October 10th, 2008
08:31 AM GMT
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LONDON, England - What do you expect finance ministers meeting in Washington to say?  I have had some thoughts (below), and I want to read yours:

We, Finance Ministers and Central Bank Governors, met today to evaluate the global economic outlook (and were pretty horrified by how the markets have stuck two fingers up at our responses so far ...)

We have committed ourselves to ensuring the stability of the world financial system (but frankly, we don't know what to do next ... Hank's idea didn't really work ... Alistair's plan in London was interesting and is getting a lot of credit ... as for poor Trichet, not sure what he is up to ...)

We believe that our economies are fundamentally sound (hey guys, we have to say this, even though so many of us are heading into deep recession ... )

And that we will co-ordinate activity to ensure the return to steady growth (assuming any of us can afford to make an international phone call after we have finally paid the bank bailout plan – Hank? will you take a collect call?)

We commit ourselves to the successful conclusion of the Doha round of World Trade Talks. (Hey guys – don't forget, we always add this bit into every G7 statement ...)

At that point, most of the so-called G7 sherpas decide the G7 ministers need to be removed to a place where they can't do any more damage to themselves or others.

Now then – add your own touch to this G7 communique.



soundoff (54 Responses)
  1. Rebecca

    Why doesn't anyone on CNN speak about Canada? This is a country which has just been rated as having the world's soundest banking system by a survey of the World Economic Forum. And also has very close ties wtih a very important neighbour, yet has managed to get by largely unscathed, as of yet ,due to much stricter regulations etc. I t would be nice to hear Canada mentioned on the mainstream media more than just in mere passing.

    October 10, 2008 at 8:49 am |
  2. J.R.

    Richard, I like the side comments you made on the pseudo-communique. Very British and has a tangy taste to it but based on truth. However, my comment is on your co-anchor's remark of you "almost relishing" that the world markets are breaking down left and right. What seems to me is that what you're relishing is you bearing witness to this great financial upheaval. It's like seeing the dinosaurs getting hit by the giant asteroid. One cannot stop the event itself. All we can do is watch and learn from it. The market is cleaning itself of the consequences of years of bad business decisions and directions. My ten-cents worth on the matter: I agree with you on this. Let the markets run their courses. Let the "dinosaurs" die from the asteroid impact and pick up the pieces afterward. The previous financial crises resulted from events and situations unforeseen (or largely ignored by those in power). The aftermath was always to setup a new set of rules to prevent it from recurring. But it only applies to known circumstances but not to prevent the unforeseen. This is an "unforeseen" event. It's a "wait and see" stance.

    October 10, 2008 at 9:18 am |
  3. Kevin

    I reckon continued intervention in a capitalist society only serves to deepen the crisis as what happens after a massive capital injection into falling banks ? INFLATION! of massive proportions. Let banks go bankrupt and start all over again.

    October 10, 2008 at 10:01 am |
  4. Ray

    Richard, in my humble opinion, the reason for this 'panic' selling around the world is because the selling of stocks & shares is probably the only short term form of cashflow available right now. The system is still blocked because banks still will not lend to each other, fearing another big surprise around the corner. The governments around the world only took action when it was already too late and the US had crashed into freefall. The UK economy is one of the most vulnerable in the whole world right now, and the current gloating by the PM is totally wrong and misplaced. The 'Swedish Plan' they copied will not of itself solve the problem either.
    Now Insurance companies are failing (Japan) and the next gorilla in the room will be CDS. The Credit Default Swop market is unregulated, out of all control and will deal another blow if we fall into a global recession.
    G7: wake up! The world governments need to address the lack of liquidity in the system by taking a stake in the banks. They need to study the Swedish model that Darling was clever enough to copy.

    October 10, 2008 at 10:02 am |
  5. Lee

    Unfortunately the asteroid was created by the some benefitting dinosaurs & now a lot of smaller "innocent" dinasaurs all over are to be history as a consequence.
    Now some dinosaur groups will meet to reslove that all the dinosaurs shall put their accumulations together to save the population – even the baby dinosaurs will have their share of contributons – when they are borned.

    October 10, 2008 at 10:02 am |
  6. Matthew Laino

    What do you reckon the chances are of one or two of them breaking down and repenting their misguided economic policies of the last 10 years.

    "We the finance ministers and Central ban- OH GOD! IT'S ALL OUR FAULT! WE'RE SO SORRY!"

    Pull yourself together Alastair!

    As a Londoner who recently moved to work abroad for a brief period, I am so glad I don't have to constantly listen to Mr Brown blaming the City. Let's get this straight, this was a REGULATORY problem. I don't want to hear about greed. The markets acted rationally. The problem is political.

