Life: World Financial Crisis and Some Memories of Them

This week was a hectic and scary week for financial market. Started with the bankruptcy filing by Lehman Brothers, a prominent and global name investment bank, Merrill Lynch 'surrender' itself to Bank Of America, and AIG liquidity problem were surfaced and shocked the already fragile market and sent the world stock markets to free fall. Then came the rescue from US Fed and Treasury by bailing out AIG and flood the financial market with the necessity liquidity in tandem with the most major countries' central banks. Stock market rebound in a very dramatic way... like a roller coaster!!

Sure there some other big and well-known companies failure before, like Baring Plc, a 233 years institution, which was collapsed in hand of one person (Nick Leeson) in a very risky derivatives trading. Or, the well-known Andersen Consulting (now known as Accenture) lost its reputation and good name due to Enron scandal. And, also Bear Stearns 'swallowed' by JP Morgan Chase 6-months ago due to liquidity issue because of mortgage problem in US market. Big names and reputation can be wiped out in just a very short time when it was not managed properly.

Well, for me, in my over 40 years of life, I have seen quite numbers of similar things happened. Back to the first Asian-lead financial crisis which started with bubble burst in Thailand, it sent tsunami effect to the whole Southeast Asian countries, especially Indonesia which was hit very hard. I witnessed how Indonesian currency, Rupiah, free fall from around 3,000 per US Dollar to at one time hit 15,000 per US Dollar (now stabilizes at 9,200 per US Dollar) and prices of goods increased dramatically. People panic since their money worth much less - even though for some who diligently held US Dollar instead of Rupiah, it meant a huge windfall. Then, businesses struggling and collapsing, so as banks - mostly because they were not managed properly.

But, among all of those bad memories, there was one scene which I still remember very clearly and probably the most famous scene during the Asian Monetary Crisis. It was when Indonesia President that time, Soeharto, had to sign a no-choice-agreement with IMF as the last resort to survive the country from collapsing. The live coverage of him signing the agreement while the IMF head standing with hands folded on his chest (see picture below) - looks like a 'look down' for majority of people who watched it, the sentiment that I also felt that day. It looked like surrender kind of ceremony.... well, indeed, Indonesia lost control on its own monetary by signing that agreement for quite numbers of years until all IMF loans repaid. Such a bitter pill to swallow...