Le Canard Enchainé today kindly reminds us of various speeches and decisions of Sarkozy over the past year or two:

• his encouragement to the French to take on more debt (a "sign of dynamism");
  
• in particular, his suggestions to take on more mortgage-backed debt;
  
• his consistent moves to decriminalize white-collar fraud;
  
• the de-funding of the financial crimes squad.

Energy prices 'stronger for longer', says BP

Surging demand in developing countries and global fossil fuel supply constraints are creating volatility in energy markets and will keep prices up over the long term, BP's Chief Economist Christof Rühl told EurActiv in an interview.

(...)

Non-OECD (Organisation for Economic Cooperation and Development) countries like China and India accounted for nearly 50% of growth and for nearly 90% of energy demand growth in 2007. China alone was responsible for 40% of that demand, much of it met by coal, Rühl said.

Soaring demand has put oil markets in a tight spot, with spare capacity in 2007 down to only two million barrels per day. The global oil market was estimated at around 86 million barrels per day in 2007, according to US Department of Energy figures.

Small disruptions in supply can therefore cause "violent reactions" in terms of price movements, he said.

(...)

BP's chief economist vehemently countered the idea that the world was facing a physical shortage of oil as proposed by 'peak oil' theorists. "I have no reason to accept [peak oil] as a valid statement either on theoretical, scientific or ideological grounds," he said.

"There is no resource constraint at the moment for oil. There is enough oil if you're willing to accept the costs - including the environmental costs for sources like tar sands," he added.

The article links to the full interview, and to BP Full Year Review.

In the long run, we're all dead. John Maynard Keynes

So even if Gwen Ifill

is publishing a book titled The Breakthrough: Politics and Race in the Age of Obama (due out in January), that's not a problem, right?

Truth unfolds in time through a communal process.

...and now.

Ferrari sees flat 2008 sales, probably better

PARIS (Reuters) - Ferrari said on Wednesday it should be able to sell the same number of cars -- if not more -- in 2008 as it did last year, but it stopped short of making a forecast for 2009 due to the global financial crisis.

(last year was a record year)


In the long run, we're all dead. John Maynard Keynes

GETTING OUT IN FRONT.

People keep talking about the need for a new financial regulatory structure, but Brookings actually steps into the breach today and tries to outline what it should look like. Smart move. One of the lessons progressives should take from the turmoil of the past few weeks is the need to be in front of events so your legislation can define the conversation around solutions, rather than being reactive to whatever is proposed. After Paulson came out with a plan to buy assets, for instance, that's really all you heard about, and some equity measures were tacked on to appease the left. Assets defined the debate. If progressives had been aggressive with a plan based around purchasing equity, and proposed it right after the AIG bailout, you might have seen Paulson reacting to the proposal, or offering something more balanced. Similarly, you can pretty well predict that there's going to be some serious efforts to construct a new regulatory structure for Wall Street. If progressives did some thinking now about what they want that to look like, they'll have a better chance of setting the terms of the debate when the time comes.

Com'on, you ET financial folks!  Tell me how I don't understand. PLEASE!

McCain/Palin ... total sacks of SHIT!

Looking down from his building's 87th floor at the glittering signs of multinational banks along the river here, Fan Dizhao declared confidently that Wall Street's reign as the world's No. 1 financial hub is coming to an end.

The United States may be grappling with its worst economic crisis since the Great Depression, but these are go-go days in China.

Venture capital, private equity and foreign direct investment are at all-time highs. Although Shanghai's stock exchange has lost close to two-thirds of its value this year, China's big banks have escaped the credit catastrophe largely unscathed, and the economy continues to expand briskly...

With U.S. investment houses tumbling into bankruptcy, consolidating operations or transforming themselves into more closely regulated commercial banks, Wall Street's reputation as the prime address to raise capital, seek investment advice or trade securities is no longer rock-solid.

The flow of capital had already begun moving away from the United States this summer. A survey released last week about the competitiveness of world financial centers found that New York and London, often neck-and-neck in such rankings, were still at the top.

