To make these changes happen in the shortest possible time, with the aim of reducing the negative consequences and the time of partial paralysis in major economic activities they have to happen in local and global scale, country by country.
First of all the crisis should be faced as a "natural phenomenon of the market" that is cyclical and comes out when there are imbalances and flaws in the system. The crisis occurs to correct the mistakes and to expose the flaws causing thus the improvement of the whole structure and preparing better the players of the market and governments.
The collapse unveils the errors, deficiencies and structural weaknesses. The inadequacy of the current criteria for evaluation and slowness of the officers responsible for monitoring show us the needs for recycling markets, adopting new and more flexible procedures for the existing rules and simplifying the application of procedures. New concepts of security and distribution of market risk should be pursued, under the threat of new collapses.
The global market is one only. Businesses, banks, stock markets interact as one body and discard the concept of country, continent and economic block!
The markets interact in cyberspace speed, while the current mechanisms for monitoring do not have the structure and speed needed to enforce the existing standards, even though they are backed by a demanding legislation. The solution is probably not changing standards, most likely the solution is to establish an organized international structure that communicates instantly thus being able to apply the existing standards on all businesses that are conducted in the financial market and stock market.
The viewing of these weaknesses, as well as the consequent obligation to change them, causing investment in the development and qualification of human resources in order to prepare professionals to recover and understand the consequences of the crisis and the concepts of the market.
Those who do not seek development, qualification and improvement, as well as those professionals, businesses, investors, banks, governments and bodies established by law to comply with, international agreements and treaties will ostensibly be exposed as incompetent, they are all inevitably condemned to disappear.
Therefore, the crisis - as a natural phenomenon of the market - shows that from time to time there must be a natural drought in the cost-control mechanisms, the entities and agencies of government in order to exclude the excesses that usually plaster structures in the public and private sector.
If the processes of self criticism cleaning of structures do not occur as the initiative of them market s’ own agents, cyclical crises - of greater or smaller extent – will always occur to force the changes and expose those who do not want the changes, for the sake of ensuring the sound and safe development of humanity.
The description of the crisis as a natural phenomenon is based on the argument that the crisis only occurs to ensure the "development", which is in the essence of human nature. This is the reason why it is safe to say that the crisis is a natural phenomena of the market focused on human self-preservation.
It worthwhile mentioning a similar example on the issue of nature:
- Imagine a city built by the seaside.
- Many are the phenomena of nature that indicate to humans the strength and inevitability of the water movements (in analogy to market signals of "leveraging").
- If men do not alter their projects, and their ideas - the end - its architects, engineers and mayors, in search of new concepts and skills not conflicting with human concepts of nature (that analogy is the market as an instrument of development and not speculation), building and changing the way cities of the coasts coastal to preserve the people from (preserve the agents of the market) the tsunamis and that will come and take away sand, land, buildings and even human lives that deny the search for protection from the natural system implanted.
We must recognize the need to improve mechanisms for the monitoring of professional qualification and procedures of institutional safety assessment, without going against liberalism, as this is not a fault of the system itself, but a fault of its institutional agents.
In fact, the mechanisms of control, evaluation and implementation of market safety are completely outdated, bureaucratized and slow.
The processes, investments, logistics, infrastructure face the reality of contracts, business and investment shaken by abrupt changes in market conditions and economic fundamentals. World business operates in cyberspace speed, while the mechanisms of control and supervision of them follow the step of a turtle, almost contemplatively. The institutional police bodies must stop being reactive and contemplative, to be interactive.
All agents of the market, its businesses and its assets must be evaluated daily through the existing concepts of transparency and absence of conflict of interest in management and supervision. The strategic realignment is vital.
During a crisis, bad businesses, even the symbolic ones, will find the time and moment to be abandoned. Those businesses that manage to survive out of the crisis are those that show their officials are seeking results, solely based on a pragmatic vision of profit and sustainable objectives.
The crisis is always proportional to the corporate vision, macro-economic and governmental policies. It is the right time to return these old concepts, allowing even the experimentation with models that would not even be admitted as a “test” one year ago.
These circumstances - the most negative and painful ones - occur, as an automatic and natural process of "economic development", focused on the natural selection and "development of the human race."
During or immediately after the crisis, it is possible to identify which policies, ideas, and economic agreements, which countries, governments and companies are sustainable as an economic and human model of social development.
