reckoning than you all imagine
(dinosaurs - reckoning - meteorite: get it?).
Europeans have not smartened up on the investment
side of things, but they have at least taken to
their old habits of going on strikes as shown by
transport workers across Germany, France and the
United Kingdom this week. (Perhaps the Italians
don't bother turning up for work anymore and so
missed the opportunity to go on strike.)
A
number of you around the table may think that TIC
(Treasury International Capital) is a horrible
louse that infests dogs. It is
actually an important
statistic that shows how much of American assets
are being purchased by non-Americans. For the
first time in a long while, this figure was
actually negative in August this year - foreigners
sold more than they bought in the United States.
Others around the table don't necessarily publish
these figures, but don't make any mistake, much
the same may be happening in places like Italy and
the United Kingdom already.
Then there is
the ham-handed attempt by the three largest US
banks to put together a rescue fund for the SIV
(structured investment vehicles) sector. Among all
the ideas that involved good money chasing bad,
this one takes the cake. To think that none other
than the US Treasury Secretary Hank Paulson
chaired this effort leaves the rest of us with an
astoundingly bad taste in the mouth - forgive me
for being impertinent, but aren't you guys
supposed to be the policemen rather than the
thieves?
Xenophobes
anonymous All this talk of money and
banking must be making you tired, so perhaps it is
time to find an appropriate target for you to
lecture and hector in your meetings. Yes, it is
understandable that you need to make terrifying
sermons from the pew, but this time around you may
find the going a bit tougher than usual.
You see, by pulling in the sovereign
wealth funds of various countries (China, Korea,
Kuwait, Norway, Russia, Saudi Arabia and
Singapore) for a quiet chat, you intend to signal
the need for higher standards of disclosure and
prevent backdoor takeovers of your largest
companies. Truth is, if only you were so lucky. As
I hinted in one of the preceding paragraphs, your
economies are in a state of permanent decline,
thus making your stock markets prone for long-term
downward adjustments. In plain English, that means
sell while you still can.
Then again, the
presumption of relevance has long been a
characteristic of your conclave, so why change it
now? You happily lectured the Latin Americans and
Asians in the 1990s (4) about the need for
structural reforms, open markets et al, and yet
when it is your turn to benefit from these
innovations, actions no longer reflect the spoken
word. You want foreigners to buy your worthless
debt but not your brands or your technology? Well,
why don't you look around for another group of
suckers instead?
Making a symbolic gesture
against China has of course always been a standard
feature of these meetings, and this time your
hosts invited the Dalai Lama for an
otherwise-unknown honor just in time for this
weekend's meetings. If symbolism was your goal
though, perhaps you should have gone for Lee
Hun-jai, the courageous head of the Korean
restructuring effort post-1998 who actually
achieved more in five years than the likes of
Japan, Italy, Germany and Russia among you managed
in your entire history.
Instead, you will
probably choose to listen to the musings of former
Fed chairman Alan Greenspan who has completed his
"See No Evil, Hear No Evil, Speak No Evil, but
Please Buy My Book" tour of world capitals. The
gentleman announced that the credit crisis was
over a few days back, so I guess all of us can
rest easy now. Except of course that banks
continue to fail their funding tests, and credit
markets still operate within a logjam.
Perhaps I shouldn't be so critical after
all. From the vantage point of the countries that
will run the world soon enough, such as China,
Brazil, India among a host of others, it is good
news that your group will choose to ignore the
most pressing problems and instead devote all your
energies to mundane and useless agenda items. This
gives us all the time we need to push you off the
economic cliff once and for all. Oops, maybe I
shouldn't have just written that.
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