    I agree with Mr Quest (I confess to always agreeing with you), that we have to let the market run its course. Our brave leaders failed to address the problems hastily enough. Let the junkies hit rock bottom and allow the shrinks to come in to pick up the pieces. You can't legislate for paranoia.

    October 10, 2008 at 10:03 am |
  7. CharlieF

    We, the Leaders of the G7... etc etc

    Having learned a valuable lesson from Enron we have approached this crisis much differently. No longer will we allow companies which generously lobby us needy politicians to go bankrupt!

    No while last time greedy dishonest people were brought to account and punished, this time we will instead use zillions of tax payer's money to keep these companies afloat. President Bush himself lamented how Enron had given him over $600,000. Said Bush..."That sort of tragic loss convinced me that using over $700 billion of his taxpayer's money to save 50 'Enrons' would be a really wise move, especially when in a few months he will be facing unemployment in the middle of a depression! Even Barrack – I call him Barrack – said he and the Democrats were all for it, as they certainly didn't want to lose the the squillions they were getting from companies such as Fanny May and Freddie Mac and even worse have an investigation and prosecution against their Fannie and Freddie exec 'friends' (such as they insisted on with Enron).

    Also we wish the media to no longer refer to our actions as a 'bailout" or a 'Paulson Plan", but instead it should now be known as the "Confetti Theory Plan". i.e we plan to keep endlessly throwing taxpayer money at all these greedy incompetent and/or corrupt companies until finally they will stop being sad and return to party mode! (and by party that also means returning to donating enormous sums to our relevant political parties).

    A vote was to be taken to increase the membership of the G7, it was decided that this would not happen this year, but is was decided that the Solomon Islands could apply again next year when, if the current crisis continues, they could be on par with any number of current G7 members.

    Lastly we firmly committed ourselves to the successful conclusion of the Doha round of World Trade Talks, so long as the venue is still available...apparently AIG execs and Goldman Sachs currently have every 5 star hotel in the city booked for a critical tax-payer funded 'desert paintball' bonding session for execs and former execs!

    October 10, 2008 at 10:04 am |
  8. CM

    We G7 commit ourselves to reforming the International Monetary Fund to refocus its work back to its original mandate: to promote international monetary cooperation. The IMF should concentrate on global macroeconomic stability including the stability of the global financial sector. Its work through the Poverty Reduction and Growth Facility (PRGF) in low-income countries duplicates the work of the World Bank and Regional Multilateral Development Banks and adds little value. This duplication should be eliminated so that the IMF may focus its attention, resources, and work on areas where it has comparative advantages – surveillance over the global macroeconomic and financial sector, with the aim to recommending reforms that will restore sustained global economic growth and stability.

    October 10, 2008 at 10:12 am |
  9. Lyndon

    Darling, the UK chancellor, came up with the correct response – unfortunately the FTSE cannot operate in "spendid isolation" and the Brits have been overtaken by events – like everyone else.

    I see this whole crisis as an inevitable re-adjustment of world markets to a more realistic (and sustainable...?) level. As such, anything we throw at it in terms of $$$ – no matter how vast and unthinkable the amout – will not stop it.

    We just have to adopt a bunker mentality and sit this one out, then when we emerge into a blasted financial landscape, we can pick up the useful pieces build a better system.

    October 10, 2008 at 10:29 am |
  10. George

    Hi,

    I watched from early on the discussions the three of you had amongst each other and with guests. It seemed to me that free-market approach clashed with providing government corridor to finances all morning. It was really inspiring to see very basic schools battling it out. I won't take sides, but I must admit that in some countries (G7 as well), less competant people sit then you guys.

    So getting to the topic: as I wrote, apart from a basic assessment, I wouldn't expect much more then "Our Dear People in troubled times, we are taking the needed steps to calm the market, give back confidence. We don't want the financial world to collapse, give us a chance to apply corrective actions."

    Richard,
    I really agree with you that this is not a time for declarations of will, but rather fast, direct and aligned action globally. If this doesn't happen, then I will listen to Jim Rogers from next monday.

    October 10, 2008 at 10:38 am |
  11. Vinay

    Capitalism and free market (we think it’s free) economy are facing some of the toughest challenges (cos we were dumb enough not to learn from history). But through concerted coordinated efforts (of playing the blame game) we will ride out the storm (and take credit when things smooth out – if they do). And just in case things don’t work out – we will start a war somewhere in the world – so the media have something else to report and the people have something else to focus on – hey, if things were not quiet in Iraq – would you have noticed this “small dip” in economy we are facing? So, it’s actually the fault of the Iraqis and the 70 odd billion dollar surplus they have and are not investing in our developed and sophisticated financial system……… (hey Fannie, Freddie, you think I can pick up an oil well or two in Iraq on a cheap mortgage?)

