Beware, do not be taken in by the topic title! This topic discussion has nothing with with morals but it is a mere quotation from one of my local papers.

Quote Originally Posted by Retrieved 1st October 2008 page 16 THE NEW PAPER; Adapted from Washington Post column

Wall Street's 7 deadly sins - and Congress' lunacy

GREED - Feeding frenzy of financial houses on sub- prime loans
LUST - Banks' desire to boost value at all costs
SLOTH - US Govt's reaction to the crisis
ENVY - How US public sees bank CEOs' pay
WRATH - US public's anger at having to foot bailout bill
GLUTTONY - US consumer spending - borrowing to live good life
PRIDE - Before a fall - in worldwide markets

Bonus Sin:

STUPIDITY - US Congress deadlock on bailout bill - pandering to partisanship
For all of you dudes not familiar with this situation (which I doubt so), the disaster first started out as sub-prime mortgage crisis. From then, things escalated into the point where by the US Government have to purchased three investment banks; Freddie Mac, Fannie Mac and Merill Lynch. The fourth largest investment bank, Lehman Brothers, was declared bankrupt soon after the acquisition of the three banks were done with. It did not stop there. AIG, the second biggest investment bank, was given a US$85 billion package by the US Govt. And now with the talks of another major buyout of US$700 billion dollars to save Wall Street was discussed, investors' confidence was given a boost. But yesterday, that bailout was not given the green light by the Senate.

As a foreign observer to this whole economic drama, my first reaction to the rejection of this bailout was like 'what the fuck'. What on earth is Senate thinking about when this whole US$700 billion was rejected when it could be used to save the global economy, including that of American's? Is it really the time for the Senate to be bickering at those minute details, when they should be approving the bailout as soon as possible to restore the economy and preventing another Great Depression? Well one thing is true is that US$700 billion isn't like your Zimbabwe dollar notes, which is practically worthless. Is America responsible to fork out this sum of money from their bank roll? We are talking about the green back here. The major disadvantages of approving this package would be as followed,

1) The next incoming American president, be it Obama or McCain, will have a huge financial burden to take care of. The America's economy is already in recession and they would have to deal with the US$1 trillion deficit, should the US$700 billion be added onto the whole Iraq war expenses.

2) US citizens would be paranoia on whether the major of this payment would it ended up as being the banks' CEO walk away bonus package.

But if we have to think of it, the whole thing started out in America. Banks 'killed' themselves by repeatedly lending money to consumers without considering about their liquidity ratio. Consumers borrowed too much, spent it on their lifestyle and did not repay back the bank loans, which eventually becomes bad debt. Now if I repeated question again, does America deserves it?

Many world leaders apparently thought so. They had even asked Bush's administration to take up responsibility of it and fork out that massive sum. Even if you asked for my opinion, I would likely agreed wholeheartedly with them. It does affected me indirectly here. This US$700 billion besides having an immediate impact on the Wall Street, but this impact would be heavy enough to send ripples of assurance to the global economy. I have immediate concerns of this incident too.

1) The fallout would affected SGX (Singapore Stock Exchange). Share prices dropped rapidly and investor's confidence is at its all time low. Surprising to know is that the performance of the stock market is the reflection of the next six month local economical outlook. Already, the job market is at an all time low and is expected to worsen till June 2009. This rejection of the bailout will only aggravate the situation. Taking into account that I would be graduating by this year end, wouldn't the whole job search issue for me becoming a more daunting task?

2) The AIG has a local insurance subsidiary arm in Singapore, in the form of AIA. Soon after AIG was given the bailout of US$85 billion, insurance policy holders here were given repeated assurance that the company would not go bankrupt. However soon after that, the CEO of the insurance company jumped ship and got himself a job at a Canadian bank. The customers went into jittery mode. How would we expected other insurance companies, who have affiliations with banks back in the US, to do when the bailout gets reject? For short, the local insurance sector here would crumbled too. Nobody would even have the confidence to even buy any insurance policy in fear that they might never see its benefits.

Now we are seriously talking about undergoing hard times here. Now that the Bush's administration had informed the public about their plans to review the bailout package on the Thursday's Senate meeting, I have just one instruction to all the Senators and lawmakers out there. Be sensible and accept the bailout! You will not only saved your own ass but also millions of other people worldwide. -.-;