Wednesday, January 6, 2010, 10:38PM ET - U.S. Markets Closed.
Mick Weinstein The Week's Best Stock Blogs
Posted on Friday, April 3, 2009, 12:00AM
A great deal was at stake as leaders of the world's largest economies met this week in London to tackle the economic crisis and consider reforming the global financial system as we know it. As always, econobloggers provided immediate, candid analysis of the event that delves beyond the headlines (bold emphasis in the following excerpts is mine):
• Things began rather inauspiciously as French President Nicolas Sarkozy threatened to walk out of the summit if his plan for tighter global regulations wasn't adopted. As reported in Daily Beast: "Ultimatums are always the smartest way to go." Perhaps...in the end, Sarkozy left pleased with a step in his direction.
• Yet as Kevin Drum notes: "Obama was also said to be opposed to a greater role for international regulatory bodies, and he appears to have won that round. The draft section that called for regulators 'to supervise cross-border institutions and to complete the establishment of colleges of supervisors for all significant cross-border financial firms' is gone."
• Jeffrey Sachs was in attendance, and he came out of the summit very satisfied indeed: "The results were beyond what most, including myself, expected...the combination of new credit lines of all sorts -- in effect, new liquidity -- is on the order of $1.1 trillion. While this is much less than direct spending in its effect on aggregate demand, the contribution to increased global liquidity will certainly be helpful for many economies, especially emerging-market economies..."
• Felix Salmon essentially agrees: "The 3,000-word G20 statement today seems to me to be more substantive and harder-hitting than any I can remember...the G20 did what they could -- which of necessity will have more impact on smaller nations reliant on IMF bailouts than it will on huge economies like that of the US. But every trillion dollars helps -- that's still a serious amount of money, especially for poorer countries..."• Paul Krugman: "The G20 outcome was better than I expected, with something substantive and important emerging& -- namely, much bigger funding for international financial institutions (IFIs), plus expanded trade credit. This will help smaller, currency-crisis countries a lot...realistically, most big-time international meetings produce nothing; this did something significant."
• But Mark Thoma finds the results were "mixed...The agreement to triple the funds available to the IMF is noteworthy... But the failure to move aggressively on an international stimulus package, while expected, was still a disappointing outcome. The attitude, it appears, is that the U.S. caused the problem and it is up to them to fix it. But the U.S. cannot solve this problem alone ..."
• And VoxEU has Charles Wyplosz presenting the skeptic's view of the G20's outcome: "What would be counterproductive would be to declare victory, or merely to claim that sufficient progress has been achieved, for it would lessen the pressure on governments to work harder. And work harder they must, very urgently."• Clusterstock has hedge fund manager George Soros weighing in on the G20 to Maria, and calling it a success: "They really pulled a few rabbits out of the hat... very important is the issue of special drawing rights. $250 Billion... that will help to allow the countries that cannot print their own money the way we can, actually to stimulate their economies."
• Indeed Izabella Kaminska at FT Alphaville finds the final communique's IMF provision " an all-round G20 capitulation to the ideas of George Soros, who pitched for exactly this measure as early as October last year."• Brad Setser posits that, historically, " summits rarely are the venue for the key decisions that end up defining the character of the world's financial system. Many of the decisions that ended up mattering the most were fundamentally national decisions." That said, Setser finds that, "as a veteran of almost ten years of debate over the scale and scope of IMF lending, I am amazed by the set of changes that seem poised to happen."• Finally, WSJ.com has a terrific interactive graphic presenting how the G20 nations currently stack up on some key economic data.
And to close on a lighter note...
• G20 host Gordon Brown does Dr. Evil from Austin Powers.
• Much ado about Barack Obama bowing to the Saudi King -- says Clarice Feldman at American Thinker: "I am quite certain that this is not the protocol, and is most unbecoming a President of the United States."
• Dana Goldstein at The American Prospect asks, " Who's missing from the G20 photo op? The male spouses, that's who."• From CJR, reporters talking swag: "I covered the G20 and all I got was this lousy..."
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