Speaking in Austria on Saturday, Sept 20, Merkel said her government had tried in vain to win G8 support last year for tighter regulation of hedge funds and financial oversight of capital markets, hinting that she felt vindicated in her stance as a financial disaster unfolded on Wall Street in recent days. "It was said for a long time 'Let the markets take care of themselves' and that there is 'no need for more transparency'," Merkel said at a rally in Linz, where she was campaigning on behalf of the Austrian conservative People's Party (OeVP). "Today we are a step further because even America and Britain are saying 'Yes, we need more transparency, we need better standards for the ratings agencies'," Merkel said.
Speaking in Austria on Saturday, Sept 20, Merkel said her government had tried in vain to win G8 support last year for tighter regulation of hedge funds and financial oversight of capital markets, hinting that she felt vindicated in her stance as a financial disaster unfolded on Wall Street in recent days.
"It was said for a long time 'Let the markets take care of themselves' and that there is 'no need for more transparency'," Merkel said at a rally in Linz, where she was campaigning on behalf of the Austrian conservative People's Party (OeVP).
"Today we are a step further because even America and Britain are saying 'Yes, we need more transparency, we need better standards for the ratings agencies'," Merkel said.
Beim Geld hört die Freundschaft auf. That was all the time that way. USA and Europe were battling over economic issues always, without that that this would effect security issues, like the 'war on terror'. So, when you hope for serious opposition let's say with regard to Afghanistan, Russia, or Iran, you should dampen your expectation. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
In my impression, when speaking of German governments rather than the EU, what you say applied to 'specific' 'money issues' like the VW Law (which, again, don't add up to policy). Even at EU level, despite the Banana Wars and other struggles, the EU line on the WTO was more or less in line with the US one. As for German governments on other international fora, by and large, you barely saw them sticking to separate positions before 2002 and after 2005. For example, not much came out of Merkel's 'Green' drive at the G8 meeting a year ago - though that experience may have taught Merkel something, like the initial altercations with Bush for Schröder. *Lunatic*, n. One whose delusions are out of fashion.
Opinion: Can a Government Lifeline Alone End the Crisis? | Business | Deutsche Welle | 19.09.2008
Greater regulation needed So the state emerges as the savior. Initial news of the bailout led to a swift recovery. First, profits were privatized and now, losses are being socialized. With the banks saved, the whole game can start over again. That is, unless the government makes stricter regulations for the financial sector part of its rescue program. The sector is always willing to be bailed out, but most unwilling to have regulations imposed on its business dealings. But without stricter monitoring and regulation, such a bailout will only plant the seeds for the next bubble on the financial markets to grow. Karl Zawadzky is DW-RADIO's business editor (dc)
So the state emerges as the savior. Initial news of the bailout led to a swift recovery. First, profits were privatized and now, losses are being socialized. With the banks saved, the whole game can start over again. That is, unless the government makes stricter regulations for the financial sector part of its rescue program.
The sector is always willing to be bailed out, but most unwilling to have regulations imposed on its business dealings. But without stricter monitoring and regulation, such a bailout will only plant the seeds for the next bubble on the financial markets to grow.
Karl Zawadzky is DW-RADIO's business editor (dc)
Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Lobbyists Scramble to Sway Deal Titans of the financial industry are battling to influence the government's financial rescue plan, a package that will create new winners and losers in the sector. Democrats in Congress want a rescue package that benefits homeowners at risk for foreclosure, not just Wall Street. Securities houses don't want executive salary limits for banks that participate in the rescue. (...) House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed. "We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers. A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.
Titans of the financial industry are battling to influence the government's financial rescue plan, a package that will create new winners and losers in the sector.
Democrats in Congress want a rescue package that benefits homeowners at risk for foreclosure, not just Wall Street. Securities houses don't want executive salary limits for banks that participate in the rescue.
(...)
House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.
"We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.
A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.
Give us the money and don't tell us what to do with it. Or else. In the long run, we're all dead. John Maynard Keynes
Example: Lehman had
liabilities of $613 billion and assets worth $639 billion. But nobody trusted the quality of those assets.
Anyone 'serious', I mean.
South African President Thabo Mbeki has agreed to resign after his African National Congress (ANC) party asked him to leave office. A statement from the presidency says that Mbeki will "step down after all constitutional requirements have been met."
While Saturday's action by the African National Congress's 86-member national executive committee required a day and a half of deliberations, it was actually the culmination of seven years of discontent between South Africa's most powerful politicians, Mr. Mbeki and Mr. Zuma, the man he fired in 2005 as his deputy. Last December, Mr. Zuma defeated his former boss for the congress's leadership in a vote that showed the party deeply split. With that victory, and with the African National Congress dominant in national elections, Mr. Zuma was in line to become president in 2009 when Mr. Mbeki's second term in office expired. But many of Mr. Zuma's supporters, openly despising the president, wanted him gone sooner rather than later. A majority of the party hierarchy seemed to resist that view until a week ago when a judge's ruling in a corruption case that has long dogged Mr. Zuma tipped the balance. In that decision, the judge not only set aside the case against Mr. Zuma on procedural grounds, he pointed toward what seemed to be a pattern of vindictive political meddling in the matter by Mr. Mbeki's government. ... But some of the seeds of Mr. Mbeki's undoing were planted [while he was deputy to Mandela]. Once in power, the party's leaders veered from their leftward leanings and did what some have called "the great U-turn," adopting policies of fiscal austerity that reassured the financial markets but postponed most efforts to aid the downtrodden.
