Gloria Ferris

one woman’s view from a place by the zoo in the city

Archive for September 17th, 2008

Just The Facts, Ma’am.

with 2 comments

 

At times, I have lamented the reporting at our local newspaper, The Plain Dealer.  Today, on the business pages is a Q & A about AIG where Theresa Dixon Murray gives more facts in a few column inches than any of the other news reports I have read so far.  So today, I tip my hat to the Plain Dealer and this business reporter.

“Far-reaching consequences” is the right take on this situation.  Cash-flow problems within a company that has $1 trillion in assets is almost beyond comprehension.  But, if you read the second reason  of why this help by the Federal Reserve was imperative for global financial stability, you get a bit more of the picture than what the national papers have said about the “risky loans” that AIG underwrites.

AIG underwrites the banking industry.  The domino effect would be devastating.  By approving this short term loan, the Federal Reserve has given the financial industry some breathing room to continue to “make right what went wrong”. 

Earlier this month,  an article from The Economist  about Paulson’s nationalization of the housing sector illuminated  how the housing market has caused a big bit of the financial markets uncertainty.  We truly are in a global marketplace.

Late last year, in a comment on Brewed Fresh Daily, I said that the subprime mess would have global implications. I was soundly chastised by another BFD reader.  At that time, I stated that part of the problem was the short term thinking overtaking the corporate world and that everything was transaction based–moving numbers around on a balance sheet.    My hope is that everyone remembers that peoples’ jobs, retirement savings, and our way of life depend on a stable monetary system when making the decisions that will affect our future.   Transition should happen in a deliberate thinking environment with the human factor being considered.

If ever there was a time that our government officials should act in a cohesive bipartisan way it is now.  We need leaders that can effectively govern by best practices and not by the latest polls.  Deregulation may have gotten us where we are today, but regulation for regulation’s sake may not get us to where we need to go.

Written by Gloria Ferris

September 17th, 2008 at 11:34 am