Two headlines, one extremely serious and the other seriously and un-friggingly-believable

extremely serious...

Nouriel Roubini: The world is at severe risk of a global systemic financial meltdown and a severe global depression

Urgent and immediate necessary actions that need to be done globally include:
1) another rapid round of policy rate cuts of the order of at least 150 basis points on average globally;
2) a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;
3) a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;
4) massive and unlimited provision of liquidity to solvent financial institutions;
5) public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;
6) a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;
7) a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;
8) an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.

seriously and un-friggingly-believable...

Palin pre-empts state report, clears self in probe

Trying to head off a potentially embarrassing state ethics report on GOP vice presidential nominee Sarah Palin, campaign officials released their own report Thursday that clears her of any wrongdoing.

to say that we live in interesting times is perhaps the most profound understatement of the century...

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Spiegel: The Madness of Ben Bernanke

as usual, you have to read the foreign press to get any semblance of truth about what's happening in our own country... (and ya gotta love spiegel's headline...)

The dollar is in a tailspin, the trade deficit is growing and a recession is on the horizon. The American way of life is in serious danger. But the head of the Federal Reserve keeps on pumping easy credit into the system -- a crazy policy that will worsen the crisis.


Ben Bernanke at the G7 meeting
of central bank governors over
the weekend.

Alan Greenspan and Ben Bernanke have more in common with the big cat entertainers Siegfried & Roy than any of us can be comfortable with.

The Las Vegas magicians call themselves "Masters of the Impossible" and have been fascinating audiences for decades by getting snow-white tigers to leap through burning rings.

The legendary Federal Reserve Chairman and his successor were equally adept at fascinating their audiences -- with a policy of miraculous monetary growth that gave America one of the longest periods of economic expansion in modern times. Many saw them as "Masters of the Universe." It seemed as if the central bankers had tamed predatory capitalism with their constant interest rate cuts.

[...]

The credit-financed consumer boom of recent years is coming to a painful end. Today's American Way of Life has no chance of surviving the coming years undamaged. The virus will continue to ravage its way through the financial system.

The property crisis is likely to spread to credit card providers soon and will then probably infect car manufacturers, furniture makers and all the other firms that owe their sales increases to the growth in credit finance. "The virus will keep on infecting the system," one management board member from a large bank said, requesting anonymity in return for the candour of his analysis.

His argument is that banks that grant mortgages to home buyers virtually unable to pay their bills are unlikely to be especially scrutinizing when it comes to lending cash to the buyers of fridges, cars and furniture. Indeed, a furniture store in Miami recently tried to lure consumers with the following offer: buy now, pay your first credit installment in three years, and no need for a down-payment.

The credit-financed way of life is typical of the US these days. Many people resort to credit to plug the gap between the lifestyle they have become accustomed to and their declining wages.

The borrowed cash is like an anaesthetic against the painful impact of globalisation. Private household debt has been growing by $4 billion each business day for years.

yeah, well, ok, but what spiegel fails to point out is that the financial and credit markets ain't going to hell just in the u.s... it's all well and good to point a finger at the unbelievable mess that the so-called "leaders" of the u.s. corporatocracy have created, but that conveniently ignores the complicity of europe, japan, australia, and the rest of the industrialized world... today's globally-interconnected financial markets have all been operating on an ethos of unrestrained greed and the collapse is happening world-wide, not just in the u.s., even though the u.s. has certainly been a leading role model...

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Bush on Wolfie: "I regret that it has come to this"

i'll take this as a farewell...

"I believe all parties in this matter have acted in good faith," Bush said in a markedly somber tone. "I regret that it has come to this. I admire Paul Wolfowitz. I admire his heart, and I particularly admire his focus in helping the poor. There is a board meeting going on as we speak. All I can tell you is that Paul Wolfowitz has an interest in what's best for the bank, just like he's had an interest in what's best in making sure the bank focuses on things that matter -- human suffering, the human condition. So I applaud his vision, I respect him a lot, and as I said, I regret that it has come to this."

paul wolfowitz hasn't had the best interest of a goddam thing in mind with the single exception of advancing an arrogant, megalomaniacal, neocon agenda focused entirely on power, money and absolute control, an agenda he has made his life's work... the world bank has never been an exemplar of pure-white altruism, working as it has to advance the interests of the g7, but at least it had SOME credibility... i think that it's now clear to everyone that wolfie's appointment as world bank president was just another item on the to-do list of the bush administration's push for absolute world power...

there were many who believed that wolfie's appointment to the world bank was an effort to get him out of the way, putting him on a siding where he couldn't do any more harm... i posted this back in january 2006...

there were those who speculated that bush was sending wolfie to the world bank to neutralize him and get him out of the line of fire in the defense department particularly since he was one of the principal architects of the iraq war... i didn't believe that for a minute...

that was in response to this from steve clemons, someone else who never bought the idea that installing wolfie in the world bank would "neutralize" him...

Wolfowitz may be showing his stripes now -- and may be finally tilting the Bank into a groove where it becomes a harsher instrument of U.S. foreign policy -- rewarding friends and punishing those who don't fall into lockstep behind George W. Bush's vision.

until it finally dawned on me a few weeks ago that one of the principal reasons wolfie was pushing for the world bank to increase its lending to iraq was to support the iraq oil law, i was somewhat vague on just exactly what "being a harsher instrument of u.s. foreign policy" might look like... well, i guess like so much else in bushco, it looks like power (controlling iraq) and money (oil)...

