Bush Urges Covening 'Emergency' 20 Nation Economic Summit - "New Bretton Woods"

Discussion in 'Wall St. News' started by ByLoSellHi, Oct 23, 2008.

  1. All the more reason to ring alarm bells and panic already devastated financial markets -

    - I'm almost beginning to believe it's intentional at this point.

    It is true that Argentina, Iceland and Hungary are basically destroyed, however, and Korea isn't looking so stable, either...

    But what the hell can they do?


    Bush Calls 20 Nations to Summit on Markets

    Published: October 22, 2008

    President Bush will convene leaders of 20 nations in Washington on Nov. 15 for an emergency summit meeting to discuss the economic crisis, the White House said Wednesday. But the session, coming less than two weeks after the presidential election, could put Mr. Bush on a collision course with his successor.

    International Monetary Fund, via Agence France-Presse — Getty Images

    The White House envisions an overhaul of financial markets as was done at the Bretton Woods Conference in 1944, here being addressed by the British economist John Maynard Keynes.

    The White House said Mr. Bush would “seek the input” of the president-elect, and both the Republican nominee, Senator John McCain, and the Democrat, Senator Barack Obama, praised Mr. Bush for convening the session. But neither man committed to attending, and the White House conceded it did not quite know how the meeting would play out.

    The White House envisions the meeting as the first of a series of international meetings intended to lay the groundwork for a possible overhaul of the rules governing financial markets, in much the way that the conference at Bretton Woods, N.H., in 1944 remade the global financial system — spurred by the Great Depression and World War II.

    Many economists say such a meeting is necessary and important, coming at a time when fears of a contagion among emerging market economies have multiplied. But from the American political perspective, the timing — at the tail end of a lame-duck administration — is terrible.

    If history is any guide, Mr. Obama and Mr. McCain might prefer to steer clear. Historians say Mr. Bush’s summit meeting brings to mind similar efforts of another president facing tough economic times, Herbert Hoover. During the Great Depression, in the waning days of his administration, Hoover tried to draw the president-elect, Franklin D. Roosevelt, into policy prescriptions for the economy, but Roosevelt steadfastly resisted.

    “Roosevelt simply did not want to get close to him or be identified with anything he would want to do, because he was terribly unpopular, and the same now exists with George W. Bush,” said the historian Robert Dallek. “In some ways, he’s trying to rescue his reputation, and the last thing Obama or even McCain are going to care about is saving George Bush’s reputation.”

    The White House press secretary, Dana Perino, said Wednesday that it was “too early to say” if the incoming president would attend. “Let’s just let this election happen,” Ms. Perino said. “We don’t want to box the next president in.”

    Mr. Obama, appearing in Richmond, Va., said the meeting provided “an opportunity to advance the kind of cooperation” that he himself had called for last month, when he advocated global coordination in addressing the credit crisis. Mr. McCain’s senior economics adviser, Douglas J. Holtz-Eakin, called the session “an important opportunity to take urgent steps toward recovery.”

    One question, though, is how much Mr. Bush can accomplish with so little time left in office and foreign leaders already looking toward a successor who could easily undo any commitments he makes.

    The conference will come just days before Mr. Bush’s last official foreign trip, to South America for a conference of leaders of Asian-Pacific nations. Ms. Perino said the White House thought it was important not to wait.

    “We didn’t want the financial crisis to happen at all,” she said, adding, “but now that it’s happened, we can’t control the timing of it.”

    Some economists said the meeting could have a calming effect on markets, if only by demonstrating that world leaders are willing to cooperate. “At best it does something; at worst it does no harm,” said Carmen M. Reinhart, a professor at the University of Maryland who is writing a book on financial crises.

    But others are skeptical that a meeting pulled together on such a hurried basis could produce substantive results. They said that the Bretton Woods conference, which resulted in the creation of the International Monetary Fund and the World Bank, was years in the planning.

    “Things like this that produce real results for the world are planned years in advance,” said Edwin M. Truman, who was an assistant secretary of the Treasury under President Bill Clinton. “The notion that you’re going to have something come out of this in three months is probably naïve.”

    Indeed, the meeting is being planned in such haste that Ms. Perino said the White House was not yet certain where it would be held. She said the goal was for the leaders to “agree on a common set of principles for reform” and then direct financial experts “to put meat on the bones when it comes to fleshing out the principles.”

    Mr. Bush has been under intense pressure from his counterparts in Europe, notably President Nicolas Sarkozy of France, to hold a meeting of world economic powers. But the White House at first sounded resistant to the idea; administration officials have said Mr. Bush is concerned that adding new layers of regulation could stifle free markets and free trade.

    On Saturday, Mr. Sarkozy and the president of the European Union, José Manuel Barroso, had dinner with Mr. Bush at Camp David and apparently brokered a deal. Although Mr. Sarkozy had suggested earlier that day that the meeting be held in New York, the White House wanted it in Washington, on Mr. Bush’s turf.

    The president also insisted that the sessions include developing nations — a decision that experts said acknowledges the risk that such countries face, especially now that larger, more prosperous nations have poured billions into stabilizing their banks. The rescue measures adopted by Western countries, including the United States, actually heighten the risk for emerging markets, because banks in those countries are now less safe than those in the Western economies.

