For Pony!

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The number of posts on this blog have been dwindling lately and though it seems that I no longer touch some of the more serious topics here, this doesn't mean that I no longer care or don't have an opinion about them. Let's take for instance the debate and commotion about the financial crisis, not only in the USA, but also in Europe.

While it may seem that it all started with the sub-prime bubble bursting in the US, I'm convinced that if you believe that, you are missing the whole underlying issue. Most - I'm no financial expert - European banks have not issued sub-prime mortgages, yet they did invest in institutions that did. Take away a certain amount of support beams from a building and it loses integrity and collapses. If you build your house on quicksand, should you be surprised that even after years of relative stability, suddenly cracks appear and minutes later the whole place tears apart?

What we see right now is not the result of the sub-prime market collapsing, but rather symptoms of a fundamentally flawed way of doing business. It's always about "more for less", extending credits for which there is no security, consumerism and meeting expectations.

The past week(s), both in the USA as well as in the Benelux (Belgium, Netherlands, Luxemburg) politics and central banks alike have been fabricating over the top plans to "save failing banks". Last time I checked, banks were companies that worked to earn cash, they are commercial entities. If you are willing to take risks, you should not come knocking on the door when things go wrong, but refuse interaction or sharing when you rake in the big bucks. You can't have all the benefits, but none of the potential risks.

Now, let it be clear that while I would most definitely support seeing one of the current players in this crisis fail, it would also have a serious impact on people that "assumed" their money was safe. If I deposit money into a bank - yes, I do that too - I get a return on it. That return is the payment for letting the bank use my resources to generate more for themselves, however, that also means that I carry at least a part of the risk involved of doing business. If there is no risk, there is no reward.

I guess that what I'm trying to say here is that even John Doe should think twice before accepting an offer, before signing up for yet another credit, or at least try to know what exactly he is investing in. If we all took a bit more responsibility for our actions and choices, there would be less need to clean up the mess later.

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This page contains a single entry by ServMe published on October 2, 2008 12:34 PM.

Finished was the previous entry in this blog.

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