Day of Reckoning for Americans Who Lived Beyond Their
Means
London, UK - 26 August 2007, 08:29 GMT
Dear ATCA Colleagues
[Please note that the views presented by individual contributors
are not necessarily representative of the views of ATCA, which is neutral.
ATCA conducts collective Socratic dialogue on global opportunities and threats.]
Further to the ATCA submission Asymmetric Knowledge
Risk -- Insurance Lessons for Sub-Prime Contagion incorporating the
conclusion of Prof Joseph Stiglitz's Nobel prize winning analysis (along with
George Akerlof and Michael Spence) of "Asymmetric Information,"
we are grateful to:
. Prof Joseph Stiglitz, Nobel Laureate in Economics (2001), Columbia University,
New York, USA , for "Day of Reckoning for Americans who lived Beyond
their Means;"
Dear DK and Colleagues
Re: Day of Reckoning for Americans who lived Beyond their Means
The pessimists who have long forecast that the US economy was in for trouble
finally seem to be coming into their own. Of course, there is no glee in seeing
stock prices tumble as a result of soaring mortgage defaults. But it was largely
predictable, as are the likely consequences for both the millions of Americans
who will be facing financial distress and the global economy.
[CONTINUES]
[ATCA Membership]
Many thanks
Joseph Stiglitz
Joseph E Stiglitz was born in Gary, Indiana, USA in 1943. A graduate of Amherst
College, he received his PhD from MIT in 1967, became a full professor at
Yale in 1970, and in 1979 was awarded the John Bates Clark Award, given biennially
by the American Economic Association to the economist under 40 who has made
the most significant contribution to the field. He has taught at Princeton,
Stanford, MIT and was the Drummond Professor and a fellow of All Souls College,
University of Oxford. He is now University Professor at Columbia University
in New York and Chair of Columbia University's Committee on Global Thought.
He is also the co-founder and Executive Director of the Initiative for Policy
Dialogue at Columbia. In 2001, he was awarded the Nobel Prize in economics
for his analyses of markets with asymmetric information. He was a member of
the Council of Economic Advisers (CEA) from 1993-95, during the Clinton administration,
and served as CEA chairman from 1995-97. He then became Chief Economist and
Senior Vice-President of the World Bank from 1997-2000. Stiglitz holds a part-time
appointment at the University of Manchester as Chair of the Management Board
and Director of Graduate Summer Programs at the Brooks World Poverty Institute.
Prof Stiglitz helped create a new branch of economics, "The Economics
of Information," exploring the consequences of information asymmetries
and pioneering such pivotal concepts as adverse selection and moral hazard,
which have now become standard tools not only of theorists, but of policy
analysts. He has made major contributions to macro-economics and monetary
theory, to development economics and trade theory, to public and corporate
finance, to the theories of industrial organization and rural organization,
and to the theories of welfare economics and of income and wealth distribution.
In the 1980s, he helped revive interest in the economics of R&D. His work
has helped explain the circumstances in which markets do not work well, and
how selective government intervention can improve their performance. Recognized
around the world as a leading economic educator, Prof Stiglitz has written
textbooks that have been translated into more than a dozen languages. He founded
one of the leading economics journals, The Journal of Economic Perspectives.
His book Globalization and Its Discontents (WW Norton June 2001) has been
translated into 35 languages and has sold more than one million copies worldwide.
Other recent books include The Roaring Nineties (WW Norton), Towards a New
Paradigm in Monetary Economics (Cambridge University Press) with Bruce Greenwald,
and Fair Trade for All (Oxford University Press), with Andrew Charlton. His
latest book, Making Globalization Work, was published by WW Norton and Penguin/
Allen Lane in September 2006.
[ENDS]
We are grateful to:
. Prof Joseph Stiglitz, Nobel Laureate in Economics (2001), Columbia University,
New York, USA , for "Day of Reckoning for Americans who lived Beyond
their Means;"
. Dr George Feiger, President & CEO, Contango Capital Advisors, based
in Berkeley, California, USA for "Suggestions
for Resolving Sub-Prime Dilemma Step by Step;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Understanding Rating Agencies beyond
the Sub-Prime Meltdown;"
* The ATCA Research and Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "Asymmetric Knowledge Risk and Market
Deadlock;"
* Anthony Whitehouse based in Coppet and Geneva, Switzerland, for "High
Credit Ratings and Breakdown of Trust;"
* John Pickering, Vice-Chairman, Labour Finance and Industry Group, based
in London and Tunbridge Wells, UK, for "Role
of Auditors;"
* The ATCA Research and Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "ATCA QUERY: Role of Credit Rating
Agencies;"
. Peter Tasker, Founding Partner, Arcus Investment, based in Tokyo, Japan,
for "Resilience of Corporate Profits &
Sub-Prime Fiasco -- Global View from Japan;"
. Daniel Morler, Head of Middle East, LGT Private Bank, based in Vaduz,
Liechtenstein, for "Human Factor, Information
Lag, Geo-Politics and Central Banks;"
. Justin Urquhart Stewart, Director, Seven Investment Management, London,
UK, for "Pride Before the Fall -- Those Who Don't Know that they
Don't Know;"
. Martin Wolf, Associate Editor & Chief Economics Commentator, Financial
Times, London, UK, for "To Cut or Not to
Cut: Federal Reserve must Prolong the Party;"
. The Hon Al McDonald, Chairman and CEO, Avenir Group, from Michigan, USA,
for "Balancing The Role of Management in Extreme
Financial Turbulence."
