PO201
Randy Bush
10/19/2012

Hot potato around the world
Today, in this era of globalization, the globalization is transforming not only good news for trade but also bad news for disaster. Globalization has had its most profound influence in the way states, businesses, and individuals deal with financial markets. For example, in the video, as result, systemic risk had gone global, the panic from bear stearns spreads to lehman brother, spreads to AIG, spreads to Goldman, it was going to spread, it was going to infect the rest of economy, this is like a disease spread, finally, the bad news spread throughout the Europe, as the Ireland has problems, Iceland has bankrupted. A lot of countries falling into financial crisis in the worldwide. However, someone who knows these beginning in an American company and trouble in the U.S housing market. The consequences of these actions were disastrous and a global financial meltdown.
Let us turned around to see what was going on. The Bear Stearns Companies, a global investment bank and securities trading and brokerage firm.In March 2008, the market were voting “no confidence” in this company, it has made credit default swap deals worth hundreds of billions of dollars, all over wall street and around the world. The Fed thought that if Bears go bankrupted which would cause a cascade of other failures .At this point, every single part of Wall Street is plugged into other part of Wall Street. This is a huge web that connects everyone. Ben Bernanke felt that the risk to the system the financial system as a whole would be too great. It had to be contained, that the government viewed as necessary to avoid a systemic risk. So, the Fed provided an emergency loan to try to avert a sudden collapse of the company. The government’s attitude towards Wall Street. Both Paulson and Bernank continued to insist al was well. The market seems likely to be contained. Unfortunately, things had got worse as the crisis has spread. Finally, the market were crashing, systemic risk became a fact.
Liberalism and mercantilism are theories of economics and also ideologies that shape state policies. Liberalism sees individual households and firms as the key actors in the economy and views government’s most useful role as one of noninterference in economics except to regulate markets in order to help them function efficiently. Hidden in the market is the mystery of the “invisible hand.” When the Fed is bailing out Bear Stearns, the free marketer are believing the best government was no government. In fact, the meltdown was happened, the government throw their principles out the outside. They need to save the economy, AIG became a full nationalization. More importantly, the government went on to intervene directly in bank markets and capital into banking system. There's no doubt that the government taking a central role in the financial systems.
The United States financial system which is not only the most complex and