Panglossian views

I was watching the financial news while waiting for a phone call.  It was amazing how much the people wanted to believe that they would be okay [my view of reality in parentheses]:

1. South-east Asia i.e. Singapore will not be affected by a global recession because it is only 6 hours away from China, India and the Middle East.  [And Moscow is 6 hours from Europe, the Middle East and China.]
2. Because commodity prices have gone down, Chinese growth will pick up. [Commodity prices have gone down because markets for Chinese goods are hurting. In fact, China just reported that its growth rate fell, to 9%.  Chinese numbers are problematic, but trends are probably real.]
3. India will actually benefit from the financial crisis. A $700 billion dollar bailout requires many thousands of loans to be evaluated and much of that work will be outsourced. This could be the Y2K crisis of the financial industry i.e. the crisis that proves the quality of work that Indian outsourcing firms can do. [The US government is not going to be outsourcing its loan analysis to India.  And terms of aid to banks will probably grand-stand against outsourcing jobs.]
   
4. South-east Asian banks are safe.  They learned their lessons from the Asian financial crisis a decade ago.  Besides, savings rates are high.  [Aren't savings rates high in Japan too? And haven't banks around the world bought bad paper?]

You would think that people here are avoiding reality.  Meanwhile, this morning's paper reports that Singapore's Changi airport reported its first year-on-year decline in passengers since 1995.