This would be the year of contrasts. The two biggest events of the year symbolize the same thing - US power may be waning, and something must be done very soon to save it.
Lets start with the first event - the great credit crisis. As has been said earlier, it was a game of musical chair being played by the banks, and thankfully, they always seemed to have a seat when the music suddenly stopped. Many corporations as well as a few banks have gone bankrupt in the last 2 decades, but the big ones got bigger. They became too big to fail. But in a complete turn-around, banks now find themselves caught in their own game. All are left with huge amount of sub-standard assets on their balance sheets, and with continuous fall in their market values, its a south journey for most of them this year. Bear Sterns has already been sold-off at throw-away prices, and Lehman Brothers may no longer exist after a couple of days. Nobody wants to make a guess on who would be next, but everybody in almost convinced that this is not the end of pain.
All the great institutions of US are performing badly. The big three of the automobile would may be struggling, and may meet the same fate as their banking counter-parts. The US is losing its hold over all the manufacturing sectors, and now with financial services, this may be the beginning of the service sectors as well. Already a large chunk of the these companies is being owned by Asian funds.
A marked phenomenon has been the interference by the US government and treasury in dealing with this crisis. The treasury tried its might to lend support to the sector, and extended a number of facilities earlier undreamt of. It was a great irony that the greatest proponent of Capitalism and free-market needed government intervention at the time when Socialist countries are turning towards Capitalism.
The second event that would define the year would certainly be the Beijing Olympics. From being described in superlatives all over the world, it was undoubtedly, the best ever sports event hosted on such a large scale. China showed its might to the world, and in the year where US and Europe are struggling with their economies and budget deficits, China spent more than USD 70 billion in preparation of the games. The move has paid-off handsomely, at least in an absolute sense. The world which was already witnessing an ailing giant saw a rising star as well in the same year. China brought an end to the US domination of the games, and in its typical manner. There was no star like Michael Phelps, or Usain Bolt. It was an effort by little known athletes, who together brought a giant to its knees. It was just another example of how socialism conquered the year.
What are the implications of these events for the future? They clearly shows us the divergence between the two big powers today. Whereas much of the money and energy in US has gone into preserving its institutions and survival, China has grown by leaps and bounds. For all the talks about recession and its severity, a country which spends all its year in fighting for survival and arranging bail-outs must surely be in a deep recession.
Lets start with the first event - the great credit crisis. As has been said earlier, it was a game of musical chair being played by the banks, and thankfully, they always seemed to have a seat when the music suddenly stopped. Many corporations as well as a few banks have gone bankrupt in the last 2 decades, but the big ones got bigger. They became too big to fail. But in a complete turn-around, banks now find themselves caught in their own game. All are left with huge amount of sub-standard assets on their balance sheets, and with continuous fall in their market values, its a south journey for most of them this year. Bear Sterns has already been sold-off at throw-away prices, and Lehman Brothers may no longer exist after a couple of days. Nobody wants to make a guess on who would be next, but everybody in almost convinced that this is not the end of pain.
All the great institutions of US are performing badly. The big three of the automobile would may be struggling, and may meet the same fate as their banking counter-parts. The US is losing its hold over all the manufacturing sectors, and now with financial services, this may be the beginning of the service sectors as well. Already a large chunk of the these companies is being owned by Asian funds.
A marked phenomenon has been the interference by the US government and treasury in dealing with this crisis. The treasury tried its might to lend support to the sector, and extended a number of facilities earlier undreamt of. It was a great irony that the greatest proponent of Capitalism and free-market needed government intervention at the time when Socialist countries are turning towards Capitalism.
The second event that would define the year would certainly be the Beijing Olympics. From being described in superlatives all over the world, it was undoubtedly, the best ever sports event hosted on such a large scale. China showed its might to the world, and in the year where US and Europe are struggling with their economies and budget deficits, China spent more than USD 70 billion in preparation of the games. The move has paid-off handsomely, at least in an absolute sense. The world which was already witnessing an ailing giant saw a rising star as well in the same year. China brought an end to the US domination of the games, and in its typical manner. There was no star like Michael Phelps, or Usain Bolt. It was an effort by little known athletes, who together brought a giant to its knees. It was just another example of how socialism conquered the year.
What are the implications of these events for the future? They clearly shows us the divergence between the two big powers today. Whereas much of the money and energy in US has gone into preserving its institutions and survival, China has grown by leaps and bounds. For all the talks about recession and its severity, a country which spends all its year in fighting for survival and arranging bail-outs must surely be in a deep recession.
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