    The talks come as nations like Hungary, Ukraine and Belarus are showing the same symptoms — flight of foreign capital, plummeting currencies and soaring inflation — that hit Iceland recently, capsizing its banking system and hobbling its economy.

    All these countries are in talks with the International Monetary Fund for loans to stabilize their banks. With Western banks pulling back credit, the list of countries at risk of a financial crisis could grow to include several more in Central Europe and Latin America, economists say.

    “You’ve got a lot of emerging markets who are going to go to this meeting and say ‘You’ve got to take this seriously,’ ” said Simon Johnson, a former chief economist of the International Monetary Fund.

    With Europe and the United States both paying for costly bank bailouts, however, they have limited resources to help countries directly. That suggests a growing role for the fund, as well as for the World Bank. The White House has invited the heads of both institutions to the meeting.

    The countries invited are drawn from the so-called G-20, a forum of rich and emerging nations that was convened in 1999 after the Asian economic crisis. Its members are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, Britain, the United States and the European Union.
  2. achilles28


    Things could be a lot worse than originally thought.

    The jury is still out on total exposure from derivatives.

    If it is really *that* bad, they'll just print and maintain currency pegs.

    The entire world will go into hyper-inflation once the US rebounds.

    Then, jack rates to contain inflation (once the banks are saved) and we'll go into a World-Wide Depression, the likes never seen on Earth.

    Could get Mad Max ugly.

    Think Global Reduction in real income by 20 to 30%, plus a Depression.

  3. Yep.

    I was once in denial that this could be possible.

    No more.
  4. Why won't Bush JUST GO AWAY?

    When is the idiot speaking?

    Nothing like a gimme short when the fool opens his mouth.
  5. Geez. Buying a farm and sitting this one out is getting more and more attractive every day.

    Some articles on bloomberg starting to talk about monetization of debt by fed buying l.t. treasuries to keep rates low.

    Put that together with paulson's recent TIPS comment.

    Bodes quite ill.
  6. achilles28


    Thats what it looks like.

    More and more the bond sell-off coincides with Global talk of additional trillions heaped onto this raging derivative vortex. Mark Faber and Jim Rogers say the last bubble is US Treasuries.

    Nobody has the actual capital to give, so they've got to print.

    Future expectations of inflation are high and bond prices can't be contained.

    Sort of like the Plunge Protection Team props the market with capital generated from dilutions.

    The more the FED prints and buys, the higher future inflationary expectations = more downward pressure.

    Farms a good idea. Farm in another country is even better.

    I think we're going to see gold and precious metal take a jump soon.
  7. Just remember everything is relative...

    For example...the battle of the developed fiats all dilute their paper by 50% on average....

    They do it at the same time....

    The velocity of money in each country is about the same....

    The changes in prices are about the same....

    Interest on debt moves in the same manner.....

    Commerce prevails in all...

    However credit is at bay in that money does not make it to...

    House purchases
    Auto purchases
    Credit cards

    What this means....

    Auto manufacturers downsize
    Housing manufacturers downsize
    Less higher education
    Less is bought at Walmart, China sells less....


    The population is increasing....

    Fewer houses...more people?
    No....prices have to adjust...

    Fewer cars...more people?
    No...prices have to adjust....

    Less education.... No, more internet usage...prices must adjust...

    What would be helpful to business is to eliminate income taxes to free up more money.....taxes will change to a consumption tax....not greater than 10%.....

    Look...why channel through the government? The government is a broker, and a money regulator.....
    The economy is better off letting all people have all of their money.....and paying taxes for what they use.....


    Also ....government cannot be managed by having some ego driven individual living in a dream world trying to please his mama.....by advertising for votes, and getting to sit in a chair with a podium for 4 years....

    Government's management needs to happen on a localized township level....with local projects....

    Sorry...but it is past time for the two party system to be replaced....The current system is just a closed special interest country club at the hub of tax money....Pure bullshit.....
  8. I don't suppose someone can get their mits on recent M3 and post it.? :cool:

    I don't think the financial leaders in the US are as dumb/blindsided as everyone wants to think. There is a reason they stopped publishing M3 in early 2006. They knew this was coming and have planned for it for some time now.
  9. trader99


    That's what I've been thinking as well.
    But ironically that's not what the market
    is saying though. Gold futures dropped
    like a rock down the lake! How can we
    have hyperinflation when all commodities
    prices are going through the floor? I
    think the market is pricing in a slowdown
    & recession thus putting downward
    pressures on gold, oil, copper, silver,
    and other commodities. So, does it
    mean hyperinflation or deflation?

    Picture very unclear now. But at least
    in the short term prices are down not
    up... But it could reverse if the financial
    crisis is stabilized(?).

    Any thoughts...
  10. achilles28


    Commodities will stay low until economy rebounds.

    Metal prices are largely suppressed by central bank loan-sale schemes.

    Deflation then Inflation.

    This time, metals will go higher because the inflationary "boom" post-recovery won't be as strong. Therefore, commodities that depend somewhat on strong consumption won't experience crazy run ups. Although, still appreciate.

    Metals are a good bet.

    my 2 cents.
    #10     Oct 23, 2008