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The financial crisis - like a bad movie

It is absolutely frightening, watching how the rumours and the panic spreads. It's really scary following the daily press and being jolted into reality each morning by the blazing headlines as the tide of fear moves from country to country - Ireland, Germany, Italy, Iceland ..... And the names of the banks that are now involved! Where and who next?

The fear and uncertainty which now seems to have erupted into a full blown international panic is seeing new rumours at every turn and the information age is actively helping the spread of the panic at unimaginable speed. Local community lists far from the areas of current concern are now even doing their bit. Questions like "should I close my pension plan and take the cash", or "how safe are our (local) banks" are adding to the mayhem as the uninformed first seek and then regrettably take advice and counsel from their equally ignorant peers.  

And now the politicians, ever wary of their re-election chances, are panicking too! Hence this past week's display of the European Union's disunity as they seek (un)common ground to address the crisis.

I wonder how history will view the panic of 2008?   

 

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Comments: (3)

A Finextra member
A Finextra member 09 October, 2008, 09:33Be the first to give this comment the thumbs up 0 likes

That bad movie went on for a long time, and became public as the subprime crisis more than a year ago. If the financial and political systems had worked as the good citizens expected, there would have been ample time to fix the problems in the background and to avoid the panic that we do see now.

Unfortunately those systems did not work as their  leaders cowardly preferred to keep their eyes closed and their fingers crossed, rather than working seriously on cleaning up that mess.

The result is the demise of investment banking as we knew it before, and hopefully some corrections that lead to financial markets getting down to earth and nearer to the real world. And by the way, economy is to serve the people - not the other way round.

 

A Finextra member
A Finextra member 09 October, 2008, 12:37Be the first to give this comment the thumbs up 0 likes

Strongly agree with Gerhard.

Stanley, you seem to be talking as if the panic is inappropriate and everything would be ok if people would only calm down. Unfortuntely the problem is not one of sentiment: we are in the middle of a fundamental and inescapable economic disaster. It is almost certain to keep getting worse (yes, worse) for a while to come, and the bad times are going to last for years, not months. Panic may not be such an inappropriate reaction.

Stanley Epstein
Stanley Epstein - Citadel Advantage Ltd - Modiin 10 October, 2008, 06:46Be the first to give this comment the thumbs up 0 likes

Paul, I certainly did not intend to convey the sentiment the "... the panic is inappropriate and everything would be ok if people would only calm down".

Panic is a normal part of this situation. My "bad movie" comparison relates to watching events unfold. The extent of the panic, how it spreads in unforeseeable directions and the speed of events has me mesmerized. The events that we are witness to cannot be wished away or reversed by simply calming down.

While I agree with you that worse lies ahead, there still will come a time when confidence will be restored and some sort of "sort of normalcy" will return.