    October 10, 2008 at 10:44 am |
  12. Mohamed

    Hi Richard,

    I've been following myself the financial markets for the past 2 years & this crisis we're facing now was absolutely expected, which makes me wonder why all responsible parties wether politicians, CEO's, financial analyst among others have been ignoring it or should i say getting blinded, i guess it was just one major poker game with the money of the consumers & citizens of the world.

    The problem we're facing now is branched into 3 main paths:

    1- All concerned parties have been sitting in front of computers trying to save the big fish "Banks & Financial institutions", while the computers can't calculate one variable in this equation which is the human behavior, what's the point of declaring bailouts of billions or even trillions of $$, the whole mess is generated because of the insecurity & fear of the normal citizens, so to control this market, this is the main target to be approached & communicated in the right manner, they need to feel safe, have an exact definition of what's happening & how are they secured, seeing the red arrows everyday have definitely much more impact than the big boys words, otherwise all this bailouts will be lost too & the mess will turn into a big blackhole sucking everyone in it.

    2- Some countries which have big financial institutions globally ie. Switzerland & liechtenstein haven't even bothered to declare their situation, while the whole financial system across the world is collapsing, they still keep discreet about what they're holding in their banks (which definitely worth millions of trillions of dollars), i think that more visibility of what's in their banks, what they have been investing & how much percentage of the crisis is held down in their drawers would definitely clear the situation up.

    3- Finally, the G7 should start to force the financial institution to invest in projects in the Southern hemisphere, where there is loads of resources & manpower which means better life for this parts of the globe & more financial benefits for them, investing in Europe & USA is really pushing it to the limit as the markets are really tight & expenses are high.

    My conclusion over all is that we should start working together on solving this crisis, not only the G7, there should be global plans, highly communicative delegates representing the entire world.

    October 10, 2008 at 10:57 am |
  13. Nina

    Apropos politicians’ attempts to make reassuring communiqués- here in France (a G7 member) the finance minister has now declared we are now in a "TECHNICAL recession".. due to socalled VOLATILIY but " the economic fundamentals are strong" so we should not worry.. French banks are "solid" and in a much better state than our neighbours.. This is as bad as saying a new "Chernobyl" would stop at the French border (which the authorities more or less did at the time of the atomic catastrophe)!
    A new G7 communiqué will be all about “stabilize markets and reinstall confidence”, one of the politicians’ favourite expressions these days. But it is too late, where were Paulson and Bernake one year ago? They knew billions of “toxic assets” were sold and exported as highly “sophisticated” financial products all over the globe.

    October 10, 2008 at 11:00 am |
  14. Emmanuel

    why all the bruhaha without the mention of God in this whole crisis? Maybe its time there was some recession so that those down below the ladder can do some catch up.
    It is time to know and understand that the most High ruleth in the Kingdom of men and giveth it to whomsoever He will.

    October 10, 2008 at 11:03 am |
  15. Torben

    Dear Richard,

    Love your comments on the latest economic development!

    Here is a proposal for the cheapest bailout package money can buy:

    1) Deal with the valuation problems: donate calculators to all the bankers and analysts that most evidently don't have the faintest idea about calculating real values or predict how much it will cost to take the bus home from wall street. I presume these calculators could even be donated by one of the many technology companies that are currently valued well below the total value of their assets!

    2) Teach banks the most basic of financial lessons: if you buy something for 10 dollars and then sell it for 8..you actually LOST money. Now, the same is the case if you lend money...100.000 dollars loan, 80.000 dollars security...BAD deal. Bankers that don't understand this simple lesson, I suggest that we transfer to charity organizations where they belonged in the first place!

    3) Give everyone time to think about the reality of the situation: close all stock exchanges for a week in order to give all the same analysts and bankers some time to do their calculations. This might refocus their minds and calm them down before they end up in mental hospitals...the poor guys!

    4) Resolve the core psychological problem: instead of pumping billion of dollars in to the system and stir additional nervousness, it might be about time we deal directly with the nervousness instead. I suggest that we fund a number of psychologists that will treat all the misguided financial people that apparently still don't realize this crisis is partly a self fulfilling prophecy created by...themselves! I'm sure that Dr. Phil will participate for free...he seems to like this kind of publicity!

    5) Introduce accountability in analyst reports: when reading recent week's analyst reports, I'm amazed how they are at all allowed to publish one word in the media. Analysts are actually downgrading companies that currently have bigger assets than their total market cap (JAVA and NT are good examples)! Are these analysts really serious or are they trying to talk down the market to make some bargains for themselves? Let's have an expert panel monitor them...if their analysis proves not to "hold water" – ban them from further publishing of reports!

    Richard, as you can see the above bailout package might very well be presented in a slightly ironic or sarcastic way. I'm sure it will not cost a fraction of the packages already rolled out and I would not be surprised if elements of it, would have greater effect ;-)

    Good LUCK (Labor Under Correct Knowledge) to all of us!

