The Past Week: April 19-25, 2009 (Pakistani Women Pushing Back; French Finance Minister Christine Lagarde Speaks; Doubts About Toxic Asset Plan; UK Blogs)

~~By InsightAnalytical-GRL

With Pakistan and the Taliban now center stage, I found this story from The Dawn Blog interesting. Women in Karachi are meeting because of their concerns about events there:

Women Push Back

…On Friday, the Karachi chapter of the Women’s Action Forum (WAF) invited members of the civil society to help craft a comprehensive strategy to stem the Talibanisation of Pakistan and respond to the recent passage of the Nizam-i-Adl Regulation 2009. On short notice, about 60 women gathered at the Aurat Foundation’s Clifton premises to brainstorm ideas for concrete action against the spread of militant ideology. Participants included the crème de la crème of Karachi society – revered activists, teachers, artists, filmmakers, professionals and many women who described themselves as ‘concerned citizens’ and ‘mothers’ (I could start name-dropping but someone might mistake this for the social pages and not the Dawn Blog).

The general mood was somber and, as the discussion proceeded, panic and passions flared. As one long-term women’s rights activist put it, ‘we came of age in the Zia years. Then, we were fighting the state. Now, we’re fighting against public misogyny being encouraged by non-state actors who have grown more powerful than the state – and they don’t play by any rules.’ In short, the women assembled at Aurat’s offices knew they were there to put up a fight.

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Let’s hope we don’t see the women of Pakistan have the same fate as those in Afghanistan.

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Caught a brief segment a few days ago on BBC America’s nightly newscast with the French Finance Minister Christine Lagarde, but she’s been speaking about the latest IMF report elsewhere, too.  Here’a link to a transcript of  her inteview on Lateline which airs on the Australian Broadcasting Corporation (ABC). It’s a worthwhile read if only to get a better understanding of what the people in charge of the money elsewhere are thinking.

But what caught my attention in the BBC segment was her comments about how unimpressed she was with the idea of creating stimulus package after stimulus package without getting a clear idea of how useful they really are.  She noted that France was early in pumping up government spending on infrastructure projects, like public buildings, etc. and programs versus cash payments, but the results were only just beginning to trickle in.  She was very pointed about how the French had started their stimulus efforts earlier than the U.S. and was quite clear that an idea of how effective the spending has been–and if it is getting to the right places–is needed before more spending is approved.  She also pointed out that the money really hasn’t started flowing yet, so it’s going to be a while before anything is really known here in the U.S.

Although Lagarde is “on the same page” with the Obama Administration in many ways, we’ll have to see if the Obama crowd and Congress keep creating more “stimulus packages” in spite of Lagarde’s warnings.

Here’s a something Lagarde said toward the end of the interview:

My personal belief is that this crisis stems from excess, abuses of the system. I don’t suggest, though, that it would be the end of free enterprise. I think that a liberal economy can also have its social dimension and that liberal economy, as liberalism is understood in economic terms, can only survive if it is properly regulated. And I think it would be a complete deterioration if you will, or abuse of liberalism itself, if it wasn’t regulated. So, when he says that government is back and policies are back, I totally agree with him if he means regulation, ownership of the development of a free market economy by politicians, by those who have been elected by the people to represent the general interest and to make sure that proper functioning of the economy is actually respected. And to that end, we need a combination of sensible and strong regulations, but also sensible and strong bodies that will make sure that regulations are actually applied. And if there are violations, that such violations are sanctioned appropriately.

“And if there are violations, that such violations are sanctioned appropriately.”

I’m not holding my breath here in Obamaland, are you?

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Kenosha Marge spotted this article in the Financial Times….seems like Timothy Geithner still hasn’t dispelled a sense of mistrust among financial leades:

Warning over US toxic asset plan

By Francesco Guerrera, Deborah Brewster, Henny Sender and Aline Van Duyn in New York

Published: April 24 2009 02:03 | Last updated: April 24 2009 02:03

The Obama administration will on Friday get the first indication of investor interest in its $1,000bn toxic assets plan amid fears that the threat of government intervention and banks’ reluctance to sell will deter fund managers from participating.

Applications to become one of the five asset managers charged with raising funds to buy mortgage-backed securities from banks are due today and groups including BlackRock, Pimco and Bank of New York Mellon are set to apply.

However, financial executives warn that the plan is in danger of missing its goal of quickly shifting billions of dollars in troubled assets off banks’ balance sheets unless the government dispels investors’ concerns.

Potential buyers of assets complain that, a month after Tim Geithner, US Treasury secretary, unveiled the public-private investment programme, the authorities have yet to reassure them they would not be subjected to draconian Congressional scrutiny.

