david.fm

Hi David,

Concerning the US governmental Bailout plan, I don�t understand how it would reconcile the economical seen?!!! It just transferring cash between pockets� and unfortunately, the transfer would be from the pocket of tax payers to the pocket of irresponsible bank managers should be held responsible for their moves and the plan should target the root cause of the problem!!!

The whole story in my opinion is a camouflage or a smoke shield to cover other heavy draw backs of the republicans retreats from the white house, something like the monkey�s story I believe that Ammar mentioned couple of them.

On the business platform, now is the time of opportunities as flags would roll down other names should raise up. considering the Middle East, I wouldn�t expect a great deal impact to this crisis as the philosophy and culture appreciates dealing with cash on dealing with debts even the next period might have players from the middle east on the US or European playground.

Dear Prof,
I do agree that poor management is the underlying problem, but would really like someone to answer your question: How can you suddenly end up on a Sunday morning with only those two alternatives, bail us out or we go bankrupt? Surely the writing would have been on the wall prior to this? Perhaps there is something more sinister to this than just overconfidence and blindness?

Hi Prof,

I agree 100% with your submissions. I want to re-emphasize that poor management foresight and poor risk management is the bane of the US banks problems. Just as you pointed out above, exposures should not be more than 30%.

I also do not know how any bank, global or local can survive any turmoil when its liquidity ratio to liabilities is also at par or even negative. It should not be less than 30% also. Experience taught us that also in Nigeria.

Proper statutory regulation and monitoring should be put in place for this because it is obvious that these banks take a lot of unnecessary investment risks. All in the name of presenting fat balance sheet to investors.

The US financial economy has also been fragile with the absurd budget deficit the government has been running with full steam.

Hello,

Thanks for the comments. The current crisis going really indicates that capitalism theory does not stand anymore. Why ? well you saw what happened. Interest based economy causes disasters. It's time to move to the Islamic Financial system.

I wholeheartedly agree with the mis-management aspect but again dismayed by the fact that Barclays have pledged to pay $2.5 billion in bonuses to Lehman staff in NY. Another case of reward for failure. Repurcussions will be felt among UK taxpayers as there is talk of an increase in taxes of up to 5p in the pound and the prospect of an additional one million unemployed by the end of 2009.

Dear Dean Costa:

Your point on risk management is vital, don't lend 20 if you only have 10. But have these reckless lenders learnt anything? or have they now learnt that, "Don't worry, the tax payer will bail us out"! The bailout for AIG sort of makes sense but the rest?

Dear Prof.,
I fully agree with your view. You have thrown enormous light on the current happenings in the economic market worldwide. I agree that management has to take credit of whatever happens in the company, good or bad. I also wish to clarify a few doubts which occur in my mind after looking at the current scenario and i would be obliged if you could help me with it.

i) When these situations are nourishing in any organizations. What should be the preventive measures taken?

ii) CEOs should take responsibility, But what if management gives wrong information or mislead the decision makers, in that case what are the alternatives to be taken to avoid the situation?

Thanks & Regards,
Apurv

Prof,

I strongly agree with your points, the tumour last week should be an eye-opener to the Banking sector. The US government intervened and it is contemplating setting up structure(s) that will further tighten or regulate market operations.

Within the week, I recall telling a friend your position on the article �Beyond Warrant Buffen� in which you strongly emphasized on the need to trade on commodities � a message I repeatedly got over the media by many Investors.

Regards,

Richard

wouldn't this only delay the rot ?

Dear Prof.

I agree with your valuable points and like to add that I think the matter is bigger than a failure of individuals to assess ( CEOs ). The answer is " YES "; to your question (Is The U.S. Spending Too Much? ). The unnecessary cost of the unjustified wars in Iraq and Afghanistan are costing a lot of money which are waste with no returns !! these are not investments ; and they made the American economy to be cohesion less; brittle, and very poor to resist sudden crises similar to what had happened. These are signs of empires collapse !

� The financial system is still broken
� Home prices are still collapsing
� Unemployment is still rising
� Real estate is still collapsing
� Treasury bills are virtually worthless, and
� Corporate earnings are on the verge as vanishing fast as you can say �Lehman Brothers�

Is it over ? the answer is also not; and the worst is still on the way!

fully agree to David's view.