, pure and simple... For years now, I have been listening to stories of top level officers getting bonuses so large that the payroll system cannot cope with the number of zero's!! I'm all for rewarding good performance, but surely there are limits. The pressure on these people to consistently deliver better results year after year has lead to shortcuts being taken in the relentless pursuit of profits.
Well, let us hope that the crisis is averted sooner rather than later, coz no matter what the cause is, you can bet your bottom dollar that we will get affected too!! The only good thing is that once things hit rock bottom, the only way back is up, and hopefully, there'll be better controls this time!!
Salams,
Muntazir
I gotta say I'm a bit surprised not to see a single article on the ongoing global financial meltdown :-D What happened to all the accountants in the forum?? :-)
Anywys, over the last couple of weeks, our friend Dubya has been working on a financial bailout plan in the USA reportedly worth... hang on now... US$ 700 BILLION! That's right folks, that's Billion, with a B!! Needless to say, most of the lawmakers are not very pleased with this idea, esp as the American taxpayer will have to bear this cost. Given the already shaky economy, and the fact that people are losing their jobs, their homes, and probably their lives due to this mess, this seemed like the final nail in the coffin! And we also have to remember, most of the members of Congress are also due up for election November, and no one wants to be linked to this with a 10-foot pole!
Most of the lawmakers actually came out and opposed the bill, asking why the 'normal' man has to bail out these bankers. The BBC reports the situation as such:
Members of Congress have been dealing with two powerful conflicting forces over the last week.
The first was remorseless pressure from the White House - the argument that the country faced a crisis so profound that unless they approved the government's plans, American capitalism would grind to a halt as funds flowing between the banks began to dry up.
But the second pressure which is much harder to measure came from ordinary voters writing or emailing their own members of Congress angrily demanding that they reject a scheme which is universally perceived here as a bail-out of Wall Street bankers.
They are perceived as greedy, incompetent fat cats who have created this crisis themselves and who are now being allowed to pick the pockets of American voters to fix it.
(Source: http://news.bbc.co.uk/2/hi/business/7643199.stm)
The Congress voted on the proposed bill, details of which are also available on the internet (http://news.bbc.co.uk/2/hi/business/7631321.stm), and the result was a resounding NO!! The plan has now been taken back for 'editing' and will probably be voted on again in the very near future. It will be interesting to see how the second round goes...
Of course, the problem is not limited to the USA. We have already seen a few banks in Europe that have rcvd help from their governments (Fortis, Northern Rock, Dexia, Bradford & Bingley). The issue does not seem to be as bad in Europe so far, but some analysts argue that it only appears to be so, as the European govts are putting up a facade of all being well...
So, what is the root cause of all this? IMHO, it is greed, pure and simple... For years now, I have been listening to stories of top level officers getting bonuses so large that the payroll system cannot cope with the number of zero's!! I'm all for rewarding good performance, but surely there are limits. The pressure on these people to consistently deliver better results year after year has lead to shortcuts being taken in the relentless pursuit of profits.
Well, let us hope that the crisis is averted sooner rather than later, coz no matter what the cause is, you can bet your bottom dollar that we will get affected too!! The only good thing is that once things hit rock bottom, the only way back is up, and hopefully, there'll be better controls this time!!
Salams,
Muntazir
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