This week marks two important events. One - an unfortunate anniversary celebration of the collapse of the Lehman Brothers - and another - mark of a new progress in the eventual attack on Syria.
Starting with the World today in five years from the Lehman Collapse - Have we come a long way from the collapse of the Lehman Brothers even though we know that many other countries particularly the emerging markets and the Europe have yet to recover from the collapse. It somehow seems like baring the US, none of the major economies have really performed as one would expect. This could also be because US was the most affected as a result of GFC. The US though seems to have done good during the last five years - household debt ratio has gone down by more than half and has almost reached the stage what it was in the early stages of the last decade, S&P 500 has performed better than most of the other indexes across the globe and Investors have earned close to 7.7% per year after inflation. This is better than the long run average which is about 6.5 to 7%. Unemployment rate has gone down to reach ~ 7.3% and average labor wages have gone up thus prospering more spending. Europe however has still been behind although there are some signs of progress - banks are not yet capitalized as the talks on Basel III regulations are on the table, countries such as Greece, and Spain are yet to be out of their bankruptcy situation, the debt problem is yet to be solved and most important is the unemployment rate (~ 12.1%). Emerging markets baring China, have crawled growth during this period. So overall it will be difficult to conclude that we have come a long way from the collapse!
This week saw President Barack Obama addressing the American population on the possibility of an attack on Syria. However he started his speech by saying that there are many wrong things happen in the world and we cannot right all wrongs. This was contrary to his stand that US is the messiah of the world. When we retrospect, this is no surprise speech for he had already given away the initiative that he had when John Kerry said in the media that the only way the strike could be evaded is when Syria admits possession of chemical weapons, discloses their location, and destroys them. The Russians immediately cashed on this proposing Syria to disclose the chemical weapons and destroy them. In fact President Obama had lost the initiative even before when he went to Congress seeking its vote so that he can launch a strike on Syria. This to a large extent showcased that he did not want Congress to turn around later. Now everything lies with Syria in frankly declaring the chemical weapons which ideally would be the best possible scenario that could happen as it would avoid any attack on Syria although the chances of this happening is very weak. One that it is very complex to carry out a detailed inspection of the locations and identify the chemical weapons and destroy them when the country is experiencing a civil war. Second that Bashar Assad should support this initiative which the world believes that he might not out-rightly as was the case in Iraq during the Saddam Hussein's regime. However the good way this Russian plan (asking Syria to disclose the Chemical weapons and then destroying them) could succeed will be if Congress votes in favor of the strike stating that US could strike Syria should diplomacy fail. This will keep pressure on both the Russians and as a result on Assad to quickly move on this front.
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