Hell in Crisis: How greed corrupted all

These caricatures while funny tend to accurately depict the boom and consequently the greed that enveloped all the mighty and powerful be they businessmen, executives, Government servants or anyone in positions of power. This eventually led to the downfall and meltdown of the financial markets and brought us where we are today in the financial landscape. Everyone played this game of power wherein the high and mighty kept on dancing (or paying bonuses) mainly because everyone was doing so and too many people/companies were making too much money at the same time. The executives and businessmen were paying off to subordinates because they were making too much money because the company was making too much money. The executives and subordinates alike were spending more in luxury items, large houses, traveling, food etc because they were making easy money and the circle went round and round. All the brakes and controls were thrown to the winds and all rules were bent because money continue to be made. Leveraging, back room dealings, uncontrolled growth, manipulations, low interest rates leading to excessive risk taking, lack of Government & regulatory control and mostly greed all made a lethal mix to bring us to this day today.

Now that companies have stopped making money (stopped dancing), so the Governments (who received large bribes - read donations - and tax revenues) are not happy and neither are the folks who received large amounts of easy money. Hence the music has literally stopped and the world has come upon a crisis.

Good quality, ethical compass, value for money and customer service have all made a sudden and swift comeback.

Anyone who has not been doing so in the past is and will be suffering by virtue of no easy money, no job/income and hence the cycle of money rotating in the system has to reduce dramatically which is being currently supported to an extent by the spending of all Governments in infrastructure projects. We have seen the beginning of this catastrophe over the last few months whereby non financial companies have also gone into a meltdown which include car companies as different as GM, Chrysler, Toyota, Jaguar; Retailers such as large malls in America and other stores; TV companies such as Sony and Panasonic; real estate companies such as Trump (USA), Nakheel (Dubai) and DLF (India) etc; Telecom companies such as BT, not including the hedge funds, mortgage companies, banks and insurance companies that have gone under around the world. Read here the job cuts of first quarter of 2009 across countries and industries.

Another job loss tracker is here from Forbes.com. Please note this is only for announced lay offs of Top 500 US companies. It does not include anyone outside of the top 500 companies or in Govt sector or in independent outlets or in small businesses or self employed etc. Regardless, it is an interesting indicator.

There indeed is a crisis that does not seem to abate just like an oncoming tsunami - of 2004 - that was also never witnessed before!

Today, when America loses 500,000 jobs per month, it is claimed that things are improving, which effectively shows that how bad the things become! If you think about it, until about 2 years ago, America was on a huge growth trajectory and new jobs were being added around the world including USA whereas now with millions of jobs being lost just in 2009 (if we include job losses of 2007 and 2008 the numbers are really staggering and easily go above 15-20m job losses only in America), the media continues to put a positive spin on the news that losing 500,000 jobs is better!

Everyone needs to get over their high horses and realise how bad things have become and will continue to be, for some more time to come.

However, it is certainly true, what a learned economist characterized as TWINE - The World Is Not Ending.

Things shall improve, as eventually everything does, just like a new dawn after a dark night but it will take some more time and loads of patience.


Hell in Crisis
by Edward Sorel and Richard Lingeman
June 2009