Is There An End To The Meltdown?

Submitted by Bush Tea

It seems to me that the real challenge being faced with this “global economic downturn” is not about good management ‘gone bad’, but rather, it is all about a new social and economic reality that has presented itself to this world.

This is a particularly dangerous situation, since it appears that our best managers (those who knew how to succeed in the old reality) now appear at a loss as to how to proceed and we all know what happens to the people where there is no vision….

The first to be exposed will of course be the speculative fields such as banking, insurance, real estate etc. What house in Barbados should be valued at $40 million dollars? And how does a 3 bedroom 2-bathroom home on 8,000 square feet of land get to have an asking price of 2 million?

Only because greedy speculators were allowed to impose their selfish will. Greedy managers over the last two decades manipulated the system to create ‘wealth’ for everyone (but especially themselves) by over valuing assets, ignoring risks, and breeching rules of common sense. These are supposed to be the people who are our ‘great Gurus of management’. However, as the old folks used to say, “Day does run ’til night catch it….”. All it took was one spoilsport ratings expert to blow his whistle, and the whole scheme is in rolling collapse.

Where Will It End?

The various multi billion dollar ‘bail-out’ plans being bandied about are quite laughable. No one even bothers to try to explain how these funds would address the fundamental problems faced (loss of confidence in the system and in the ‘experts’). These actions will clearly only serve to buy us a few more months, while pouring resources down into a bottomless pit.

Unfortunately, the world’s economic engines (like all pyramid schemes) were designed ONLY for forward motion (expansion). They do not work in an atmosphere of decline. Indeed, decline leads to and ever-accelerating decline (well… increasing deceleration I guess) in activities – bottoming only at the level of fairly basic trade…depression

The only difference between CLICO and most other similar companies is that they broke a basic common sense rule by having such disproportionately large deposits from a single depositor on their portfolio…(without appropriate conditions for withdrawal)

Most organisations that invested in real estate such as our beach lands will shortly find themselves similarly asset rich (on paper) and cash short, as creditors demand their funds while intended victims (sorry, I mean customers) default on million dollar condo and other property deals.

We all heard how well BNB was performing since OSA sold it. I wonder how much of that ’success’ is reflected in book value of questionable assets (such as the ABC expansion), which are largely figments of someone’s imagination.

Solving The Problem

The first thing that needs to be done to address this problem, both locally and globally, is to have a realistic revaluation of assets and an immediate write off of all fictional accounts. Someone has to pay for all the folly that went on in the last two decades. That someone should be the ‘fat cats’, who engineered the various schemes, the regulators who allowed them, and the governments who turned a blind eye. Stability would quickly return as honesty returns to the system.

Instead, these ‘bail out’ plans seem designed to maintain the fortunes of the very ones who raped and pillaged the system in the first place, by giving billions to these crooks in an effort, apparently, to convert the bogus assets into real value. What a stupid plan!!

…what a world !!!

Thank God that we are nearing the end of this nonsense.