EUOBSERVER / BRUSSELS - Moldova's newly elected pro-Western government hopes to secure an aid package from the IMF and the EU in the coming weeks in order to bring the country back on the floating line, Prime Minister Vlad Filat told MEPs in Brussels on Tuesday (29 September). Only a few days in office, the 40-year old premier chose Brussels as his first destination abroad and even named his four-party coalition the "Alliance for EU integration" as a sign of its commitment to EU-inspired reforms. Prime Minister Vlad Filat hopes the EU will offer financial assistance to his country. "Up until now, EU-Moldovan relations were based on mere declarations, but my government is committed to real reforms and the implementation of the promises made," Mr Filat said during a hearing in the European Parliament's foreign affairs committee. His election was broadly acclaimed by MEPs from across the political spectrum as a victory against a repressive and backward regime, which has kept the country down for the past eight years. The democratic coalition won the majority in the parliament after a re-run of the fraudulent April elections, in which the Communist Party claimed victory.
EUOBSERVER / BRUSSELS - Moldova's newly elected pro-Western government hopes to secure an aid package from the IMF and the EU in the coming weeks in order to bring the country back on the floating line, Prime Minister Vlad Filat told MEPs in Brussels on Tuesday (29 September).
Only a few days in office, the 40-year old premier chose Brussels as his first destination abroad and even named his four-party coalition the "Alliance for EU integration" as a sign of its commitment to EU-inspired reforms.
Prime Minister Vlad Filat hopes the EU will offer financial assistance to his country.
"Up until now, EU-Moldovan relations were based on mere declarations, but my government is committed to real reforms and the implementation of the promises made," Mr Filat said during a hearing in the European Parliament's foreign affairs committee.
His election was broadly acclaimed by MEPs from across the political spectrum as a victory against a repressive and backward regime, which has kept the country down for the past eight years. The democratic coalition won the majority in the parliament after a re-run of the fraudulent April elections, in which the Communist Party claimed victory.
The French government vowed to continue its stimulus effort as it unveiled its latest budget Wednesday. Public deficit will grow to a record 8.2% of GDP this year and 8.5% in 2010, by which time public debt will have reached 84% of national output. AFP - France's public deficit will grow to a record 8.2 percent of GDP this year and 8.5 in 2010, according to the government's budget on Wednesday, based on expected growth of 0.75 percent next year. France is edging out of a recession caused by last year's global financial collapse, but the government vowed to continue stimulus spending, and warned that deficit levels will not begin to fall until 2011.
AFP - France's public deficit will grow to a record 8.2 percent of GDP this year and 8.5 in 2010, according to the government's budget on Wednesday, based on expected growth of 0.75 percent next year. France is edging out of a recession caused by last year's global financial collapse, but the government vowed to continue stimulus spending, and warned that deficit levels will not begin to fall until 2011.
If I were to design a stimulus plan, Cash for Clunkers might be among them. -Skip- So why is this likely to fail, at least in part? That is because the Obama Economic Team, under the leadership of Larry Summers, is grasping at stimulus and aids programs like bank capital asset subsidies that as part of a total package might be useful, but as remedies applied to a sick system do not promote a cure, but merely serve to mask the symptoms. Stimulus and aid programs do not work when they are merely poured into a system that is broken, or worse, broken and corrupt. And it cannot be reformed by actors who have been and continue to be willing beneficiaries of its flaws, such as the transference of wealth from the many to the few. Congress and the Administration have to take themselves away from the trough and start acting for the greater good of the people whom they represent, rather than the special interests who give them campaign contributions and fat, overpaid jobs when they leave office.
-Skip-
So why is this likely to fail, at least in part?
That is because the Obama Economic Team, under the leadership of Larry Summers, is grasping at stimulus and aids programs like bank capital asset subsidies that as part of a total package might be useful, but as remedies applied to a sick system do not promote a cure, but merely serve to mask the symptoms. Stimulus and aid programs do not work when they are merely poured into a system that is broken, or worse, broken and corrupt.
And it cannot be reformed by actors who have been and continue to be willing beneficiaries of its flaws, such as the transference of wealth from the many to the few. Congress and the Administration have to take themselves away from the trough and start acting for the greater good of the people whom they represent, rather than the special interests who give them campaign contributions and fat, overpaid jobs when they leave office.
Bernanke has said, with only a slight hint of doubt that he may be overstating things, that he saved the world from depression. The banks are declaring the recession over, and chipping away in Congress at any legislation that would limit their bonuses or dampen their derivatives activity. M&A activity is picking up now that stock prices have recovered nearly 50% of their decline. CDOs are being repackaged again and securitized. Fees on consumer banking are being scaled back but only on products like forced overdrafts that have drawn consumer outrage. These recoveries are the businesses which boomed during the housing bubble. Banks want to get back into the most lucrative parts of their businesses of the 00's. But their basic lending, to consumers, small businesses, corporations, local governments and non-profits, is stagnant if not declining. The country is still being deprived of credit, and bankruptcies are rolling along as the credit crisis deepens. Consumers are retrenching by increasing their savings and ploughing what money they can not into the banks, which offer hardly anything in the way of interest because they don't want the money, but into Treasuries. What credit there is comes from the federal government - which for example is financing over 3/4 of all home mortgages. We remain in the classic Keynesian liquidity trap. Uncle Ben has been unable to do anything about it. Until many trillions of dollars of debt are paid back or defaulted, the economy will not recover, and the government will be the only place open for lending, unless you are in the speculative business of derivatives trading or securities placement. The next round of disappointment for the markets - in fact let's call it shock - is just around the corner. Numerian
Bernanke has said, with only a slight hint of doubt that he may be overstating things, that he saved the world from depression. The banks are declaring the recession over, and chipping away in Congress at any legislation that would limit their bonuses or dampen their derivatives activity. M&A activity is picking up now that stock prices have recovered nearly 50% of their decline. CDOs are being repackaged again and securitized. Fees on consumer banking are being scaled back but only on products like forced overdrafts that have drawn consumer outrage.
These recoveries are the businesses which boomed during the housing bubble. Banks want to get back into the most lucrative parts of their businesses of the 00's. But their basic lending, to consumers, small businesses, corporations, local governments and non-profits, is stagnant if not declining. The country is still being deprived of credit, and bankruptcies are rolling along as the credit crisis deepens. Consumers are retrenching by increasing their savings and ploughing what money they can not into the banks, which offer hardly anything in the way of interest because they don't want the money, but into Treasuries. What credit there is comes from the federal government - which for example is financing over 3/4 of all home mortgages.
We remain in the classic Keynesian liquidity trap. Uncle Ben has been unable to do anything about it. Until many trillions of dollars of debt are paid back or defaulted, the economy will not recover, and the government will be the only place open for lending, unless you are in the speculative business of derivatives trading or securities placement.
The next round of disappointment for the markets - in fact let's call it shock - is just around the corner. Numerian
~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
American International Group Inc. dismissed McKinsey & Co. as an adviser for the bailed-out insurer's restructuring as Chief Executive Officer Robert Benmosche seeks to trim consulting fees, said two people familiar with the matter. McKinsey worked on a review of AIG businesses that started in March under Benmosche's predecessor, Edward Liddy, said the people, who declined to be identified because the decision wasn't public. The plan was to produce a multiyear road map, called Project Destiny [pdf, oversight.house.gov], to restructure the company after it took a U.S. rescue valued at $182.5 billion. Mark Herr, an AIG spokesman, and Yolande Daeninck of McKinsey declined to comment. The insurer has "too many" advisers because managers "forget to look in our own backyard for skills," Benmosche told employees of New York-based AIG in August, according to a record obtained by Bloomberg. "I am busy getting lists of bankers, lists of lawyers, how many consultants we have." ... AIG owes more than $38 billion on a Federal Reserve credit line. The $182.5 billion bailout includes a $60 billion Fed credit line, a Treasury Department investment of as much as $70 billion and $52.5 billion to buy mortgage-linked assets owned or backed by the company. The New York Fed has hired Ernst & Young LLP to advise on the dismantling of AIG at a rate of $775 an hour per person for work done by partners or executive directors, according to documents [pdf, NewYorkFed.org] from the accounting firm released July 17. The firm may earn as much as $60 million, the records say, an increase of 50 percent from the initial agreement.
McKinsey worked on a review of AIG businesses that started in March under Benmosche's predecessor, Edward Liddy, said the people, who declined to be identified because the decision wasn't public. The plan was to produce a multiyear road map, called Project Destiny [pdf, oversight.house.gov], to restructure the company after it took a U.S. rescue valued at $182.5 billion. Mark Herr, an AIG spokesman, and Yolande Daeninck of McKinsey declined to comment.
The insurer has "too many" advisers because managers "forget to look in our own backyard for skills," Benmosche told employees of New York-based AIG in August, according to a record obtained by Bloomberg. "I am busy getting lists of bankers, lists of lawyers, how many consultants we have." ...
AIG owes more than $38 billion on a Federal Reserve credit line. The $182.5 billion bailout includes a $60 billion Fed credit line, a Treasury Department investment of as much as $70 billion and $52.5 billion to buy mortgage-linked assets owned or backed by the company.
The New York Fed has hired Ernst & Young LLP to advise on the dismantling of AIG at a rate of $775 an hour per person for work done by partners or executive directors, according to documents [pdf, NewYorkFed.org] from the accounting firm released July 17. The firm may earn as much as $60 million, the records say, an increase of 50 percent from the initial agreement.
