September 16th, 2011
09:44 AM ET

Roundup: Finance chiefs meet in Poland

Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations. 

European and U.S. economic officials, including U.S. Treasury Secretary Timothy Geithner, are meeting in Poland (WashPost) to discuss how to avoid financial crisis. Geithner has urged Europe to take strong action to prevent a Lehman Brothers-style credit crunch, and UK Chancellor of the Exchequer George Osborne said the eurozone crisis is "grave" (BBC).

Five central banks–including the European Central Bank, the Bank of England, and Switzerland's central bank–said they would provide three-month dollar loans (FT) to banks starting in October, ensuring unlimited dollar funding through the end of the year. The move signaled that authorities are prepared to take action to boost confidence and prevent an escalation of financial market tension.

The rare coordinated move buoyed markets (WSJ), with European financial stocks surging.

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Analysis

The plan to provide the dollars that cannot be raised in the markets won't solve Europe's other problem, which lies with its sovereigns, writes CFR's Sebastian Mallaby in the Financial Times.

Investors and financial markets are growing convinced that Greece will default on its debt, heightening fears of a eurozone banking crisis that would rattle an already fragile global economy, explains this CFR Analysis Brief.

Unless politicians act fast to persuade the world that their desire to preserve the euro is greater than the markets' ability to bet against it, the single currency faces ruin, says the Economist.

MIDDLE EAST

Rebel Fighters Hit Qaddafi Strongholds

Fighters loyal to the interim Libyan National Transitional Council have reached the outskirts of the coastal city of Sirte in an assault on Muammar al-Qaddafi's hometown (al-Jazeera). NTC fighters were also heading toward thedesert enclave of Bani Walid (Reuters), another of Qaddafi's last bastions of support.

The United States should support the stabilization effort to help establish a united and sovereign Libya with inclusive democratic institutions, writes Daniel Serwer in this CFR report.

SYRIA: The Obama administration and its European allies are planning for a protracted confrontation (WSJ)with Syrian President Bashar al-Assad, amid signs his regime is weathering the rebellion that turns six months old this week.

In this media conference call, CFR's Elliott Abrams and Robert Danin discuss how Syrian violence affects U.S. foreign policy toward the Middle East.

PACIFIC RIM

Chinese Premier Urges Reform

Chinese Premier Wen Jiabao told business leaders at the World Economic Forum in Dilian that China mustchange its system (BBC) of absolute power and introduce more democracy. Wen has spoken recently about the need for reform, but his comments are rarely reported in China's state-run media.

SOUTH KOREA: South Korean officials arrested a North Korean defector (KoreaTimes) suspected of plotting to kill high-profile activist Park Sang-hak, who leads a group that criticizes the North Korean leadership.

SOUTH AND CENTRAL ASIA

Bombing Kills 26 in Pakistan

A suicide bomber struck the funeral ceremony of a tribal elder who belonged to an anti-Taliban militia in northwestern Pakistan, killing at least twenty-six people. The blast is the latest in a recent string of militant strikes against anti-Taliban forces (WashPost) and leaders.

An increasing number of suicide attacks have rocked Pakistan, raising concerns for the country's security as existing militant groups have reconstituted themselves and a new crop of militants has emerged, says this CFR Backgrounder.

AFGHANISTAN: Two days after a twenty-hour siege in Kabul, security appears to have returned to normal (Reuters), with just three policemen guarding the building from which insurgents showered the city's diplomatic enclave with rockets and gunfire.

The attack on the U.S. embassy and NATO headquarters raised new concerns about Afghanistan's security as NATO forces continue a phased withdrawal, says this CFR Analysis Brief.

AFRICA

Uganda Jails Men Responsible for World Cup Bombing

Two Ugandan men were jailed after pleading guilty to the 2010 bombings at the World Cup that killed at least seventy-six people in the capital of Kampala (BBC). Islamic militant group al-Shabaab claimed responsibility for the attacks.

KENYA: The death toll has risen to at least ninety-six in a gas pipeline explosion (CNN) this week in a densely populated slum in Nairobi. Authorities suspect the pipeline was punctured in an effort to steal fuel.

AMERICAS

U.S. Drug Blacklist Grows

President Barack Obama added Belize and El Salvador to a blacklist of countries considered major producers or transit routes for illegal drugs. The two Central American nations are thought to be routes for smuggling cocaine from South America (BBC) to Mexico and the United States and reflect the growing reach of Mexican drug cartels.

EUROPE

Turkey Joins NATO Defense Shield

Turkey agreed to join the missile defense shield protecting Europe against a potential Iranian missile attack, allowing a U.S. radar system on its territory that could be in operation by the end of the year. U.S. officials said the move was the most significant military cooperation (NYT) between Washington and Ankara in years.

Turkish Prime Minister Recep Tayyip Erdogan's recent tour of Egypt, Tunisia, and Libya was aimed at convincing Turks that their country is a powerful regional player, writes CFR's Steven Cook in Foreign Affairs.

