Obama, McCain meet to find way out of a grave financial crisis

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From Fazle Rashid
NEW YORK, Nov 18: Dismal and gloomy forecast about the global economy is pouring in from all directions. A survey undertaken on behalf of the Federal Reserve Bank of Philadelphia revealed that the US economy has been in recession since April and it will remain so until the end of 2009.
The respondents, 51 reputed economists, in a chorus said that the US economy is in recession. The respondents strongly feel that the US government would soon come out with a bailout package of $211 billion superceding the package of $150 billion announced earlier this year.
Japan officially announced yesterday that the economy has entered recession for the first time in seven years.
China, the fastest growing economy in the world had few days ago said that its economy has slowed down to the lowest level in seven years. China has been maintaining a steady double digit growth rate for past several years. Both China and Japan have suffered huge dents in their export earnings mainly due to severe economic downturn in the US and Europe.
Banks withdrawing finances from the small companies both in the US and Europe have further heightened the crisis. That is perhaps the single most important issue: the availability of credit to small and medium sized enterprises (SMEs). It is a very severe situation, an analyst was quoted as saying.
Citigroup in a cost saving bid announced yesterday axing of 52,000 jobs worldwide. Vikram Pundit CEO of Citigroup hopes to save $10 billion. The bank has so far written down loans amounting to $50. The axing of jobs, the level of which was not seen in last 15 years, was clear indicator of the difficulties facing the financial institutions.
Bleak news, coupled with mounting signs of global recession, overshadowed any developments at the G20 summit, an analyst commented. The pledge made by G20 summiters to give a shot in the arm to the global growth, avoid protectionism and move swiftly on regulatory reforms failed to calm down the volatile markets. Analysts claimed that in the absence of a well coordinated fiscal action by the G20 nations has further unsettled the investors.
UBS, the Swiss banking giant joined Goldman Sachs in saying that its top executives this year would get no bonus as public scrutiny of bankers' compensation intensified under bailout plans by government. The greed of fat-salaried Wall Street executives has often been cited as one of the reasons for the current economic crisis.
The educational institutions even such names like the Harvard are also feeling the pinch of the credit crunch as flow of endowment funds has suffered steep falls forcing the colleges and the universities in America to a period of great uncertainty. Several university presidents including those at Harvard, Columbia and Dartmouth have sent SOSs to faculty, staff and students describing the financial plights of the institutions.
In an exemplary instance, worth emulating by ever-feuding two political leaders in Bangladesh, Khaleda Zia and Sheikh Hasina, President-elect Barack Hossain Obama and his main rival the vanquished John McCain sat together yesterday promising to sink their political differences and work in conjunction to retrieve US from a grave financial crisis. Obama is making an honest bid to reach out to his political adversaries in much the same Abraham Lincoln did after a embittered election in 1860. The two will work together hand in glove to overcome financial and energy crises and national security. They pledged to ' fix up the country'. John Mccain, according to TV channel ABC, refused to accept the offer of a cabinet post. McCain has two years left of his Senate tenure.
Whatever the outgoing US president George Bush may say about retaining market economy in its present shape, the analysts and experts are unanimous in their verdict. They say, "Whatever institutions emerge from the current crisis, it is clear that the traditional governance of the financial institutions is dead". The banks' managements ruinously failed to assess the real risk their companies took in pursuit of profit. The global meltdown was in no small part due to the failure of the meaningful boardroom scrutiny, an analyst wrote today in a reputed paper.