Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


He Really Shouldn't Have Said That, Should He?

Oops! He Really Shouldn't Have Said That, Should He?


By Sean Corrigan
http://www.capital-insight.com
March 20, 2003

Not content with moves to restrict short selling, to allow companies to break rules applying to share buybacks, to sell their currency, and to mobilize state pension monies massively to move the Nikkei off yet another 20-odd year low, the Japanese let slip that they'd cut a deal with the U.S. authorities to provide a little mutual assistance in their attempt at subverting markets.

As the BBC reported:

"A deal was struck last week in the United States between a former Japanese finance minister and the head of the U.S. central bank, the Federal Reserve's Alan Greenspan.

"There was an agreement between Japan and the United States to take action cooperatively in foreign exchange, STOCKS and OTHER MARKETS (bonds? GOLD?) if the markets face a crisis," Chief Cabinet Secretary Yasuo Fukuda said.

In an oblique kind of confirmation, good old Reform-Man himself, Finance and Economics super-minister Heizo Takenaka also said the Bank of Japan and the regional stock exchanges would be "watching the markets closely during the current Iraq crisis."

"We will follow the prime minister's instructions, cooperate with the Bank of Japan and exchanges, and respond appropriately," he said.

But, this is all so-o-o embarrassing for that temple of free economic activity, the United States, where all talk of the activities of the President's Working Group on Markets, the so-called Plunge Protection Team, is confined to "X-Files" buffs, gold bugs -- and -- oh, half those working on Wall Street, once safely ensconced behind a large scotch at their favourite bar, safely out of earshot of the trading floor manager or the regulators.

In the best tradition of the REAL Iron Chancellor, Otto von Bismarck, we know never to believe anything until it's been officially denied, so we were pleased to note that U.S. Treasury Department spokesman Tony Fratto did just that, stating: `The administration's views on markets on interventions are well-known and there has been no change in our view.'

Bloomberg reported that Fratto also refuted a report that Japanese Cabinet Adviser Haruhiko Kuroda met last week with Treasury Secretary Snow during a visit to Washington, despite Fukuda himself claiming that he and Snow had "talked about the necessity of taking crisis management measures in currency and stock markets."

Snow, it seems, was "away" and Kuroda met with other, conveniently unnamed Treasury officials instead, Fratto said, and, in any case, the "discussions were routine and touched on a range of economic and financial issues."

Have the Japanese managed to appoint themselves a senior official who is either befuddled with senility, or who simply cannot tell one gaijin -- however important -- from another, do you think?

Or, rather, has Fratto based his comments on material from the newly-redundant Iraqi Nuclear Weapons Fabrication Plant, where the State Department fabricates the evidence (not the actual WMDs!) for Secretary Powell to brandish at United Nations meetings?

After all, the Bank of England's own deputy governor, Sir Andrew Large – with an impossible remit to try to assure "financial stability" in an inherently unstable system -- told an audience of bankers only last week that the Old Lady was "discussing" the stock market slump with financial authorities in the both the United Kingdom and the wider world.

"Major moves in all assets can be an issue," Large told reporters at a conference organized by the British Bankers' Association in London, Bloomberg said. "There is pretty constant dialogue between all the different authorities at a time like this, when you've got significant fluctuations that everybody can see."

Backing him up, Robin Gordon-Walker, a spokesman for the regulators at the FSA, added: "You would expect there to be discussions between financial authorities under the tripartite arrangements of the Treasury, the Bank of England, and the FSA at times of market volatility."

You would indeed!

And if it's good enough for the Brits, the Japanese, the Thais, Malaysians, and Koreans, it's also good enough for the Europeans, as Bundesbank member Edgar Meister effectively confirmed when he circulated a "memorandum of understanding" around some 20 of his peers on the Continent, outlining what steps to take in the event of a banking crisis.

Now remember we live in a fractional reserve market where all we use for money are promises.

Note too that we also have to worry about Warren Buffet's "Weapons of Math Destruction" -- as the good Sir Andrew was only the latest to tell us in his speech:

"In today's 'derivatised' world, the utilisation of derivatives and complex forms of contract ... is just about omnipresent. This is not a value judgment -- it is a fact. I think we have to accept that any set of accounts, however drawn up, is likely to be considerably deficient, taken just as numbers, in terms of outlining the economic realities of risks within the balance sheet."

"However much it may be a matter of regret, and despite best intentions, the transparency of today's accounts has become less and the opacity greater than was the case in former days, thereby giving a less than complete or reliable view of overall risks…."

In this world, with its complex intertwining of incredible volumes of risk, all ready to interact with itself in unpredictable and violent ways, you would wonder why the Americans alone would prevaricate so much about undertaking a little benign market "smoothing."

Then again, you might see that as an admission the system itself is dangerously out of hack.

Worse, you might begin to suspect that the last 11 percent rally in the S&P500 or the stunning 550-point reversal in the FTSE were less to do with honest decisions to discount a brighter future and more to do with subterfuge and official manipulation.

And we wouldn't want you to think that now, would we?

-END-

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Werewolf: Living With Rio’s Olympic Ruins

Mariana Cavalcanti Critics of the Olympic project can point a discernible pattern in the delivery of Olympics-related urban interventions: the belated but rushed inaugurations of faulty and/or unfinished infrastructures... More>>

Live Blog On Now: Open Source//Open Society Conference

The second annual Open Source Open Society Conference is a 2 day event taking place on 22-23 August 2016 at Michael Fowler Centre in Wellington… Scoop is hosting a live blog summarising the key points of this exciting conference. More>>

ALSO:

Buildup:

Gordon Campbell: On The Politicising Of The War On Drugs In Sport

It hasn’t been much fun at all to see how “war on drugs in sport” has become a proxy version of the Cold War, fixated on Russia. This weekend’s banning of the Russian long jumper Darya Klishina took that fixation to fresh extremes. More>>

ALSO:

Binoy Kampmark: Kevin Rudd’s Failed UN Secretary General Bid

Few sights are sadder in international diplomacy than seeing an aging figure desperate for honours. In a desperate effort to net them, he scurries around, cultivating, prodding, wishing to be noted. Finally, such an honour is netted, in all likelihood just to shut that overly keen individual up. More>>

Open Source / Open Society: The Scoop Foundation - An Open Model For NZ Media

Access to accurate, relevant and timely information is a crucial aspect of an open and transparent society. However, in our digital society information is in a state of flux with every aspect of its creation, delivery and consumption undergoing profound redefinition... More>>

Keeping Out The Vote: Gordon Campbell On The US Elections

I’ll focus here on just two ways that dis-enfranchisement is currently occurring in the US: (a) by the rigging of the boundary lines for voter districts and (b) by demanding elaborate photo IDs before people are allowed to cast their vote. More>>

Ramzy Baroud: Being Black Palestinian - Solidarity As A Welcome Pathology

It should come as no surprise that the loudest international solidarity that accompanied the continued spate of the killing of Black Americans comes from Palestine; that books have already been written and published by Palestinians about the plight of their Black brethren. In fact, that solidarity is mutual. More>>

ALSO:


Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news