This is the essence of a "natural phenomenon". During a crisis almost all problems, errors and weaknesses are exposed in order to find those to be removed by the process of "natural selection". Only the crisis allows us to discover what would never be discovered without the crisis.
Therefore, the systemic crisis is the remedy that the market itself finds so as to make transparent the vices hidden by failures within the market.
The crisis will always be as big as the number of people, investors, banks, businesses, markets and governments involved in it.
For this reason, the current crisis shakes the world in a proportion never seen before.
With no precedent historical moment the world economy had been so much globalized and interacting with so much agility. All business, prices, accidents and falls, cause dynamic information, instantaneous information, with its own consequences. Markets, firms, stock exchanges and even the countries are now linked, united as in one only body.
The agents of contemporary life, though they are players of the process, they are required to realize that the speed of transport, communication and the existence of a large number of agreements, conventions and governmental treaties, added to the existence of large and mega companies created from mergers and global mergers, have made the world a single large market.
The crisis, from now on, will always be global; will always involve trillions of dollars in interest, hundreds of millions of people and all countries and international organizations of human, environmental and economic interest.
Everything and everyone is connected!
The disappearance of the antagonism of the capitalist world in confrontation with a communist or socialist model was the last ideological boarder of mankind, of the markets, of business and of investment. Even wars depend on these grounds to happen.
Economic crises and scandals, events of global warming, human rights issues and even political and religious issues are now global issues.
A bombing in Israel, the increase of the ozone hole in southern Brazil, the closure of a pipeline in Ukraine, the fire of oil wells in Kuwait, the melting of polar ice caps, a terrorist attack in the center of New York or in a major hotel in India, the destruction of nuclear plants in Iran or frauds in balance sheets and investments of the Madoff’s Fund or a service company in India, are remarkably global events. Any of these facts change the assumptions and values of markets in all countries of the world.
Once, smaller crisis or larger ones did not bring about the world consequences we now experience, because the fundament of the crisis was not rooted in the concept of global business, a phenomenon that occurs on the basis of instantaneous sharing of information and the fast consequences that caused by each business as a tool for boosting the derivative investments, even the credit operations.
Corporations, businesses and commodities are global!
The above mentioned instantaneous speed of Internet, the speed of intermodal transportation, the merger of enterprises and banks in global business, set an environment, and behavior whose regulation and oversight – a very burdensome and multifaceted one - no longer keep up, inhibit or prevent business with unviable fundament.
The reactivity of government institutions in no longer sufficient. The attitude of repression or punishment, after the occurrence of crises does not solve or diminish the effects of it. A structure of surveillance is only effective if it is able to avoid the problems. The modern civilization has technology and knowledge needed for this purpose.
Let us make a historical review:
- In the example of American Crash of 1929, the economic and structural crisis together had as ultimate result the cleaning/sanitizing of a hyper-valued market, the firing of several bad managers in the financial sector and private business who were working in "Evil interlocking directorate" who had the sole purpose of artificially manipulating the increasing of prices for various shares/stock and "commodities” in the stock exchanges in the U.S. The 1929 Crash was the natural market phenomenon that ended up with the sanction - in 1934 - of the law known as SEC Act (SECURITIES AND EXCHANGE ACT OF 1934).
This law the U.S., in view of the progress it brought about, immediately after its creation began to be applied by almost 100% of the securities markets and financial markets of the economies included in stock exchanges.
The same happened with the Enron / Arthur Andersen and Parmalat sector crisis occurred in the world financial and securities markets in the years 2001 and 2003.
The Cases ENRON / Arthur Andersen and Parmalat are symbolic because the faults and weaknesses exposed by them led to the creation of the SARBANES AND OXLEY Act, this law has complemented and updated the rules for regulating the corporate world and the global securities and financial market.
The legal improvements and the selectivity that came out from the Sarbanes Oxley Act originated the now so-called "SOX” standard of corporate management and transparency. This pattern of management - in terms of its quality and instrumentality - was exemplarily adopted by almost all markets and governments around the world and it is also serving as a source of information for the publication of new laws (bills and acts) by direct adherence to the concepts proposed by the SOX system, which although this standard has been edited to be used exclusively in businesses conducted in U.S. territory or from it.
The SOX System - Sarbanes Oxley Act System - based upon North American standards named after the Senator Sarbanes and the representative Oxley have rules that in practice whose greater goal is transparency and corporate responsibility for asset management and monitoring.