But many of Mr. Zuma's supporters, openly despising the president, wanted him gone sooner rather than later. A majority of the party hierarchy seemed to resist that view until a week ago when a judge's ruling in a corruption case that has long dogged Mr. Zuma tipped the balance. In that decision, the judge not only set aside the case against Mr. Zuma on procedural grounds, he pointed toward what seemed to be a pattern of vindictive political meddling in the matter by Mr. Mbeki's government.
...
But some of the seeds of Mr. Mbeki's undoing were planted [while he was deputy to Mandela]. Once in power, the party's leaders veered from their leftward leanings and did what some have called "the great U-turn," adopting policies of fiscal austerity that reassured the financial markets but postponed most efforts to aid the downtrodden.
We live in interesting times.
A massive suicide truck bomb devastated the heavily guarded Marriott Hotel in Pakistan's capital Saturday, killing at least 40 people and wounding at least 250. Officials feared there were dozens more dead inside the burning building. The blast targeting the U.S. hotel chain appeared to be one of the largest terrorist attacks ever in Pakistan, leaving a vast crater some 30 feet deep in front of the main building, where rescuers ferried a stream of bloodied bodies. ... The bombing came just hours after President Asif Ali Zardari made his first address to Parliament and days ahead of the new leader's meeting with President Bush Tuesday in New York on the sidelines of the U.N. General Assembly.
The blast targeting the U.S. hotel chain appeared to be one of the largest terrorist attacks ever in Pakistan, leaving a vast crater some 30 feet deep in front of the main building, where rescuers ferried a stream of bloodied bodies.
The bombing came just hours after President Asif Ali Zardari made his first address to Parliament and days ahead of the new leader's meeting with President Bush Tuesday in New York on the sidelines of the U.N. General Assembly.
Prospective Israeli prime minister Tzipi Livni holds the last chance for peace in the country, senior Palestinian officials have warned. Rafik Husseini, the top advisor to the Palestinian Authority president Mahmoud Abbas, has told The Sunday Telegraph that Palestinian politicians may take the drastic step of disbanding the authority if a lasting agreement is not reached during the current peace negotiations. Such a move would mark the end of the US-backed talks launched with much fanfare at Annapolis last November. and put day-to-day Palestinian governance back in Israeli hands, almost certainly igniting fresh violence in the process.
Rafik Husseini, the top advisor to the Palestinian Authority president Mahmoud Abbas, has told The Sunday Telegraph that Palestinian politicians may take the drastic step of disbanding the authority if a lasting agreement is not reached during the current peace negotiations.
Such a move would mark the end of the US-backed talks launched with much fanfare at Annapolis last November. and put day-to-day Palestinian governance back in Israeli hands, almost certainly igniting fresh violence in the process.
British Ambassador to the UN John Sawers said Friday that London was ready to support Zimbabwe's recovery but only if "genuine" power-sharing is fully implemented. "We are ready to support Zimbabwe's recovery ... but we clearly have to see a commitment that the tragic policies pursued in Zimbabwe in recent years have come to an end and that there is a genuine effort to share power with those who were elected in the March election," he told reporters. He spoke after attending a UN Security Council briefing by UN troubleshooter Haile Menkerios, who monitored the South African-mediated talks in Harare that produced the power-sharing accord.
"We are ready to support Zimbabwe's recovery ... but we clearly have to see a commitment that the tragic policies pursued in Zimbabwe in recent years have come to an end and that there is a genuine effort to share power with those who were elected in the March election," he told reporters.
He spoke after attending a UN Security Council briefing by UN troubleshooter Haile Menkerios, who monitored the South African-mediated talks in Harare that produced the power-sharing accord.
Value written down to $1.35 billion because of market volatility A bankruptcy judge today decided that Lehman Brothers can sell its investment banking and trading businesses to Barclays, the first major step to wind down America's fourth-largest investment bank. ... Lehman Brothers Holdings Inc. filed the biggest bankruptcy in US history on Monday after Barclays plc declined to buy the whole of the investment bank. Barclays will take control of Lehman units that employ about 9,000 in the US. "Not only is the sale a good match economically, but it will save the jobs of thousands of employees," said Harvey Miller, a lawyer for Lehman.
A bankruptcy judge today decided that Lehman Brothers can sell its investment banking and trading businesses to Barclays, the first major step to wind down America's fourth-largest investment bank.
Lehman Brothers Holdings Inc. filed the biggest bankruptcy in US history on Monday after Barclays plc declined to buy the whole of the investment bank. Barclays will take control of Lehman units that employ about 9,000 in the US. "Not only is the sale a good match economically, but it will save the jobs of thousands of employees," said Harvey Miller, a lawyer for Lehman.
