Wisdom in fragments

In a highly emotive and risk-averse market, rationality seems to fall by the wayside, with investors trigger-happy to pull immense volumes of liquidity out of assets at the earliest risk warning.

Politically and practically, the Euro Zone nations cannot be seen to bail-out Greece. Not only would this set a potentially dangerous precedent, but it could also affect the overall financial stability of the system itself.

Our nations cannot exist independently, we are intrinsically linked to the global economy, and another-nations problems will, invariably, affect us.

The USD is the world's most liquid currency, used as the tool of choice for global finance. It is for that reason that we, as observers, must pay great attention to policy changes such as this.

The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.

Central bank system managing US monetary policy and financial stability

The Federal Reserve has, historically, used the discount rate as a tool to 'test' market reactions to monetary policy. We are in extremely volatile markets, and raising the discount rate allows the Fed to observe the reaction their actions will have once they are reflected in the core 'Funds Rate'.

When Tiananmen Square happened, tanks were sent in to deal with them. It's not a joke. Do whatever it takes to stay united… People in front of tanks were crushed. The unity of China is more important than those people in Tiananmen Square. Anyone who undermines the constitution shall be put to death

Toyota's reputation for long-term quality is finished. People aren't going to buy Toyotas, period. It doesn't matter which model. What's happened is sufficient to keep people out of the stores.

Automotive industry analyst and consultant, known for expertise in car manufacturing.

For commercial markets, a shift to collaborative economies is not far behind, and businesses must change their thinking about the nature competition, defending value, and other strategies if they wish to grow in an uncertain future.

Participants in each market, faced with threats, had to put competitive behaviour aside and realise the strength of collaboration.

Yahoo Inc. is aligned with Google in condemning the kind of cyber attacks that Google Inc. said Tuesday it experienced from China.

The proposed link-up between Microsoft and Yahoo has been approved by European regulators, paving the way for the two companies to combine their search engines and take on Google together.

It is the sinusoidal movement of economies between stage 1 and stage 2 which contributes to growth, while the participants in stage 3 very rarely contribute to any real economic growth as their entire theatre is virtual.

Fundamentally, the real way to tackle bubble-formation is through careful understanding and regulation of how financial products are created and traded, not necessarily regulating the capital structure of the markets themselves.

In December 2007, Listed credit derivatives stood at USD 548 trillion - to put that in context, The GDP of the entire world is USD 50 trillion. On top of the listed credit derivatives, there was also an OTC derivatives bubble which had a notional face value of USD 596 trillion.

Classic economic theory simply will not allow governments and regulatory bodies to deal with bubbles effectively, as they will grow to tremendous sizes immensely fast, meaning that the amount of support needed when they burst vastly exceeds the value of most economies.