    Best Regards
    Torben

    October 10, 2008 at 11:27 am |
  16. Rebecca

    Sorry Richard, I guess you were more likely hoping for thought provoking contributions to your G7 communique. However, as you have said yourself, Iceland is an example of what can go horribly wrong, than why not look at Canada as an example of what can go right? Canada is indeed on a much smaller scale than other countries which dominate the market. And I am aware that as such, they do not share the same circumstances that have led to such a monstrous problem in other areas. However, don't you think, as a member of the G7, they could be looked at for guidance in the future?

    October 10, 2008 at 11:49 am |
  17. Esther Phillips-Constans

    I suggest everybody switches to the Totnes Pounds. Ever heard of it?
    Well there is a bunch of people who said not only are we facing the problem of climate change (oh yes most fruitflies will have forgotten as financials are in the news at the moment) and peak oil and so we have to build the resilience of local communities. In other words learn some proper survival skills like gardening, mending, making things. I'd love to find out what bankers and polititians can really do apart from enriching themselves!!

    Read the Transition Handbook by Rob Hopkins

    October 10, 2008 at 11:54 am |
  18. M. Alexander

    We are all pleased to announce that concerted efforts and substantial steps have been undertaken in the wake of this unprecedented economical situation which is affecting both developed and emerging economies alike.

    We have all unilaterally decided to close all of the stock exchanges and commodities exchanges with immediate effect until the election in the United States and a winner is declared (?) and have declared a four week holiday for all those persons involved in the Banking, trading, insurance, commodities, and properties industries, you can go home and look forward to a nice big fat bonus for all of your steadfast efforts which have landed us in such a serious predicament and, those who have already benefited from this situation with your multi-million dollar and pound bonuses already received, take comfort in the knowledge that this all no longer concerns you, YOU'RE RICH! (P.S. Now, can we borrow some money off of you?)

    Signed the G-7, The ECB, The Federal Reserve, the World Bank etc...

    October 10, 2008 at 11:56 am |
  19. liz, oslo

    Hi Richard
    I seem to have misunderstood your position on "free marketing". You are not espousing all and any deregulation, if I understand correctly, as J.R. mentions in his/her dinosaur-asteriod-crash metaphor earlier in this blog?

    Just read Naomi Klein’s "The Shock Doctrine" and am understanding this crisis on a completely different level. We will see who is to blame for this mess once we see who emerges with bags of dollars/gold bullion and/or the next trading medium of choice.

    Liz, Oslo
    PS: Norway also fixed its 1989 bank crisis in the same manner as Sweden and as Gordon Brown has now espoused.

    October 10, 2008 at 12:12 pm |
  20. Torben

    From CNNMoney.com:
    "Morgan Stanley (MS) fell again Friday after Moody’s said it might downgrade the investment bank and rival Goldman Sachs (GS), noting that a weakening outlook for the capital markets will put a lid on profits next year and perhaps beyond. The news of a possible downgrade – which would boost the firms’ already rising borrowing costs – is particularly grim for Morgan Stanley, whose shares have fallen 48% this week in the latest flight of investors from big, heavily levered financial firms. They slid 5% in premarket trading Friday"

    And now tell me that the problems are not created and constantly worsened by analytics who drag all of us in to a vicious spiral of self fulfilling prophecies! Moody's is actually DOWNGRADING a company that has already been totally hammered down from previous levels...if Moody's is right this time, they were for sure wrong before. I guess that CNNmoney hardly can be blamed for bringing this piece of news, but I would wish there was some kind of mechanism holding back this kind of news until we are certain it's 100% valid.

    PS: to M. Alexander...I loved your comment...well done...points from here!!

    October 10, 2008 at 12:48 pm |
  21. Anthony

    Canadian and Spanish banks are getting by relatively unscathed...

    October 10, 2008 at 12:57 pm |
  22. Ong

    Dear Todd wouldn't it be good during the good old days where banks just lend what they can. Insurers insure what the can afford and everyone makes a normal profit. Then came some smart alex that came and bend the rules, to make extra ordinary profit then screw up the system which all of us have to pay for it. The regulators should do the job properly without fear or favour. If it was exuberance then by all means raise the interest rates years ago and we won't have this problem today. In future please stick to basic banking and insuring. And lastly encouraging home ownership doesn't mean lending to people who can't afford it, at the end messing their lives and ours.

    October 10, 2008 at 1:18 pm |
  23. Damianos

    Richard,

    Is there something they can do about Smart Alec types that have got used to making huge amounts of money without actually producing anything?

    If they can do that, there is a chance the markets will become healthy in the future.

    October 10, 2008 at 1:27 pm |
  24. Kurt

    Add to the G7 Communique:

    Free trade and globalization are extremely important so that when we are affected badly, so is the whole world. That way, we can always be keep this group together.

