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RISKS AND WEAKNESSES OF THE WORLD MARKET – A PROBLEM OR A TOOL FOR GAIN?
Dr. Édison Freitas de Siqueira


When we examine the capital flow before and after a crisis, it is typical to - first – see the invasion of resources and - further - the movement of capital flight and selling positions. The capital flight - rather than monitored - illogically is almost always stimulated by the imposition of the qualification of investment grade, without any monitoring of the price that the "assets" reach for the real economy.

These signs, being guided solely as a matter of market, never take into account either Governments nor countries involved. The capital is placed above these values, abandoning any organized movement of motion control that prevents or leads to crises.

The behavior of Governments and international regulatory bodies are often too simplistic or - even - naive. It happens because they do not want to call back the strict liability they should. They don’t even face the fact that the States and their population will always be beneficiaries or victims of such deregulation.

The complicity of all governments to the crisis is a consequence to the absence of limits. Nothing is done to avoid or minimize market manipulation that leads to bubbles and successive crises.

Or is it not obvious, for example, that the property market always suffers overvaluation when exposed – with no amount limits – to the sheer volume of capital. And the same happens with bonds issued by countries. These papers are far from reality by the derivative way of the foreign exchange market and interests, whose bets turn them into devalued or burden them, in such way that cripple the ability of payment of these papers by the issuing country, affecting or destroying the ability of reaction, when the capital defect from that position or market.

These conditions, therefore, if we analyze the current crisis, show that the market and its players continue to disregard the value of human beings - and even the States at the intricate engineering of the profit.

The U.S debt crisis, as well as the European Union countries’ crisis (Greece, Italy, Portugal, Spain) and, most likely, the future crisis that will devastate other emerging markets are largely linked to the same causes, which have occurred during the formation of the North American market "Crash" in 1929, or the Crisis of 2001 (Enron / Arthur Andersen), or in the Parmalat case in 2003. No different with the real estate bubble in 2008.

All these crises have been announced and could not be avoided by the total absence of global responsibility, although the various abuses and illegalities that caused them were identified.  

The "Securities Exchange Act of 1934". which was drawn up after the "Crash" of 1929, was useless to avoid the market disturbance caused by the emblematic case "Enron / Arthur Andersen." And the same happened with the "Sarbanes-Oxley Act of 2002," created after the Enron case, which also did not prevent the factors that caused the 2008 crisis. And the facts keep repeating. The newly created "Dodd-Frank Act", has already proven to have no use to avoid the current crisis, facing the obvious expiration and need for absorption of bonds emission in the listed countries, in addition to the issuance of U.S. Treasury itself. The market players have the power even to - isolated and irresponsibly - lower the level of classification of American Bonds, whose liquidity - everyone knows - is the best in the world, because it is ballasted in the foreign exchange allowance of the world's largest economies.

Facing these circumstances, in every crisis, the need of the World Community, and not only the G7 or G20, is evident, to organize itself around an international treaty or international organization, in which is created a Board of Review of all capital movements that occur in stock markets, in futures trading, derivatives, foreign exchange, Foreign Exchange Reserves and Sovereign Wealth Funds, overestimating markets, directly or derivatives "assets".

If the nations have managed to come together to create the Vienna Convention I and II, the United Nations, the Warsaw Pact, the NATO, WTO, Interpol, the Treaties of Basel I and II, the European Union and the World Bank, why, then, fail to organize an international body that monitors the supporting actors and the international financial markets?

After all, in all cases, the ultimate goal of modern civilization is "the human being and its quality of life" and not the "Men of Power."



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Édison Freitas de Siqueira Advogados Associados S/S - OAB/RS 22.136 - OAB/SC 22.281-A - OAB/GO 28.659-A - OAB/MG 92.047 - OAB/RJ 2.541-A - OAB/SP 17.2838-A - OAB/DF 2.074-A - OAB/MT 10.305-A - OAB/BA 23.016
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