Why a Repeat Global Crisis is Inevitable

For the last few weeks the only sound I cannot hear is the sound of suspended, not bated, breath. Its as though people cannot bear to think of the next moment, and perhaps holding breath will hold time. Surely, the following moments can only be worse than the previous ones? Market Crash, bankruptcies, bail-outs, job losses have become buzzwords where M&A, surging stock indices and fat bonuses were not even causes of plain old jealousy

So whats with the fast and feast? Human Nature is the simple answer.As Taleb famously said " Risk Avoidance is not governed by reason,cognition or intellect. Rather, it comes chiefly from our emotional system "

And collective emotions lead to a mob mentality. "Market makes reason". Perfectly sane people who would never have picked a knife except to cook their daily meal indulge in frightful behaviour as a mob. William Bonner and Lila Rajiva trace the reasons for witch hunts in medieval Europe.Plague, the split of Christianity into Catholics and Protestants and religious wars.... And the probable reason, closest facts? Border disputes!

Just as there was a mob (I mean respected analysts) claiming the Sensex would touch 50,000 points are the naysayers saying the global economy will collapse. Its apocalypse now.

Nothing will happen. Even in the USofA the impact of the current event affects 7% of the economy belonging to the financial markets. Of course there will be an impact, but nowhere near as Catastrophic as predicted.

As usual when the streets are burning the crooks make away with the most. Leftists are gloating about the "nationalisation" of AIG, the massive funds the Fed is pumping into the bastions of Capitalism. Yet when all the breast beating dies down the world will go into a recession. Some people will lose their savings, many their homes, but people will pull through.

In 3-4 years people will pick up the threads and get back. In probably 7 years you will see the next bull run.... The next bubble...... It was dot com then its CDOs now , it will be something else next time.....

It was always thus, and so it will be.