But the survey also found that the two cities' lead over their rivals shrank after February because of the credit crisis and the collapse of U.S. securities firms. Frankfurt, Germany, and Paris also lost ground. Cities in Asia and the Middle East, meanwhile, were deemed most likely to gain in importance.

In Chicago, Private Firm Is to Run Midway Airport
By Susan Saulny, The New York Times

Midway Airport is poised to become the first large privately run hub airport in the country, officials said Tuesday, after an investment group bid $2.52 billion to win rights to a long-term lease.

The deal, with Midway Investment and Development Company, requires final approval from the Federal Aviation Administration and the Chicago City Council, which is set to vote Oct. 8...

Congress has allowed the agency to permit up to five airports to take part in the program, and if the Midway deal is approved, it will be the first.

Airports in the program are subject to the same federal oversight as public-use airports.

"As the first privatization of a major American airport, this transaction will provide unprecedented benefits for the traveling public, the airlines and the taxpayers of Chicago," Mayor Richard M. Daley said Tuesday at a news conference here. "For the traveling public, the lease will mean the benefits of a world-class airport operator whose airports have been acclaimed for the range and quality of their amenities and service."

A privatized airport is somehow fitting for the home of the Chicago School and the Temple of Friedman.

Good description in a recent CEPS report of how the U.S., via its AIG bailout, temporarily saved the over-leveraged European banking system.

But the AIG case shows the importance of another link across financial markets, namely massive regulatory arbitrage. The K-10 annex of AIG's last annual report reveals that AIG had written coverage for over US$ 300 billion of credit insurance for European banks. The comment by AIG itself on these positions is: ".... for the purpose of providing them with regulatory capital relief rather than risk mitigation in exchange for a minimum guaranteed fee". AIG thus helped to organise regulatory arbitrage on a gigantic scale. A formal default of AIG would have had a devastating impact on banks in Europe. This explains why AIG's problems had sent shock waves through the share prices of European banks. For the time being the US Treasury has saved, inter alia, the European banking system, but given that AIG is to be liquidated European banks now have to scramble to find other ways of obtaining the `regulatory capital relief' they appear to need urgently.

Get all that? It's less well known than it should be, but Europeans banks have long been gaming their regulators, having far less than the actual capital reserves that they needed given their balance sheets. AIG filled the hole, selling credit defaults swaps to European banks via which they could tell regulators that they were adequately covered -- at triple-A, no less -- while carrying less cash than required.

France to propose 300 billion euro financial rescue package

LONDON (MarketWatch) -- France will propose a 300 billion euro ($424 billion) rescue package for the European financial sector, Reuters reported, citing a European government source. European Union countries are due to meet over the weekend to discuss a potential rescue plan. Already, two banks, Fortis and Dexia, have received cash injections from multiple governments.

Today, this is what we can read on VoxEU:

Open Letter to European leaders on Europe's banking crisis: A call to action | vox - Research-based policy analysis and commentary from leading economists

Europe is in the midst of a once-in-a-lifetime crisis. Every European knows what happened when financial markets seized up in the dark years of the 1930s. It is not an exaggeration to say that it could happen again if governments fail to act. We are not predicting that it will happen, but it is critical to know that this is what is at stake.

[...]

In Europe, the key problem is high leverage among the internationally active large banks. Hence the EU contribution must be centred on a recapitalisation of the banking sector, through the injection of public equity or through mandatory debt-to-equity conversions. This has to be done at the EU level (e.g. through the EIB). The current approach of rescuing one institution after another with national funds will lead to a Balkanisation of the European banking sector.

Is the EIB the way to go? How do you capitalize the EIB to the extent required by this solution? As per Wikpedia:

European Investment Bank - Wikipedia, the free encyclopedia

The total subscribed capital of the Bank as of end-2007 was EUR 164 billion, of which EUR 8.2 were actually paid-in. Due to the fact that on average EIB extends around EUR 50 billion per year in the form of various loan products, the Bank uses its AAA credit rating and funds itself by raising equivalent amounts on the capital markets.

Where would the EIB get the cash?

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine