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Old 01.10.2008, 21:45
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Consequences of banking debacle?

There's an excellent thread about "How it all started" with this finance thing that keeps me glued to my BBC money news. What I was kind of wondering is if this will have any real impact on values or how we choose to live our lives?

It appears that people borrowed for consumption by taking out mortages on their houses. But why? Is it because of TV portraying the lavish lifestyles of a select few VIP's? (It's always popular to blame TV... Perhaps for a reason? Or perhaps only because it's there?) Will we see a shift away from this drive to consume, only for the sake of consumption? Initially enforced perhaps by a lack of money, but will it mean that it'll become fashionable not to consume - sort of making a virtue out of a necessity? Perhaps a bit like higher oil prices making it less popular to drive SUV's, thus driving car companies into trying to hype their smaller models.

What about in business? Will this spell an end to the accountants running companies and instead usher in an era where the thing the company does is more important than an artificial return on investment target? The reinstatement of the entrepreneur? I'm not saying that there won't be an interest in getting a return, but will the short-term thinking yield way to more sustainable time lines?

Clearly it'll all be speculation, as it always is when trying to predict the future. Still, it would be interesting to hear your thoughts if you happen to have some to share.
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Old 01.10.2008, 21:50
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Re: Consequences of banking debacle?

Nothing will change. Human nature remains the same. Greed and fear will continue to drive us. We were in the greed phase. Now we are in the fear phase.
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Old 01.10.2008, 22:55
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Re: Consequences of banking debacle?

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Nothing will change. Human nature remains the same. Greed and fear will continue to drive us. We were in the greed phase. Now we are in the fear phase.
Sadly, I agree. When the fear has left the building, complacency comes in and opens the door to greed.
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Old 01.10.2008, 23:17
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Re: Consequences of banking debacle?

Some say that the only thing we learn from history is that we don't learn anything from history.

Still, there have been times in history where ideals other than the ones we have today were prevalent. It could happen again. Actually, watching the news, it appears that many Americans were opposed to the rescue plan partly out of feeling a measure of disgust with the banking sector and its history of over compensation of underachievers whose contribution many times seems unclear. The same feelings could easily then be directed towards media stars and Hollywood. In turn, this could lead to people looking in other directions in search of new ideals to subscribe to.
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Old 02.10.2008, 09:17
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Re: Consequences of banking debacle?

The extension of credit allowed us to live somewhat untethered from reality. I think we've recently lived through a period of fantasy and glamour where cash is king. The problem with cash is that no one is really sure how much its worth anymore. These days are winding down, and a new zeitgeist will start to form. So a lot of the aesthetic values we see in culture and fashion will lose their applicability. We are likely see a cultural shift very shortly.

Not to scare anybody, but disruptions in the flow of goods and services can occur. There could be social upheavals. It could get nasty. Martial law may be instated in some places. There are signs of preparation for this.

We'll see a new sensibility across the whole spectrum of culture. I suspect a conscious effort towards more realism, followed by a strand of extreme escapism. Guns and religion may come into vogue. Or pick your favorite dystopia movie. Sound optimistic? So far, I'm glad I'm in Switzerland.
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