reckons of spring: Wall Street and Uncertainty

Source: http://www.wallstreetfighter.com/

Source: http://andrewprokos.com/photos/new-york/landmarks/wall-street/

I was in awe over what has been happening the past three weeks in the United States and to the world. Lehman Brothers , an investment bank of more than a hundred years declaring bankruptcy, Wall Street stock prices tumbling down as a result, Merrill Lynch & Co., Inc affected and bought by Bank of America, Washington Mutual Bank, one of the huge banks closing down and increasing economic turmoil making the political concerns , i.e. presidential campaign in particular to temporarily stay out of the limelight.

The US government presents a temporary and quick solution to the huge losses going on by proposing a bail-out package worth $700 billion, stocks temporarily picks up, US Congress disapproves the proposal making the stocks to further go down. American International Group or AIG declares losses too and needed help. Europe is alarmed and prepares for the possible effect of the US economy to them and I read that even the oil-rich Dubai has been affected by the crunch although few Asian economics claimed to be not severely affected. US Senate approves the repackaged bail-out plan, tosses it back to the US Congress and finally gets approval. Is this bailout, already signed by the American president yesterday and is now a law could really do the rescue plan as it was pictured to be?

These banks and financial institutions were really huge. I got some important information regarding these organisations. Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. (http://www.lehman.com/) As of 2007, the same website states that Lehman Brothers ranks #1 "Most Admired Securities Firm" by Fortune. Further, the website reported that it achieves record net revenues, net income and earnings per common share (diluted) for the fourth consecutive year based on record results in all three business segments. It acts as financial advisor on largest-ever M&A transaction in financial institutions sector: $98 billion acquisition of ABN AMRO by a consortium of the Royal Bank of Scotland, Santander and Fortis.* Also, it is the #1 dealer on the London Stock Exchange by annual trading volume for the third year in a row. It creates the Lehman Brothers Center for Global Finance and Economic Development at Spelman College, the #1 ranked institution among historically black colleges and universities by U.S. News & World Report.Finally, it establishes the Council on Climate Change to bring together leaders from industry, policy and academia to facilitate constructive dialogue regarding climate change policy formulation and its impact on business. (Factbook index have also indicated that during the first half of 2008, its total assets amounted to $639.4b, book value per common share is $34.21 and Lehman Brothers employs twenty-six thousand one hundred eighty nine(26,189). http://www.lehman.com/who/factbook/index.htm).And the Barclays is not yet included! Since it has celebrated its 150th year in 2000, 2008 was its 158th year in business. Amazing, isn’t it? How could an organisation who has weathered long 158 years suddenly end up like that? Who would have thought that an organisation seemingly stable as this would experience severe losses?

Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of approximately $1.6 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with $1.4 trillion in assets under management at June 30, 2008. ( http://www.ml.com/.) Again, this organisation, as mentioned by my friend pretty much familiar with world trade and economy, just like the Lehman Brothers is always discussed in her books as a successful case of a financial institution.

Washington Mutual and American International Group were also huge but ended up being rescued by the Fed. So how can we explain such too sudden turn of events? Which makes me go back to the question i posed earlier. Could the bailout ssolve everything? I am not an economist nor an expert in foreign ( alright, i just had a semester studying Issues in American Foreign Policies) nor banking and financial policies so i think it will be useful to look at the perspectives of those who i feel are " authority" to answer such question. Warren Buffet,the world's most successful stock market investor in his recent CNBC interviews criticised US Congress for not acting sooner on the rescue plan. He made an analogy about the US economy to that of the athlete who had a cardiac arrest and fell flat on the floor. He said " Paramedics have arrived, and are arguing who was at fault, however, the most important thing is applying the resuscitator. It does not help spending time worrying who is to blame for the patient having a heart attack. "

He then went on saying: "This( referring to the rescue plan) is not a panacea. This will not solve all our problems. " This indicates therefore that the credit crunch is far from over and there are no guarantees that the US economy will get better soon. However, Buffet said that passing the rescue plan is crucial for it unfreezes the credit markets, restoring confidence both in the markets and financial institutions.

The unprecedented circumstances surprised probably everyone and most importantly affected the economic situation probably throughout the world boils down to one word- uncertainty. Given the records of the financial institutions, who would have thought that they will incur such losses, and bankruptcy? The same goes to relationships. Sometimes a couple are uncoupled in some way to another. No matter how both parties seemingly have strong feelings for each other at some point, in some cases the other or another party does gives up and the former "happy union" ends. Some enter legal committments only to end up undergoing a way out probably a divorce or an annulment after seeing some reasons to do so. Some couples promise to "grow old together" but at some point the other one leaves earlier because of illness or death. I can go on and on but the point remains- arguably, nothing is permanent or certain in this world and that is my perspective no matter how positive i might try to become. I have seen empirical evidences or examples of relationships coming to an end and that includes my own. And they ended no matter how hard i tried to hold on- simply because they have to and finding solace in the thought " it was not meant to be".

Over a couple of weekends ago, i was talking to a doctor himself suffering from diabetes that he inherited from his mother and whose sister is my close friend. I was able to attend the funeral rites of their mother in January but i missed the funeral rites of their father in May( both of this year) so he was telling me how their father went. In conclusion he said " Everybody will leave this earth, the thing is- one does not know when and how." I nodded in agreement thinking that different religions(or faith groups to those who does not want to use the term religion) have different teachings about where someone would go " after this life". Yet somehow, all goes to one thing- no one will stay permanently on earth or to those who believes that this earth will be renewed and will become the new heaven, one should still undergo a phase, or this earth will undergo change.

I am a regular listener of a business radio and a classical music radio station, " The Master's Touch". Sometime last week, the radio host has eloquently expressed an important point. Given the uncertainty of the times, where organisations, financial institutions and relationships fail - or maybe fail us, one should put hope and trust somewhere else. Most importantly he stressed, one should put his trust to someone else. And who is that someone else? Someone of greater authority than any royalty or any political stature and could take control of everything- a Divine Providence and since that was a Christian station, to Christians, its trusting Jesus. The speaker then went on saying the reasons why we- should put our trust to Jesus and ending it with a lovely song " Tis so sweet to trust in Jesus". I was convinced and comforted.

Indeed, in these times of uncertainty and even during happier times, i reckon that it is not only advisable but essential for us to put our trust to the Divine Providence. For me, its trusting the " author and finisher of our faith".

I for one did not lost anything over this financial crisis although i feel sorry for those who have lost a lot due to this economic crunch. I have felt the pain and loss of failed relationships but i am fully convinced that we have someone to trust where we can pin our hopes on- Jesus. Eveything may not fall perfectly into place as we have planned but in the end, we will understand why things happen- not necessarily because it is His will but simply because they have to happen. Personally, i have stopped asking so many questions why all things( and this is not limited to personal and emotional issues) should happen that way and learned albeit difficult or seemingly unbearable to " live with it" and move on simply because i have to.

And the comfort of that song "Tis so Sweet to Trust in Jesus" stays on my heart as i think about the uncertainties of this world.