Sunday
Nov162008
Fact x Importance = News: The Non-Story We're Watching (16 Nov)
Sunday, November 16, 2008 at 8:42
Developing Non-Story of the Day: The Global Economic Summit
Really. I was expecting major headlines on the G20 Summit this morning if not to reflect reality, to at least keep up the impression of decisive action to shore up the economies of the world.
The Washington Post tried hard to deliver on the headline --- "World Leaders Agree to Seek Major Reform" --- but failed miserably in its attempt to keep up the appearance when it gave the "highlights" of the conference statement:
Global accounting bodies should work toward enhancing guidance for the valuation of securities and toward the creation of a single, high-quality global standard for accounting.
Regulators should ensure strong oversight of credit rating agencies.
Supervisors and regulators should speed efforts to reduce the systemic risks of credit-default swaps
National and regional authorities should work together to enhance regulatory cooperation on a regional and international level.
Global standard for accounting? Oversight? Regulatory cooperation? All very good if you're talking about sound day-to-day practice, i.e., practice that should have been pursued these past years of supposed global boom, but in the current situation, more like closing a very tiny door after a very large horse has bolted.
Nothing in the statement makes even a cursory approach to the issue of the already-existing toxic debt mountain and the already-emerging global recesssion that will accompany this. No recognition of the immediate crisis, and no recognition of the coordinated stimulus that some are advocating to try and off-set it.
The Observer of London comes closest to identifying an actual story, albeit with a focus on the British Prime Minister (and albeit on page 6):
Gordon Brown was struggling last night to prevent the G20 nations from watering down his ambitious plans for a global anti-recession package, the revival of stalled trade talks and radical reform of the international banking system.
Amid signs that several countries were not ready to sign up to his blueprint, the Prime Minister admitted that negotiations were 'difficult' and would go on until the very last minute in Washington.
Brown's proposal for stimulus is far from his own. Other Europeans leaders have pressed for this, as have some American observers (if often with a narrow focus on the US). The key question becomes: who is in opposition?
The Observer is on shaky, speculative ground, pointing to Canada and Germany. The latter is especially surprising, as the German economy has just recored a second straight quarter of negative growth.
My own perhaps-shaky speculation is what goes unnoted in The Observer or any newspaper I've read this AM. George Bush's free-market flutterings on the eve of the conference were in large part a signal that his Administration was not prepared to make any Government-led intervention, at least in co-ordination with other government. So it's a friend thousands of miles from any summit who makes the shrewdest observation with her "feeling that all is awaiting Obama".
Well, maybe. I don't think others will find it advisable or even possible to wait for the 44nd President and they certainly won't be hanging around until the next meeting of the G20 in April. My sense, bolstered by conversations with insiders from the City of London, is that European countries could soon make a co-ordinated move. Having taken criticism in the autumn for moving one-by-one and, conversely, having (at least in the case of Gordon Brown) received political kudos for finding a European approach to shore up the banks and financial sector, moves from the EU nations to avoid an even more serious recession seem likely.
That, of course, doesn't mean success. A financial insider, answering my questions on Friday, noted that the US system can find a 1st tranche of money to shore up its bailout of banks and insurance companies. The 2nd tranche of money to fund a stimulus package, let's say $650 billion? She can't see where it's coming from.
So, as China already takes a lead with its own stimulus package --- $500+ billion --- can Europe find the economic resources and the political will to make its own move? If so, it will bolster the other striking notion in the story in The Observer: this meeting is "signalling a shift away from America's traditional global economic dominance".
Really. I was expecting major headlines on the G20 Summit this morning if not to reflect reality, to at least keep up the impression of decisive action to shore up the economies of the world.
The Washington Post tried hard to deliver on the headline --- "World Leaders Agree to Seek Major Reform" --- but failed miserably in its attempt to keep up the appearance when it gave the "highlights" of the conference statement:
Global accounting bodies should work toward enhancing guidance for the valuation of securities and toward the creation of a single, high-quality global standard for accounting.
Regulators should ensure strong oversight of credit rating agencies.
Supervisors and regulators should speed efforts to reduce the systemic risks of credit-default swaps
National and regional authorities should work together to enhance regulatory cooperation on a regional and international level.
Global standard for accounting? Oversight? Regulatory cooperation? All very good if you're talking about sound day-to-day practice, i.e., practice that should have been pursued these past years of supposed global boom, but in the current situation, more like closing a very tiny door after a very large horse has bolted.
Nothing in the statement makes even a cursory approach to the issue of the already-existing toxic debt mountain and the already-emerging global recesssion that will accompany this. No recognition of the immediate crisis, and no recognition of the coordinated stimulus that some are advocating to try and off-set it.
The Observer of London comes closest to identifying an actual story, albeit with a focus on the British Prime Minister (and albeit on page 6):
Gordon Brown was struggling last night to prevent the G20 nations from watering down his ambitious plans for a global anti-recession package, the revival of stalled trade talks and radical reform of the international banking system.
Amid signs that several countries were not ready to sign up to his blueprint, the Prime Minister admitted that negotiations were 'difficult' and would go on until the very last minute in Washington.
Brown's proposal for stimulus is far from his own. Other Europeans leaders have pressed for this, as have some American observers (if often with a narrow focus on the US). The key question becomes: who is in opposition?
The Observer is on shaky, speculative ground, pointing to Canada and Germany. The latter is especially surprising, as the German economy has just recored a second straight quarter of negative growth.
My own perhaps-shaky speculation is what goes unnoted in The Observer or any newspaper I've read this AM. George Bush's free-market flutterings on the eve of the conference were in large part a signal that his Administration was not prepared to make any Government-led intervention, at least in co-ordination with other government. So it's a friend thousands of miles from any summit who makes the shrewdest observation with her "feeling that all is awaiting Obama".
Well, maybe. I don't think others will find it advisable or even possible to wait for the 44nd President and they certainly won't be hanging around until the next meeting of the G20 in April. My sense, bolstered by conversations with insiders from the City of London, is that European countries could soon make a co-ordinated move. Having taken criticism in the autumn for moving one-by-one and, conversely, having (at least in the case of Gordon Brown) received political kudos for finding a European approach to shore up the banks and financial sector, moves from the EU nations to avoid an even more serious recession seem likely.
That, of course, doesn't mean success. A financial insider, answering my questions on Friday, noted that the US system can find a 1st tranche of money to shore up its bailout of banks and insurance companies. The 2nd tranche of money to fund a stimulus package, let's say $650 billion? She can't see where it's coming from.
So, as China already takes a lead with its own stimulus package --- $500+ billion --- can Europe find the economic resources and the political will to make its own move? If so, it will bolster the other striking notion in the story in The Observer: this meeting is "signalling a shift away from America's traditional global economic dominance".
tagged Recession, Summits in US Economy
Recession, Summits in US Economy
Reader Comments (1)
Everybody's waiting for the 'Obama Gravy Train.' Banking and financial sector in the front row, homeowners in the second row (those who bought houses they couldn't afford), auto industry (what the GOP calls "a dinosaur") in the third row, housing industry in the fourth row, colleges and universities in the fifth row - because more students are opting for junior colleges and other cheaper alternatives, agriculture, and so on.
Will the Obama Administration bail them out and turn protectionist, angering the international community?
The global system is made in America's likeness and the Europeans want a greater say in the system. That's why we hear "global solutions to global problems" and "multilateralism" and the like in the 6 page letter. http://www.reuters.com/article/politicsNews/idUSTRE4A267Q20081103
Question: Will Obama concede where Bush hasn't? Will he give the Europeans what they want?