The U.S. law has led the largest economies, audit companies, banks, brokers and investors from several countries to adopt the SOX standard, as the best analytical criterion for corporate transparency and absence of conflict of interest. This was a response to factors that were relevant to the Enron/Arthur Andersen case and that resulted from a permanent and promiscuous relationship of clients and the executives from publicly held corporations with their audit companies and rating agencies. This contamination has created "relationships” treaded with conflict of interest and lack of transparency. One could not tell what vicious was cause or consequence. What could objectively be verified is the fact that that the environments of fraud has harmed the normal processes of evaluation and monitoring. The antidote to help the system meet the standards called "Chinese Wall Rules", the definition of "Conflict of Interests" and corporate transparency - "disclosure”.
In the Parmalat case, it became evident that all accounting documents and information, including banking information, whose authenticity has been systematically checked, did not correspond to the real numbers in billions of dollars, infecting with incurable defects to bank reports, rating agencies reports and reports on the financial performance of investments, markets, macroeconomic capacity or simply on the compliance.
The Parmalat episode was marked by the unusual and fragile observation that the evaluators of the accounting firm (auditors, economists, investors and executives), when they came to express in public their doubts about the project investment of 500 million euros of Parmalat in the Epicurum Fund, located in the Cayman Islands, where it was shown the falsehood of accounting information, including in a report issued by the Bank of America in the Cayman Islands, considered as perfectly legal by auditors, accountants, analysts and investors in regard to the compliance of Parmalat for values above 1.5 billion euros.
The fraud was discovered when the Bank of America denied the existence of 3.95 billion euros in cash and hypothetical investments and assets. The lack of transparency in the management of Parmalat, the "conflict of interests arising from the relationship of auditors and executives, led to exposure and to significant losses to more than 115 thousand small investors and savers all over the world who witnessed the vanishing of around 11 billion euros. The crisis that followed was so expressive, that in Brazil, for example, the consequences were - among others - the closing or breaking or the great increase in debts that reached nearly 80% of the milk producers and processors from the country.
Therefore, when discussing the crisis related to the Enron scandal (whose bankruptcy led 5,600 people to unemployment and loss of 68 billion dollars), Tycon, Worldcom, Ahold, and Parmalat (whose losses amounted to more than 8 billion dollars), see the market downturn that followed (fall in prices of bonds and securities traded in the stock exchange).
These crises - which I consider as "natural phenomenon" - used to improve the mechanisms of control and transparency in the corporations, preventing the practice of fraudulent transactions, which were accepted as ordinary ones leading to losses of almost a hundred billion dollars, with global consequences.
The current crisis has its grounds on the lack of speed and instrumentality of the institutions and governments responsible for overseeing the operations and agents of the so-called "new global market."
This inefficiency, which was announced by earlier scandals in the market, allowed that a small debt (5% of total credit operations of the U.S. residential real estate) to become a chain of losses which now identified as the largest economic crisis of the world since the 1929 Crash.
The losses already exceed the figure of 70 trillion dollars, causing panic, unemployment and economic slowdown in every country in the world.
The crisis began within 3 or 4 North American banks specializing in real estate credit, which - with their fast profit businesses - attracted investors from around the world, remunerating long and short term operations with above the average interest rates.
The collapse could only reach the impressive figures we all have seen because the agents and governments responsible for monitoring the market left those credit assets to be used at the same time all over the world so as to support the guarantees and investments that have affected the granting of new credits that were also used to raise the price of shares, overvalue assets of banks and companies from various sectors of the economy.
All these transactions occurred at exponential speed, with derivations in all stock exchanges and banks in the world, generating virtual wealth of geometric proportion, the numbers began to back the credit in companies that had nothing in common with the American real estate market, although this has been the root and foundation of the maximized wealth.
Everyone ended up realizing that all the cycle depended (and depends) on the behavior and health of banks and real estate credit operations performed in the U.S., this sector has experienced major default and the escaping of direct investment. At this moment the chain of derivatives discovered the lack of foundation of an entire international macroeconomic movement, creating the panic that has dropped the price of all property and assets involved directly or indirectly.
In fact everything happened because the oversight mechanisms, in most cases, are not organized and structured to monitor at the high speed with which business happens on the stock exchanges and financial market worldwide.
The multiplicity and economic capacity of the thousands of agents operating both in the financial and stock markets worldwide should be organized and monitored if they are looking for the same investment, or we may create sequential mistakes leading to a cycle of that generates unrealistic "virtual" wealth with overwhelming consequences, because this wealth will leverage investments exponentially wealth and assets used in other investments, creating a multiplicative environment for investment as derivatives.
