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  • Dec 18, 2014
  • Updated: 10:05pm
My Take
PUBLISHED : Thursday, 31 January, 2013, 12:00am
UPDATED : Thursday, 31 January, 2013, 5:37am

Admit it's a 'Western financial crisis'

Why do we continue to call the recent turmoil the global financial crisis and not, as it should have been from the start, the Western financial crisis? After all, we have taken to naming financial crises by their origin in recent decades. It really should have been the "US and the euro zone financial crises".

So why this exception?

I was led to this question after reading the column of a highly respected British economics commentator - for whom I have the highest regard - in which he named the following: the Asian financial crisis of 1997 and 1998, the Russian financial crisis of 1998, the Brazilian currency crisis of 1998-99 and the Argentine crisis that ended in the latter's default in 2001.

To his list we can add: the Mexican peso crisis of 1994 and 1995 or the Tequila crisis, as Wall Street humour had it; and the Latin American debt crisis of the 1980s, which affected at least 16 countries in the region.

Yet when he described the most recent crisis, it was the "global financial crisis". Is there any doubt that The Trouble really started in the United States around the summer of 2007 when its housing market bubble began to burst? Sure, its effects eventually percolated through the global economy, and it was followed by the euro zone crisis. However, the major emerging economies recovered quickly and came out relatively unscathed.

The answer is, of course, Western arrogance - particularly American arrogance.

In a moment of frustration during the height of the euro zone crisis last year, European Commission president Jose Manuel Barroso stated that the continuing global crisis was triggered in the US. It was no more than a statement of fact, but it was enough to provoke a backlash from US broadcasters such as the Fox news channel.

To their credit, most fair-minded US commentators have acknowledged this basic fact, but persist in using that exceptional nomenclature. It must be due to hurt pride. For decades, everyone assumed Western policymakers and central bankers knew all about economics and finance, so such crises happened only to little brown people. But hubris is that moment before you fall flat on your face. And that is just too painful to acknowledge, even if it is impossible to deny.


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This article is now closed to comments

Alex, you once again betray a typical, parochial Hong Kong chip on the shoulder and an inability to hold up a mirror to Asia. The banking capitalists are multinational, they do business in HK as well as in America, and they have been sticking it to much of the rest of humanity since 2008.
Grow up and get over your resentment of the Americans. If it wasn't for the USA China would have ended up speaking Japanese in the 1940's.
Apart from a self centred, parochial **** on semantics, your point is what?
Alex, it is Global because of the scale not the origin of the crisis. In 1997 the Asian crisis the scale was so small and even then China economy was still small. The other crisis had made no major impact to global economy virtually. But this recent one it involved trillions of dollars and actually if you are trader that time, you felt the whole world was collasping? You would felt this was Global. If you recollect china stocks loss almost 70%, Hk was 33,000 heading to 9,000 HS? Even China government had to pump 4T RMB to pop the market otherwise factories closed and everywhere will be big unemployment.
Now US stock is 5 yrs high almost back to pre rash level. hK is almost 24,000 vs 33,000? China SH is still at 2400 vs 6,000 + pre crash that is still almost 60% under. Had any of you wondering what is happening? Part of that also attribute to the fact at precrash, global money was in china pushing up the equity. That's why I hope you all understand the magnitude of the crash or crisis is "Gloabl"
Re Hoi Polloi
pslhk Jan 31st 2013
All the more reason to call it WFC
Think Asian flu
Australian flu
or Spanish flu
All named after the source
Don't go away yet, bmr
Honest compliments here:
I like your adoption of
Ulysses’ Molly Bloom style

Why the feelings so strong
and the disputes so excessive
over some harmless and non-inconvenient truth
The West is all right
the source of kind and good and wealth
and never wrong like the rest of the world
Don’t even imply otherwise
AL, write something else, you’ve been warned,
or some in the “Western” community
who read only what they like
will despise and ex-communicate you.
This is a silly exercise in futility.
Lo has nothing to say but try to rabble rouse
The rabble have been roused
The column is a success
At each others throats
With pointless platitudes
The Westerners cry foul
Pointless arguments flung about
And tomorrow another column
And off we go again.
See you tomorrow guys!
Don't go away yet, bmr
Honest compliments here:
I like your adoption of
Ulysses’ Molly Bloom style
interesting format problem
dialog box appears and dispears
causing mis-sent and double sent
It's like a bad tempered child who doesn't want to be alone guilty on something and would drag all of his classmates in the same sh*t.
But US wants to have his claws, words on everything so that the world won't revolve without him.
Or to put it even more simply, US sound like an injured runner asking other runners to put the race on hold for them and to fairly run it
It's global because everyone's banking reserves are parked mostly in US debt.




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