Busted: Bankers and The Global Economy

October 24, 2008

The Fear of EU Leaders

U.S. quietly key player

U.S. quietly key player

President Nicolas Sarkozy of France, the current placeholder of the rotating EU presidency, is spearheading the planned global summit in New York City. He expects concrete decisions to come out of the economic summit next month, which must address the underlying causes of the crisis rather reciting world crisis effects. “We have all understood that it will not be possible to simply meet and have a discussion. We need to turn it into a decision-making forum.”

Most of the world economies seem keenly interested in creating a new global solution to save the global economy and themselves from much economic pain. EU leaders and some other world leaders have voiced a certain amount of fear regarding the cooperation of the United States, who has remained very much on the back burner of the global summit considering its usual role. The election is undoubtedly playing a role in U.S. hesitation and resistance. 

Even Japan and China have become very interested in global economic solutions. Sarkozy told Chinese President Hu Jintao that he fears the United States, which is wary of excessive regulation, would be content if the summit produced “principles and generalities.” That is the real fear of EU leaders since they seem to be looking for radical global change and protection rather than placation and stop gap measures. ~ E. Manning

Global Financial Overhaul Recommended

October 9, 2008

IMF Global Outlook Darkens; Stabilization Dims

The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s,” the IMF said Wednesday in its World Economic Outlook. Several prime economies are on the edge of economic recession simultaneously. Even so world banking leaders insist on the idea of a recovery sometime in 2009. The IMF warns of “considerable downside risks” to that scenario, which assumes U.S. and European governments will succeed in their efforts to stabilize markets.

The problem behind the U.S. recovery is that the latest economic bailout assumes stability in overseas markets and the ability of foreign investors to lavish funding on the U.S. economy. With a global recession looming, this potential is quickly dimming as the U.S. economy faces still more rescue measures in the effort to stabilize the national economy. A global recession puts the entire premise of a quick U.S. success in dire straits. ~ E. Manning

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