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Subprime
Crisis Spreads Across Regions and Financial Sectors;"
* Hervé de Carmoy, European Vice-Chairman, Trilateral Commission,
based in Paris, France, for "Role of Large
Financial Institutions in Fuelling Crisis;"
* Dr Jim Walker, Chief Economist, CLSA, based in Hong Kong for "China
Chaos and Subprime Butterfly;"
. Ashutosh Sheshabalaya, CEO, India-Advisory, based in Brussels, EU, and
Bassilly, Belgium, for "India turns History
Upside Down;"
. John Elkington, Chief Entrepreneur, SustainAbility, based in London, UK,
and returning from India, for "Mother Convulsion
- India's Third Liberation;"
. Stephen Lendman, based in Chicago, Illinois, USA, for "Slow
Motion Train Wreck" via Ashok Khosla, Chairman, Development
Alternatives, New Delhi, India;
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Market
Convulsions;"
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Federal Reserve's Changed Focus;"
. Bill Emmott, Director, UK-Japan 21st Century Group, based in London and
Somerset, UK, for "Japan's Strong Yen;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "The Asymmetric Loss of Trust and Chain
Reaction;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Public
Inquisition of Credit Rating Agencies may Accelerate Downturn;"
. Dr George Feiger, President and CEO, Contango Capital Advisors, based
in Berkeley, California, USA, for "Watch
out for Dramatic Winners;"
* The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Systemic
Risk & Sectoral Meltdown: Heightened Correlation and Deleveraging;"
. Rudi Bogni, Chairman, Medinvest, and Director, Old Mutual, from Basel,
Switzerland, for, "Non-Stop Central Banks'
Intervention;"
. Dr Ravi Batra, Professor of Economics, Southern Methodist University,
Dallas, Texas, USA, for, "Towards a Global
Economic Crisis?;"
. Aurora Carlson, Founder, Open One Center, based on the West Coast, Sweden,
for "The Coming Storm of Change;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Large
Quake hits Quants as Computer-Driven Quantitative Hedge Funds Short-Circuit;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Prolonged Credit Market Correction Ahead;"
. Prof Dr Norbert Walter, Chief Economist, Deutsche Bank Group, based in
Frankfurt, Germany, for "Economic Consequences
of The Sub-Prime Crisis;"
. Anthony Whitehouse based in Coppet and Geneva, Switzerland, for "Regulators,
Hedge Fund Lending and Cross-Selling;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Perfect
Storm: Credit Freeze and Distress Selling by Hedge Funds;"
. Dr George Feiger, based in Berkeley, California, USA, for "Two
Faces of the Same Coin;"
* The ATCA Editorial Team, based in Canary Wharf, London, for "Contagion
and Systemic Risk? ECB Injects Record Euro 95bn post Major Disturbance;"
. The ATCA Editorial Team, for "Flight to Quality
as Markets finally Appreciate Risk;"
. Robert McNally, Chairman, London Chamber of Commerce Property and Construction
Group, for "Erosion of Commercial Real Estate
as a Solid Asset Class;"
. Alexander Hoare, CEO, C Hoare and Co, Private Bankers, based in the City
of London, for "Destructive
Creativity, Leverage and The Derivatives Market;" and
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, for
"The Fear of Central Bankers -- Flight from
Illiquidity, Derivatives and Heightened Risk of Contagion;"
in response to, "Are the Currency Markets Warning
that there is Trouble Ahead? The Precipitous Decline of the US Dollar and
its Impact on the World."
* Denotes ATCA QUERY: Role of Credit Rating Agencies
We look forward to your further thoughts, observations and views. Thank
you.
Best wishes
For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency
Alliance (ATCA)
ATCA: The Asymmetric Threats Contingency
Alliance is a philanthropic expert initiative founded in 2001
to resolve complex global challenges through collective Socratic
dialogue and joint executive action to build a wisdom based global
economy. Adhering to the doctrine of non-violence, ATCA addresses
asymmetric threats and social opportunities arising from climate
chaos and the environment; radical poverty and microfinance; geo-politics
and energy; organised crime & extremism; advanced technologies
-- bio, info, nano, robo & AI; demographic skews and resource
shortages; pandemics; financial systems and systemic risk; as
well as transhumanism and ethics. Present membership of ATCA is
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over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen
and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at
Academic Centres of Excellence; 500 Inventors and Original thinkers;
as well as 250 Editors-in-Chief of major media.
The views presented by individual contributors are not necessarily
representative of the views of ATCA, which is neutral. Please
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