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Wednesday, March 19, 2008

Last Monday, the World Came Close to Disaster

A lot of people probably didn't, couldn't realize the severity of the situation. Watching the event unfold on twitter and on the web was one thing. Reading the post game account via Wall Street Journal's The Week That Shook Wall Street: Inside the Demise of Bear Stearns was the stuff nightmares are made of. The post game account of the past few days got this thought racing through my mind: we were close to a systematic meltdown. 

A crisis of confidence is an apt and well used description but such phrase does not convey the depth of it.

Had the US Government not acted the way they did, had JP Morgan and Bear Stearns not closed their deal that weekend, Asia would have panicked, and it would have spread like wild fire. Everyone would be thinking the same thing, "I don't want to be the guy at the end of the day holding an empty sack of money". The consequences would have been staggering and with certainty, every nation on Earth would have felt it.

It makes every other concern, sound so mundane, so childish. 

We certainly live in uncertain but exciting time.

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