What a week! It really has been full of momentous events, in two very different areas.
First, of course, came the complete reworking of the financial industry in the US (and elsewhere, to a lesser extent). Assuming, of course, that the worst is over — here’s hoping. No doubt there will be endless books and such written about this week in years to come. But right now three things come to mind: firstly, I find it interesting how rapidly “conventional wisdom” changes. I remember just months ago that learned figures were saying that the days of multi-functional financial firms were numbered, as their different divisions couldn’t realise benefits from working together — since a broker, for example, cannot preferentially sell his/her own company’s products to a client. Now, just a short time later, everyone is talking about the end of the narrowly-defined investment bank or other focused entity, as a concept, as it’s too hard to guarantee funding in a downturn. Secondly, there’s been the wholesale nationalisation of a large chunk of the financial sector in the US — which, if performed in another country, would probably have been labelled as completely against market principles. It has probably been wise, but still easy to label as hypocritical. Thirdly, it’s still sad to see how excesses amongst a few people drag so many more down with them. Poor regulation and dangerous practices in certain sectors of the US economy have now ruined markets elsewhere in the US, and around the world, despite that fact that many of those countries have very solid credit markets.
The other big news just broke: the National Executive Committee of the ANC (the ruling party in South Africa) has just decided after a marathon meeting to recall the deployment of Thabo Mbeki as president of South Africa. Now starts the constitutional process, but it seems that soon SA will have a new (acting) president. This is but the latest in a long sequence of events. But the hope now is that we can remove the poison of the accusations of political interference in the decision to continue the corruption prosecution of Jacob Zuma. By this stage, regardless of the truth, it seems hard to see how any legal events can be accepted without controversy, especially after the most recent judgment referred explicitly to possible political interference in the National Prosecuting Authority (not, I should stress, in the judicial system). Whether the legal process will continue (that is, whether there will be further appeals in the Jacob Zuma case) remains to be seen. But it at least seems that the ANC is trying to deal with its internal divisions, and are recalling Mbeki in a way that will not lead to unnecessary uncertainty and instability.
Of course, for all of the above, only time will tell. But it’s really interesting, in a morbid way, to be living through events that you know will be seen as momentous in retrospect.