The PNP has transferred at least 40%

[Assasin]

of black Jamaican business to white foriegners with selling Finsac debt to foriegners for 30% on the dollar.

The government could have action off most of these property themselves and could have gotten more money or ask the owners to pay that 30% on the dollar and wipe away their debts.


If you notice what the US government did in the Bear Sterns and Subprime crisis. A bill just went through congress where homebuilders will benefit. The British Government just did the same for a bank recently.

Even if these businessmen were careless the fact is that the devaluation of the dollar and high interest rate played a part in the meltdown of the financial sector too.

[Jawge]

Sass please name these businesses as I'm
interested to get the details of this PNP folly.

Thanks; Eternal Learner.

[Assasin]

Wha you was under a rock in the 1990s?

Numerous businesses it affected Jawge small and large.

Even your friend Godfrey Dyer lost his hotel. Let me ask you how do you pay back a business loan at 30 and 35%. People borrow money and before they know the dollar devalue from 5-1 to 50 to one, interest rate went sky high so instead of having to pay back the original amount with interest they were paying 5 and 10 times the amount they borrowed.

[Don1]

Greed vs Incompetence

of black Jamaican business to white foriegners with selling Finsac debt to foriegners for 30% on the dollar.

The government could have action off most of these property themselves and could have gotten more money or ask the owners to pay that 30% on the dollar and wipe away their debts.


If you notice what the US government did in the Bear Sterns and Subprime crisis. A bill just went through congress where homebuilders will benefit. The British Government just did the same for a bank recently.

Even if these businessmen were careless the fact is that the devaluation of the dollar and high interest rate played a part in the meltdown of the financial sector too.

You have interesting but one sided views.

I too believe the PNP government of the day is culpable in the meltdown of the financial sector. Their oversight of the liberalizing financial sector was poor. The appropriate laws, regulations and institutions of oversight were not put in place to oversee the expanding financial sector. The result was a disaster.

In fact the PNP government mishandled the entire process of liberalization (in foreign and local trade) by inadequate regulation and oversight.

The businessmen of that period are equally culpable. They allowed their greed and vanity to ruin their businesses and the economy.
Investing in trophy properties and projects using depositors short term funds, loans to connected parties without adequate collateral and for no viable business purpose etc. All of a sudden everybody had to have a bank - to play with depositors money.
Where is their personal responsibility? .... that's not just an issue for consumers ... businesspeople must practice the principles of personal responsibility as well.
Craven kill puppy.

It is instructive to note that foreign-owned institutions with risk control systems and oversight from their home offices did not suffer much in this period.

Lots of blame to go around.

You claim that properties should have been auctioned ... they were... by Beal Bank's Jamaican affiliate.... I believe they're still trying to unload properties even now.

If GOJ had attempted to do that themselves... who would have bought those assets? Jamaicans? Which bank would have financed those purchases in that environment? Only a few locals had access to capital at that time.

The fact is capital had unfortunately to come from outside the country to fix the mess - Jamaicans had neither the confidence nor the capital to address the problem.

Omar's prescriptions to fix the situation were highly questionable - totally agree. However it is ridiculous to compare the responses of the US Govt. to their current crisis to Jamaica' response - apples and oranges.

The US is in a completely different economic situation so their Govt. will have available to it tools that GOJ can only dream of.

The US dollar is the world's main reserve currency. This means they can get credit easily, instantly and on very favorable terms by issuing bonds which foreigners as well as their own institutions snap up readily even though the interest payments are low. This also means they can print money to smooth its flow through their financial system without the immediate threat of inflation.

Jamaica does not have that luxury because the JA$ is not convertible internationally as there is no demand for it. Our currency only has a market in Jamaica - nowhere else.... not even in Caricom. So every dollar we print must be used in Jamaica and has an impact on local inflation. A dollar printed in the US has a market and can be used in virtually any country on earth.

It would be more instructive to compare Jamaica's response to the extreme financial crisis to that of countries somewhat closer to our development profile which experienced crises around the same time frame e.g. the Dominican Republic, Mexico, Argentina or Belize.

[Jawge]

Sass yuh talking the bank failures? If yuh tek up ova 20 mil USD
an mek him figet bout it. Nuh your fault?

Boss mi only know Dyer like everyone inna Bay. I guess Dyer should have partnered with Govt. I wonder why he didn't get that deal? Any ideas sass?

[Assasin]

First thing is entrepreneurs will always be entrepreneurs and will invest where they think there is money and it is the role of government to regulate.

When has greed been a problem for businessmen? The fact is we can depend on businessmen to be statesmen and have a great consience but that will not happen on a wide scale. A very small percent of them will be patriotic.

The government sold the properties wholesale for 30 cents on the dollar to a Texas company that is selling assest mainly to Jamaicans at a huge profit so they could have done better.

They could have written off some of the debt and give some businessmen a chance to rescue their business.

Take the case of three business I know
One a very good clothing company. He had a very high profile and has been doing business from the 60s. He took out loans to help him and found that he simple couldn't pay back the loan as interest accumulated.

The second was a female run landscaping firm who went under as real estate dried up. The entrepreneur had to flee to make ends meet.

