Crisis Diary as it unfolds ….

03NOV08 – 09NOV08: Barack Obama, AIG, GM and more …

Barack Obama - the only headline of the week

Barack Obama - the only headline of the week


This week undoubtedly belonged to one person – Barack Hussein Obama.

Barack Obama created history when he became first African American to become president of united states. What this mean to the crisis at hand? If anything, he is a welcome news for economy. Perhaps, he is just the kind of guy the economy needs at the moment. His temperament, his willingness to work in bipartisan manner and more importantly his left ideology which will empower him to use Keynesian stimuli unhesitatingly and nationalization of big corporates if needed.
Other than the news on political front, GM and AIG were center of attention once again. GM is standing on brink of bankruptcy and so are the other
US automakers. Any of them going bankrupt would signal the death for AIG, which is anyway a dead man walking even otherwise. Soon AIG will feel pressure to post collateral for all its outstanding CDSes and will soon run to Fed for another bail-out package. Large scale nationalization seem to be only.
China announced a huge stimulus package and many governments are expected to follow the suit. Are we overdoing the deflationary pressures? Will this lead to global hyperinflation never seen before? Nobody knows. But this should prop commodities market and augurs well for commodity economies and currencies like Aussie, kiwi and loonie.

That’s it for this week.

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November 9, 2008 - Posted by | Weekly News | , ,

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