    October 10, 2008 at 1:28 pm |
  25. Anne

    The House of Cards is coming down and Economists, Analysts and Politicians have been, like the alchemists of old, looking for the philosophers' stone that turns everything into gold (I think it was called Globalization and Deregulation until recently).

    And, just like the alchemists, they are no more than (well intentioned?) charlatans. Of course the very rich will become richer by the end of this episode as they will the only ones able to buy these shares and properties at giveaway prices. Do we get a revolution next?

    October 10, 2008 at 2:22 pm |
  26. Denise

    Previously, the G7 grouping always met to pontificate upon, and parley about what they condescendingly termed: "The African Problem."

    Wonder WHO will meet to ponitificate and parley about "The G7 Problem?!!"

    Life – unlike Man, does have a way of keeping things Fair and Square.

    October 10, 2008 at 2:23 pm |
  27. Vagn

    Barack Obama hit the nail on the head with his remark about Exuberant Fear. He should impress on the population that all that made the American people great is still out there. As a parallel he could use Sarcozys sudden inspiration that France could afford more debt because of her un-accounted-for riches, such as education, health, castles, beauty, sunshine etc.

    US still has an infrastructure, houses, education, inventiveness, but the "grassland" has been grazed by sheep so there is but stubble there. That is condition US has learned to cope with: Work and manure will make it productive again, but it cannot be made with flimsy papermoney and subvention, and here is the problem – it is a bancrupt state trying to pay with value-less promisory notes, and I pity the Japanese and Chinese who have to foot the bill.

    US should re-introduce reality money again by a devaluation, a controlled swap to a REAL 30% lower. It could safeguard the small holder of dollars, it would rid the system of a lot of illegal and untaxed cash, and it would convince the home-owners to start to see a nominal reintroduction of inflation propping up their sense of wealth, even if is to some extent illusory. And then we could hope for Obama's enabling of all the poor , of the untapped productive power, for the elimination of all attempts to steal other nations' riches and self-determination. And to eliminate the country's criminal wastefulness.

    with exuberant fear stopped, credit would soon flow again, and the man in the main-stream would realise that deep down there is still value, for the country, for him.

    October 10, 2008 at 2:26 pm |
  28. Roberto Sylianteng

    1. The Root Problems and their symptoms are interacting to give birth to more problems.

    2. Head off all problems by carrying out the U.K. approach namely guarantee all registered Bank accounts, recapitalize banks, provide working capital, exercise intense oversight over all financial transactions under Legislature declared state of emergency.

    October 10, 2008 at 2:29 pm |
  29. paternotte

    After 9/11 the mrkets were closed a couple of days to cool things down
    What is preventing this happening again as per monday ?
    Also re ban short selling

    October 10, 2008 at 2:34 pm |
  30. Nick T

    Rebecca (first poster), I thank you for pointing that out. I think all the G7 leaders at the meetings this weekend should sit down and examine the Canadian banking system and various rules/laws/policies in place. Listen to what our finance minister (or whoever else presents/speaks on our behalf) and listen to them. I mean REALLY LISTEN to them.

    The ONLY reason why Canada is feeling any hit right now is because our largest customer (the U.S. is spending less on our products. If it weren't for that, we wouldn't be feeling a thing!

    Sometimes other countries need to swallow their pride and realize that their way isn't the best way. Look to countries that are doing well and will prevail over hard times like this and adopt some (or even all if you want) of their policies/rules/laws to prevent anything like this ever occuring again.

    October 10, 2008 at 2:53 pm |
  31. Jane and Barry Rubin

    Richard

    First a comment : We are currently groaning under the strain of heavy "Bleakonomics" with journalists and their gurus predicting the end of the world as we know it. We have watched the Big Fix rolled out by the US (which now looks like "Tweakonomics") and was anyway probably too little, too late. We have marvelled at the bold moves made in the UK by Messrs Brown and Darling, but the banks in their infinite wisdom are taking their time to respond to what's on offer. The phrase "fiddling while Rome burns" comes to mind.

    The comminique should include the following statement :
    "We pledge to research the development of a 100% computerised Global Banking System, supported by all the major economies and adequately capitalised from Day One. We will concentrate the world's finest minds on providing the best solution, minute-by-minute, for all world economies. A global council would oversee the daily operation of the system to ensure its integrity."

    In one fell swoop this would eliminate greed and personal interest from financial marketplaces.

    October 10, 2008 at 3:09 pm |
  32. Pingala

    I thnk the greedy CEOs are to be punished. I am sure the market bounces back once the investors hear the good news. US government shoudl think that "people" come first before "country". PROTECT PEOPLE

    October 10, 2008 at 4:43 pm |
  33. Ian

    In stock exchanges (as in any commercial tensaction) if people are selling, there must be a buyer.
    Therefore, even at lower prices, people are still BUYING.

