Just received this from the Roubini Global Economics Monitor Newsletter:

RGE Monitor MEDIA ALERT:   Nouriel Roubini predicts the worst financial crisis since the Great Depression and the worst U.S. Recession in the last few decades.

New York, July 15, 2008- In a series of recent writings on the RGE Monitor Nouriel Roubini - Chairman of  RGE Monitor and Professor of Economics at the NYU Stern School of Business - has argued that the U.S. is experiencing its worst financial crisis since the Great Depression and will undergo its worst recession in the last few decades. His analysis leads to the following conclusions:

Promoted by afew

In the Prospect Magazine July 2008 issue,there is an interesting debate abou how to stop the next bubble. It involves Mark Hannam, who has worked for the Bank of England, Citibank and Barclays, Jonathan Ford (chair), deputy editor of Prospect, John Gieve, deputy governor for financial stability of the Bank of England, Martin Wolf, chief economics commentator at the Financial Times, Anatole Kaletsky, economic commentator and associate editor of the Times and George Soros, chairman of Soros Fund Management. Here are some excerpts:

Success Breeds Failure - Paul Krugman - New York Times

Cross your fingers, knock on wood: it's possible, though by no means certain, that the worst of the financial crisis is over. That's the good news.

The bad news is that as markets stabilize, chances for fundamental financial reform may be slipping away. As a result, the next crisis will probably be worse than this one.

Let's look at the story so far.

After the financial crisis that ushered in the Great Depression, New Deal reformers regulated the banking system, with the goal of protecting the economy from future crises. The new system worked well for half a century.

Eventually, however, Wall Street did an end run around regulation, using complex financial arrangements to put most of the business of banking outside the regulators' reach.

(snip)

We now know that things that aren't called banks can nonetheless generate banking crises, and that the Fed needs to carry out bank-type rescues on their behalf. It follows that hedge funds, special investment vehicles and so on need bank-type regulation. In particular, they need to be required to have adequate capital.

(snip)

And now that the financial clouds have lifted a bit, the pushback against sensible regulation is in full swing. Even the Fed's very modest proposal to curb abusive mortgage lending with new standards is under fire, and there are worrying signs that the Fed may back down.

(snip)

And if we don't fix the system now, there's every reason to believe that the next crisis will be bigger still -- and that the Fed won't have enough duct tape to hold things together.

The Anglo Disease pandemy has not ended yet...

This diary has been written based on a discussion with UnEstranAvecVueSurMer, Afew and Redstar.

It is meant to present and discuss the genesis of the petition, the collective work that led to it, the self-organised process that took place and some lessons we can draw from it,

First, let's remind the timeline of the petition's genesis and set up:

Everything starts with the first rumours about a possible Blair candidacy for the post of President of the Council of the EU.

In "Financial Hypocrisy", a recent article published in "The Economists' Voice", Joseph Stiglitz  compares the current financial crisis with the East-Asia crisis which occurred ten years ago (see his book "Globalization and Its Discontents") and shows that the main actors (in that case IMF and the US Treasury) are promoting totally different policies. Have they learned from the East Asia crisis, or are they hypocritical?

On February 20, in the Financial Times, Martin Wolf finally acknowledged the situation of the American economy and the seriousness of the threats it is facing: America's economy risks mother of all meltdowns.

Quoting extensively Nouriel Roubini's February 5 publication The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster, he paints a very scary picture of America's economic future.

Nouriel Roubini is a Professor of Economics at New York University's Stern School of Business and is also the co-founder and Chairman of RGE Monitor (access to the blog is possible through free registration). He was one of the few economists who predicted an American recession as soon as 2006. At the time, he has been dismissed as a bear and excessively pessimistic. What follows will not sound new to ET readers who followed Jérôme's diaries: in fact, Nouriel Roubini has been quoted several times on ET. It is however telling that the key FT columnist (and a few prominent economists - see his forum's comments) now think that the bleak scenario he was forecasting is very likely to happen.

Let's read Martin Wolf:

We've been doing a superb collective job for the first step of this project (see Petition against a Tony Blair presidency of the European Union).

We already have a text in English, French, German, Italian, Spanish, Dutch, Hungarian, Portuguese and Danish! We are waiting for a Polish version. Any other language is indeed welcome.

You will find hereunder the final text in English. It must have the same content in every language, so, please, correct the other language versions according to it. I will do the French one. You will find the link to your version of the treaty here (look for the EU official journal).

The next step is about hosting and designing a site for the petition. We must also discuss what kind of dissemination strategy we adopt.

Promoted by DoDo with edits

I think we all share the same opinion: the nomination of Tony Blair as president of the European Union would be a disaster for Europe as well as for the rest of the world. We have mentioned the idea of a Europe-wide petition against it. You will find hereunder the text I've drafted. It is written in French, as I had not enough time to write in English.

First, I propose that you help me to translate it into proper English, and then we should discuss its content and presentation.

The second step will be to translate it into as many languages as possible (German, Spanish and Italian at least). Could you please tell us in which language you propose to translate it?

The third step will be to find a site to host it and to which we can link for people to sign the petition. Should we host it on ET? Should we use ipetitions?  Or la petition?

The fourth step will be to define a strategy for its dissemination: whom do we target? Through which channels do we reach them? Should we publish it on friendly sites, on PESmanifesto? Should we send it to organisations (NGOs, Trade unions, political parties)? Do we use e-mailing?

[Update]

Following the debate and several useful contributions, we have drafted what looks like a good text (although you can still make remarks).

Taking the new English version as the original, could you adapt the German (Turambar?) and Spanish (Migeru?) versions using the quotations of the treaty provided by someone?

Nanne will provide a Dutch version and one of his friends could translate it into Polish. We’re still looking for somebody willing to translate it into Italian.

You will find the New English version after the fold and the new French version below:

Nelson Kuria is the managing director of Kenya's Co-operative Insurance Company. The CIC is one of the few organisations doing micro-insurance for the poor. Nelson Kuria is a remarkable person fully dedicated to the co-operative model. He was one of the speakers of the Forum for a Responsible Globalisation.  

Business Daily Africa - CIC to honour poll related claims

CIC to honour poll related claims

Kenya's only micro insurer, the Co-operative Insurance Company (CIC), is paying claims resulting from losses due to political violence, unlike some insurance companies that have attached conditions to honouring such claims.

The European Trade-Union Confederation organises a Europe-wide petition for high quality public services accessible to all

TOGETHER, WE DEMAND PUBLIC SERVICES THAT GENUINELY MEET PEOPLE'S NEEDS, AND WE CALL ON THE EUROPEAN COMMISSION TO BRING FORWARD EUROPEAN LEGISLATION

Public services  are essential for social, economic and regional cohesion in Europe. Such services must be of high quality and accessible to everyone. Until now, the only options put forward for developing public services have been privatisation or liberalisation (namely in sectors such as Energy, the Post and Telecommunications). It is time to find different solutions!

For this reason, we are calling on the Commission to propose European legislation on public services designed to:

- Give priority to the general interest embodied in public services;
- Ensure that everyone has access to public services;
- Strengthen public services in order to guarantee citizens' fundamental rights;
- Guarantee more legal security so as to allow the development of sustainable public service missions;
- Give public services a firm legal basis and thus immunity from ideologically motivated free market attacks.

Diary rescue by Migeru

This diary is meant to illustrate what I proposed in the ET Think Lab diary and in the Open Source Social Democracy diary

I propose to work together on a contribution we could put on the PESmanifesto debate on European democracy and diversity and send to some media as an op-ed.

The theme is: how could we improve the relationship between the EU institutions and the European citizens and how could we make the European citizens take ownership of the European Union?

To start the debate, I will recycle what I wrote in this comment about the ways to improve democracy in the EU by working on the relationship between the European level and the national/local level:

At the moment, the European level and the national/local level are very much disconnected form each other. It is true for the institutions and administrations as well as for the civil society organisations.

Paradoxically, it is probably because the European Union is not bureaucratic enough... As Migeru mentioned it, given the size of the EU (now ~500 millions of citizens), the European Commission has a surprising low number of agents (you could almost drown them in a big bathtub... well, maybe a swimming pool!). What is less known is that it's also true for the civil society organisations like the trade unions, the employers' organisations and the NGOs as well as the national representations: their Brussels-based teams are very small. For example, in the European permanent secretariat of the European Trade-Unions Confederation, there is at the most one or two team members coming from a given country and some countries have no permanent member in the team. Ditto for Business Europe and UEAPME (the employer's organisations), let alone the NGOs.

These teams are usually very knowledgeable about the functioning of the European institutions and they have developed a high level of expertise in working together. however, their small size has an important consequence: each person in these small teams has a very heavy workload (meeting MEP, preparing dossiers, participating in negotiations, attending commissions and work groups, informing/training new member states representatives...) and thus they have no time left to play the essential role of go-between with their colleagues at national and local levels in order to share their knowledge and disseminate information. The result is the existence of a micro-society which is very efficient (yes!), but disconnected from the national and local level. And I think it is true also for the European political parties and for the MEP who are really involved in the parliament (unlike most of the French ones!).

And here is the vicious circle: given the high level of skills and knowledge of these people, and the necessary cost/time to acquire them, and given the depth of their commitment, the turn-over is very low, so there is little dissemination of knowledge/information through "shuttle" effect.

Even if I think these teams should be reinforced, I don't think the solution is to develop huge Brussels-based teams.

What is your opinion on this problem?

In my comment, I suggested to work at several levels:

• to set-up awareness-raising and educational programmes to improve the European citizens knowledge of European institutions,

• to organise ambitious training/exchange schemes bringing together counterparts from several countries to work on a common issue, both monopartite (trade-unionists with trade-unionists) and multipartite (employers, trade-unionists, elected representatives, NGOs representatives...). If ambitious enough, this would produce a significant number of Europe-knowledgeable/skilled people among national and local actors in each member state and, thus, create a pool which would facilitate and improve the turn-over. Such schemes already exist but, so far, they address a very limited number of persons, thus they are not significant enough.

