That's Very Reassuring ...

by hilzoy

From the NYT:

"President Bush and European leaders, who have been tussling over whether to revamp the regulatory framework for global finance, agreed Saturday night to take steps toward a series of international meetings to address the economic crisis, the White House said.

After a private dinner at Camp David, Mr. Bush, President Nicolas Sarkozy of France and the president of the European Commission, José Manuel Barroso, issued a joint statement saying they agreed to “reach out to other world leaders” to propose an international summit meeting to be held soon after the United States presidential election, with the possibility of more gatherings after that."

Steps towards a series of meetings! Just the thing to put the markets to rights!

With any luck, they'll move on to considering the possibility of future discussions to explore the option of appointing a blue-ribbon commission to propose possible joint statements and recommendations. And then we'll really have progress!

Comments

[Mike Schilling]

They'll have the shape of the table decided by 2010 or so.

[Tony P.]

...an international summit meeting to be held soon after the United States presidential election...

Is it possible that Sarkozy and Barroso, not to mention Gordon Brown and others, are basically telling Dubya they want to start talking turkey with Obama as soon as possible?

--TP

[MeDrewNotYou]

The last paragraph reminds me of the http://blogs.24.com/ViewComments.aspx?blogid=e876969d-2085-44ce-a7c0-7efa64a1027f&mid=ec3fede9-4a1e-49f2-b4e4-c108a0f76047> Peter Sellers politician speech.

My friends, in the light of present-day developments, let me say, right away, that I do not regard existing conditions lightly. On the contrary, I have always regarded them as subjects of the gravest responsibility and shall ever continue to do so...

[byrningman]

I think you're being a bit unfair. This could be the beginning of something very significant, a new Bretton Woods, only more multilateral.

[Jesurgislac]

Look at it this way: it's probably better if nothing's done than if the wrong thing is done, and you know you can always rely on Bush/Cheney to do the wrong thing.

[von]

This is unfair, and shortsighted.

Presumably, the discussions are going to involve a new series of treaties and an overhaul of at least some of the regulations that govern the international banking system. Given that these changes are going to have minimal -- perhaps no* -- impact on the current financial crisis, I'd rather they take some time and try to get it right. It's also better that the US be represented by a non-lame-duck in the negotiations (whether it's Obama or McCain).

*Obviously, we don't know exactly what would be under discussion. However, the main government levers on the financial system are at the nation-state level.

[rea]

This could be the beginning of something very significant, a new Bretton Woods, only more multilateral.

It's the prophecy, byrningman:

Be lion-mettled, proud; and take no care
Who chafes, who frets, or where conspirers are:
MacCain shall never vanquish'd be until
Great Bretton wood to high Capitol hill
Shall come against him.

[bob mcmanus]

China is angry, Great Britain is angry, everybody is really extremely PO'd at having their economies wrecked by high-powered American conmen.

Something very painful is soon to be forced down America's throat, likely a major permament loss of independence and sovereignty in financial regulation. And yes, I definitely approve of letting the EU regulate American financial markets. We have failed miserably.

Much better than Bush take that humiliating political hit than Obama, which is why Sarkozy isn't waiting. You can be certain that Obama is informed and involved behind the scenes.

[hilzoy]

Look: I'm all in favor of increased international cooperation, especially now. I just thought that the idea that it would take the form of taking steps towards a meeting was silly. I'd love an actual meeting, for instance.

[bob mcmanus]

And it could still be a matter of extreme urgency.

Here is Brad Setser on the emerging markets, East & Central Asia. Not having access to the Euro-American currency swaps, they are in grave difficulties. Note that South Korea begged its way into negotiations. We really really don't want Pakistan to collapse any further.

If y'all think we need to go that route, could be we need a couple more trillion in liquidity for those emerging markets. Could be Bush is resistant to having it done on his watch.

[Don the libertarian Democrat]

Felix Salmon doesn't think that these talks can lead anywhere for the U.S.:

http://www.portfolio.com/views/blogs/market-movers/2008/10/18/usa-the-biggest-obstacle-to-global-banking-regulation

[John Thullen]

Who cares when the meetings occur or the size of the table?

McManus speaks.

Something very big is up.

Not to mention McManus and Von in one thread for the first time since approximately ........ Bretton Woods.

[bob mcmanus]

Felix Salmon doesn't think that these talks can lead anywhere for the U.S.

Remember that Gordon Brown managed to move Paulson further than he wanted to go.

I am only guessing of course, but somehow I believe Sarkozy is calling for immediate meetings rather than waiting for Obama because Sarkozy has some leverage behind him, e.g., the SWF's dollar reserve holdings.
Dubai, vacation spot of the ME, is in big trouble. China doesn't want its East-Asian markets, which are far more important to it than we are, to collapse.

I could be wrong, but I think an int'l regime will get started before the inauguration. Everybody over there likes Obama, understands American politics well enough, and understands which party destroyed the world's currency, to really want Bush to be the focus of generational Republican rage.

You cannot overestimate how angry the world is. They just might "bring this sucker down" if Bush doesn't cave.

[bob mcmanus]

Thullen, I still read these threads. I just thought hilzoy had misinterpreted events.

Bush is still the petulant boy his party elected twice, and would much rather be ranchin'. He sure doesn't want to meet with funny-named Frenchies.

Sarkozy must have some very serious threats to get his foot in the door.

Something big is indeed up.

[Jesurgislac]

Thullen nails it, as ever.

[bob mcmanus]

Here's an overseas commenter at Mark Thoma's:

hari says...

What TC and his like don't anticipate - right now - is what follows from the decision Bush/Sarkosy/Borosso agreed last night at camp David. Bretton Woods II is already drafted by Gordon Brown and more or less approved by EU Summit last week. There's no way EU-27 will allow further erosion of their hard earned social security and financial stability under American Capitalism gone mad!

Be prepared for a different and substantially restructured global financial superstructure with global regulatory control/audit of financial and other related markets. There is no such thing as a *free* lunch - any more - for hi street!

Posted by: hari | Link to comment | October 19, 2008 at 02:17 AM

Here's the thread link:Link

They ain't asking. The only question is whether Bush can stall it out. It could be that a new popular President could say no, and they are trying to take advantage of Bush's weakness, but in these circumstances I doubt the EU would want to insult Obama that way, so I'm guessing Obama knows.

He just won't celebrate the loss of American sovereignty publicly.

And that's way too much from me.

Hi von! You are the real reason I'm here today. Hope you enjoyed my comments.

[liberal japonicus]

And I, for one, welcome my daughter as one of your future overlords...

[byrningman]

Obama would be precisely the right, and McCain precisely the wrong president of the US for the international challenges ahead. Obama has always been much more attentive to the the broader spectrum of international relations, including economic and cultural aspects of power, and has shown much greater awareness of perspective and long-term thinking.