    October 10, 2008 at 5:42 pm |
  34. Chris Nnaji

    I believe that G7 should discuss of a New World Economic Order or a new economic conference like The Briton-Wood Conference that should take into consideration the following factors:

    - oil dependence and its effect on world economy
    - terrorist effect on the world economy
    - putting most of the countries into the discussion of the economic world problems and not just the so called "world powers"

    Thanks

    Chris Nnaji

    October 10, 2008 at 5:50 pm |
  35. Egill Atlason

    What nobody is in the main media is talking about is how countries are using this situation to weaken other countries and for political and financial gain. Gordon Brown openly stated that Iceland was bankrupt without any shred of information and seized assets of on private international bank and thus bankrupting it because of the trouble of another private international bank. Both these banks were Icelandic. The British government used terrorist laws to do this and threatened legal action in the public media while it is clear to anybody that does any research on the matter that the British government is liable for the damages. This point and blame game of Gordon Brown has not helped anybody and not even him. To do this fully knowing that Iceland was the only Nordic country Britain and the US that did not renew cash flow to and being one of the most democratic, educated, equal rights, human rights, free market driven country in the world is beyond description of what is evil. Iceland is forced to look for new friends in Russia for cash flow. Iceland will not be forced to loan from the IMF so you can steal our fish and deplete our resources by your private industry like Bolivia. Remember where the cold war ended. Yes, my former friends a new one has begun.

    October 10, 2008 at 6:32 pm |
  36. Rudolph Prinsloo

    Since the crude price escalated without economical justification from a fair price of 60usd per barrel to the latest peak prior to the global economic crisis to date, the trillions of dollars unjustifyably earned by the oil barons globally, should be returned to the global crisis stricken economy to avert certain global suffering

    October 10, 2008 at 6:38 pm |
  37. JOSE

    This all started with letting Lehman fail, everybody new it was a mistake, but nobody wanted to be critized for using tax payers money for a bailout, now even regular people are convinced that they loose less with a bailout than with letting all they have disapear.
    So if you fix what was done wrong (goverment bailing out Lehman),
    and convince investors (at least bondholders and preferred stockholders) that they won't loose money as the depositors of banks, investors will help goverments do their job and not let goverments all alone on this. Naturally this has to be combined with interest rates almost 0%, goverments participating up to 49% as stockholders of banks, and a lot of cash as required and urgently work on regulations
    so when calm comes banks cannot do the same thing again.

    October 10, 2008 at 6:43 pm |
  38. Rudolph Prinsloo

    The trillions of dollars unjustifyably earned by the global oil barons, should be returned to the global crisis stricken economy to avert certain global depression followed by fwww

    October 10, 2008 at 6:45 pm |
  39. Zsolt

    Agree with Nick T above. America should stop telling the rest of the world how to manage a free economy. Apparently everyone else did a better job managing their financial markets.

    It is ridiculous to “punish” traders, “speculators”, CEOs or any other small player (even if big) – they just did what was allowed by the system. Which was a misunderstanding of free market, as free market is about supply and demand, thus balancing prices. But when you have some markets where the 80% of funds are not real demand and supply, just simple speculation – that is not a market, but a big roulette.

    October 10, 2008 at 6:51 pm |
  40. Mike Hogan, Newbury, England

    I know that the current worldwide financial crisis cannot be pinned down to one thing or event but I do recommend the website "Bird and Fortune/subprime crisis" for an amusing, but true, satirical comment on the beginnings of it.

    October 10, 2008 at 7:06 pm |
  41. Michael Krafft

    Well done Richard!

    Appears Bush is living up to his expectations at the worlds expense.

    October 10, 2008 at 7:40 pm |
  42. brian ridingson

    I’m not an economist but here’s an idea to maybe help with the financial crisis…
    What would happen if all home loans were done on simple interest? I need $100,000.00 for a home. The bank charges me 25% simple interest. My total I owe is now $125,000.00. That would be a payment of appx $350.00 per month over a 30 year period. My idea would have the bank get all their interest money first, any extra sent in would also go to the interest. Once the interest is paid then the payments start going towards the principal. I see this helping in multiple ways…First, the bank gets their interest money back much faster, not over a 30 year period. Second, my monthly payment is much less than it is now with conventional interest schemes. Enough so that I will probably want to pay off the note in it’s entirety much faster. Also, I have now only paid 125K for my house instead of almost 300K with the current system. More people could afford housing, more houses could be built, more jobs would be created, etc… I realize the lenders wouldn’t be making as much total profit but they would be making it quicker from more people overall, and lets face it, they aren’t making much of anything right now. I’ve pointed out the “pros”, someone give me the “cons”.

