Anwer Sher at PostGlobal

Anwer Sher

Dubai, UAE

Originally from Pakistan, Anwer Sher is based in Dubai and writes for Gulf News, Khaleej Times and Emirates Today. His varied career experience includes banking, consulting, and real estate development. He has a Masters degree in International Relations. Close.

Anwer Sher

Dubai, UAE

Originally from Pakistan, Anwer Sher is based in Dubai and writes for Gulf News, Khaleej Times and Emirates Today. His varied career experience includes banking, consulting, and real estate development. He has a Masters degree in International Relations. more »

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Greed and More Greed

The Current Discussion: Does the crisis on Wall Street mean that the American style of capitalism is no longer the model for the world?


The job I held longest was in banking, for well over 25 years, and a major portion of it involved trading in the markets. A few lessons I learned from were actually common sense (which is not very common these days) and quite easy to grasp:

1. No one is bigger or smarter than the financial markets.
2. Don't listen to predictions on market trend; if the gurus were sure they were right, they would not share the information.
3. Three things drive the financial markets: Greed, More Greed and Even More Greed.
4. Don't listen to a broker, it's his job to make you buy or sell.
5. Never average a losing position.
6. If you want emotions, get married-- the market is brutal, cold and yes, you are alone.

Having traded financial instruments from long bonds, to options and futures, from strangles and straddles to spread trades, I learned most of all that the markets will always remain volatile in short bursts. Whether this is U.S. capitalism, or not is not the point: There is as much greed in the Chinese market as there is in the U.S. It is clear that making profit is a motive in all markets.

Now, in an interdependent global world, the effect of one market on the other is naturally more direct and at times painful. If the question is whether the world economic order is under serious threat, then indeed it is facing a serious crisis of confidence. In essence, the problem has been one of over-leverage and, in some ways, of pure ignorance. It all started with the sub-prime crisis -- didn't people know that "sub-prime" means riskier assets, which are more likely to lose value in hard times? The crisis in the U.S. market has been an economic slowdown, a gross mismanagement of public money, (spending $1.5 billion a day on the war machine rather than on jobs, health and education), and the absence of a viable economic plan.

The "knock on" effect of the crisis on the world economy will stay until enough debt is written off to bring the debt-to-asset ratios back to manageable levels. The crucial question is how much more pain remains in the vagaries of Wall Street before this market finally finds its feet. My guess, a little more pain still remains. However, as with other market crises, this, too, will pass and in time we will see books written about what went wrong and why. As for now, solutions are hard to find.

For the world at large there will be a moment of respite and then a regrouping back to sane levels of asset values and market expectations. That, too, will depend on how the underlying economy begins to perform in the U.S. As for that, my guess is we have to wait for recovery until after the U.S. election.

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