Monday, January 2, 2012
Ineptitude: 2011 Edition
Now that we have stumbled, headfirst into another year after we all barely escaped the last one alive, it's time to reflect, as they say. And while our success and victories might serve as the sweeter ingredient in our 2011 memories, it is undoubtedly more entertaining to parade out the failures for one last lap around the track.
Embracing said tone, we at EconStu would like to present 3 economic failures of note in 2011. Sadly, unlike personal flops, economic ones take a while to fade to the background, and, in some cases, cannot be relegated to "Memory Land" just yet. But enough! Here they are:
3. MF Global gets its hand stuck in the wrong cookie jar.
It was Halloween when derivatives broker MF Global showed the world its hand. That hand, it turned out, was alarmingly void of money. Money that belonged to clients. MF was not stashing that cash away for a rainy day, protecting form the hardships of the world. Actually, MF didn't seem to have much an ideas as to where it all went. It appears the company, in reality, decided to use this customer money to cover up some of its own mistakes, namely, bets on European sovereign debt.
Also, MF Global was a "primary dealer." That means it was one of a handful of firms allowed to trade directly with the Federal Reserve. Well... That's reassuring.
2. The Clock almost strikes midnight on Congress
We should well remember the fiasco in the middle of the summer of 2011. Here's the brief:
The U.S. has a debt ceiling (Why? I don't know).
Congress habitually raises said ceiling to allow the Treasury to borrow money to pay people to things (read: pay the governments employees).
The Tea Party recently rose to power (hence, they have a fresh agenda).
Some right wing politicians decided to NEVER raise taxes... Again.
They almost failed to pass the debt ceiling raise.
They did (in the end).
We got downgraded.
3. Europe's in trouble.
Get rid of your euros!!!! NOW!