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We are in for more turbulence. The consequences are clearly spreading from Wall Street to Main Street. The recent performance of nonfinancial stocks indicates that investors are well aware of the fact.
The Fed (美国联邦储备局) now, like the Fed in the 1930s, is very much groping in the dark. Every financial crisis is different, and this one is no exception. It is hard to avoid concluding that the Fed made a big mistake when deciding that Lehman Bros. could safely be allowed to fail. It did not adequately understand the possible consequences for other institutions of allowing a primary dealer to go bankrupt. It failed to understand that its own actions were bringing us to the brink of a destructive financial battle.
If there is a defense, it has been offered by Rick Mishkin, the former Fed governor, who has asserted that the current shock to the financial system is even more complex than that of the Great Depression. Absorbing the shock is more difficult this time because it is internal to the financial system. Central to the problem are excessive power, lack of transparency, and risk taking in the financial sector itself. There has been a housing-market collapse, but in contrast to the 1930s there has been no general collapse of prices and economic activity. Corporate defaults have remained relatively low, which has been a much-needed source of comfort to the financial system. But this also makes resolving the problem more difficult. Since there has been no collapse of prices and economic activity, we are not now going to be able to grow or inflate our way out of the crisis, as we did after 1933.
This time the Fed will provide however much liquidity (流动资金) the economy needs. There will be no tax increases designed to balance the budget against the economic slump.
And what the contraction (收缩) of the financial services industry takes, the expansion of exports can give back, what with the continuing growth of the BRICS (金砖五国), no analogy for which existed in the 1930s. The ongoing decline of the dollar will be the mechanism bringing about this reallocation of resources. But the US economy is not going to be able to move unemployed investment bankers onto industrial assembly lines overnight
What does "Main Street" represent?
The Hippocratic Oath (希波克拉底誓言,即医生从业前所立的保证遵守医德、拯救生命的誓言) is taken by doctors and other healthcare professionals swearing to practice medicine ethically (合乎道德地) and promising not to do more harm than good when treating a patient.
It's a shame there isn't a similar oath taken by government leaders, bankers, brokers, traders, and regulators, among many others too. Clearly the financial markets are in need of a refresher course in the subject of ethics.
I'm in New York this week to consult with a law firm regarding the MF (short for Man Financial) Global case. They hired me to help them analyze the situation and advise them. In my opinion what MF Global, and in turn the CME Group and Commodity Futures Trading Commission have done is a truly betrayal of customer trust and their moral obligations.
I've also had the opportunity to walk around Wall Street, where I chatted with the "Occupy Wall Street" folks, and really listened to their stories.
I talked to many people who have been deeply impacted by the poor decisions made by government and business leaders, reckless regulators, and corrupt banks.
A wide array of once-trusted and respected institutions have shown a general disregard for basic ethics and moral obligations, thereby undermining the public's trust, and confidence. You reap what you sow.
Many of the media reports say that the vast majority of "Occupy Wall Street" protestors are a lost generation of "hippies" (嬉皮士) out for free love and aimless protest. But from what I can see, that's way off base. What we have are a lot of people who feel deprived of the right to vote for the American Dream, which has now turned into the American nightmare for many.
The fact of the matter is that the protests may not be well organized. But the underlying distrust of financial and government institutions has spread to all levels of the socioeconomic scale, and the protests reflect that.
The "99 percent" as the protestors call themselves, are angry over foreclosures (取消抵押品赎回权) and lack of due diligence (应有的注意) by banks, lack of a proper healthcare system by a broken government, and an almost nonexistent job market. The list goes on and on.
Wall Street, Congress, banks and financial institutions must find their moral compass, so long buried, and use it to navigate (导航) out of this disaster and regain public respect and trust. Otherwise, America as we knew it may never be the same.
What can be inferred about Hippocratic Oath according to the passage?