The stakes are immense, faced with risky cross currents, but I am confident that if in the first year of his administration, president-elect Obama, aggressively addresses these concerns, and he will, the outlook for the economy and thus credit quality will greatly recover
Houston, TX (PRWEB) December 24, 2008
Uba, who received a standing applause from his fellow members, for his lead, starting nearly two years ago, in calling attention to this crisis, echoed the former Secretary of State, Henry Kissinger, at the World Economic Forum's 24th India Economic Summit in New Delhi, India, that the "United States faces a moment of enormous complexity, but also a moment of extraordinary opportunity."
"For a financial meltdown that has already claimed stellar companies like AIG, Freddie Mac, Merrill Lynch, Fannie Mae, Bear Sterns, Lehman Brothers, Wachovia and Washington Mutual, a flood of bad economic news lurks, among them an 8.5% unemployment rate forecast and an extreme credit crunch, as the wheels of commerce, such as bank lending belts to a halt underlining weaknesses in the U.S., while cutting off flow of capital and credit to consumers and companies."
"The credit cycle is the most important psychology in the U.S. economy. In general, a well-functioning financial market drives a healthy economic growth. Thus easing this tsunami credit crunch must be central front. And bridging the gap between speculative, fear and the real economy, with a focus on boosting economic fundamentals and accelerating the emergence of core growth optimism, is what makes great presidents."
"This is time for bold, assertive and upper brilliant leadership. The stakes and facts are beyond distractions."
Uba told the committee that an aggressive $865 billion economic stimulus package that targets the middle class, infrastructure, education, small and medium size companies, healthcare, energy and innovation, is critical.
"In a revenue pursuit from derivatives, high-growth fixed-income products with broad endurance for risk, including Collateralized Debt Obligations (CDO), banks and investment banks, faced with the real estate market and consumers as two viable market segments, ignored the rest of the economy, that when the subprime market began to crumble, it fed a vicious cycle that gained momentum going forward, affecting debt obligations with subprimes far at base, Uba stated."
There are lessons here, Uba said. "In creating these derivatives, Wall Street allowed computers and artificial intelligence to overwhelm their own human intelligence, in the process rendering regulators and many central bankers, worldwide, incapable of risk controls and analysis, essentially driving the locomotive on risk models that completely discounted possible housing downturn, with zero risk inclusions…But the broadest lesson here is that global finance, is increasingly more sophisticated, absolutely demanding that governments and their regulators realize the high stakes. The Treasury department, the Federal Reserve Board and other market-related institutions can no longer pretend knowledge of the markets with an average Joe. Timothy Geithner, president-elect Obama's Treasury Secretary designate, must commit to restructuring the department into a 21st century institution capable of modern financial markets' oversight and regulatory strengths. The strong dollar policy is now insufficient. Larry Summers, the highly brilliant former Treasury Secretary and Obama's incoming director of National Economic Council, the president's closest economic adviser, will be a huge asset. And countries that aspire real participation in the global financial markets must cultivate and bring forward their upper best and brilliant."
"We now have a systemic collapse of regulatory structure and intelligence. The Federal Reserve Board must be restructured. Its inflationary/interest rate trending mechanisms and culture are gravely inefficient and inadequate," Uba said.
"Any stimulus package must help broaden the guarantee reach of the U.S. Small Business Administration. Bolster its banking relationships and relax many huddles to its guarantee capital."
"In a global competitive environment, you don't play the hand you're dealt. Building a winning hand. Most poor and developing nations are where they are, because they are still playing dealt hands, some for more than 100 years," Uba added.
"The stakes are immense, faced with risky cross currents, but I am confident that if in the first year of his administration, president-elect Obama, aggressively addresses these concerns, and he will, the outlook for the economy and thus credit quality will greatly recover," Uba concluded.
© ETI MMVII
About Jude E. Uba
Jude E. Uba, Economic Technologies' Chairman & Chief Global Strategist, developed the Fluid Fence Economic Principle and the Dimax/EXCAP economic growth blueprints and capacities for national economic efficiency objectives.
About Economic Technologies:
The company is leading an ambitious global effort, driven by innovative ideas and products, to help countries achieve massive and sustained economic growth, through the bundling and convergence of breakthrough economic growth technologies and applications, advanced global healthcare access, brilliant infrastructure solutions (water & power), data distribution/delivery platforms and its mega-infrastructure funding concept, EDTC. Working with governments to build a country where everything works. The Company's proprietary economic science breakthrough, Dimax/EXCAP, the product of a 15-year intensive R&D, the first-of-its-kind, is poised to change how billions of people, worldwide, work and live.