Cloud Clarity vs. Shadow Banking
23 March 2008 :: by jr3o
CAN THE BURGEONING INTEGRATED FABRICS OF WEB 3.0 HELP GENERATE A BROAD, SUPER-RESILIENT TRANSPARENCY THAT SAVES INT’L BANKING SYSTEMS?
The United States is facing what some experts are calling an “economic perfect storm“, with historical economists worrying about symptoms and reactions “not seen since the Great Depression”. Resources (natural and financial) are increasingly scarce, strained by tight credit markets and by competition from major emerging economies (China and India), and food prices are soaring.
One of the most serious aspects of the current crisis is tied to the widening deficit in the credibility of major financial institutions. The New York Times, for instance, is reporting:
The Federal Reserve not only [has taken] action unprecedented since the Great Depression — by lending money directly to major investment banks — but also has put taxpayers on the hook for billions of dollars in questionable trades these same bankers made when the good times were rolling.
“Bear Stearns has made it obvious that things have gone too far,” says Mr. Gross, who plans to use some of his cash to bargain-shop. “The investment community has morphed into something beyond banks and something beyond regulation. We call it the shadow banking system.”
The lesson may be that we have a problem of endemic manipulations, permitted by current regulatory and technological standards. What if it were possible to build into international banking institutions —including but not limited to the manner and volume of transactions engaged in by investment banks— a transparency-insuring mechanism based on the dispersed computing power of an integrated web-based “cloud” matrix?
While a primary function of Web 3.0 must be the innovative enhancement of privacy safeguards, it should become increasingly possible to create broad-spectrum data-screening aggregator applications that allow for the creation of a banking process safeguard fabric. Multiple unique and even competing software analysis platforms could work on the same expansive datasets to help prevent dangerous overdependence on excessively volatile market trends.
On Tuesday of this week, the UK’s Independent newspaper published a cover story, including a photo of Americans standing on line for charitably donated food, titled ‘2008: The Great Depression’. The Independent looked to the 28 million Americans reported to be receiving food stamps, more than 9.2% of the current population, adding that:
While some media outlets have challenged this characterization, and politicians have been wary of using such grim terms, the confluence of economic stresses is such that looming recession may be just another cause of what could be serious eco-political upheaval. Already, the Bush administration has implemented monumental changes to the US financial regulatory system.
The ‘Though tLeader‘ from South Africa’s Mail & Guardian newspaper puts in this way:
Part of the problem is that the current system is not adequately taking into account how much the overall global economy now depends on sometimes underprivileged consumers and their ability to participate in global markets, either finding work in stable or conflict-free locations, or in keeping up with prices for food staples.
A widening gap between the wealthiest and the poorest across the world is in part due to the failures of the marketplace to distribute goods and services effectively, a situation which could be remedied as information is extended more freely, beyond borders, and technology plays an enhanced role in the lives of those currently excluded from its direct benefits.
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