Theory of Marketivity

Ahem! Class! Today I will explain the Theory of Marketivity. The solution to the global economic situation lies within the housing and mortgage crisis and strict regulation of banks.

According to CQ researcher, the mortgage crisis in the U.S. not only affected large national banks and insurance industries such as AIG and WaMu, but also the largest wealth management company in the world: the Swiss Union Bank. "The flood of subprime mortgage defaults roiling the U.S. housing market is also feeding a worldwide credit crisis," says Kenneth Jost. "Along with other big banks in Europe and the United States, UBS had experienced a financial meltdown — and in UBS's case a shareholder revolt — after it lost nearly $38 billion, more than any other lender, since the start of the subprime crisis in July 2007." What are people going to do when they see the global economy suffering dramatically? Panic.

The U.S. Stock Market is driven by consumer spending. What drives consumer spending is the confidence each individual has in making a purchase or buy stock through their own financial situation. Just as Kara Baskin describes in the Boston Phoenix, Wall Street tycoons had overseen the hollowed loans as assets for the banks because they said so. "They overplayed their hand and believed their own hype. There comes a tipping point when ego and greed replace empirical data and logical confidence. The problem is, for better or worse, Wall Street sets the confidence level for the rest of the country. They rally, we rally. They panic, we eat Ramen noodles," Baskin writes.

The risky speculation, deception from banks, and deregulation of large brokerage companies have led to significant consequences as the Stock Market suffered an epic loss in this month of October. What America needs to do is target these sources of this economic meltdown. Once regulation is in place with the banking business, it will alleviate the mortgage crisis which will in turn raise the global economic status. All this will require time; years and possibly decades may pass before the Stock Market and universal economy completely recovers.