• to foster and support the creation of European networks in which stakeholders cooperate on common projects and through that, come to share experiences and point of views,

• to set-up Europe-wide political organisations and parties which develop Europe-wide political programs and campaign together on common issues,

• to encourage and facilitate the development of European media (newspapers, TV channels, Radios, Internet portals, Blogs(!)...).

Do you agree with these ideas? Could we develop them? What suggestions would you make?

Here is a short summary of the debate held between Ségolène Royal and François  Bayrou Saturday.

The dialogue was a high quality one, open, without hiding disagreements. They excluded  any idea of Bayrou rallying Royal stating that was not the purpose of the debate, but that they wanted to explore the possible convergences and identify divergences.

Update: Here is the address where you can see it (seems to work only with Internet Explorer):
Royal - Bayrou debate part 1
Royal - Bayrou debate part 2

Please complete and comment.

From the diaries (with format edit) ~ whataboutbob

Lucie Aubrac, one of the great figures of the French Resistance, has passed away yesterday at the age of 94.

Lucie Aubrac was born Lucie Bernard on June 29 , 1912 in the region of Mâcon. Before the war, she studied History at the Sorbonne University from which she received the highest teaching diploma. She then started to teach History.

As soon as 1940, she engaged in the Resistance in Lyon with her husband, Raymond Aubrac and she contributed to the founding of one of the first resistance movements, Liberation-South. Together with Emmanuel d'Astier de la Vigerie, they founded one of the most important clandestine newspapers: Libération. As the head of an armed commando, she carried out, among other actions, a military action to liberate her husband from the hands of SS-Hauptsturmführer Klaus Barbie, head of the Gestapo in Lyon. After the success of this operation, the couple left France in February 1944 to join de Gaulle in London and then in Algiers.

After the war, in 1945, when the French women obtained the voting rights for the first time, she created the Privilège newspaper of women, which lasted for a few months.  She was a member of the Consultative Assembly resulting from the Resistance and charged with supervising the Departmental Committees of Liberation.  She then resumed the teaching of History and kept campaigning for Human Rights. After she retired from teaching, Lucie Aubrac kept relentlessly going to high-schools to explain the resistance to the students.  

Lucie Aubrac published several books, among which was one published in 1984, "They left, wild with joy", an account of the escape that she organized to liberate her husband from Klaus Barbie.  

Lucie Aubrac was a great Frenchwoman - afew

For those of us non-Americans who, like me, have been following the evolution of US politics and the Progressives' fight against the Bush/Cheney administration, the 2006 mid-term elections landslide has been a great relief. It will be an even greater one when, as it seems likely (I cross my fingers), Democrats will win the 2008 presidential election and get rid of the worst administration ever.

So, everything seems going all right. Well, not exactly. The hubris of the Bush/Cheney administration has brought such a maelstrom of failures, corruption and crimes, it has lead the world so close to a global disaster (it could still happen...) that, in comparison, any other administration will look like angels come on earth to save us. But I don't believe in angels.

While I reasonably (optimistically?) trust the Democrats for restoring democracy and civil liberties, implementing (slightly) more responsible socio-economic policies and promoting environmental awareness within the United States, I still wonder if they will bring any change to the United States foreign policy doctrine. So far, I have little hope.

From the diaries with a slight edit - afew

In a comment in the diary "Free market and mind", whataboutbob asked this question: "So who is Mr Natural here [on ET]? (with thanks to R. Crumb ~ wab)

I think it is a very important question which is worth a diary and a poll. You will find some pictures of Mr Natural below. Who do you recognise?

An article with profound social & philosophical significance!! From the diaries ~ whataboutbob

A recent diary was asking the question: Do we need to get poorer? The debate focused mainly on the meaning of "poor" and "poorer".
I will not restart it, but it made me think we need to have a better understanding of what "poor" means and a better knowledge of the levels and dynamics of poverty in the framework of globalisation.

Furthermore, the dominant narrative conveyed by the Congregation for the Propagation of the Economic Faith (almost all the economic and mainstream media as well as most of the economists) asserts that growth is the solution and that eventually, the rising tide will lift all boats. So, the question is: is it true? And what level of growth is required to reduce poverty within the current global economic framework?

Promoted by Colman

Every year, beginning on the 8th of December, Lyon celebrates the "Fête des Lumières" (Lights' days).

Everybody put small candles on the windows sills and balconies and the whole city is lit with wonderful light shows projected on the buildings. For three days, the city centre is closed to cars and people walk in the streets and drink mulled wine...

Have a look:

Promoted by Colman - lots more pretty pictures after the fold.

Just to let you know that following Gradinski chai's Euro Trib Action Alert Primer, I have added a list of links to European institutions, agencies and resources on the ET Wiki, in the same "Tools for Action" section, under the name: European institutions and resources links

I'll add some comments in the future.