1 / 14

Shock Waves from the Financial Crisis

Shock Waves from the Financial Crisis. Karim Pakravan DePaul University ITAG October 21, 2008. Massive wealth destruction. Fear sets in…. ..feeding in market volatility. As contagion spreads globally…. … emerging markets feel the heat. Led by the G-3….

valiant
Download Presentation

Shock Waves from the Financial Crisis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Shock Waves from the Financial Crisis Karim Pakravan DePaul University ITAG October 21, 2008

  2. Massive wealth destruction

  3. Fear sets in…

  4. ..feeding in market volatility

  5. As contagion spreads globally…

  6. …emerging markets feel the heat

  7. Led by the G-3…

  8. ..the global economy slides into recession

  9. Dollar slump

  10. Weak dollar..

  11. ..helps narrow the external gap

  12. US & EU Sep/Oct rescue packages($ billion)

  13. History repeats itself • “Promissory notes, interchanged between scheming individuals, are liberally discounted at the banks, which become so many mints to coin words into cash; and as the supply of words is inexhaustible, it may readily be supposed what a vast amount of promissory capital is soon in circulation. Every one now talks in thousands; nothing is heard but gigantic operations in trade; great purchases and sales of real property, and immense sums made at every transfer. All, to be sure, as yet exists in promise; but the believer in promises calculates the aggregate as solid capital, and falls back in amazement at the amount of public wealth, the "unexampled state of public prosperity. • Now is the time for speculative and dreaming or designing men. They relate their dreams and projects to the ignorant and credulous, dazzle them with golden visions, and set them madding after shadows. The example of one stimulates another; speculation rises on speculation; bubble rises on bubble; every one helps with his breath to swell the windy superstructure, and admires and wonders at the magnitude of the inflation he has contributed to produce. • Speculation is the romance of trade, and casts contempt upon all its sober realities. It renders the stock-jobber a magician, and the exchange a region of enchantment. It elevates the merchant into a kind of knight-errant…. The slow but sure gains of snug percentage become despicable in his eyes; no "operation" is thought worthy of attention that does not double or treble the investment. No business is worth following that does not promise an immediate fortune….” • Washington Irving on the Panic of 1819

More Related