Crumble, crumble, crumble...

The economist, in an article on AIG writes:

The AIG bailout shows how hard it is for America's financial authorities to steer a straight course through a crisis that is piling one systemic threat onto another. Bear Stearns had been helped in March for fear of chaos in derivatives markets, in which it was a leading player as a prime broker. And, in taking on Fannie and Freddie, they were belatedly making explicit the implicit government guarantee that the twins had long enjoyed in the eyes of investors. In allowing Lehman to go bust when competitors balked at taking it on, Hank Paulson, the treasury secretary, attempted to draw a line in the sand. But AIG was considered simply too big to fail.

Its been a sad summer for US Financial Giants - long 'known' names have gone down the drain - some more are being consumed, others threatening to go bust. In the era of globalisation, and market integration, the impacts of financial strain in the World's biggest market is going to be felt heavily - in addition to the costlier oil. One hopes the Indian government takes adequate steps.
Although initial reaction belies that hope. (link)

How would this change affect the US elections - would they be less about change - or would the collapse lead a bigger clamour towards change - or a "stronger" President (with a female pit-bull a heart beat away).

We're heading for interesting times!

Tag: Financial Trouble, US, Recession, India, Government Response.