President Obama’s overarching hand, no longer the invisible hand of free market, on the entire financial system will be closely watched as it was deemed that a culture of irresponsibility took root from Wall Street to the Main Street.
One of the most striking aspects of his intervention was his increase in the volume and velocity of money supply in the economy. His government’s policy response to the crisis is to stabilize the confidence and to thaw the credit stalemate that crippled the entire US economy and affected world’s confidence. The domino effect brought devastating consequences to many economies. With the overhaul, they are looking to speed up structural adjustments.
The crisis which was magnified by the shakeout in the subprime mortgage market alongside the toxic CDOs and other derivatives were not properly understood. These weaknesses were due to a lack of transparency in management, inadequate supervision of banks and financial institutions.
In Singapore, whilst the subprime mortgages cause a precipitous drop in asset prices in the US, the effect is not as acute in Singapore. In fact, there was a stabilization of HDB prices which held up well in the heat of turmoil. Singapore’s banks are regulated in a conservative framework and the issues of indiscriminate credits extension are limited.
Whether it is DBS High Notes 5 and Merrill Lynch Jubilee Series 3 products, they have limited impact on most investors in Singapore and even for those who were affected; MAS stepped in and provided stern warning to banks to resolve any misrepresentations with certain groups of less sophisticated investors. There is also a Financial Industry Disputes Resolution Centre (FIDReC) for further mediation. Such acts are enough said of a responsible MAS.
Any ambitious reforms to the Singapore’s financial system may end up prompting more, not less, interventions by MAS. For so long as MAS set up a framework with sufficient monitors and safeguards with constant scanning of macro risks in the ecosystem, Singapore may be better off this way with a steady hand prompting and cueing markets than one that directly intervene in the market mechanism.
Point is -the hand should not be invisible when a crisis is imminent.
Sunday, July 5, 2009
Going Green Cost
Going green has a price tag. Question is “Who is paying?” Whether the mantra calls out for the protection of earth or it is about a “Green Recovery” or “Green Revolution”, it must begin with a mindset shift. No matter how much technology, policies or a Kyoto Protocol defining a framework for environmental treaty, if the Green Economics does not make sense, it will be a hard struggle for businesses.
Our environmental problems originate in the hubris of imagining ourselves as conqueror of earth but as it seems we have become a cancer on nature with global warming and pollution getting awry and out of control. Somehow, with the advent of technology and ever increasing demands for oil, we are seeing some ruination of our eco-system and depletion of our own resources. It does not matter if the oil price spiked at over $140 a barrel or at today $70 a barrel, it does not dent the need for consumption. Consumption, nonetheless, but just hard to swallow.
Will the go-green efforts go the extent to disregard business economics and be operable even at higher costs? For so long as it make long term economic sense, to the top and bottom lines of companies, whether is it consumer demanding the green effort or is it the awaking of the corporate consciousness, the effort will be pursued.
On the brighter side, the Green Economics seems to have developed a certain momentum with the stimulus, subsidies and protectionism for green energy in US. Even China is taking a different tact with the building of more eco-cities to lead the Green Revolution. President Obama’s push for American’s industries to develop new kinds of energy and technologies will eventually pay off – both monetary and environmentally. It is now left to be seen how the momentum will gather pace to ensure that everyone, from governments to consumers, will have that green mindset. Green initiative can be implemented anywhere and by anybody.
Humanity is definitely on the march and I hope that our earth itself is not left behind.
___
Our environmental problems originate in the hubris of imagining ourselves as conqueror of earth but as it seems we have become a cancer on nature with global warming and pollution getting awry and out of control. Somehow, with the advent of technology and ever increasing demands for oil, we are seeing some ruination of our eco-system and depletion of our own resources. It does not matter if the oil price spiked at over $140 a barrel or at today $70 a barrel, it does not dent the need for consumption. Consumption, nonetheless, but just hard to swallow.
Will the go-green efforts go the extent to disregard business economics and be operable even at higher costs? For so long as it make long term economic sense, to the top and bottom lines of companies, whether is it consumer demanding the green effort or is it the awaking of the corporate consciousness, the effort will be pursued.
On the brighter side, the Green Economics seems to have developed a certain momentum with the stimulus, subsidies and protectionism for green energy in US. Even China is taking a different tact with the building of more eco-cities to lead the Green Revolution. President Obama’s push for American’s industries to develop new kinds of energy and technologies will eventually pay off – both monetary and environmentally. It is now left to be seen how the momentum will gather pace to ensure that everyone, from governments to consumers, will have that green mindset. Green initiative can be implemented anywhere and by anybody.
Humanity is definitely on the march and I hope that our earth itself is not left behind.
___
Subscribe to:
Posts (Atom)