Buffett in $4.7bn deal for Constellation Warren Buffett has made his first move in response to the latest round of credit market turbulence by agreeing to buy $4.7bn Constellation Energy Group, a US power company whose shares have been hammered over fears of a lack of liquidity in its commodities trading business. MidAmerican Energy, a holding company of energy assets that is majority-owned by Mr Buffett's Berkshire Hathaway, agreed on Thursday to buy Constellation for $26.50 a share - at less than half the company's market value a week ago.
Warren Buffett has made his first move in response to the latest round of credit market turbulence by agreeing to buy $4.7bn Constellation Energy Group, a US power company whose shares have been hammered over fears of a lack of liquidity in its commodities trading business.
MidAmerican Energy, a holding company of energy assets that is majority-owned by Mr Buffett's Berkshire Hathaway, agreed on Thursday to buy Constellation for $26.50 a share - at less than half the company's market value a week ago.
But EdF holds 9,5 % of Constellation energy...
EDF set to launch bid for US group EDF of France is planning to go on the offensive to protect its foothold in the US with an offer for Constellation Energy, the electricity utility that agreed on Thursday to a $4.7bn (€3.2bn) takeover by billionaire investor Warren Buffett. The board of the French utility agreed in an emergency meeting on Friday to back a joint bid with a US partner, as required under US regulations.
EDF of France is planning to go on the offensive to protect its foothold in the US with an offer for Constellation Energy, the electricity utility that agreed on Thursday to a $4.7bn (€3.2bn) takeover by billionaire investor Warren Buffett.
The board of the French utility agreed in an emergency meeting on Friday to back a joint bid with a US partner, as required under US regulations.
No matter what this is a major league f*ck-up by the Constellation management who has lost one of the most promising companies in the US for chump change. All because of a stupid business model which resulted in a exposure of $120 million to commodities contracts with Lehman, which in turn led to rumors and violent speculation against the company.
Why the company didn't ask for a capital injection from its shareholders instead of selling it to Buffet I have no idea.
And imagine I did some research on this company a year or two ago to see if I should buy some shares because the generation portfolio is just beautiful. Thankfully I bought Exelon instead. Peak oil is not an energy crisis. It is a liquid fuel crisis.
"These companies don't go bankrupt because of losses, they go bankrupt because of a lack of cash," Shimko said. "They could be making a billion dollars on trades, but if they can't post collateral it will all unravel." Constellation's worries started last month not so much because of instability in its business but because of questions about how much the company would have to set aside if its credit soured. When executives said they had underestimated collateral requirements in the event of a credit downgrade, S&P promptly reduced the company's rating, from BBB+, saying the revelation showed "a lapse in the company's risk management and control process." The downgrade required Constellation to post about $106 million in additional collateral with its trading partners.
Constellation's worries started last month not so much because of instability in its business but because of questions about how much the company would have to set aside if its credit soured. When executives said they had underestimated collateral requirements in the event of a credit downgrade, S&P promptly reduced the company's rating, from BBB+, saying the revelation showed "a lapse in the company's risk management and control process."
The downgrade required Constellation to post about $106 million in additional collateral with its trading partners.
If they want to do that stuff they should quit their jobs and start working for an investment bank (if there are any left). Peak oil is not an energy crisis. It is a liquid fuel crisis.
This is interesting because counterparty risk is relatively well understood, but the risk of yourself being downgraded seems not to be. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Also, as long as Constellation operates in "liberalised" energy markets (US, UK), they have to have an energy trading section. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Make sure you fully understand the trades that you are doing Make sure a hedger does not become a speculator Be cautious about making the treasury department a profit centre
Define risk limits Take the Risk Limits Seriously Do not assume you can outguess the market Do not underestimate the benefits of diversification Carry out scenario analysis and stress tests
Constellation says "we're not in a good position to face a downgrade by S&P" and S&P, on hearing this says "okay, I'll downgrade you".
Is S&P stupid? A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Is S&P stupid?
Well judging on how relentlessly positive they've been about organisations who have heavily invested in securities that have been little better than toilet paper, if that then you'd have to say you've good evidence to say yes. Any idiot can face a crisis - it's day to day living that wears you out.
S&P got into a heap of trouble following the Enron crack-up by not looking past the companies financial (mis-) statements to the underlying reality. So to avoid that mistake they are going to quickly down rate companies on the edge and by down rating those companies they drop their debt rating below 'investment grade.' Once that happens insurance companies & etc. are forced to sell the paper, driving the interest rates of that paper up, increasing the cost of the debt, & so on through the downward spiral making the ratings downgrade a self-fulfilling prediction.
Which "proves" the ratings system "works." (For a low value of "proof" and "works.")
I, for one, sit back and marvel at the asininity of it all.
¹ My humble suggestion for updating the 'Invisible Hand' metaphor.
</tinfoil hat> Peak oil is not an energy crisis. It is a liquid fuel crisis.
I think Buffet just was faster and more nimble than EdF. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Plus, BE is really a real estate deal (ie sites already approved for nuclear plant construction), not a purchase of existing assets. In the long run, we're all dead. John Maynard Keynes
