Shades of Schadenfreude
As the United States wallows in the worst financial crisis since the Great Depression, the world looks on with horror, fear and sometimes guilty pleasure.
PHOTOS
The Bailout Felt 'Round the World
A look at how an American made crisis has shaken economies the world over.
Rarely does an event capture the world's attention as the American financial crisis has in the past few days. In Mexico, they're calling it the "American FOBAPROA," an echo of that country's infamous 1994 bailout fund. In Beijing, many are hoping it will chasten China's free-spending materialists. In France, President Sarkozy views it as a vindication of heavy-handed government policies. The crisis, which has caused the spectacular failure of storied banks like Lehman Bros. and Wachovia, and probably more to come, hasn't caused a global financial meltdown (yet). But its effects are being felt on minds and pocketbooks around the world. Here—from our correspondents in Britain, France, China, Germany, South Korea and Japan—are glimpses of the international reaction to the panic on Wall Street.
—Barrett Sheridan
Britain: Rooting for the rescue plan.
The British don't have time to gloat. They're too worried about their own pension funds and savings accounts. Last week, the historical Scottish bank HBOS failed and now another high-street stalwart, Bradford & Bingley, has gone under. While most people don't understand the first thing about the FTSE, let alone complex derivatives, there's a pervasive feeling of cold panic. "It's like bad weather," says Tom Norman, 41, "That's how I see it. We've got a hurricane coming towards us and there's nothing to be done but hunker in."
Bankers are taking the blame for the crisis. The Archbishop of York, the country's second senior prelate, has condemned traders who cashed in on falling prices as "bank robbers and asset strippers." The generic trader makes a good whipping boy: "It does make me angry that this situation has been created by greedy, irresponsible, feckless city boys," says Katherine Walker, 27, who works in publishing, "The financial world has been acting in a megalomaniacal fashion and deserves to be taken down a peg or five. This is a terrible situation for the average hard-working family. It happened to my family in the 90's during the last downturn and affected us deeply for years." In the Square Mile itself there's a similar antipathy toward suited traders: "That's what happens when you get greedy," says James Terrell, 29, a construction worker on a cigarette break just a stone's throw from the Bank of England, "What goes around comes around. It's not just the Americans—they're alright. Everyone thinks because they've got the most money they're to blame. But we're all to blame. We always follow them anyway—that's inevitable. It's going to effect us all."
Still, any schadenfreude toward the global banking community is only a distraction. "While I love to see bankers suffer, actually my son is one, so I'm pretty torn," says architect, Stephen Brown. "I know too well how disastrous these slumps can be. During the 1991 recession I was basically bankrupt—it all happens very quickly. So what's the use in finger-pointing? I don't want to see the Americans go down the pan. Everyone knows that we'll follow." The average Briton is staring at the eye of the storm. If anything, they're rooting for America—and Paulson's rescue plan—hoping for a quick fix before the crisis lands on their own doorstep.
—Sophie Grove, London
France: The bailout is 'profoundly revolting.'
French President Nicolas Sarkozy, in a speech before 4,000 supporters last week, seemed at once to stake his claim on I-told-you-so's about unbridled capitalism and to legitimize the sort of state intervention he's taken flak for in the past. "When the American taxpayer is getting ready to spend one thousand billion dollars to avoid generalized bankruptcy, it seems the legitimacy of public powers to intervene, in the functioning of the financial system, is no longer in question," he said. The irony of the free-market president George W. Bush proposing a massive intervention was not lost on business leaders. "Seeing big American banks saved by privatizations, one almost wants to scream, 'Marx, come back, they've gone crazy!'," wrote Arnaud Lagardère, general partner and CEO of the Lagardère Group, in the financial daily Les Echos. "We're seeing, in renewed form, the most debatable aspects of Anglo-Saxon capitalism called into question."
Unbridled speculation and collapse aren't entirely unknown in France. Rogue trader Jerome Kerviel cost the Société Generale five billion euros earlier this year. But the French are sympathetic to U.S. citizens who will ultimately pay for the bailout. "It's a scandal," says Lyne Khabbaz, 28, a public relations executive who came to France from Lebanon eight years ago. "One, because it's the small-time saver who pays, who loses his loans, his money, and then on top of that, it's up to the small-time depositor to bail them out. And then how is the state going to fill its coffers back up? Are they going to raise taxes? It puts too much of a load on the small-time saver who has strictly nothing to do with this, who's fighting day-to-day to meet his needs and his family's needs. So to me this solution is scandalous. I find it profoundly revolting." Nicolas Menant, 31, an auto industry project manager, thinks his government would have had the same impulse. "In the United States, the state doesn't tend to involve itself in the private sector. But this has gone beyond the private sector—it's more of a public sector issue."
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Member Comments
Posted By: amy04790460 @ 11/05/2008 11:50:08 PM
Comment: The House is discussing another economic stimulus package right now!!!
Please email your congressman and tell them our economy depends on it.
Nancy Pelosi: http://speaker.house.gov/contact/
Hilary Clinton: http://www.hillaryclinton.com/help/contact/
John Shadegg: http://johnshadegg.house.gov/Contact/ContactForm.htm
I wrote John Shadegg complaining of bailout plan and he wrote me an email "assuring" me it was the right thing to do. Needs to get BIT*HED at more I guess.
Posted By: cani77 @ 10/13/2008 6:23:26 PM
Comment: THE GREAT BUSH DEPRESSION
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
He perfectly predicted the current meltdown and the picture he paints about what will happen next
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
The government took them over because they are bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
the credit markets are frozen and all of us may suffer beyond anything seen in generations
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand how its been broken.
It is no surprise that he doesn't. The people that make up these securities use quantum mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He was the last to know somthing was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a budget surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?
Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
which means running the biggest smear campaign in history.
They think they can just tell you lies and you wont be smart enough to see through it
Let's teach him we are smarter than that
Stand up and hold them accountable
Bush isn't on the ballot this year but his policies are
Elect Obama Biden 2008
Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
http://www.youtube.com/watch?v=r36Xc0GG4iQ
Posted By: cani77 @ 10/13/2008 6:22:59 PM
Comment: THE GREAT BUSH DEPRESSION
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
He perfectly predicted the current meltdown and the picture he paints about what will happen next
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
The government took them over because they are bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
the credit markets are frozen and all of us may suffer beyond anything seen in generations
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand how its been broken.
It is no surprise that he doesn't. The people that make up these securities use quantum mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He was the last to know somthing was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a budget surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?
Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
which means running the biggest smear campaign in history.
They think they can just tell you lies and you wont be smart enough to see through it
Let's teach him we are smarter than that
Stand up and hold them accountable
Bush isn't on the ballot this year but his policies are
Elect Obama Biden 2008
Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
http://www.youtube.com/watch?v=r36Xc0GG4iQ