World Crisis Online

What is the fundamental reason for current world economic turmoil? It is a quadrillion dollar question. Contrary to popular perception, the answer is not US housing crisis or exotic derivatives such as CMO’s and CDO’s or high oil prices or cheap dollar. The fundamental reason is lack of trust. People don’t trust the banks with their hard earned money. Banks don’t trust people to lend money. Investors don’t trust the CEO’s and CFO’s of public companies to invest in them . Business leaders don’t trust the political establishment and political leaders don’t trust private enterprises.Finally people don’t trust their elected officials and public institutions. It is a evil cycle: Classic chicken Egg problem.

So who is responsible for it? It is my view that everybody played a part in creating this mess. No one group is individually responsible for it. As People, we didn’t do due diligence of our personal finances before buying an expensive home.Bankers didn’t do due diligence of risks associated with complex derivatives before hoarding them.Public institutions didn’t do due diligence in monitoring wall street and private enterprises. Business leaders didn’t do due diligence of shareholders interest before awarding million dollar bonuses and back dated stock options to employees. The direct analogous to financial crisis is silently happening in the internet world. Without understanding the risks associated with storing our private data in the servers of Google and Facebooks of the world , we are happily uploading our photos, documents and other intellectual assets to these Web 2.0 providers. People need to perform due diligence and understand the risks before uploading thier data to web service providers. What if they shut down their business tomorrow? What happens to your data? Please for your sake don’t be naive or have a belief that Google or facebook won’t shut down thier services. They might if the services are not profitable enough for them.

Source: http://www.codelathe.com/blog/…