tag:blogger.com,1999:blog-82916344362575875672012-02-16T20:18:56.450-08:00Pentagon Finance International. tel: 0845 224 0736 Fax: 0845 224 0739 This is Blog space created for the use of Pentagon Finance staff and employess, as well as the general public who want to engage in productive intellectual blogging debates on past and future economic and financial issues affecting the global economy. Moderated By: Arthur Ngoka.PF Blogshttp://www.blogger.com/profile/01887265030998046946noreply@blogger.comBlogger11100tag:blogger.com,1999:blog-8291634436257587567.post-81358815542430190892008-10-12T08:01:00.000-07:002008-10-12T11:12:30.294-07:00World equity markets plunged again last week (weekend Fri, 10th Oct), ending a week long dive that matched the falls during the Great Crash of 1929.<br /><br />On Friday 10th of Oct, the London FTSE fell 8.9%, its biggest one-day fall since Black Monday 21 years ago (Oct 19th, 1987 to be precise), hence making last week the second worst week in FTSE history, in which £250bn was wiped off the value of leading UK shares.<br /><br />UK authorities warned that the financial system was on the verge of collapse. Alistair Darling the Chancellor of the Exchequer said: "we need a clear committment today. It is a real test of international institutions that we actually sign up to doing things rather than a piecemeal process".<br /><strong>Furthermore, the G7 said it will take "Urgent and exceptional action" to stem the financial crisis. </strong><br /><strong></strong><br /><strong><u>Q1</u></strong>: Can they? What can the G7 really do? There is no clear strategy for dealing with fear of the unknown..? So what credible strategic options are available within a "free" market economy???<br /><br />Nationalisation should never be an option, surely it is retrogressive whichever way you look at the present situation - but why are prominient G7 member states flouting the free market rules? Re- nationalisation is now taking place on a global scale -which is disgraceful.<br /><br />It is clear that the G7 leadership is in crisis. But who are they leading?...and what is there to be desired from the G7 and their "leadership"? Gordon(twiddle dee) and Bush(twiddle dum) are the worst set leaders to lead the free world?<br />I, like other decent tax paying citizens are feed up, we have all lost a lot of investments in this chaos - but who cares about us?<br /><br />I dont believe the driving force behind this chaos is completely economic...they are unexplainable political forces operating behind the scenes that are also to blame.<br /><br /><strong><u>Q2</u></strong>: Who are they? Are they countries or highly placed individuals who don't care who suffers so long as they achieve their short term and long term economic, political and social objectives?<br /><br />Important economic assumptions concerning <strong><u>human rationality</u></strong>,<strong> <u>efficient market</u></strong><u> <strong>hypothesis</strong></u>, and <strong><u>economic equilibrum</u></strong> have been thrown into chaos - are these assumptions now irrelevant?<br />Can the same assumptions be used to thinker up a solution to resolve the current financial crisis???<br /><br /><strong><u>Q3</u></strong>: In a free market economy, why are UK and US governments interferring to rescue these failed banks, with tax payers money? It is absolutely incredulous and beggers belief!<br /><br />Nationalisation has no place in a free market, so what are the UK (Labour) government, and US Republicans playing at? Have they run out of ideas?????<br />What has happened to the philosophy of the survival of the fittest in a free market?<br /><br />Most ordinary people find the current state of affairs shocking.<br /><strong>Mr Robson a Pensioner from London said</strong>: "How on earth are we ever expected to trust the government? My savings are no longer guaranteed, and the value of my pension has dwindled since Labour came into power in 1997"<br /><br />Surely in a free market , you must expect businesses and individuals to fail - that is how the poor ones fall by the way side and the good ones prosper?<br /><br /><strong><u>Q4</u></strong>: Why then is the UK government rescuing these failed banks with over £500bn of tax payers money, meanwhile there is no help or lifeline being thrown to the ordinary tax payers whose monies are being spent in such a reckless and controversial manner?<br /><br />I expect taxes to go up in the short to medium term, and who knows what will happen to interest rates...a downward interest rate movement would be welcome by most tax payers and businesses alike.<br /><br />God help us.<br /><br />All serious comments are very welcome.<br />Sunday/12/Oct/2008. 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