Keith Watanabe * NET 2.0

The recent monstrous price drop in Lehman's stock along with the announcement Commerzbank in buying off Dresdner Bank from Allianz are not great signs for me.  Washington Mutual is another bank (my own in fact!) facing huge financial troubles.  Considering that banks/finance are what prop up the economy, one has to wonder whether our money is safe after all in this.

I ran some scenarios in my head about what might happen.  It's possible that many banks are going to undergo massive mergers and acquisitions as well as layoffs.  The assets that banks want most, naturally, are the money that we have stored in them.  We might be seeing something like what has gone on in Japan for the past two decades or so in the constant mergers, creating super banks like Tokyo Mitsubishi-UFJ, Mizuho and Sumitomo.  We're seeing it already with things like JP Morgan buying out Bear Sterns' assets.  Rumors has it that Bank of America might end up being the major buyer for Lehman Brothers.  In the end, we might see fewer banks or perhaps even nationalized banking systems, as indicated by the Feds' recent move in pulling Freddie Mac under the government.  Naturally, the larger overall concern in this situation is the lack of choice in the banking industry if something like this might occur.

Another somewhat frightening scenario is the possibility of a global depression.  The 2001 dot com meltdown mostly eroded tech stocks, but other industries were still relatively good.  However, now we're seeing a full meltdown of numerous industries, all chained together.  The massive loss of jobs to 2002 levels will certainly affect holiday spending, the typical point in time, especially in America, where many retailers count on for determining the following year's economic situation.  The problem this time is that prices for necessary goods like food and gas are at an all time high, so many people may be inclined to pinch pennies.  As a result, the economy will suffer as more companies look to short term gains and layoff workers.

In the tech bust era, you had a concentrated area where things burned out.  This time, you're looking at numerous industries.  So one has to wonder if the overall economy can recover.

Of course, that depends on the leadership of the country.  With Palin running her mouth on attacking Russia, I'm reminded of the Great Depression and WW2 (although these two events were separated by a decade, but many signs are starting to point to a new depression.  With people losing their jobs, confidence growing low, banks blowing up, prices skyrocketing despite people not having money, population increasing, fears of global warming striking, indications of global warming via the recent hard hitting hurricanes, people in the world naturally are fearful and desperate. 

The last time we saw the world get out of the depression partly was a result of industrialization.  Of course, a good reason behind the consequence of industrialization was producing for the machines of war.  So it's quite possible that a ferverent, impatient and nutty leader (like the ones the Republicans are propping up) will do something equally nutty and attempt to start a war to de-focus attention on the economic problems, rejuvenate the economy through concentrated spending in military (which honestly is America's chief economy), depopulating the earth through an expensive, drawn out war that will be extremely high tech (biowarfare, tech warfare, etc.), potentially getting rid of another of America's chief competitors (it could be Russia, China or some other large country that America can put up on TV as the face of the enemy).

Unfortunately, it seems partly that this may be the only way America can justify NOT paying off its debt.  I've heard how a good deal of debt now is external where America owes other countries (like China).  It would be immensely convenient for America to clear its debt through a well placed invasion or story to invoke blind patriotism in its citizens who will become restless over their state.

However, one has to ask whether America can win such a war.  China is huge and America has made many inherent enemies over the years.  People will never spit back in America's face directly, but come outside the country and you'll hear how people truly feel.  That war potentially could expand everywhere.  I can see places like the Middle East, South America, North Korea, and parts of Eastern Europe banding together against the US.  And the US would be stupid to simultaneously piss off China and Russia.  With those kinds of alliances and the subtle hatred most people outside of the US have for America, it's hard to see America stand up again.  The only thing America really has left is the military.

I think some big victims in this are the people who arre living in more internationalized cities.  The ones inland that have few if not no contact with the outside war are the ones easily provoked as they are already dumb and easily brainwashed (religion is a powerful tool to keep people stupid).  So unfortunately, those inland states are going to be voting with their blind pride and lack of foresight.

Personally, I hope that none of this happen.  It's not really a scenario(s) I want to live through.  I'm hoping that America does the right thing in electing Obama rather than that old fart McCain and that mad stupid woman Palin.  I doubt that the economic situation will improve anytime soon, but if the leadership of the country falls into the wrong hands, far worse consequences will occur.