    October 10, 2008 at 8:07 pm |
  43. Eric Johnson City,TN

    Has anyone considered the Fair Tax at the G-7 meeting? I thnik it's about time that someone did. What do we got to lose? nothing is the answer, but everything is to gain. Let's rally and get this Fair Tax passed into law.

    October 10, 2008 at 8:10 pm |
  44. Robert

    Richard, to expect the G 7 to address this most catastrophic event in a timely yet appropriate manner was a few weeks ago. Call me the sceptic, were it not for Paulson´s Bailout Plan hysteria, give the money Congress or we´ll declare martial law...a classic stampede scare tactic deployed for effect...then the population would be none the wiser and none the panicier. The news media certainly has it´s agenda, so certain corporations can´t be upset. Bush planned this whole fiasco, that´s a fact. Goldman Sachs, JP Morgan and Citibank are all the winners. Something reeks of rotten fish here. The globe is larger now, because of this. Americans get out of debt freecard is not available. Ever play Monopoly as a kid? Well, the communique´ should be America is now under the auspices of the new International Financial Authority, the IFA. It´s debt -based economy will be used as collateral, untill the outstanding balance is paid off in full to China, Russia, Europe and Asia. Beyond that, never allow this to happen again.

    October 10, 2008 at 8:40 pm |
  45. yves dombrowsky

    It is time to put a stop to uncontrolled speculation. Share markets have to be controlled avoiding trillions of $ to be poured into them for only pure unproductive speculative motive. Nobody, should be able to get a share of any company for less than a full financial year waiting for his divident, at the end of that year he could only remove 20% of it's share at once. Blinded speculation would stop and capital would be invest in proper investment capable of improving company human-power, equipment etc... Let's go back to real positive capitalism and stop the lasy unproductive capitalism we have seen recently, profit at any cost even when shares were related to food ! All the money pumped into company shares does not even profit the company anymore to improve their cashflow for investment purpose, the money come and go too quickly, the purpose being to get easy and quick profit with rumors and speculative news fulling the motion of the all system... Profit generated by yelling frenetic brokers pushed by investors over the phone working from their cosy living room will never generate real richness but only speculative unreal ressources. When that sort of unactive speculators realized they're sitting on an empty mountain they can only panic trying to finally materialized their utopical richness. Only problem their utopy has often been inflated by real life-saving capital given to them by little savers contaminated by the easy-profit-virus-syndrom. The situation left everybody empty handed, speculators, little savers, banking system, compleasant policians... Social unrest and mass focus to extremers is than a very likely possibility for the human way of life. Solution : freeze the all world share market tomorrow morning and set new conditions to own and trade shares, from monday morning impossible to sell them, people would have to keep them, calm down to their investment and wait for their invesment to profit the company they have invested into, wait till their divident at the end of the next financial year. May be that would make people more careful when investing and choosing the good investment that in turn would grow the all system positively and calmly. Could our politicians be couragous enough for that or free enought to accomplish it ? This is the human capitalism survivance question. The only answer may be very tearful...

    October 10, 2008 at 8:48 pm |
  46. roy

    hi lets get back too the root of the problem all the those people who had too move out because they could not afford them invite them too go back and pay rent at the going rate untill they are affordable

    October 10, 2008 at 9:14 pm |
  47. Vijay Richard

    Richard,
    G7 should facilitate economic intellects worldwide to work together. This is no more a single nation`s problem but a well interconnected global issue. I think its time to do some research and find constructive idea rather than to blame.From my homework, I can identify that root cause for credit crunch is the toxic assets held by banks.
    First of all why banks were allowed to buy assets which either were over-valued or the housing sector was allowed to bubble up on sentiments. This means we dont have proper regulation. Economic policy should be redrafted such that there will be a balance between a well regulated economy & free economy.
    I have no doubts that either the people behind this bubble up, or the empoyed assesment techniques for bank needs to be investigated.
    We need to setup indicators & regulatory mesures before secor can bubble up.Every economic cycle can have downturns,its acceptable but not a sudden downfall.

    October 10, 2008 at 9:32 pm |
  48. Thomas

    I am totally amazed how everyone is blaming Wall Street right now... this mess did not happen just because of all the crazy bankers out there... no, they provided what the majority of Americans wanted, cheap credit!
    Banks sold parts of their risky junk to others to diversify and make credit accessible to everyone! Therefore many people were able to live above their means, either directly on credit or based on inflated house prices created by cheap credit ...
    but the house of cards collapsed because it did not have any counter value! So its not just Wall Street that created this mess, it developed years before... I think its necessary to get used to create less debt ... Just stop spending money you don't have (even if you think you might have it in the future)

    October 10, 2008 at 9:43 pm |
  49. Vaibhav

    Well, nobody has mentioned Japan...the country faced similar situation which the world is facing right now....

