We are brought up and educated to analyze, assess, and evaluate situations, problems, and people and we are warned that being naive is no way to survive in our society and this world. I can vividly remember taking offense to being called naive when I was younger, therefore, adopting cynicism and embracing resignation seemed only natural. One day, I woke up as a "reasonable" adult looking for proof and evidence that this world does not tolerate naiveté. After all, it is easier to lower the expectations of people and government policies than to be hopeful and then disappointed.
I had a conversation with a colleague the other night talking about the automobile industry bailout. We both agreed that the auto industry deserves to fail but the consequence of such failure will be catastrophic not only to the industry itself but the economy as a whole. We disagreed on the root of the problem therefore the solution to the issue. We are not trying to pretend that we have THE solution for the auto industry but the discussion was to exchange information and checking in with our thought process. At the end of our discussion, he said "I don't care about what happens to the Big Three or Detroit, what's important to me is my family and my savings". I nodded in agreement and left for home. As I got on the highway and sat in traffic, it occurred to me that not only are the financial markets around the world intricately linked together, the asset classes are synchronized by various factors and economies, but all of us - human beings - will inevitably be affected by the choices that each one of us make.
This is going to sound naive but we can no longer afford to believe that our choices in our lives only affect us. The consequences of our decisions are borne by many if not all. The financial system meltdown is the manifestation of our beliefs and choices over time. The mentality that our actions do not affect others have been proven dead wrong. We are not many, but we are one. The choices that we make at the expense of others will eventually come back to haunt us, maybe not in our generation, but it will eventually catch up to our future.
Intervention?
I have been itching to write about the financial market bailout but had a lot of considerations so I have been refraining from sharing my point of view until today... Please note that this is my opinion and in no way it reflects the reality of the market.
First of all, the US government's treatment of failing financial institutions in September of this year failed to restore confidence in the financial market and possibly fueled the trading volatility in the equity market. The fed arranged the sale of Bear Stearns to JPMorgan, took over Freddie Mac and Fannie Mae and wiped out these institutions' preferred and equity holders, then the government allowed Lehman Brother to fail without government assistance and turned around the very next day to bailout AIG by extending a $85 billion loan package. Shortly after AIG, the FDIC seized Washington Mutual and threw it into the arms of JPMorgan which made JPMorgan
the largest US depository institution. (I thought the reason for the bailout was because these banks are too big to fail, so why are we making them bigger?) The Washington Mutual acquisition by JPMorgan was completed at the expense of unsecured creditors. As if these weren't enough, FDIC orchestrated the Wachovia takeover by Citigroup with government assistance which was later countered by Wells Fargo with no government aid. (FDIC was going to sell Wachovia to Citigroup with government help for $2.2 billion and Wells Fargo offered $15.1 billion to takeover Wachoiva. Wells Fargo must have gotten the valuation right because Citigroup put up a good fight for this transaction)
In addition to failing to provide equal treatment of financial institutions, Congress also passed a $700 billion bailout package without a thoughtful implementation strategy. Treasurer Hank Paulson announced today that the $700 billion package will not be used to purchase toxic assets that was originally intended by Congress. The money will be used to provide additional equity injection to the banks that have not eased lending practices. A few banks have taken advantage of the TARP (troubled asset relief program) to acquire their rivals to make themselves bigger, pay dividends to make the executives richer, and reclassifying their assets by avoiding mark-to-market to make their earnings look better to ensure their bonuses are in tact. Whether these are intended or unintended consequences of government intervention, something needs to be done so that our financial system, corporations, and small business remain solvent and what is left of the taxpayer money from TARP does not go to waste AGAIN.
First of all, the US government's treatment of failing financial institutions in September of this year failed to restore confidence in the financial market and possibly fueled the trading volatility in the equity market. The fed arranged the sale of Bear Stearns to JPMorgan, took over Freddie Mac and Fannie Mae and wiped out these institutions' preferred and equity holders, then the government allowed Lehman Brother to fail without government assistance and turned around the very next day to bailout AIG by extending a $85 billion loan package. Shortly after AIG, the FDIC seized Washington Mutual and threw it into the arms of JPMorgan which made JPMorgan
the largest US depository institution. (I thought the reason for the bailout was because these banks are too big to fail, so why are we making them bigger?) The Washington Mutual acquisition by JPMorgan was completed at the expense of unsecured creditors. As if these weren't enough, FDIC orchestrated the Wachovia takeover by Citigroup with government assistance which was later countered by Wells Fargo with no government aid. (FDIC was going to sell Wachovia to Citigroup with government help for $2.2 billion and Wells Fargo offered $15.1 billion to takeover Wachoiva. Wells Fargo must have gotten the valuation right because Citigroup put up a good fight for this transaction)In addition to failing to provide equal treatment of financial institutions, Congress also passed a $700 billion bailout package without a thoughtful implementation strategy. Treasurer Hank Paulson announced today that the $700 billion package will not be used to purchase toxic assets that was originally intended by Congress. The money will be used to provide additional equity injection to the banks that have not eased lending practices. A few banks have taken advantage of the TARP (troubled asset relief program) to acquire their rivals to make themselves bigger, pay dividends to make the executives richer, and reclassifying their assets by avoiding mark-to-market to make their earnings look better to ensure their bonuses are in tact. Whether these are intended or unintended consequences of government intervention, something needs to be done so that our financial system, corporations, and small business remain solvent and what is left of the taxpayer money from TARP does not go to waste AGAIN.
The Power Within
Have you ever had other people tell you how great you are and it is just impossible for you to believe them? Have you ever been acknowledged and just do not feel like you deserve it? Has someone told you that you've made a profound impact on his/her life and you just don't know if you can take credit for it? This happens to me all the time and it happens to a lot of my friends and colleagues too. There are so many amazing people in my life that I can see their strengths, their love, their ability to make a difference, and their power. However, the power that they have within themselves is usually hidden from their view that awaits to be tapped into and unleashed.
John is one of the power houses that I know who just radiates energy, charm, and tons of love! I was so fortunately to be there for him as he goes through the landmark forum as he starts to let people back into his life and move on from the past. I was so touched and inspired by his appreciation for inviting him to the landmark forum. I have no doubt that John will continue to touch and inspire others in his life and I am absolutely certain that he will electrify everyone by sharing his power within.
Recently, I heard this quote that I just can't get it out of my mind - We never touch people so lightly that we do not leave a trace. Because of this quote, I no longer (or seldom) gets fiesty with telemarketers or credit card company representatives. By acknowledging the power I have within myself, it not only allows me to contribute to others but it also teaches me to be responsible for managing this power so I can always leave others appreciated and empowered.
John is one of the power houses that I know who just radiates energy, charm, and tons of love! I was so fortunately to be there for him as he goes through the landmark forum as he starts to let people back into his life and move on from the past. I was so touched and inspired by his appreciation for inviting him to the landmark forum. I have no doubt that John will continue to touch and inspire others in his life and I am absolutely certain that he will electrify everyone by sharing his power within.
Recently, I heard this quote that I just can't get it out of my mind - We never touch people so lightly that we do not leave a trace. Because of this quote, I no longer (or seldom) gets fiesty with telemarketers or credit card company representatives. By acknowledging the power I have within myself, it not only allows me to contribute to others but it also teaches me to be responsible for managing this power so I can always leave others appreciated and empowered.
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