Light Visible in Financial Tunnel
by Glen Hiemstra on 08/10/08 at 3:55 pm | 
Mark Anderson is a friend and colleague, and probably the smartest person I know personally. He is long-time publisher of the most widely read online newsletter on the future of the tech economy, Strategic News Service. His organization also produces the number one future and technology conference each year, Future In Review.
Mark has been tracking, as have we all, the current financial and economic crisis. I do not always agree with his entire analysis, but believe he is on the right track with this assessment of where we are now. Today he sent out a special alert to his newsletter list, saying that the pieces now appear to be in place to mark the turning point in the financial crisis. He says he is not calling a “bottom,” but he does believe that we are in better position to begin the long process of recovery.
A few excerpts, with Mark’s permission:
It is not my intention by this alert to “call a bottom.” But I think the steps taken in the last 24 hours by U.S. Treasury Secretary Henry Paulson, U.S. Federal Reserve Chair Ben Bernanke, and other global financial leaders, have put into place essentially all of the pieces necessary for a turnaround in global market stability…
The concerted move by the Fed, in conjunction with banks from China, the UK, Switzerland, Canada, China and the ECB, among others, showed, for the first time in history, that a concerted action was possible. Coming on the heels of outright stupid squabbling between France, Germany and Italy, yesterday, this action put matters that matter front and forward: country national banks will act in the best interest of global stability, and not according to local politics…
The speech by Hank Paulson today at noon was, I think, a masterful and reassuring rundown of all of the various protections and plans put into place over the last week. He emphasized speed, transparency, and quality of decisions, and these seem clear to me. Naysayers will have their shot, but I believe no one today could be doing a better job.
During questions, Paulson was asked about McCain’s proposal to buy mortgages directly, and he noted that the Treasury already has this in plan and power, so it is already among his current portfolio of tools…
Of course, problems remain: banks must turn their lending policies back on, central bankers must move from worrying about global and local liquidity to the proper allocation of capital with their systems, short sellers are about to be let out again in the financial arena, and no real prevention against “vampire” investing (taking profits without contributing to the system) is in place.
I might add that in the much longer term we are going to have to adjust the housing market in the United States in such a way that what is built better matches what average customers can afford and what will be needed given future demographics, something which has definitely not been happening. That is a large project of adjusting the construction and real estate industries, and re-thinking community policies. But with continued smart policy we might just get to do that.
Glen Hiemstra is a futurist speaker, consultant, blogger, internet TV show host and founder of Futurist.com. To arrange for a speech contact Futurist.com.
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