The third is a small hotel in Negril that was once a popular spot but go so much in debt not because of new borrowings but because of regular borrowings that they are use to get to run the business.

The hotel and the clothing business was saved only because they had family in the states who could sacrifice a few dollars but now of these business recovered even close to where they were. The landscaping company went out a business and there are many stories like this, it is not only Chen Young and company that were affected.

I used the US as an example as the government interviened, didn't take direct control even when they could, however late but they used policies and fiscal management to solve the problem, not government high hand.

The fact is the business men had no faith in government and government had no faith in Jamaican businesses and that made things worst. If it was a company or a few that went out of business I would agree with you but it was a cross section of businesses and company and the only thing they had in common was high interest rate and the devaluation of the Jamaican dollar so I put most of the blame on the government of the day.

[Assasin]

Are you talking economics?

There is no reason why Seaga shouldn't have gone to jail or get charged for something but that goes to show the competence of the government of the day, not even a slap on the wrist.

[Jawge]

Instead ah yuh ansa mi question. Yuh
ah talk bout jail. is wha mek unnuh labourite luv jail so?
Ansa mi man, cho

[Assasin]

banks were not the only businesses that failed Jawge, the complete economy collapse by about 30%, that is what I m talking about rich and poor people went out a business. The only people who were immune were the people who didn't have to borrow but had cash on hand.

[Jawge]

so who were these blacks that lost businesses
to foreign whites. Breezes? Air J? Let me stop guessing, Sass please tell me. Thanks.

[Assasin]

Maybe you need to do some reading for yourself Jawge, there were too many for you not to know any.

[Don1]

First thing is entrepreneurs will always be entrepreneurs and will invest where they think there is money and it is the role of government to regulate.

When has greed been a problem for businessmen? The fact is we can depend on businessmen to be statesmen and have a great consience but that will not happen on a wide scale. A very small percent of them will be patriotic.

The government sold the properties wholesale for 30 cents on the dollar to a Texas company that is selling assest mainly to Jamaicans at a huge profit so they could have done better.

They could have written off some of the debt and give some businessmen a chance to rescue their business.

Take the case of three business I know
One a very good clothing company. He had a very high profile and has been doing business from the 60s. He took out loans to help him and found that he simple couldn't pay back the loan as interest accumulated.

The second was a female run landscaping firm who went under as real estate dried up. The entrepreneur had to flee to make ends meet.

The third is a small hotel in Negril that was once a popular spot but go so much in debt not because of new borrowings but because of regular borrowings that they are use to get to run the business.

The hotel and the clothing business was saved only because they had family in the states who could sacrifice a few dollars but now of these business recovered even close to where they were. The landscaping company went out a business and there are many stories like this, it is not only Chen Young and company that were affected.

I used the US as an example as the government interviened, didn't take direct control even when they could, however late but they used policies and fiscal management to solve the problem, not government high hand.

The fact is the business men had no faith in government and government had no faith in Jamaican businesses and that made things worst. If it was a company or a few that went out of business I would agree with you but it was a cross section of businesses and company and the only thing they had in common was high interest rate and the devaluation of the Jamaican dollar so I put most of the blame on the government of the day.

I see your points and agree with many.

However people expect Government to anticipate and solve all problems... maybe that is reasonable but unfortunately doesn't happen much.

Just as we decry the man in the street for behaviour that leads to poverty or worthlessness..... and demand that they exercise personal responsibility over their actions....similarly must we hold businesspeople accountable for ruinous behaviour.

Our governance is poor and so are our business practices. It's not a matter of businesspeople being patriotic - we should expect that they make astute business decisions especially when they're handling depositors funds or borrowed money.... instead many played around as if they were barons - investing money for reasons of vanity and profiling.

How do you explain the foreign owned entities surviving and even thriving in the meltdown?

[Jawge]

sass, I don't need to do any reading. let me tell you this: as a boy
in 83 when I would sit among my among other boys (who were sons of my dad's associates) in a debate it was predicted that G.G Dyer would lose
wexford court based on the loans he took. Now boss this was 1983 and teen age boys talking. You must ask yourself why was this easy to predict? I wish Mr. dyer no ill and was happy to see him own that property
but other things are out there working against him (coupled with the concept of maintaining an image; a jakan weakness) that you aren't mentioning.

Then again certain parents teach their kids stuff about money that the average man on the street will not know.

Until Ja has a civil rights bill, these instances will continue to happen. Ja will always languish as a third world nation becuase she does not have a true middle class. One cannot import a middle class. One's middle class has to come from the populace. Our laws, which are archaic prevents the above from taking place. What tangible goods do we produce in modern times? Is our system setup that the populace can produce tangible goods?
What are ja's key industries? Do blacks own anything of significance in these indusrties? To be honest I get the feeling that Ja is happy where she is: playing master and slave.

[Willi]

You have interesting but one sided views.

I too believe the PNP government of the day is culpable in the meltdown of the financial sector. Their oversight of the liberalizing financial sector was poor. The appropriate laws, regulations and institutions of oversight were not put in place to oversee the expanding financial sector. The result was a disaster.

