FBI gets thuggish with G-20 arrest

Arrested for Twittering police activities in Pittsburgh?

Unless there’s something that TruthDig isn’t telling us, I give Obama himself until the end of the week to actually do something, or else give more ammo to populist foes of him on the right as well as the left.

Brown: G20 will replace G8

And, British Prime Minister Gordon Brown means that in an official sense, not unofficially. I don’t think he’s quite so right, because the original G7 will debate how much power to give the newer 12 as well as on how to codify Russia’s economic power.

IMF issue bonds instead of loans? Many implications

A VERY intriguing idea got pushed today at G20 financial ministers’ talks at International Monetary Fund headquarters in Washington, D.C.

And that’s for the IMF to issue bonds, not loans, to countries in need of international financial assistance. The four BRIC countries are the pushers, while the U.S. and Eurozone are fighting it. Indeed, it appears BRIC countries are balking at ponying up massive new monies for the IMF unless the West actually discusses this as an idea on the table.

The bonus is that bonds would probably reduce to some degree the power of the “austerity measures” stick that the IMF has used for decades against developing nations, which is precisely why the West is resisting.

Little Timmy Geithner at the U.S. Treasury may be the U.S. official on whom the repayment for all our years of Chinese borrowing starts falling due.

And, along that line, bonds instead of loans, I think, could be played with more, to go partway toward Beijing wanting a backup global reserve currency. That, too, is certainly why the US is cool to the idea for a second reason.

Steve Pearlstein gives G20 two thumbs up

His hit all corners take on the summit?

1. Sarko got at least the appearance of IMF reform;
2. Brown got to rail against the “old system” while still standing apart from Sarko;
3. Obama gets Western Europe to actually do more stimulus work, albeit via the mechanism of IMF loans, and at the same time can use Sarko’s reform call as a cudgel at home.

At the next G20, in September in New York, we’ll see how this has played out.

Sarko: We’re moving beyond ‘the Anglo-Saxon model’

He’s of course talking about the Anglo-Saxon financial model, which a combination of old-school business conservatives and neolibs getting yet another Democratic presidential administration home still try to foist on the rest of the world.

“He” is French President Nicolas Sarkozy, who said, “a page has been turned” on financial regulation and related issues at the G20 summit.

Now, some neolibs, and with better standing, a few non-neo liberals, will say Sarko is “just posturing.”

Is there some degree of posturing in his statement? Sure.

But, “just” posturing? Wrong.

That said, Sarko said the deal wasn’t perfect. He wanted tighter regulation on securitization issues.

THAT said, with something on the books, and the Eurozone still the world’s largest economy (see poll at right on homepage), an opening wedge on this issue can now be further developed in one segment, at least, of the global economy.

More on Sarko’s take on the G20 from the Wall Street Journal.

“Controlling hedge funds doesn't create a job in the French textile industry...but this turns the page of the madness of all those years of deregulation,” he said. “This is without precedent.”

And, pushed by Sarko, the G20 has asked the Organization for Economic Cooperation and Development to publish a list of tax havens; Sarko said he expects that list to be released at any time. And, with help from President Obama, he apparently got China, not an OECD member, to go along, at least for public consumption.

Euros double down on increased IMF support

European and other members of the G20, in a move that will hopefully shut the collective yap of American neolibs have doubled their original proposal for additional financial support for the International Monetary Fund, from $250 billion to $500 billion in new funds. The G20 agreed on other special measures as well.

A BIG caveat on more IMF funding

If the European Union, and the U.S., is on board for more funding for the International Monetary Fund, the old “cui bono” must have its head brought up to see the shadows of Big Finance.

An IMF with more money sounds good, but…

More money to do what?

If the IMF of 1990s austerity budgets is simply revived, and trained on Iceland, Hungary (again), maybe Malaysia, etc., well, then we haven’t made any progress after all, have we?

You think the IMF has changed its spots? Think again. And again. And again.

Recent details of IMF loans suggest they haven’t learnt their lesson – Pakistan was recently told to raise interest rates and electricity tariffs, Hungary to devalue its currency and increase interest rates, Latvia to reduce its local government wage bill, Serbia to cut public sector pay and El Salvador not to increase its fiscal deficit.

So, everybody in favor of giving, not the G20, but the old G7, ultimately, more financial bully power, sure, raise your right hands.

Oh, and that scary “Chinese” idea for a new world reserve currency?

Unless Joe Stiglitz just moved to Beijing and renounced his U.S. citizenship, I don’t think he’s Chinese. And, as Nicholas Dearden observes, neither is the UN Commission of Experts established by the President of the General Assembly on the financial crisis.

Michael Hudson offers one more talking point. He claims the global “dollar glut” helps finance American military expansionism.

Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.

Hmm… Beijing and/or Moscow wouldn’t be at all upset about that now, would they?

Hudson points out that when sovreign wealth funds, whether from China or elsewhere, look at making major investments in things besides various aspects of the financial market, “national security” or other red flags get waved. (Sidebar: That ought to tell you just how important the “financial sector” actually is.)

