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Reuters – President George W. Bush said on Monday an announcement on a auto industry rescue was not imminent, leaving the industry’s fate clouded in uncertainty for a little longer.
"We’re not quite ready to announce that yet," Bush told reporters on Air Force One during a flight from Baghdad on an unannounced visit to Afghanistan.
He had been asked when he might make an anticipated announcement about tapping a $700 billion financial industry bailout fund to aid General Motors Corp, Ford Motor Co and Chrysler LLC.
Asked whether he was leaning toward using financial bailout funds, Bush said: "I signaled that that’s a possibility."
AP – President George W. Bush has granted pardons to 14 individuals and commuted the prison sentences of two others convicted of misdeeds ranging from drug offenses to tax evasion, from wildlife violations to bank embezzlement, The Associated Press learned Monday.
The new round of White House pardons are Bush’s first since March and come less than two months before he will end his presidency. The crimes committed by those on the list also include offenses involving hazardous waste, food stamps, and the theft of government property.
Dallas Morning News – It’s every SMU grad’s dream: to be young, handsome, and closely involved with deciding how to spend $700 billion.
Attention, Class of 2000: Your fellow alum, Jeb Mason, is living it.
Mr. Mason, 32, has spent his entire career inside the Bush administration. His first assignment: running the mailroom for President George W. Bush’s transition office. His latest: overseeing the Treasury Department’s contacts with Washington’s influential community of lobbyists, trade groups and think tanks.
Mr. Mason is the gatekeeper to Henry Paulson, considered the most powerful treasury secretary in more than a decade.
Bloomberg – During the height of the financial crisis in late September, some of Barack Obama’s campaign advisers pushed him in a conference call to distance himself from Treasury Secretary Henry Paulson. The former Goldman Sachs Group Inc. chief executive officer, they warned, was too close to President George W. Bush and Wall Street.
Obama, 47, rejected the idea. At one point, he talked to Paulson everyday for two weeks.
As the president-elect faces a once-in-a-century opportunity to remake the regulatory apparatus governing Wall Street, some of Obama’s fellow Democrats and investor groups are urging him to bring sweeping changes to banks, hedge funds and executive pay. His closest economic advisers, men like Robert Rubin, Lawrence Summers and Paul Volcker, may recommend otherwise: go slow. If Obama takes their counsel, the 44th president, who succeeds Bush on Jan. 20, may not clamp down all that hard on a financial industry whose excesses have pushed the nation — and much of the world — into a recession.
West Palm Beach (HedgeCo.net) – The leaders of the world’s 20 biggest economies will hold an historic meeting Saturday in a bid to head off the threat of a protracted global recession and forge a new world financial order. Called together less than two months ago by US President George W Bush, the emergency summit of the Group of 20 (G20) leaders at the Washington National Building Museum comes in the wake of the biggest crisis to engulf the world economy since the Great Depression.
Unleashed by the US mortgage meltdown, the upheaval in the world financial system that emerged in recent months has sent stock exchanges into a tailspin, undercut credit markets and prompted a drive for tighter worldwide regulation of the financial industry.
As the crisis spread from the United States to the wider world, the International Monetary Fund (IMF) last week forecast global growth would slow to 2.2 per cent in 2009, considered a global recession by the organization. Most advanced economies will contract over the same period.
Billed as a Bretton Woods-style gathering, after the 1944 meeting that established the post-Second World War financial system, this week’s summit marks the launch of a process world leaders hope will lead to an overhaul of the rule book for the global financial industry.
While a revision of the capitalist model itself may not be on the horizon, even financial institutions have recognized that more transparency and scrutiny of their business practices is now inevitable.
"We do believe that coming out of all this will be some rather fundamental reforms in the global financial architecture," said Charles Dallara, managing director of the Institute of International Finance (IIF), the world’s top banking lobby.
The IIF has even called for a new global body that could coordinate such reforms, but Dallara added: "I think it would be the height of misguidedness if we concluded that capitalism is dead. I think we do need to fix the things that went wrong."
But many governments have sought to lower expectations for the summit, while others have pushed for a broader agenda that could include climate change and trade policy.
"The summit has not been well prepared," said Heribert Dieter, senior fellow with the German Institute for International and Security Affairs in Berlin. "It is not clear what those attending the summit really want to talk about."
Indeed, a major risk facing the summit is that it could expose deep divisions between the US and other key G20 states, with the Europeans expected to try press for more regulation than the US believes is necessary.
