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Johannesburg - The global collapse of markets can be compared to the 1989 fall of the Berlin Wall.
So says Finance Minister Trevor Manuel.
The tumbling of world markets will lead to a need to think in a totally different way about markets, just as the collapse of the Berlin Wall introduced new perspectives on the world order.
Old theories will need to be dusted off. Existing theories will have to change. One thing is certain - the next few weeks will define the future.
Analysts in the USA say the shape of the recession is a "U" or a "V". Manuel thinks, instead, it is an "L". The markets will move down and we will all land up down there. Things will have to change.
Manuel was speaking yesterday on the release of his biography, Choice, not Fate: The Life and Times of Trevor Manuel.
He discussed, inter alia, the impact of derivative instruments on the financial crisis. One specific derivative instrument, CDF (credit default swap) involved about $100bn in 2000. By 2007 $67 000bn was involved.
The problem with derivative instruments is that nobody knows whose savings are involved or what the assets concerned are really worth - or how far the whole story will unravel.
The other problem is of course that the whole story is not limited to Wall Street - there is, for example, concern in the US about job losses in the motor industry.
According to Manuel there is one good thing in all this confusion, and that is that governments are once again coming into fashion. People's beliefs that markets are rational will also disappear, he says.
- Sake24