The people are stirring

October 10, 2011

Global Macro

Over the past few years since the GFC first started and got intense, since governments bailed out their banks and then placed their economies into reverse with austerity measures in order to pay the bills the chances have been rising that a politician and or politicians somewhere would start to realise that in throwing in their lot with the big institutions that the hoi polloi would feel they were wearing the costs.  From this point it would be possible that all the work to rescue global finance might be reversed as rational self interest morphs into  nationalistic policies.

To their credit even if it is in a fractured and somewhat anarchistic fashion European politicians have steadfastly tried to move forward on a solution. They have ignored actual protests in Greece and Italy, intellectual protests in Finland, Germany and beyond and they have tried to push on toward some sort of solution.

But there seems to be a growing feeling in the hoi polloi of many countries that the medicine to cure for the excesses of the GFC are heavily slanted away from them and in the words of Peter Finch “They’re mad as hell and not going to take any more of it…”.

What better example of this than in the nascent but growing “Occupy Wall Street” crowd. It would be easy to dismiss these people as the lunatic fringe and some certainly have but its reach is growing outside of New York and CNBC reported on Sunday that more than 900 separate events have now been set up across the USA.

There is something happening in the populations of the globe and as a behavioural finance/economics guy I reckon we are seeing a new economic order slowing being built. Not in so much as these protesters will bring down the bastions of politics and industry but like the tea party before it this movement has the ability to change the politics of the world’s biggest economy.

If it changes the politics of the economy it can potential change the politics of bailouts and return moral hazard to the big global financial institutions that have so far been bailed out essentially to help the common good. This is an interesting time for all of us, Australia and the Australian banking system remains in good shape as the RBA reiterated recently. But something is happening overseas, something very interesting.


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