Is the Wall Street banking crisis a forecast for what's ahead?

Economists and financial experts have different opinions from what seems to be an emerging crisis in the Wall Street with the down fall of Lehman Brothers and a nearly collapse of American International Group, Inc. (AIG), a major American insurance corporation that ensures the most world's big banks. For some, there is no need to panic. For other things may not look as pretty ahead.

Carter Dougherty, a financial news analyst from the International Herald Tribune, argues that "with a huge infusion of cash, the U.S. Federal Reserve, joined by its fellow central banks around the globe, unleashed their most forceful volley of financial firepower yet. The goal was to persuade a convulsing banking system that there will be no shortage of money to meet essential obligations, now or in the future." (http://www.iht.com/articles/2008/09/18/business/strategy.php)

Nevertheless, some venture capitalists are not so optimistic. "Martin Varsavsky, the Argentinian telecoms entrepreneur behind Viatel and latterly Fon, a wifi-sharing community, was as despondent as [Carter Dougherty] was enthusiastic. “I’m really sorry that the groups of people most likely to finance whatever we were going to do are in such deep shit.”

The US had already lost its leadership in electronics and cars, he said. “In the last few days I think America lost the leadership in banking. It’s a pity because American investment banks had the best personality vis-à-vis guys like us,” he told an audience of entrepreneurs.' (http://blogs.ft.com/techblog/2008/09/the-best-of-times-the-worst-of-times/)

Now, forget the business analysts and venture capitalists. They live in a different world than the common Joe as their pockets run way deeper than any regular working people. What's crisis for us is just 'uh, I just lost some dough in Las Vegas' and what's crisis them is 'the end of the world' for us. Therefore, what's YOUR opinion on this banking crisis? Where things are heading? Are we looking at another Depression or can we feel more confident that the technological advances and financial systems of today won't let that happen?

Please share your 2 cents.

NO I WILL NOT GET YOU WRONG,BECAUSE I KNOW WE WANT TO BE RIGHT.

THE INSTUTIONAL CHURCH IS NOT MY BAG. READ MY OTHER THREADS ON RELIGION AND ETHICS JUST POSTED ONE THIS MORNING IN ALL IN ALL. CHECK IT OUT.[/b]

Dear Cv2K

When I came back from being in the Korean War which they called a police action. Police Action? Some police action men were being killed left & right. Check out the statistics. Any way I was there there for two tours.
I was 18 years old in battle.

Anyway to make a long story short,when I got back to Boston (Sugar Hill)
on Fenno Street in which I lived across the street from what was
Saint Richards Church. I lived next door to the Priest Father Matthew an Irsh Priest. I told him that I had made promise to God that if I came home alive I wanted to serve God and I wanted to go too school to be a Priest. He told me that a colored man would not make a good Priest.
I was devastated by his remarks. Can you imagine that? I was only 20 years old and in good standing with the church upright and steadfast.

I will let you come up with why he thought that way.

Oh well I guess he did not think God liked colored people like some other folk we know.

Manu Salah

Things are not getting pretty. Today markets in Europa, Asia, and South America followed the same pass as the Wall Street by entering a free fall path. The financial crisis has trickled down to the rest of the world.

By the way, I just learned that the US national debt has risen to $10 trillion. Honestly, I'm getting really worried about what may be ahead of us.


Below are some depressing clips from today's news:

Financial crisis: World markets plunge as banking fears escalate

"The FTSE 100 index suffered its biggest ever one-day points fall today while Wall Street dipped below 10,000 points for the first time in four years, as fears over the stability of the global banking sector sent markets sliding worldwide.

The contagion in the US financial market has had central bankers and politicians across Europe running to reassure savers that their deposits will be protected.

At the close in London, the FTSE 100 was down 391.1 points at 4589.2, its worst ever closing performance in points terms as traders looked for chancellor Alistair Darling to shore up of the UK's banking sector. Shares across the banking sector dropped on fears that any deal would involve the government taking stakes in high street firms."
(http://www.guardian.co.uk/business/2008/oct/06/creditcrunch.marketturmoil3)


Dow closes at 4-year low as crisis mood sweeps the world

"The U.S. financial crisis spread around the world like a wildfire on Monday as stock prices plunged here and abroad amid eroding confidence in the world’s banking system.

The Dow Jones Industrial Average plummeted 800 points before a late rally let it close down "only" 369.88 points, at 9955.50. That’s the first time the Dow closed below 10,000 in almost four years."
...
The Fed Monday took more bold steps to keep the widening financial crisis from growing out of control.
...
Yet from well-heeled Europe to emerging upstarts Mexico and Brazil, depositors fled banks and traders fled local stock markets in a panicky stampede to the exits.

What sparked the global selloff in part was the German government’s announcement Sunday that it would backstop all bank deposits following the collapse of a rescue plan for a troubled German mortgage lender. This led to fears that problems outside the United States were worse than feared and a global panic ensued." (http://www.mcclatchydc.com/227/story/53523.html)

In an excellent Op-Ed piece today, David Brooks, a New York Times columnist, presented a simple but plausible analysis of the global financial crisis and shed more light on the root causes of it. Worthy reading:

The Testing Time
By DAVID BROOKS
"Today, world leaders have to figure out how to stabilize economies amid volatile global capital flows. This test is rooted in a shift in economic power.(...)"
You can read the article on this page:
Link:http://www.nytimes.com/2008/10/07/opinion/07brooks.html?ref=opinion