    October 11, 2008 at 1:52 am |
  50. Jacques

    We will close all stock markets until the presidential election on November 04. This way the different plans imagined to date can be put into place at a governmental pace.

    Enjoy the holidays.

    October 11, 2008 at 2:21 am |
  51. Uma in Liverpool, UK

    We, Finance Ministers and Central Bank Governors, met today to evaluate the global economic outlook (Yes, you whinging muppets are probably banging on about how we ought to have thought of this in August of 2007. Well, here's a two fingered salute to you lot. Now, what were you saying, Gordon?)

    We have committed ourselves to ensuring the stability of the world financial system (Well, no. Not really. It's not as though we like one another. It's not as though we'd work together by choice. We've been chivvied into this by that infernal Yank, Paulson. Don't get your hopes up. It's every country for itself! 'World financial system'? Rubbish...)

    We believe that our economies are fundamentally sound (Dis-donc! N'imitiez pas George Bush, svp! *souffle* Les Anglais et leurs gaucheries...)

    And that we will co-ordinate activity to ensure the return to steady growth (assuming we can bomb the crap out of blxxdy Iceland, without Sweden and Russia getting all bent out of shape.)

    We commit ourselves to the successful conclusion of the Doha round of World Trade Talks. (Doubleplusgood outcomes to Our Side. Hsst... mind the Orwell references around the R-U-S-S-K-I-E-S! Ahh, yes. Quate. Thanks old boffin.)

    At that point, the G7 'Minders' decide to separate the G7 'Ministers' and remove them to their hotels, for a nice bit of a lie-down, as they have obviously been working extremely hard, and might do themselves a mischief.

    Enter Hank Paulson, who promptly shreds the prepared document and writes one that suits the USA, nicking the bits of the British Plan, which he quite likes.

    October 11, 2008 at 7:02 am |
  52. Thiyia DM

    Instead of bailing out fraud & greed companies , if the US govt.would
    have brought the CEOs responsible for the collapse of these companies
    in front of the camera and ask them to refund the bonuses / assets
    they received for the reason : that the company is not making profit
    you are not entitled for BONUSES !
    If US govt would have done these , we as investors would have developed
    CONFIDENCE in the US system. Credit crisis would not have gotten worse
    And Wall Street will be cheering.
    Now we have anxiety, fear, nervousness – our emotions is running wild !
    Financial System of US is shaking like a see-saw !

    Instead of bailing out fraud & greed companies , if the US govt.would
    have not used the word BAIL but pumped money into the banking system
    (the skeleton of a country) , as a help and return it at least after 5 years
    we as investors would have developed CONFIDENCE in the US system.
    When you inject money into banks , it also have to be controlled.
    What happens if they don’t unfreeze the moneys ? How do you know
    there will be inter bank lending ? It is banks secrecy , the so called word.
    People need house , people need car , students need loan etc…etc..
    Is there a watchdog to oversee this ?

    Over and over bailing out AIG for what ?
    Create a new insurance company with the 700billion and recruit new leaders and get things running! Cut off the disease (cancer) .
    AIG staffs are enjoying life in luxurious spa hotels, but with our money , as investors / policyholders !
    With the 700billion , support the young entrepreneurs and let them employ staffs and create jobs. Jobs comes first for us to spend !
    Internal Auditors is insufficient , create an External Auditor policy.
    This way can control the GREEDY and DIRTY CEOs.
    Fraud, corruption etc all can be controlled.

    When the US govt realised that the first firm has collapsed , their eyes should have opened immediately and should have stopped the
    “disease” spreading.
    Wait & see attitude of these politician is the result of the global credit crisis.
    Find the loopholes ! CONTROL….CONTROL…CONTROL !

    REMEMBER : Wall Street belongs to people. If we are not there to buy there will be no Wall Street ! LOGIC & Thinkable !

    October 11, 2008 at 1:44 pm |
  53. Richard

    So What will the payment plan look like when it is decided we should recieve our geneouse loan to these finance brokers is payed back.. Perhaps like this.
    10,000,000,000,000.00 over say 30 years with a flexable rate of interest starting at, oh; say 6.00% (APR). Then automaticaly re-sets itself at the 10th year, after which it will be 10.5 % (APR). If it goes into default, then we go reposses the property (with the local sheriff in tow).
    How much would I expect out of this type of loan? (Hell, I can't count that high). In any event, I bet I dont get anywhere near that ,and the hole thing would be a wash.
    I figure Ill see a big fat return of ($ 00,000,000,000,000.00).
    Notice the missing numeric values exceding 1.

    October 15, 2008 at 1:07 pm |
  54. George Consin

    Ms. Buchanan has a smaller brain that Sarah Palin to suggest that Palin is "perhaps the smartest VP selection in US history".

    October 18, 2008 at 2:23 am |

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