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Wolfie now has only two allies, the U.S. and Japan, and maybe not the U.S.

i remain completely flummoxed at why he is fighting so hard to stay... is it just arrogance and ego or does he have unfinished business of the neocon variety...? i'm inclined to think it's probably both...

After consistently backing World Bank President Paul Wolfowitz as he faced calls to step down, the United States has now indicated an openness to discuss "all options" for the organization's leadership. ... The U.S., at a conference call meant to win support for the former U.S. Deputy Defense Secretary from the Group of Seven industrial countries -- the bank's biggest donors -- only found an ally in Japan.

meanwhile, wolfie fights on...

"I respectfully submit, to criticize my actions or to find them as a basis for a loss of confidence would be grossly unfair and would be contrary to the evidence we have presented to you," Wolfowitz said in a statement to the board.

"Rather than fix blame for something that wasn't wrong, we should all acknowledge our responsibility as I have acknowledged mine," he said, conceding he made mistakes.

anybody who displays the angry vulgarity of the sort that was revealed yesterday, has forfeited any right to "respectfully submit" anything... so LEAVE, already...

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Ecuador expels the World Bank Country Director

vs.



read the following carefully and, buried amidst all the rhetoric, see if you can spot the real reason why this might have happened...

The expulsion of the World Bank's representative from Ecuador is another political statement from President Rafael Correa, and the bank is still analyzing how to tackle the situation, one of its senior directors said.

[...]

"This is all part of Correa's political symbolism," said [Executive Director Otaviano Canuto], who overseas nine Latin American countries including Brazil and Ecuador.

"But the bank's intention, I can assure you, is to remain engaged as much as possible in Ecuador to fulfill its mission, which is reduce poverty," he said in Cambridge, where he was attending an MIT conference.

Ecuadorean Economy Minister Ricardo Patino, explaining the expulsion, said on Friday the World Bank had infringed on the country's sovereignty by not providing a satisfactory explanation for suspending a $100 million loan when Correa was economy minister in 2005.

found it yet...? good, cuz it hasn't been given yet...

Patino also said Ecuador wants to reduce its financial ties with the bank "to the minimum."

Canuto said the $100 million loan had been promised to Ecuador as part of a program to support a specific government policy regarding the use of oil revenues to pay foreign debt. When the government decided to change that policy, the program automatically expired, he said.

got it now...? of COURSE you do... "the use of oil revenues to pay foreign debt..."

in those few words you have the perfect summation of how the united states and the g7, working through institutions like the world bank and the imf keep countries like ecuador impoverished... we'll loan you the money, we'll pretty much tell you how you can spend it, and we'll also tell you where you have to get the money to pay us back... and because payback is tied to oil revenues, you have no choice but to continue to develop your oil resources, which most likely means granting exploration and drilling concessions to the world's oil giants... cool, huh...? thought you'd like it...

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The World Bank - "let the ship go down with the captain"

naomi klein, writing at the nation via alternet, argues, let's not spotlight wolfie and ignore the REAL problems with the world bank... the only difference between wolfie's sin and the daily, business-as-usual world bank sinning is that wolfie sinned without finesse as befitting his finesse-free persona, as an individual rather than institutionally, and, as fate would have it, while the spotlight was aimed in his direction...

The more serious lie at the center of the [Wolfowitz] controversy is the implication that the World Bank was an institution with impeccable ethical credentials -- until, according to forty-two former Bank executives, its credibility was "fatally compromised" by Wolfowitz. (Many American liberals have seized on this fairy tale, addicted to the fleeting rush that comes from forcing neocons to resign.)

The truth is that the bank's credibility was fatally compromised when it forced school fees on students in Ghana in exchange for a loan; when it demanded that Tanzania privatize its water system; when it made telecom privatization a condition of aid for Hurricane Mitch; when it demanded labor "flexibility" in the aftermath of the Asian tsunami in Sri Lanka; when it pushed for eliminating food subsidies in post-invasion Iraq. Ecuadoreans care little about Wolfowitz's girlfriend; more pressing is that in 2005, the Bank withheld a promised $100 million after the country dared to spend a portion of its oil revenues on health and education. Some antipoverty organization.

part of the overall problem...

[T]he United States and Europe -- via the World Bank, the International Monetary Fund and the World Trade Organization -- tell the developing world, "You take down your trade barriers and we'll keep ours up."

anti-corruption...? it is to laugh...

The bottom line is that there is good reason that corruption has never been a high priority for the Bank and the IMF: Its officials understand that when enlisting politicians to advance an economic agenda guaranteed to win them furious enemies at home, there generally has to be a little in it for those politicians in bank accounts abroad.

Russia is far from unique: From Chile's dictator Augusto Pinochet, who accumulated more than 125 bank accounts while building the first neoliberal state, to Argentine President Carlos Menem, who drove a bright red Ferrari Testarossa while he liquidated his country, to Iraq's "missing billions" today, there is, in every country, a class of ambitious, bloody-minded politicians who are willing to act as Western subcontractors. They will take a fee, and that fee is called corruption -- the silent but ever-present partner in the crusade to privatize the developing world.

the solution...?

What we should absolutely not do, however, is participate in the effort to cleanse the Bank's ruinous history by repeating the absurd narrative that the reputation of an otherwise laudable antipoverty organization has been sullied by one man. The Bank understandably wants to throw Wolfowitz overboard. I say, Let the ship go down with the captain.

an excellent and thorough background of the global damage done by both the world bank and the international monetary fund can be found in joseph stiglitz' masterwork, "globalization and its discontents," required reading for anyone who purports to understand anything about how the u.s., the g7, and those two institutions (among others) shape the global economy and keep millions of people in poverty...

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