This weakness should be removed before it produces effects. This is only possible if governments and institutions are aware of all the market movements at the same speed at which they occur. The current crisis was precisely about this inefficiency, this is the reason why in a "natural phenomenon focused on economic development to ensure the completion of development of the human race" a systemic crisis happened, imposing - dramatically - losses of more than 70 trillion dollars, to ensure that the necessary changes actually occur so as to avoid major losses.
The market cannot remain uncontrolled because the chain of operations over operations creates a virtual kind of accounting and financial wealth. This wealth exists away from the real economy in linked operations that if not controlled will feed a cycle in the unreal / real market that is not even backed by the issuance of currency.
This cycle is called "market of derivatives and futures."
When these markets overvalue 10 times the quotes of the real market, the symptom is an uncontrolled autonomy that is completely detached from the productive capacity and of the liquidity of the market and even of the existence of any species of property assets.
Let us make an example: - “Imagine that everybody valued the fact of a person to be the friend of a rich businessman, who guarantees all of his poor friend’s investments, businesses and expenses. As time goes by, others agree that the poor friend, guaranteed by the rich friend, ensures that other poor friends make investments and spending, because they are backed by the rich friend. So all in a chain, buying houses, shares, spending on credit cards, loans, looking like to be rich. One day, it is discovered that the first friend is not rich anymore, he has debts. What happens then? Like a castle of cards, in a chain-process, all businesses and pseudo-values leveraged by the initial wealth, secured by a "presumption of value", sank to the real market that was distorted by the news of the wealth of the first friend. Worse, in the end, all realize - to total despair - that the rich friend had only 10 millions when he was rich, and the trades of his poor friends, with the 10 millions of the original warranty, now amount over 100 millions. The conclusion of the market, then, is that 100 millions virtually disappeared, raised from not more than scarce 10 millions". This crisis only occurred because the government agents failed in their responsibility of monitoring, they were not quick enough to stop the process or to make public all the lack of credit given to each transaction derived, compared with the original transaction and the market, where the real economy lives.
The biggest risk of hyper leveraged transactions is the abrupt way in which the market corrects the distortions installed. The natural reaction of the market is always a "crisis" within the concept of "natural phenomenon" already described. The crisis is always traumatic because the mechanisms of self markets requires the losses to be diluted with as much mass as possible in order to protect the most vulnerable sectors of the economy. This sub-phenomenon of the crisis, the distribution of losses among thousands of investors, not charging this sector of the economy or market directly involved on the basis of the crisis, this is called watered stock, or the watering of losses.
This process, because of the instantaneous pace of the operations and their consequences are not curbed by concepts against the development that - without success - try to impose ideas for the validation of borders or policies that deny the globalization of non-derivative and derivative transactions.
This circumstance, for the proportion it has achieved, it is impossible to be corrected by the market’s own mechanisms.
Small, medium or large crises, followed by watered stocks, can not absorb the volume of capital vanishing, so that it affects all markets dramatically.
For this reason, governments, institutions and regulatory organizations, alongside the Central Banks and Securities Commissions should - immediately – accept their guilt and responsibility.
If these market players do not take the blame and responsibility, the resulting political proselytism and the epidemic hyper-speed, could create new systemic crisis in a short time.
The systemic lethargy forces the fixing of the damages from the of the agents own failure. The countries, their Central Banks and Securities Commissions - which are responsible for system’s oversight are - or at least should be - linked by international agreements and treaties such as the ones from the United Nations - UN and / or Committees of Council Securities of the Americas - COSRA and / or the World Trade Organization - WTO. These bodies are responsible for the lack of procedures for monitoring the real market in leading countries (through their sovereign wealth funds), banks, brokers and all kinds of businesses and individuals to heavily invest in floating assets based on receivable values in a single sector of the U.S. economy, the market size is mathematically finite.
The liability arises, among others, from the fact that Central Banks around the world, most of them signed the International Interbank Agreement and the Basel Accord, had not complied with its mission to monitor and alert to banks, investors from their countries, in relation to the mathematical fact that there was a market composed of net receivables not exceeding 2 trillion U.S. dollars was - virtually – backing and warranting the banking compliance, securities and financial assets valued at 70 trillion dollars all over the world.
