G-20 Meeting – Far too Many Cooks in the Food Kitchen

Posted on November 16th, 2008 in Daily Stock Market / Economic News - The Real Story, Mr Mortgage's Personal Opinions/Research

Boy, the financial media was pumping the G20 meeting this weekend as the beginning to the end to the worlds financial market woes.  Many credited the major counter trend stock rally on Thursday to be because of this. When I heard President Bush stand up yesterday with a summary that essentially said nothing, rather was a pep talk, I immediately assumed this group only showed up for the photo-op.

Mish summed up the meeting below better than I could have so here ya go. If you want to read his full write-up, which I urge you do, here is the link.-Best Mr Mortgage

G-20 Top 10 Accomplishments

  • 10: President Bush said “There was a common understanding that all of us should promote a pro-growth economic policy.”
  • 09: U.K. Prime Minister Gordon Brown said “there is a clear determination on the part of world leaders in every continent to take necessary action to move economies out of this difficult period.”
  • 08: The group agreed to not cap executive pay.
  • 07: The group sang the praises of low interest rates.
  • 06: The group will work on recommendations for enhancing disclosure while hinting it would allow the continuation of mark to fantasy accounting.
  • 05: The group called for rating agencies to be registered even though rating agencies in the US are already sponsored by the SEC.
  • 04: The group called for the creation of “supervisory colleges” who will not do anything thing but receive outrageous pay for sharing information one can easily find on Bloomberg.
  • 03: Argentina, Australia, Brazil, China, India, Indonesia, South Korea, Mexico, Saudi Arabia, South Africa, and Turkey complained “the group of friends” otherwise known as the G-8 would not let them in whenever the G-8 got together to party. The above listed countries are saying to the G-8 “please don’t throw a party without us.”
  • 02: The all inclusive group of 20 friends agreed to throw another party in April.
  • 01: Drum roll please….. The number one accomplishment of the G20 meeting was to blame hedge funds and the buyers (not sellers) of poison apples for the financial crisis.

Top 5 Things G-20 Ignored

  • 05: US Dollar Hegemony.
  • 04: Micro-Mismanagement of interest rates by the Fed and Central Bankers.
  • 03: Spending run rampant in US authorized by Congress. Same thing in other G-20 countries.
  • 02: Of immediate concern is the Collapse of Trade, Letters of Credit, and Baltic Dry Shipping. Please see Yet More Trade Finance Worries (Not for the Fainthearted).
  • 01: Fractional Reserve Lending run rampant, leverage, excessive credit creation, and unsound fiat currencies. In other words the G-20 ignored discussing the very cause of the problem we are now facing.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

3 Responses to “G-20 Meeting – Far too Many Cooks in the Food Kitchen”

  1. In essence, what the G20 (quietly) agreed upon was that they were ready and willing to:

    REFLATE.

    And reflate they will (‘they’ of course, means US as the leaders of the attempt at reflation.)

    No, it’s not going to solve much – least of all propping home prices back up to artificial levels. But it might do something for the investor like You in the short term. And that is allow you to sell into any (even briefly) sustained rally you can to get outta Dodge.

    Mish is right – there is massive asset deflation and liquidation going on right now, but as large as that asset deflation and liquidation is, so will the reflation be an order of magnitude larger and so too the consequences therein.

    There’s a hose. At one end are central banks, led by the Federal Reserve. At the other end is the general economy. In between is a mountain of printed and electronic money.

    The delta is how long it takes for the bulging money balloon at one end to reach the general economy at the other. And reach them it will.

    There is no other choice. The rational choices will not be listened to because they involve an element of personal responsibility and PAIN.

    Pain & personal responsibility are not allowed in the new age of Big Government. And you thought ‘Big Oil’ was big…

    Peace –

    C.C.

  2. Biggest credit bubble in human history is bursting. And there’s nothing anyone can do about it. But, politicians need to maintain the appearance of “solving problems”. So they get together and have a party. But nothing changes. I think this is going to be so severe that even govt jobs may be lost.

  3. If you sent the G20 to investigate a plane crash, they would have a fancy dinner, get in some photo opps, and the final G20 statement would read “The plane crash was due to the elevation of the ground and subsequent contact.”

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