The first two paragraphs from this Associated Press story Saturday night would have Alfred Hitchcock reaching for the night light and his wubbie:
President Bush and financial leaders from nations rich and poor pledged Saturday to intensify their efforts to unblock a frozen financial system before it does more damage to an increasingly shaky global economy.DO YOU understand what was said here?
While there were no concrete offers of new moves, Bush vowed anew that his administration was doing everything possible to halt the biggest market disruptions since the Great Depression. The finance ministers spoke in unusually somber terms about the need for action.
Finance ministers of nations worldwide speak in "unusually somber terms" about the need to do something to stop the global financial meltdown. Nevertheless, no one has committed to do anything along those lines, at least in any concerted manner.
I think those in charge of the global credit markets and stock traders around the world understand what has -- or more accurately, hasn't -- gone down during the Washington meetings. And I think we can guess what might happen Monday morning if the finance ministers don't do something big by Sunday night.
Don't know about you, but I'm getting damned nervous.
My parents both grew up dirt poor during the Great Depression. I've heard all the stories. I know the indignities they suffered seven decades ago. I know the opportunities lost forever to those children long ago -- the dysfunction bred and the repercussions still rippling through myriad lives after all these years.
I don't want to go there. America doesn't want to go there . . . again.
Bush started the day shortly after daybreak with a Rose Garden appearance with finance ministers from the world's richest countries and later made an unexpected evening visit to the headquarters of the 185-nation International Monetary Fund a few blocks from the White House.IT SEEMS to me -- with government ministers and private-sector economists all stresing the need for urgent, global action to stave off le deluge -- all world powers can muster are piecemeal patches and pretty words. How will that save us from the financial apocalyse predicted by the head of the IMF on Saturday? From MSNBC:
With Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, he participated for about 25 minutes in a discussion with the Group of 20, which includes rich countries and major developing nations such as China, Brazil and India.
Brazilian Finance Minister Guido Mantega said that the president told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis. According to White House spokesman Tony Fratto, Bush acknowledged the problems began in the U.S., with a meltdown of the market for subprime mortgages in the summer of 2007. The president felt it was important to take the rare step of coming to such a meeting because the problems were spreading globally.
"It doesn't matter if you're a rich country or a poor country, a developed country or a developing country—we're all in this together," Bush said, according to Fratto. "We take this seriously, and we want to work with you."
In response, the G-20 countries issued a joint statement in which the finance officials pledged to work together "to overcome the financial turmoil and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world's financial markets."
The financial turmoil also dominated discussions at weekend's annual meetings of the IMF and World Bank. The IMF strongly endorsed a five-point plan put together a day earlier by the so-called Group of Seven wealthy powers, in which the United States, Japan, Germany, France, Britain, Italy and Canada jointly pledged to use all means possible to prevent major financial institutions from failing and to keep pumping money into the banking system to unfreeze lending and get credit—the lifeblood of the economy—flowing again.
"The depth and systemic nature of the crisis call for exceptional vigilance, coordination and readiness to take bold action," the IMF said in its joint statement. That statement, in an unusual move, repeated verbatim all of the commitments made in the G-7 statement that had been released on Friday.
The International Monetary Fund warned Saturday that debt-ridden banks were pushing the global financial system to the brink of meltdown and wealthy nations had so far failed to restore confidence.EVERYBODY HAS a plan. What we need is implementation. No implementation, no chance of a solution.
The IMF's policy setting panel said the economic crisis is so deep and widespread that it will require a willingness to take bold action.
The Group of 20 nations, which includes the world's wealthiest nations and the largest developing countries such as China, Brazil and India, issued a joint statement late Saturday night stressing their resolve to work together to overcome the current financial turmoil.
"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," IMF chief Dominique Strauss-Kahn said.
The IMF endorsed a plan of action adopted Friday by the G-7 economic powers to protect the financial system and get credit flowing again.
Bush huddled with economic chiefs from the G-7 — Japan, Germany, Britain, France, Italy and Canada — and officials from the IMF and World Bank, and said top industrial nations grasped the gravity of the crisis and would work together to solve it.
"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together," Bush said. "There have been moments of crisis in the past when powerful nations turned their energies against each other or sought to wall themselves off from the world. This time is different."
"I'm confident that the world's major economies can overcome the challenges we face," Bush said, adding that Washington was working as fast as possible to implement a $700 billion financial bailout package approved a week ago.
Yet there was no concrete offer of new moves when Bush spoke on a Rose Garden stage just after daybreak, flanked by representatives from nearly a dozen nations and international organizations.
And no solution leads us to a place we really don't want to go.
At least that's what the experts who forecast our present predicament say. Like this one:
Nouriel Roubini, the professor who two years ago predicted the financial crisis, said world financial officials should orchestrate interest-rate cuts of at least 1.5 percentage points to help avert a depression.AT LEAST that's what the Bloomberg News story said Friday. As for what people will say today, who knows?
A temporary guarantee of all bank deposits, unlimited liquidity for solvent financial institutions and fiscal-stimulus measures are also needed, the New York University professor of economics said in a commentary e-mailed today to Roubini Global Economics subscribers.
"It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging-market economies to avoid this economic and financial disaster," said Roubini, 50. From late 2006, he highlighted the dangers flowing from a likely U.S. housing crisis.
The economist urged immediate action as officials from the International Monetary Fund, World Bank and Group of Seven nations meet in Washington this weekend. Stocks tumbled around the world today as the yearlong credit crisis deepened, sending Japan's Nikkei 225 Stock Average to its worst weekly drop in history. The MSCI World Index was set for its biggest weekly decline since records began in 1970.
In the U.S., the Dow Jones Industrial Average fell below 9,000 for the first time since 2003 yesterday. More than $4 trillion has been erased from global equities this week.
"At this stage the risk of an imminent stock-market crash -- like the one-day collapse of 20 percent plus in U.S. stock prices in 1987 cannot be ruled out," said Roubini. "The financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and investors have totally lost faith in the ability of policy authorities to control the meltdown."
All I know is it doesn't look good from here, as I sit in the studio typing this. You have to wonder . . . and I do.
What particularly worries me is that, after four decades-plus of cultural chaos and familial breakdown, our society is in a worse position to deal with an economic collapse that it was in the 1930s -- and it was a close call even then. We just have no idea what would happen now, and I'd just as soon not tempt fate, if you don't mind.
I'D REALLY just as soon not find out what happens if the economy implodes just as GOP presidential nominee John McCain has unleashed the right's angry demons against Democrat Barack Obama . . . and everybody else who happens to get in the way.
And it's not like the "nutroots" left is any better. Or any less angry. Just different.
I don't want to find out what happens if our financial system -- and, soon after, our entire economy -- falls apart at the same time as we do.