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Topics: Daily Roundup • Economy • Europe

soundoff (6 Responses)
  1. huyu - God of Finance

    Earthlings, listen up. I am your God, stupid, not him, your God of Finance. I, as you know ...hadn’d been with you as long; only 700 years since Emperor Kublai Khan started paying paper instead of silver money. Of course scoundrels immediately started to cheat with faked look-alikes but the punishment was sufficient to deter these devious beings to spoil my coming-out party, heard of Death-by-a-Thousand-Cuts.

    I was once almost dead, chained by these little rules that they called regulations and destroyed over half of the planet by the halfling who called himself Marx. Devilish wasn't he; the you-know-who compensated for his you-know-what by that gigantic beard. I was then freed by that odd couple, Ron and Margaret; but it was she, I believe, said "can do business" with Dennis just a few steps back, politely, of course.

    Sorry to say it, but it is true that I am a fickle god and there had been many upheavals, not only in the land of my origin in the Yuan empire but also in much of the new European ones like that has-been Holy Roman province of the Tulip fields, the kill-all-the-Reds British South Seas, the new-paradigm swamps of the French Mississippi, the Versailles victimized Weimar, and of course the blindly blissful 1929 New York, and the pacified, but-yet-lost-decade Tokyo, not to mention the baht kicked Bangkok.

    Well, admit it; you are living in one!

    Contrary to common belief, I do not usually strike a touch of anger unannounced. There were some unchained souls like M. Roubini, Shiller, and even this halfling Krugman; all gentlemen of immense intelligence, and almost my ego, surely would have spoiled my next party, had it not been for your, say, l’armour d’argent.

    Ah, the causes. It was actually quit simple despite what your weatherman tells you; I naturally live in your economy, which usually has a productive side, and a financial side. Like, some work and put food on the table, and others count it. So long as the two are balanced, the financial side supports the productive side and the productive side puts more demand on the financial side, which creates the wealth, you know, things like that shining suit on your chest, the sleek iPod in your pocket, and even that seedy establishment, you call it the mall, that you frequent.

    But unlike me, who is divine, you are only human. Every so often, especially with Ron and Margaret in business, you mistake the shenanigans as “Financial Innovation” – something like “efficient finance” actually produces real wealth by counting it many times. It happens like this. Production gets you feeling rich; you then juice it up by borrowing. Being low in intelligence and high on greed, you are carried away by borrowing so much, until that is, there is nowhere to borrow, only debts to repay, as your losses are also piling up, if you can repay at all. .

    But, but, but... This time it's different! You say, you have a New Economy. Of course you do, thanks to me; how convenient I had given these enormous gifts to you of the talented banksters. They came in all falvours, much like your candyman's chocolate, for your pleasure of choosing: your investment banksers, your shadow banksters, your mortgage banksters, your analyst banksters, and your tanned and untanned banksters. In good time, your friendly neighbourhood bankers, if you still remember them, and your scholarly central bankers, you see, are no longer your ally; much now mine and more of his, you know, the one who is denoted 666.

    I always had this small column of i-banksters, but this splendid army, I have to thank your Green spinomist, and your weatherman in many a fine season. They gave me the s-banksters, and with their aid, I won over these your-smiling-uncle banksters with huge bonuses and you-know-you-don't-understand giant pay-packages. To make it certain, I make sure they are paid each year-end so I can have my joyous party on year 5. Even your dignified officials, you know the ones you elect, are in my banksters' pockets. How do you think they are elected? Not to mention their Italian white shoes, English hand-tailored pinstripes, and trophy blondes around the elbows.

    You know you cannot win, but still tempted to jump in with these NYSE TRAPs; I deliberately stir them up each quarter so you feel you have no choice. With each passing high-and-low, you feel your gut churn and churn, and I just watch on the sidelines with amusement. Just to magnify my drama, I reward your greed with higher-and-higher highs, and of course, when the end comes, I slap that fateful tsunami on your fine behind.

    Like all gods, I cannot have mercy. I will have to punish you hard until you are pants down. I remember in 1929, those who feared me jumped and many a widow had been thrown on the streets. This year, there hadn’t been a lot of that, only that little puddle of French red, but still it wasn’t fun. The thing is, if you are illusory thinking you all can get ahead by counting money, instead of producing it, you will be very sorry indeed. Like this year, your economy is really lopsided; so many counting, so few producing, and all are greedy.

    It looks like, all over again, nothing is learned. Your weatherman, he was a bean counter, wasn’t he, is telling you that great for your taxes, you will be on it again; it is all very predictable. What is going to happen is just going to be "the same old game of the same people, intoxicated with the same old drug, pushing around the same amount of real money and each taking a same amount of little cut and then pushes it to the next stop". After enough of that go-around, you know there won’t be any cuts left but for the one on your tummy, almost sounds familiar. Oh really, it is not even the same amount of real money, remember you will have to repay your debts. When you are sorry again these more years, don’t say I haven’t told you so.

    September 16, 2011 at 11:54 am | Reply

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