OGジェンヌの今をマターリ語れ125
Crises come and crises go, but this one seems to be in a class of its own. And now that it has arrived, it doesn't look like it's going away anytime soon.
The media started out by talking about the credit crunch. Now the headlines are all about the global recession. And with good reason. Economies
throughout the world are suffering from the most pronounced setbacks they have seen in some time.
On the face of it, the situation does not seem to make much sense. There's no doubt that a global credit crunch is under way,
but what we need to pay more attention to is the cause: The world of finance drifted so far away from the world of goods that it acquired a life of its own.
Wall Street decoupled from Main Street. That being the case, one would've thought the turmoil would confine itself to the financial sector. Not so.
Within days of U.S. investment bank Lehman Brothers' liquidation, trouble was starting to brew in the real world. How can this be?
The answer is that while Wall Street may have decoupled itself from Main Street, Main Street continues to rely on Wall Street to make the money go 'round.
The slicing and dicing of loan assets and their repackaging into securities may have nothing to do with the real world, given that all the action takes place
within the confines of Wall Street. But when banks start going under as a result of trouble in the market for securitized loan assets,
the resulting drain on liquidity hits the real world very directly.
This is irrespective of whether companies raise capital in their own right by issuing securities or go the more traditional route of requesting loans from banks.
T
The media started out by talking about the credit crunch. Now the headlines are all about the global recession. And with good reason. Economies
throughout the world are suffering from the most pronounced setbacks they have seen in some time.
On the face of it, the situation does not seem to make much sense. There's no doubt that a global credit crunch is under way,
but what we need to pay more attention to is the cause: The world of finance drifted so far away from the world of goods that it acquired a life of its own.
Wall Street decoupled from Main Street. That being the case, one would've thought the turmoil would confine itself to the financial sector. Not so.
Within days of U.S. investment bank Lehman Brothers' liquidation, trouble was starting to brew in the real world. How can this be?
The answer is that while Wall Street may have decoupled itself from Main Street, Main Street continues to rely on Wall Street to make the money go 'round.
The slicing and dicing of loan assets and their repackaging into securities may have nothing to do with the real world, given that all the action takes place
within the confines of Wall Street. But when banks start going under as a result of trouble in the market for securitized loan assets,
the resulting drain on liquidity hits the real world very directly.
This is irrespective of whether companies raise capital in their own right by issuing securities or go the more traditional route of requesting loans from banks.
T
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