Thus, it is necessary that changes occur so as to upgrade the systems of supervision and regulation of these markets. Governments, the national and international organizations must have and tools that enable them to make effective interventions, so that they are not anymore surprised by the misinformation regarding the predatory movement of the market, illegal operations or simply improperly maximized.
Only this way there can be the real accomplishment of the terms expressed in the International Interbank Basel Accord, the COSRA, WTO and UN regulations, among other conventions and agreements as well as national and supranational act s and bills.
It was not by chance that the billionaire Eletrobrás and Madoff cases - were not even investigated and prosecuted by the SEC, COSRA, BIS (Basel), FED, FEDIC, PCAOB, CVM, CENTRAL BANK OF BRAZIL, FBI and the Brazilian Federal Police. These are two examples which are collected in a larger corporate practice context of international repercussion, considering those that are inserted in a context of societal and corporate dishonesty.
A detailed examination of hundreds of major securities, financial and corporate transactions thoroughly described in complaints currently being analyzed by the SEC, the CVM (the Brazilian Securities and Exchange Commission), the Brazilian Federal Police and the FBI in the USA, would not approve accounts, agreements and reciprocal investments that had been assessed by the Central Banks and the Securities Commissions linked to stock exchanges and countries that signed the agreements from the BIS/Basel and COSRA.
From October 2008 up to now, the main business groups and banks in the world experienced significant drops in their revenues.
The vertiginous drop in revenue, in important cases, reaches more than 50%. Example of these alarming figures are the cases of companies and business groups belonging to the sector of Minerals, foundries, rolled steel and metalwork, among others, some examples are the world famous groups Gerdau and Vale do Rio Doce (Vale).
In a comparison of the records of the Central Bank of Brazil data for the exports from January 2008 with the numbers now, February 2009, all sectors of industry, for example, showed retraction.
The biggest slowdowns occurred in the oil sector (-99%), Metallurgy (-74%), mining (-59%), Chemicals (-58%), transport equipment (-55%), clothing (-40% ), Mobile (-34%), Footwear (-28%), Food and Drink (-23%), Tobacco (-20%) and Machinery and Equipment (-9%).
When business groups with the size of the above mentioned enterprises have such a drop in sales, all producers of "commodities" involved (steel, ore, auto parts, industrial supplies, for example. The result, as a whole, is always the fall in consumption that leads to falling prices of all products, byproducts and the value and revenue of companies, banks and governments involved in the cycle.
Prices, then, on a chain of action and reaction, excess supply and falling consumption, sank in the global market, affecting the producing countries of minerals, vehicles, buses, home appliances, among others, as the case of Brazil.
The unfolding of the crisis may be, for example, that companies of modal and intermodal transport, logistics and safety (trucks, warehouses for containers, plant containers, ships and trains - among others), carry less, store less and provide less safety. Imagine if everyone then, including other sectors related to these businesses, no longer buy fuel, renew their fleets, reform and buy trucks, ships and trains. Thousands of tires that are no longer purchased, thousands of maintenances no longer made, thousands of phone calls that are not carried out, hundreds of millions of dollars that no longer move, matches that are not exchanged, and the closing of businesses that are held or - worse - are canceled. All this leads, inevitably – to massive layoffs and drastic reduction of costs in all sectors of the economy.
The fall in prices leads to the reduction, cancellation or lack of business which, in turn, fueled by massive layoffs, leads to the reduction in the sectors of production and distribution of food, causing a subsequent reduction in investment and consumption of energy and oil.
Not because of the entrepreneurs, but because of the lack of revenue and liquidity of the market companies are required to demobilize (resign urgently) employees who do not have what to produce. Industrial plants, offices, hotels, restaurants and shopping malls during the crisis will operate with a huge and significant idleness.
Initially, along with layoffs, there will collective vacations granted to workers in almost all sectors of the economy. When the crisis is definitively established, the process leads to massive layoffs, as we now occurs in all businesses and countries.
After all, if sales and consumption fall, there's no way to pay wages.
With the layoffs, the scenario is of people spending less on holiday trips, acquisition and renovation of houses, in rentals, for leisure, in the expansion of business, in airfares, vehicles rentals, rental of equipment, plastic surgeries, hotels, taxi fares, medicine, cosmetics, food, cars, mobile phones, clothes, private schools, training courses and many other professional activities, businesses and investments that involve in the health of the cycle as a whole. Including governments, whose omission and lack of supervision has lead to crisis, making the tax revenue to fast fall downhill.
