[IndigoMoon]

Sat Oct 4, 2008 11:07am EDT
By Tamora Vidaillet and Anna Willard

PARIS (Reuters) - The head of the International Monetary Fund (IMF) urged European leaders Saturday to agree a coordinated approach to deal with the worst financial crisis since the 1930s.

French President Nicolas Sarkozy is hosting heads of government from Germany, Italy and Britain Saturday for a summit he hopes will restore confidence to the banking sector and help an economy on the brink of recession in much of the developed world.

"What counts above all is coordination and the will not to act each for himself as we have seen a little bit in some European cases," Dominique Strauss-Kahn, the IMF's managing director, told reporters after meeting Sarkozy.

"The world economic situation is very worrying," Strauss-Kahn added, saying the IMF would be cutting its world economic growth forecasts.

The summit follows approval Friday by the U.S. Congress of a $700-billion bank bailout plan to tackle a crisis sparked by a housing market collapse and a surge in bad mortgage debt.

The fall-out has redrawn the banking landscape on both sides of the Atlantic, paralyzed wholesale money markets and caused huge volatility on stock markets.

Full Story

[virgincrude]

In my opinion this is simply Sarkozy following his script: first we'll nationalise all the banks in the US, next; Europe.

The financial crisis in Europe is very different to the US, Europe as a whole does NOT NEED any kind of bail out plan such as has just been passed in Washington. European banking law is not pan-continental, as the Irish proved last week when they unilaterally decided to guarrantee bank savings. Spain's banking laws are different to French, which are different to German, and so on.

The only reason the IMF would urge Europe to plan for something similar to the 700 Billion bail out, is to ensure the European nations create new laws which would bring its citizens into the same circumstances as the US. What appears to have come about with the passage of the Economic Stabilisation Act, is a virtual nationalisation of ALL bank assets. US banks are no longer required by law to hold a reserve amount as available cash. Meaning: you want to take out a couple hundred grand, they are no longer obliged to give it to you. Everything you earn, is now directly state controlled.

Yes, Europe is slowly sinking into a US led recession, but it is not the same as the US fincancial crisis. The UK is more directly comparable to the US in that the banks there are almost all directly linked with and their toxic waste, and the UK engaged in the feeding frenzy which was granting mortgages to the least eligible. The recent bank failures in a few European countries has been broadcast as though they were a domino like effect which was occurring across Europe. In Spain, as yet, for example not a single bank has failed, despite suffering the credit crunch caused by the LIBOR seizing up and the humongous debt. The banks which have failed in Europe are the subsidiaries of multi-nationals ultimately owned by the same bankers in New York who just got a 700 billion hand out.

Spain's number one bank, the Santander posted first-half net profits this year of 4.73 billion Euros, and is now a majority owner of most of British banks. Crisis? What crisis?

[Snowrunner]

Seems like they decided that there won't be a US style bailout, instead they are loosening the rules a bit to allow each country to deal with it's own crises.

Germany is adamant about the fact that they are not going to reward either investors or businesses for screwing up. Good.

We will see if they will hold that line, but it seems even Sarkozy has "seen the light" after the meeting in Paris today.

Guess we'll know on Monday how the markets react to this.

[Dukkha]

You'd think those twats at the IMF might be busy eating a little humble pie, not still trying to lord it over the rest of the world.