It was just six years ago when the American, and by extension, world markets collapsed, but then quickly rebounded, thanks to panic attacks from governments.
One large American institution went down for the count and their federal government decreed that no other biggies would follow. The economic fallout would be too severe and from that point on, we all became familiar with the now old adage that some entities are just too big to fail. That was the new buzz word.
GM and Chrysler learned they weren’t quite big enough to earn the too-big-to-fail tag but most of the American financial institutions and insurance companies were, simply because they run the money machines.
Big pharmas and big oil pretty well run Canada and the U.S., no matter where they’re headquartered. They lobby and governments listen … intently. We learned this year that the oilsands in Alberta are now too big to fail. The environment be damned.
They should be sinking like rocks with heavy, expensive to get oil in a world of lessened oil prices. But they’re not. Our governments won’t let them fail, even if the owners are huge oil conglomerates with cash to spare. These corporate entities will be propped up when they tell governments it’s necessary. We’re too far into it to allow them to fail. That’s what happens when a company or an industry gets to be bigger than the sum of its parts.
American banks should be in recession, but they’re not. The printing presses will keep pumping dollars to bolster the false market until it isn’t false.
The National Football League is too big to fail. It has $10 billion in storage and the hearts and souls of American fans just like Major League Baseball, another American sporting edifice that is just too big to fail. Now the NBA and NHL, I’m not so sure but their fans would bail them out, if governments didn’t want to.
FIFA, we learned last week, is too-big-to-fail too. In fact, their corrupted re-elected president declared himself “president of everybody,” following his romp. And he’s not too far wrong, seeing as how FIFA has more member countries than the United Nations.
Amazon? Probably too-big-to-fail, even though it struggles to turn any kind of profit. That doesn’t matter, they’re not allowed to lose since they are the torch carriers for the wonders of the Internet age.
WalMart? What would the retail repercussions be if they went down? They rule the retail schoolyard.
The city of Detroit? They went bankrupt. Twenty years ago, New York City was supposed to go there. Guess what? Yep, too big, must be bailed.
What about countries?
Greece is going down the bankruptcy trail, but it will be rescued several more times. The banking community and the Eurozoners need it to stay afloat so they can somehow get their money back.
America will never go broke, even as they add trillions to their already overextended line of credit on the international monetary scales. China owned a lot of the U.S. debt, but now China is in deep financial do-do too, so that lessens their power position significantly, but that doesn’t really matter either because they too, are too-big-to-fail.
Nortel, when it was a grand part of Bell Canada was too-big-to-fail. Split off? Not so much, once the mistakes surfaced.
RIM, Blackberry anyone? Let’s see how that one shakes out.
It’s all too much for me. I just like being too small to succeed. It might be easier.
