HIDDED DANGERS TO THE GLOBAL ECONOMY DAVID M.

SMICH By Stephen Okeyo

The integration of global markets by the reduction trade barriers, improved communication, foreign direct investment, and other means. Globalization allows a multinational corporation to make a product in one country and sell it in another. This provides jobs in one country and less expensive goods in the other. Globalization also allows for the free flow of capital between countries, which many believe spurs economic growth. Proponents of globalization argue that it allows developing countries to continue and hasten their levels of development, and that it protects consumers in developed countries. Opponents believe that globalization serves the interests of multinational corporations at the expense of small businesses, which sends jobs to other countries needlessly.

Definition of 'Securitization' The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. The process can encompass any type of financial asset and promotes liquidity in the marketplace

The global free market experienced an unprecedented doubling of its labor force from 2.7 billion to 6 billion Dow jones industrial average climbed from 800 to over 12,000 US household saw their networth increase from 11 trillion in 1982 to more than 56 trilion today

What does it take to sustain this new successful global system? What policy making perils could reverse this wealth creation?

The world today lack a financial doctrine or even much in the way of set of informal understandings for establishing order in a financial crisis. We cannot see the dangers beyond the horizon because of the lack of financial market transparency, therefore we cannot always identify risks Need for major reform in global financial system . Crisis of confidence because people dont believe the banks and banks dont believe each other. Make a collective agreement to create a global backstop so that there is a foundation for lending and commerce. Implement transparency standards. The financial markets have simply become too big at times posing a threat to the government regulatory capacity. Governments are struggling for relevance. Policy makers need to find ways to improve the performance of the international credit rating agencies. Devise means of better telegraphing the extent of market risk financial institutions take

From The Woe on Wall Street, by Todd G. Buchholz, a review of The World Is Curved that appeared in the Wall Street Journal, September 19, 2008: Mr. Smick, a Washington consultant, neatly spells out both the upsides and downsides of economic liberalization: the hundreds of millions of people lifted from poverty as well as the middle-class workers struggling to keep their jobs amid ferocious competition. Overall he gives two cheers for global capitalism, offering a quote from Kofi Annan that must have staggered many of the former U.N. secretarygenerals fans: The main losers in todays very unequal world are not those who are too much exposed to globalization. They are those who have been left out.