At the same time, major emerging economies such as China, Russia and Brazil are likely to demand a key role in drawing up the blueprint for the new financial system.
Responding to the slew of proposals for the Washington summit, the White House has said world leaders will agree on a set of "principles" for a regulatory overhaul and leave the specifics to a later date.
Those principles could include raising the low capital requirements that precipitated the current credit crisis by allowing banks to take excessive risks and amass mountains of debt. International credit-rating agencies could also face tougher scrutiny, and the summit will likely set in motion moves towards closer co-operation between national bank supervisory bodies.
In addition, there are plans for a crackdown on tax havens as well as financial sectors that have so far managed to evade regulation, such as hedge funds.
One of the more concrete measures likely to result from the G20 meeting is an expansion of the role played by the IMF, a global lender of last resort that has also traditionally been charged with maintaining economic stability.
Governments, central banks and legislatures around the world have already taken a series of unprecedented measures in an effort to stabilize the financial system, including coordinated interest-rate cuts and billion-dollar rescue packages for struggling banks.
Yet governments attending Saturday’s meeting are likely to face calls for the implementation of generous national economic stimulus plans to help the world economy limp through the current uncertainty.
Morris Goldstein of the Peterson Institute for International Economics said investments of 1-2 per cent of gross domestic product should be offered by every G20 member government that can afford it.
In addition to the world’s leading industrialized countries such as the US, Germany, Japan, Canada, Italy, Britain and France, the G20 also includes key emerging economies such as China, India, Russia and Brazil, which have been a major source of global economic growth in recent years.
Coming less than two weeks after Barack Obama’s election and within a few months of Bush’s departure from the White House, the process will ultimately give the new president the chance to help reshape the global financial structure.
Obama will not attend the summit, stressing last week that the US only has "one president at a time," but the White House has said his team of economic advisors will be regularly informed on its progress.
Indeed, the scale of the changes that are to be considered are expected to take several months to implement and consequently form a key part of Obama’s early period in office.
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People – Bowing to Europe’s enthusiasm fora new global financial order, U.S. President George W. Bush has agreed recently to host a world summit on reforms of the international financial system.
After a weekend meeting at Camp David some 100 km north of Washington D.C., Bush said in a joint statement with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso that the summit would "seek agreement on principles of reform needed to avoid a repetition of the problems and assure global prosperity in the future."
It was regarded as a victory for European Union (EU) leaders, who are pushing hard for an overhaul of the current global financial system in the wake of the financial crisis.
Europe has become a big victim in the financial crisis, which originated in the United States. As European banks are still struggling with tight credit triggered by the U.S. sub-prime mortgage defaults, Europe learned it can hardly be separated from the United States.
KTAK – U.S. lawmakers and President George W. Bush eased pressure on financial markets on Tuesday by starting work to revive a $700 billion bailout plan to stem a credit crisis that has spread beyond Wall Street to claim more European banks.
U.S. stocks roared back — a day after their worst sell-off in 21 years — and the dollar rallied as investors bet Washington would manage to salvage a package to stabilize the financial sector after Monday’s shock defeat on Capitol Hill.
The Standard & Poor’s 500 index shot up by more than 5 percent, the biggest one-day gain for that measure of the broad market in six years.
The relief rally came as the White House, Treasury Secretary Henry Paulson and the two candidates hoping to succeed Bush as president, Republican John McCain and Democrat Barack Obama, reaffirmed their support for a bailout plan. Congressional leaders started talks to relaunch the package this week.
Bloomberg.com: UK & Ireland – “I’ve never lived through something like that,” Stephen Jarislowsky, the 83-year-old chairman and founder of Montreal-based money manager Jarislowsky Fraser Ltd., said yesterday about the past month on Wall Street.
“I don’t even think the ’30s were like that,” he said in a telephone interview. “At least they had a bank holiday and they closed all the banks. These idiots in Washington didn’t do that.”
On the worst day in global financial markets in 21 years, investors who have seen it all were left shaken. After the U.S. House of Representatives voted down a $700 billion rescue package supported by President George W. Bush and leaders of both parties, $1.2 trillion of market value was erased from U.S. stocks.
“I’m more than worried,” said Jarislowsky, who co-founded his firm in 1955 and oversees C$51 billion ($49 billion). “In a market like this, I’m not looking at opportunity. I am looking at preservation of capital. If governments aren’t careful and this mess isn’t solved fast, capitalism as we know will be wiped out.”
