Two weeks ago I had posed the question as to when this financial crisis will end. A solution seemed round the corner as the US government seemed to be in a position and was willing to take decisive action. In fact it had proposed to Congress to approve a bailout of troubled institutions to the tune of US$700 billion, after that it had already bailed out the giant financial institution AIG and the two credit institutions Freddie Mac and Fannie Mae. Everyone was really hoping that we had seen the bottom of the pit and there was only one way to go - upwards.

Last week I asked whether we had seen the end of capitalism as we had got to know it, where the involvement of the state in the economy was judged to be nearly sacrilegious, while everything possible was expected to be done to allow the private sector to operate. We get to this week; and I have to state that I started to write this week's contribution a few times and had to delete everything as the scenario kept changing. This contribution has been written the day after the US Congress voted not to approve the US$700 billion bailout and four European financial institutions were saved through government intervention.

What urged me to use the above title were the performances of US President George W. Bush, US Treasury Secretary Henry Paulsen and British Prime Minister Gordon Brown in front of the TV cameras. They all sought very hard to be reassuring towards the public but their body language betrayed them, they had no idea what to do next in the circumstances.

Add to this the decision by French President Nicolas Sarkozy to call some form of EU summit to decide on steps to be taken to tackle the crisis from the European perspective, and what you get is a lot of hopeful faces trying to hide a lot of desperation.

However, at this stage of the crisis, it is really irrelevant whether the political leaders seek to project a message of hope. What counts are us - those all over the world who entrusted their life's savings in the hands of institutions that seemed to challenge each other as to who could come up with the most creative financial instrument.

The question is whether we are hopeful that eventually we will ever get back all the money we invested. Even here, hope does spring eternal because if the right decisions are taken at the appropriate moment, and governments, legislators and regulators ignore economic dogmas that have proved themselves to be no dogmas at all, then we will get our money back.

Irrespective of the hope that anyone may express, the capitalist system is as good as dead, as much as the centrally planned communist system died in the early 1990s.

This was very evident, even in the speeches made in the UN General Assembly by a number of leaders. I mention the president of Argentina, Cristina Kirchner, who mocked those who had told South America that market would regulate everything. Comments such as these are indicative that the free market recipe, as a solution to economic woes, is no longer palatable and acceptable.

The need to bring the social aspect (which is qualitative in nature) back into the economic equation (that has tended to move more and more towards mathematical modelling) is becoming a must. The quest for an ever-increasing return on investment, irrespective of what the human cost is, should now become a thing of the past. There is an evident feeling on the ground that market speculators can no longer cause anguish to entire peoples. It is against this scenario that I believe that there is still hope yet to emerge smiling from the mess that a few people have put so many others in.

In Malta, we are starting to come round to the fact that there are serious economic problems beyond our shores, even though our economy is still holding up. This is being felt mainly by those who have seen a shrinking in the value of their investments.

However, in spite of the fact that our economy is expected to suffer a negative impact arising from developments abroad, our government has consistently believed that its policies have to be based on creating a balance between the social and the economic aspects.