Monday 10:02 a.m. September 22,2008
The markets have opened in New York and so far are down by 109 points. The $700 billion bailout package is now before Congress where the Democrats are asking for certain improvments including greater transparency, limits on executive compensation, greater regulation and additional monies for infrastructure and extending help to financially strained homeowners. But none of these measures is unlikely to hold up passage of the package. Meanwhile on Wall street the two remaining investment banks, Goldman Sachs and Morgan Stanley have announced that with the permission of the S.E.C. they are converting themselves from their investment bank status to holding bank status eligible to take deposits from ordinary depositers, subject to much greater regulation and oversight and constrained to lower levels of risk exposure than was the case when they were investment banks. The Barons of Wall Street are no more.
In the space of a few short weeks they have been vanquished from their towering position at the heart of the American and global financial system. The shock waves from these events will travel far and deep and history will record their demise as an epoch altering event. The days of neo-liberalism and neo-conservatism with their emphasis upon rational markets, greed as good, privatization, anti government rhetoric and deregulation are now history. The era of intervention, reregulation , co-operation for a common purpose and longer term thinking about our common problems is upon us. It has taken more than three decades but it finally has happened.
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