The Treasury did say that, aside from the small group of asset managers, investors who receive the generous loans available under the PPIP will not have to abide by restrictions on employees’ pay imposed on the banks that got funds from the troubled assets relief programme.

Yet some fund managers fear Congress and the government may change the rules mid-course, as they did with Tarp. Wesley Edens, chief executive of Fortress Investment Group, said: “The most important thing for the government is consistency.”

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Wonder what Christine Lagarde thinks about all this?

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Stumbled across this site which is a huge list of UK Political Blog Feeds.  It’s fun to check out what’s on the minds of folks across the pond.

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THE PAST WEEK

Saturday Sanity: The Antidote to the Madness (April 25, 2009) The Squirrels Invade

While Pakistan Has Our Attention, Look What’s Brewing in Somalia…

The Financial Filter: How CNBC Handles Howard Dean vs. Susan Boyle

Labour (UK) Facing Poll Meltdown After “Smeargate” Allegations–Brown’s Fmr. “Spin Chief” (Now Political Director of a Union) Involved

The Past Week: April 12-18, 2009 (Newsweek Death Spiral?; Anti-Abortion Wars; Susan Boyle and Human Grace)

The Scanner–International Edition, March 24, 2009: Say Goodbye to the Dollar? China, Russia Proposing a New World Currency for “Non-Credit” Based Economies, Echo G-20 Agenda of Expanding IMF; China Will “Consider” Buying IMF Bonds; 10th China Develpment Forum Underway (UPDATE 1X–Geithner Supports China Proposal??)

~~By InsightAnalytical-GRL

Scroll down for UPDATE

Hu Jintao--Who's in Charge Here?--Barack Obama (Photo courtesy Xinhua via CRIEnglish.com)

Late last week I came across this release from Itar-Tass.  In case you can’t place the name, the IT website tells us that this agency is:

The successor to the Soviet TASS news agency, it was re-named in 1992, when Russia proclaimed its sovereignty following the collapse of the USSR. It has retained its status of being the state central information agency.

Needless to say, when Russia’s “state central information agency” talks, I listen. I held the story up and coincidentally, found something that should grab us all.  First, the story from Russia:

Russia proposes creation of global super-reserve currency

16.03.2009, 15.15

MOSCOW, March 16 (Itar-Tass) — Russia suggests the G20 summit in London in April should start establishing a system of managing the process of globalization and consider the possibility of creating a supra-national reserve currency or a “super-reserve currency.” The Russian Federation’s proposals for ways out of the ongoing financial and economic crisis and for a post-crisis order of the world financial system have been published on the Kremlin’s website. The proposals have been dispatched to the leadership of the G20 countries, the CIS and international organizations.

(SNIP)

The Russian side believes the summit should seek and achieve accord on the main parameters of a new world financial system. It suggests calling an international conference that would produce the basic parameters of a world financial architecture and adopt international conventions regarding a new financial world order.

Russia believes that the “obsolete mono-polar structure of the world economy should give way to a system based on cooperation by several major centers.”

In the sphere of control and supervision Russia suggests drafting and adopting an international agreement setting global standards of control and supervision in the financial sector – a Standard Universal Regulatory Framework (SURF).

Russia calls for reforming the international currency and financial system with the aim to strengthen its stability and control. In that connection the Russian side suggests discussing the possibility of expanding the list of currencies to be used as reserve ones, on the basis of the adoption of agreed measures to stimulate the development of major regional financial centers, and also “the creation of a supra-national reserve currency that will be issued by international financial institutions.”

“It looks expedient to reconsider the role of the IMF in that process and also to determine the possibility and need for taking measures that would allow for the SDRs (Special Drawing Rights) to become a super-reserve currency recognized by the world community,” the document says.

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The release goes on to discuss for a new mandate and more resources for the IMF.

Well, now add this piece, posted by Logistics Monster yesterday in a post entitled Quick Note About New Global Currency! Pay Attention!

The post quotes an article from the Financial Times‘ Asia-Pacific section (excerpt):

China calls for new reserve currency

By Jamil Anderlini in Beijing

Published: March 23 2009 12:16 | Last updated: March 23 2009 23:24

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

I suggest readers get over to Logistics Monster for the full quote from the article, which details the “special drawing rights” that we see mentioned in the Russian Itar-Tass release.

The Russia-China discussions apparently are just megaphones for what’s up at the Official G-20 website (excerpt):

The financial markets and the world economy continue to face serious global challenges and the severity of the crisis and ongoing uncertainties demonstrate the need for urgent action. During the United Kingdoms Chair, the immediate priority will be to gain further agreements for a concerted, co-ordinated international response.

The G-20 will need to send a strong signal that it is prepared to take whatever further actions are necessary to stabilise the financial system and to provide further macroeconomic support. At the same time, the G-20 must commit to maintaining open trade and investment, to avoid a retreat to protectionism, and direct necessary additional support to emerging markets and developing countries.

