G7: So Far All Talk, No Action. Chilling...
The world wants to see a credit market solution hat trick from the G7 meetings, but they just amped up their word without a backbone plan... Today's news excerpts:
Bloomberg:
Bloomberg:
"The current situation calls for urgent and exceptional action,'' the finance ministers and central bankers said in a statement after talks in Washington yesterday. They pledged to "take all necessary steps to unfreeze credit and money markets'' without detailing how that would be accomplished.Marketwatch:
Financial policymakers from 180 nations around the world are united in their resolve to tackle the financial crisis, Youssef Boutros-Ghali, head of the International Monetary Fund's policy committee, said Saturday. The International Monetary Fund endorsed the plan of action released Friday by the Group of Seven nations, he said. "The crisis is global, so the solution has to be global," he said. "No tools will be spared."And what does this MarketWatch commentator think?
Emergency! Emergency! Let's hurry up and do >>>>>>>>...NOTHING.I think this is the general perception now... loss of confidence in our economic and political leaders to be able to do anything at all. This is the cause of the credit crisis and the market crash.
3 Weeks ago Hank came to congress with his hair on fire declaring the Lenders had all swallowed wmds and we had to do something really quickly. He had the answer scratched on 3 sheets of tissue paper. Give me 700b and get out of my way. The congress asked can you explain. The media including this site screamed don't ask questions it's an Emergency! Just rubberstamp and get out of the way or the sky will fall. The congress rushed added some options, calculated a bit and then gave Hank his wad of cash. And Voila....the market crashed!
What did Hank do? Did he go into action? Did he start saving banks and rescue the economy? No. What's the rush? Need to build a bureaucracy to run things. Hire some Goldman cronies. And then there is that matter of figuring out what inverse up side down Dutch auctions are. Didn't have time before going to congress to figure that out. And of course we do not want to force banks to cough up for too low a price. Got 700 big ones to spend. This all takes time. Don't want to hurry things.
So it turned out for Hank the Emergency was no big rush. Things take time. And as for the markets....oh they really crashed.
So here we are with another emergency meeting. The IMF, the G7 and after meeting they issue some paper saying things are really bad and we really should do something. Do they have a PLAN? No. Do they offer quick action? NO. Do they appear to even understand the scope of the problem? Do not think so.
I love how the second article quotes that they are all united in how they will respond. Apparently doing nothing in a Seinfeld way is unity. Our best bank for consumers, National City, is now in 'purchase' talks. They will no longer be local but corporate. Which translates into typical bank fees for consumers, something Nat'l City didn't do to their clients before.
I could not agree with you more and confidence will only come when people start to believe they know what they are doing. So far it's clear they don't.
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