Foreword
FOREWORD
Global architecture is entering the final phase, a pattern repeat that worked in the 1970`s?
How is it possible for Lehman, AIG, Merrill Lynch, and now Citibank to unravel overnight with the possibility for US Debt Default imminent?
The beginning of any report is the most important part of the task and addressed the million dollar question 15 December 2008 to Dr. Leo Thomas Schrutt, Zurich Stanford Eagle;
“How did leadership allow this to happen?”
I have been grappling for a more discerning insight as to what is really going on with scope, timeframes and managing the challenges going forward. Could Japan call for early redemption of UST? The largest powers on the globe have gone over the cliff since August with no soft landing in sight.
Dr leo Thomas Schrutt 15 December 2008 (Bloomberg interview 10 December 2008)“You are asking the 1 million dollar question:
My answer would fill books. It is not only about greed, ignorance and business models that are in everybody’s mouth. The problem I guess is much more complex. The environment has completely changed. Globalisation is by far not digested and not finished. That’s in my opinion the important transition in the “real world” and it will take a lot of pain until something like a new order is established. (Take the car manufacturers as one example.) The financial system however has lost ground. We all know that investment banking is a very cyclical business. But derivative instruments that are getting so complex that they are hardly understood by their architects, not to talk about managers or banking clients, instruments that leverage real goods such as commodities to the x-fold …
In my textbooks I did learn that a bank is only a market place for somebody who has money to invest and somebody who needs some money in invest i.e. in his business. Behind the financial transaction there should be a real economic value creation …
I am afraid this crisis is by far not over. Looking at valuations of some of those structures, there will be a lot of pain to come. May be at first it was an accounting problem, to valuate toxic stuff. But now it becomes an insurance problem. Everybody pretended that he has outsourced his risks. But they must be somewhere. And the last in the chain will be the one who is hurt.
Nevertheless, I think that there are opportunities out and also this crisis will come to an end. Let’s hope that from a distance we will say that this was a rainfall that was cleaning the air.”
History is hardly comprehensible without deconstructing the impact of covert networks of influence that find expression in the overlap of state intelligence, political funding and organized crime.
Consider the following description: “I observed a shadow area, a zone of contact between legality and illegality, between the licit and the criminal, between clean money and dirty money, between honest people and out-and-out crooks. It is a no man’s land dominated by a demi-monde of intermediaries of every kind, of corrupters and corrupted enjoying complete impunity for laundering money in investments which are clean, safe and profitable.”
Sound familiar? The words are those of French MP Francois d’Aubert, chairman of an Anti-Mafia Commission that investigated the pollution of the French and Italian political systems by an alliance of Italian intelligence, the Mafia and a secret political society.
On Monday, 5 January 2009, the United States and China celebrated 30 years of diplomatic relations with Dr. Henry Kissinger former Secretary of State/ Kissinger & Associates. See CNBC interview on the economy where he states that President Elect Obama can take this crisis and establish a New World Order. http://www.cnbc.com/id/15840232?video=985330214
Either way you look at it; the current status will be a subject that will consume all of us for years to come. Whether you focus on the seedy and unpleasant; or on the positive and hopeful, your world will be defined by how you choose to look at it.
This summary review is aimed to capture order in a sea of chaos and capture the aftershock. Clearly, a contagion was evident in 2002 ( see below) , The cause and effect of the collateral damage incurred September 2001 (9/11), and post September/October 2008 changed the world.
You can sidestep much of the unpleasantness of life simply by looking somewhere else.
Hopefully, future leadership will be redefined without this luxury.