The G-20 should also lay the foundations to move beyond the crisis to a sustainable recovery. In 2009, it will be important to understand the roots of the international financial crisis and identify the lessons that we can learn to ensure that a crisis of this kind does not happen again. The G-20 should develop proposals that will restore global growth in the medium term, including the unwinding of emergency measures taken in response to the crisis.

Coincidentally, with the proposal to bolster the mandate of the IMF, we see this article from the Chinese news agency,
Xinhuanet/China View:

Central bank official: China “will actively consider” buying IMF bonds

www.chinaview.cn Special Report: Global Financial Crisis

BEIJING, March 23 (Xinhua) — China’s central bank said Monday it will “actively consider” buying bonds issued by the International Monetary Fund (IMF).

Hu Xiaolian, vice governor of the People’s Bank of China (PBOC), made the comment during a briefing about President Hu Jintao’s coming visit to the G20 financial summit in Britain, scheduled for April 1 to 2.

“China supports the IMF’s innovative financing attempts, and a more efficient and timely financing mode can effectively ease the IMF’s cash shortage,” said the PBOC’s Hu.

“If the IMF finances itself by issuing bonds, China will actively consider buying” those bonds, Hu stressed.

Of course, the Chinese have already indicated that they are “worried” about U.S. Treasury bonds and a recent China Daily headline reads:  “Allure of US Treasuries Set to Fade”…

“Although China is unlikely to massively cut its existing holdings of US Treasuries, it will try to reduce purchases,” said Yu Yongding, president of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.

The table is set.

I’m sure the G-20 will toast the dollar with fond reminiscences…

MEANWHILE, ahead of the G-20 meeting, China is now holding its 10th China Development Forum (excerpt):

Chinese premier: World should have faith in China

www.chinaview.cn

Special Report: China Development Forum 2009Special Report: Global Financial Crisis

China has launched plans to expand domestic consumption and promote economic growth. It will try its best to achieve the goal of eight-percent economic growth set for this year, according to Wen.

With timely efforts, the economy in some areas and industries in China is now witnessing better signs, Wen said.

“China can’t achieve self-development without rest of the world,” the Premier said, adding that China hopes to deliver confidence to the world and the world should have faith in the country.

SNIP

High-level officials, entrepreneurs, scholars and leaders from international and non-governmental organizations attended this year’s forum with the theme of China’s Development and Reform in the Global Financial Turmoil.

Remember the days when other countries sought “closer ties” to the U.S.? Well, Obama wants a “closer relationship” with China.

When these two meet at the G-20 session, who will be setting the pace?

And lest we forget Putin: he’s doing some saber-rattling…

Russian PM Putin Threatens to Review Relations with EU

SOCHI, March 23 (RIA Novosti) – Russia will start reviewing its relations with the European Union should Moscow’s interests be ignored, Prime Minister Vladimir Putin said on Monday.

SNIP

Russia had been effectively excluded from talks at an international investment conference in Brussels on the modernization of the Ukrainian gas pipeline network, adding that the conference, convened by the European Commission, was limited to discussions between Ukraine and the EU.

“If Russia’s interests are ignored, we will also have to start reviewing the fundamentals of our relations,” Putin said. “We would very much like for things not to reach this point.”

Interesting times, indeed…frightening times.

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UPDATE March 26, 2009

EXCERPT:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAHStUZFitk8&refer=home

Treasuries Fall on Supply Concern as Seven-Year Sale Looms

By Dakin Campbell and Susanne Walker

March 25 (Bloomberg) —

snip

‘Poor Communication’

The Fed joins central banks in the U.K. and Japan in extraordinary purchases of government debt. U.S. policy makers announced the decision last week to buy $300 billion of government debt in the next six months along with a plan to more than double purchases of housing debt to $1.45 trillion, hoping to reduce rates on home loans.

The dollar fell the most in almost a week against the euro on concern Treasury Secretary Timothy Geithner supported a Chinese plan to blunt demand among global central banks for the U.S. currency. The dollar weakened as much as 1.2 percent to $1.3651 per euro, the biggest intraday decline since March 19, before trading at $1.3601 at 4:20 p.m. in New York.

Geithner later affirmed the dollar’s role as the world’s reserve currency.

“The poor communication from the Treasury department has complicated the market for Treasuries,” said Baker Group’s Caughron.

More

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ADDITIONAL INFORMATION

China Optimistic about Hu-Obama London Meeting (CRIEnglish.com report 3/23/09)

Official G-20 website

International Monetary Fund (IMF) website

CIS: Overview (from the Commonwealth of Independent States)

THE CIS –Executive Committee website

CIS Wikipedia article