ITS like WOOOW!! their faith is about to be sealed for the coming US election. And when I mean 'their' faith, i mean it includes us as well. No bail out plan, more victims of the financial crisis coming up next. So where do we head now? US Congress is playing politics with the world economy. How do we save these so called New York fatcats from utterly destroying the US financial systems? I'll just parrot out whatever they had stated regarding the crisis because in my capacity as a first year business student (Accounting & finance), I'm still lack of the experience necessary to give out comments.
The main reason for the failure to pass out that specific bill was because many lawmakers were unsure of the consequences of the bill's results. Its a major scenario whereby giving one man (Henry Paulson-US Treasury Secretary) wielding too much power to command the distribution of $700 billion tax payer monies. Yea this maybe a plan to save WallStreet from crumbling through buying out toxic assets from troubled financial institution but who is saving and protecting the tax payers monies. What happens if the whole bail out plan turns to out to be a failure? We're talking about $700 billion , no small amount. There was lack of discussion between the congressman with the US Treasury-Henry Paulson and Federal Reserve-Ban Bernanke. Too much information are remaining ambiguous. The bill stated that it would:
"Give power to the US Treasury Secretary- Henry Paulson the authority to"He deems fit" is too ambiguous for these bill to be accepted by many lawmakers.
buy out toxic assets at a price he deems fit in the market price".
Secondly, many lawmakers hold a stand in their principle of a freemarket, whereby government intervention is unnecessary because hoping the market to stabilise itself as times goes by. But that would also leave room for more financial institution to fail. Every second is money, on Monday morning when Asian markets reopened, we could see waves after waves of drooping share prices, serious bearish outlook where thousand of sellouts occurring at once even though at that time the bill was still on discussion (no rejected yet). However though the Western countries are at the brink of recession, we here in the Asia are being supported by the continuous growth of China and India. Therefore the upcoming potential would not be a spillover effect in Asia although there will be slight turbulence form time to time. What the Deputy Prime Minister also the new Finance Minister said that "our fundamentals are strong" was a complete crap statement because its not because of our fundamentals but because of the ongoing growth rate of China and India that plays a supporting role in stabilising us. Our reliability to the US to buy our products especially crude palm oil is still strong, therefore the recession impact would definitely have a knock-on effect on us but perhaps only a lighter dose.
Overall outlook is still not good, near horrible if nothing is still done tomorrow by the US lawmakers. So from onwards after these crisis, the credibility financial institution of US banks would be a legacy to them, no longer able to rise again after so much of scandal revealed. Some layman may say the economy is bad, but why is bad? Its because the banks across the globe, including our central bank (Bank Negara) are too greedy with their slow but steady income and sought more income by commiting unethical business dealings. Our central bank governor may had retained our interest rate to promote growth, but who knows whats happening in the administration of Bank Negara. Some screw up matter could be happening in there.
This is already a world issue sophisticatedly brought to unprecendented level of fear in a new form of World War coming in the form of survival for the fittest. I do hope I'll still be able to find a job after I've graduated. GULPSSS!!! If there is SOMEONE out there who could mobilise the recapitalisation of important financial institution. PLS DO APPEAR QUICK!!