In fact the PNP government mishandled the entire process of liberalization (in foreign and local trade) by inadequate regulation and oversight.

The businessmen of that period are equally culpable. They allowed their greed and vanity to ruin their businesses and the economy.
Investing in trophy properties and projects using depositors short term funds, loans to connected parties without adequate collateral and for no viable business purpose etc. All of a sudden everybody had to have a bank - to play with depositors money.
Where is their personal responsibility? .... that's not just an issue for consumers ... businesspeople must practice the principles of personal responsibility as well.
Craven kill puppy.

It is instructive to note that foreign-owned institutions with risk control systems and oversight from their home offices did not suffer much in this period.

Lots of blame to go around.

You claim that properties should have been auctioned ... they were... by Beal Bank's Jamaican affiliate.... I believe they're still trying to unload properties even now.

If GOJ had attempted to do that themselves... who would have bought those assets? Jamaicans? Which bank would have financed those purchases in that environment? Only a few locals had access to capital at that time.

The fact is capital had unfortunately to come from outside the country to fix the mess - Jamaicans had neither the confidence nor the capital to address the problem.

Omar's prescriptions to fix the situation were highly questionable - totally agree. However it is ridiculous to compare the responses of the US Govt. to their current crisis to Jamaica' response - apples and oranges.

The US is in a completely different economic situation so their Govt. will have available to it tools that GOJ can only dream of.

The US dollar is the world's main reserve currency. This means they can get credit easily, instantly and on very favorable terms by issuing bonds which foreigners as well as their own institutions snap up readily even though the interest payments are low. This also means they can print money to smooth its flow through their financial system without the immediate threat of inflation.

Jamaica does not have that luxury because the JA$ is not convertible internationally as there is no demand for it. Our currency only has a market in Jamaica - nowhere else.... not even in Caricom. So every dollar we print must be used in Jamaica and has an impact on local inflation. A dollar printed in the US has a market and can be used in virtually any country on earth.

It would be more instructive to compare Jamaica's response to the extreme financial crisis to that of countries somewhat closer to our development profile which experienced crises around the same time frame e.g. the Dominican Republic, Mexico, Argentina or Belize.

Don, I agree with many of your views, but may areas of non-convergence.

The genesis of the whole thing started with Manley in 1990. How quickly everyone forgets! He got samfied by the Americans. USAID, I think, promised us a US$400 reduction in debt (forgiveness) in exchange for liberalizing the economy, chief thrust of which was floating the JAD. He rushed headlong into this (with Seaga squealing) and all the chaos of the 90s and beyond can be traced back to this. First we had the stock market bubble of 1991-92, the crash of 1993, etc. In the end, the Americans only forgave $278m of the promised $400m.

Now, I agree with the GOJ incompetence and the overarching greed of of our local business people. Indeed, the greed spread all the way throughout the Caribbean, as I had clients coming from Barbados and TNT, trying to cash in on the Jakan money machine.

The JAD eventually collapsed, interest rates skyrocketed and inflation was a serious problem. Our monetar management was chaotic.

Here are some areas of disagreement. CNB was crushed for political purposes. I know Don C. and I laugh at all the lies I hear spread about him. To me he is the epitome of the emergent black entrepreneur. He built that bank based on sheer force of personality...exactly what we want for black people in Jam...to be rewarded for their applied talents and hard work. Do people even remember what was Girod Bank? The political sacrifice of DC has done much to set back the cause. Confidence has been eroded and a message sent that it is better to use political connections than to play straight and use you innate talents.

This is my opinion, and I am not trying to tell anyone what to think. I dont expect ever to be convinced otherwise.

Finally, I think you overstate the case for the US. Much has changed in recent times. The sins and excesses of the past have caught up with the US. The USD is now BELOW the Swiss Franc! It is in near free-fall. The US economy for the last 20+ years has been badly managed and chickens are coming home. The scale of the US trade deficit and national debt is mind-boggling. There will come a time when new financing is impossible, as the rate of US debt accumulation exceeds the rate of capital formation in the rest of the world. In other words, the capital wont even BE there to keep the party going. The whole reserve currency deal is unravelling as we speak and in any case, the entire global financial situation is perilous. UBS has gotten shaken to the core. No one knows the extent of contagion possible with the whole sub-prime debacle, which was entirely predictable and was fostered by the current Bush administration.

[Assasin]

While you are right in many areas I don't put any confidence in most businessmen, I see them as a useful tool but the greed is always there hense Cash Plus again. It would be good if they behave rational. You are right about the fact that too many of those banks stole people idea and try to over reach.

Many of the overseas company could survive as they either had extra capital, got loans abroad or convert there US dollar to Jamaican $$$ which gave them more capital in terms of Jamaican $$$ so was easy for them.

An example of this is, I had 10,000 dollars in a Jamaican back in 1990, after the devaluation from 5.50 -1 to $50.00, and interest I had 11,000 but value was no longer the same. If I had 1 thousand US dollar then it would have been value 50,000 Jamaican dollar instead so the devaluation wouldn't matter much to me. That is how I think many of the overseas companies survived.