The fall of revenue of governments, as occurs in Brazil today, is global and occurs in the worst possible moment. All governments - in crisis - need to keep monetary reserves, on the other hand, they must find a formula to gather reserves ready to help banks that failed to receive their loans, which have their assets and profits shrunk dramatically by the fall of their operations, by the fall in the value of their shares and the fall in the value of the shares of investment companies and the shares recommended to the customers of these investment companies and funds, causing them to suffer equal impoverishment.
Governments that are part of the crisis and whose omissions deepened the crisis itself have to provide the resources necessary to give liquidity to markets, dangerously take greater loans and deepen their debts so as to fill the lack of liquidity in the market as a whole, at times by the issuing of government bonds.
Reserves are needed by governments to pay unemployment insurances and bonuses, pensions and foremost to help all sectors of the economy.
All this scenario, as we can observe, will only find a sign of stabilization, or perhaps a hope of solid solution, when the desire for recovery of liquidity and availability of reserves to the market, at the level necessary to have new businesses opening, thus, generating the recovery, this development will occur only after some years from the effective re-opening of businesses.
The level of liquidity necessary to promote the recovery of development can be achieved only with the issuance of currency, with the simultaneous practice of mechanisms that lead to drastic drop in the interest rate.
The anachronistic simultaneity, issuing of paper currency and the falling of interest rates, is justified in fighting the phenomenon that is materialized in the need - even paying the cost of inflation - to have revenues coming in the country and to generate the accounting of revenue "expectation" as for the recovery of 70 trillion dollars that disappeared from the market with the sharp fall of property values of assets and "assets" of the market.
The disappearance of "assets", money, value of assets and liquidity have been caused by the rapid decline of quotes, values and prices charged in the market, because of the excess in demand for money and the small supply of money. The imbalance has arisen because the losses did not find support in the real economy, as wealth was counted only nominal assets, not backed by data and economic facts from the real economy. Take the example:
A company or person stating that its stocks in a particular company or its investments in commodities, oil, gained value from one million dollars to twenty million dollars, would not find backing in the issuance or circulation for the gain of NINETEEN MILLION DOLLARS that represent its profit, its increased assets. In fact this was referential richness on a small sample taken from a tiny number of businesses, which leveraged with money from financial operations, carried out directly or through derivative applications, contaminated with the valuation of assets of companies and even investors who had not in fact won or received one only real U.S. dollar.
Despite the fact that the raising value (price) of assets, in the example above, had fed from the movement of the market and not the real economy, it was this “accounting” wealth , which served to justify investments, loan guarantees and transforming losses in positive results.
Banks, markets and governments, accounting, backed - rashly - the entire market value of all sectors of the economy. It is therefore true to say that the crisis resulted from the failure of the actions of government, without distinction. Omission, because the rules, agreements and conventions are necessary national and international ones. The default, the unaccountability of the bureaucracy and slow current instruments that have concerned the impact anachronistic .
For this reason, and not by any another one, the property which guaranteed the increasing of assets and the incoming of revenues was withdrawn from businesses, banks and governments, this revenue guaranteed the payment of their declared/recorded liabilities.
This means, everyone became poorer or – from the accountancy point of view - left the position of profit or balance, to the position "loss" and / or "default" (lack of capital or "Empty financier").
Therefore the solution is the in the root cause of the crisis. The solution lies in governments. They should - immediately – finance, massively, credit operations that make real the virtual economy that disappeared - while they need to stop issuing public debt securities with short-term maturities.
It is necessary to issue currency, promote the consumption in all sectors. Services, tourism, entertainment, appliances, vehicles, clothing and food. We need long-terms, low interest rates and top payment for at least 90 days.
Parallel to that investments in infrastructure should also be financed with low interest rates and longer terms, acquisition and renovation of buildings, purchasing of agricultural machinery, industrial equipment and the provision of necessary services in their various sectors.
The credit is the best way to create a virtual economy. The credit does not mean the issuing of currency, but wealth is retained in the real economy, the only kind of ballast for derived applications – if under control.
Governments need to be fast, they must take the responsibility for the crisis.
The inertia penalizes silent and slow governments. These demobilization will be such that recovery will take years and, still, could cost twice the 70 trillion dollars that disappeared from the world market.
The systems of regulation and supervision should be integrated in a concept of a single market, global, instantaneous, simultaneous and with global consequences – whether positive or negative. This is the perception that will prevail - always – in the nominal accounting economy - in terms of real economy, even when leveraged by - spontaneous - but also controlled market of derivatives.