When you read stuff like this, you realize just how much a Krugman (along with more neolib types) is missing the boat on European debt concerns.

And, folks, stuff like this is why I read Counterpunch. Where I read stuff like this.

EU, US agree on IMF – China?

Behind the alphabet soup? Both the United States and the European Union agree that the International Monetary Fund, believed to be a relic just a few years ago, needs substantial beefing up. Getting something right, U.S. Treasury Secretary and former IMF employee Tim Geithner says about $500 billion in actual funding is needed. The U.S., Japan, and the E.U. have all ponied up fair amounts of money.

What about China? And, what preconditions will it attach?

If Beijing wants to say it will pay based on its GDP per person, rather than reserve funds, unless it gets more of a say, will the IMF then in turn demand more currency flexibility and openness? Since the EU isn’t indebted to China the way the US is, the possibilities are open.

Simon Johnson says this could be the last hurrah for the U.S. and Europe. Well, maybe more so for the U.S., based on some of the things I just said, or have blogged about before. The EU has a better debt structure, a currency that is on the rise in terms of interest, not just evaluation, and more.

And, although Russia is being quiet right now, remember, oil prices are starting to climb again.

At the same time, Johnson says that if the EU and G20 are going to push financial regulation ahead of more stimulus spending, they need to get serious.

More Euro pushback against stimulus

This McClatchy article brings up points I hadn’t considered.

Namely, with stronger unemployment benefits than the U.S., most EU countries already have more stimulus-type money in the system. (So, Obama should jawbone GOP governors, not EU prime ministers.)

Second, especially with Germany, many EU countries don’t buy into Keynesian ideas as much as the US or UK. And, they’ve doubled that skepticism in the 21st century.

Continential Europe says no to Brown on stimulus

On the eve of the big G20 confab, German Chancellor Angela Merkel made clear to British Prime Minister Gordon Brown that the Continent is definitely not interested in a $2 trillion (€ 1.45 trillion or so) stimulus package.

And it wasn’t just Germany.

French President Nicolas Sarkozy and Spanish Finance Minister Pedro Solbes said the same thing.

So Brown will be an impotent, impotent G20 host while the Conservatives look for Labor to fall further in polling.

Perhaps Merkel, Sarko and others even spoke loud enough for not only President Barack Obama, but also Paul Krugman, to hear.

Is Obama taking Euro-chastizing to heart?

All of a sudden, after Germany and France, especially, at the G20 meeting mentioned the need for tougher regulation of the financial sector before more stimulus programs get passed…

All of a sudden, Treasury Secretary Tim Geithner is working on a list of financial sector reforms, to be done before the April 4 G20 meeting, so the U.S. can “take the lead” on the issue.

Beyond trying to stay ahead of the G20, Geithner and President Barack Obama are also trying to stay ahead of Rep. Barney Frank, who has some more aggressive, relatively speaking, reform ideas.

Otherwise, agreed that not only Fed powers, but Fed responsibilities, need to be spelled out, and that all financial regulatory institutions need to be more carefully integrated.

Obama: G20 split talk is ‘phony debate”

President Barack Obama was talking about the idea that there’s a split between the U.S. and much of the rest of the G20, over whether to engage in more theoretically stimulative government spending, or to focus on financial regulation.

Well, President Obama, you can prove this is a phony debate, and that you’re not too tired, by having a financial institutions regulatory bill sent up to Congress by no later than June 1. That would prove that re-regulation is as ‘front and center” as you say it is.

No love for Gordon Brown in Europe, either

German Chancellor Angela Merkel says further economic stimulus programs should come from individual nations and not a united G20.

Is Gordo looking more and more like a beggar, perhaps one from a Dickens novel?

Beyond that, the rebuke, by Germany as well as France, was directed at the U.S. as well as the U.K. It follows on suggestions yesterday that Obama needs to re-regulate banking first, THEN worry about spending more money.

China unease only part of global economic worries

European G20 countries are telling the U.S. to re-regulate banking first, THEN worry about spending more money.

”The issue is not spending even more but to put in place a regulatory system to prevent the economic catastrophe that the world is experiencing from being repeated,” German Chancellor Angela Merkel said this week.

It’s a sentiment with which I agree.

Barney Frank has talked about, and is working on, something. I say no more “stimulus” until U.S. financial institutions get reined in.

G20 like Beltway as Bush resists specifics

The G20 developed and top-rung developing nations financial conference didn’t even have that much sound and fury so far, and probably still siginifies nothing.

President Bush is resisting a supersized International Monetary Fund, the pet dream of Gordon Brown. I’m sure continential members of the Eurozone aren’t so fond of Brown’s idea either, but are content to let Bush take the hit on it.

Yes, this conference will talk some vague goals, then set the date for another conference to work further toward those goals, which will … lather, rinse, and repeat.

Sounds like a “special commission” in DC, doesn’t it?