Bailing out of 2008

2008, a very difficult year, came to an end shaped by 3 major forces:

a) Economic Collapse: The credit and real estate crisis developed into a global financial crisis when in September investment bank Lehman Brothers declared bankruptcy while the American government seized control of giant insurer AIG, and big mortage lenders Fannie Mae and Freddie Mac to avoid their catastrophic collapse. Some big banks failed while others were folded into larger ones  (Merrill Lynch, Countrywide, Wachovia, WaMu, etc) to avoid panic. With credit tightening, the American government also unveiled bail out packages to prop up banks and the financial system while the Federal Reserve slashed interest rates to zero and started to print money. Global stockmarkets collapsed wiping out trillions of paper wealth and with consumers drastically cutting spending economic activity collapsed in the US and around the world leading to mounting losses of jobs and confidence.

b) Horror paid humanity its annual visit with its share of disasters both natural and man-made. In May a cyclone devastated Myanmar killing 145,000 while violent earthquakes flattened villages in Sichuan, China’s most populous province killing 70,000 (obscuring somewhat the Beijing olympics already tarnished by the riots in Tibet). Besides continued wars in Iraq and Afghanistan, in August Russian tanks rolled into Georgia’s South Ossetia followed in November by terrorist attacks in Mumbai, India’s financial center and in December by Israel’s war against Hamas in Gazas to round up a bloody year.

c) Hope and fear dominated the end of the year with the election in America of Barack Obama as the first black president raising the prospect of change in all sorts of Amercan government policies. The reality of economic collapse with million of Americans unemployed raised fears however of a long recession punctuated by the scary images of the Great depression becoming more prominent in the once roaring American psyche.

Goodbye 2007

Another year has come to an end with so much happening in these 12 months. There was certainly a lot to celebrate but also a lot to ponder.

a) The World continues to be in a mess. Forget global warming for now because from Iraq to Iran and beyond the Middle East continues to be in chaos. The whole region which should has been Chaostan remains a potential source of wider global warfare.

b) The Global economy continues to grow with emerging markets, China and India above all, pulling it forward. In the USA however the clouds are gloomier as yet another financial bubble (housing) burst. People are getting squeezed from all sides: cost of living going up (from food to gas) while home foreclosures skyrocket, and the subprime and credit mess spread. And yes let’s not forget the almost worthless US dollar with the Feds spending like there is no tomorrow.

c) The year of 2 key Innovations. With all these excitement around, people were definitively happy to stand in line for hours to get their hands on some exciting toys. This was definitively the year of the Ipod and the Wii which are shacking up the telecom and game industries. And if the economy continues to worsen lots of people will have plenty of time to play those great super Marios games on their phones or in front of their TVs.

Yes it was a year to remember. Goodbye 2007!