Sunday, February 10, 2008

G-7 Finance in Tokyo: So-li-da-ri-ty !

G7 Tokyo

- The ghosts and the actors of the main lobby at Mita Kaigisho had three concerns: avoid the press, avoid the questions, avoid the words: recession and depression. So what we had here was: a show of solidarity. Helped by their hosts of the Japanese authority of the Finance ministry (entirely devoted to heal the pains of the foreign journalists gathered in the huge press room serving tea and cookies and chocolates), the press gatherings were distilled with parsimony. Probably the reason why one of the staff of the ministry got nearly assaulted by the crowds of reporters (agencies are thirsty) when the final declaration came out from her hands.

I saw two similar scenes and the staff, a lady, was equally submerged by a wave of dark suited journalists, steaming with fury and a not so sincere exaltation after rereading the first lines of the G7 Tokyo finance ministers and central banks governors. To avoid your pain in deciphering the report, I'll go to the essential with a couple of quotes:

- "The leaders likely intended to stave off a growing gloomy outlook for the world economy. But they failed to specify concrete fiscal and financial measures, and the statement failed to offer anything new". Daily Yomiuri.

"Although the G-7 leaders were concerned about the world economy, which has seen a slowing in growth, they failed to take concrete action for policy coordination. Their achievements from this viewpoint must be seen as inadequate for ensuring market stability." Yomiuri

"The world economy remains vulnerable to downside risks stemming from tighter credit, a deterioration of the US housing market, higher oil prices and rising inflation, according to G7 finance ministers gathering in Tokyo on Saturday."

"Although “long-term fundamentals remain sound” and recession in the US and elsewhere could be avoided, according to the final communiqué, the world’s richest nations said they stood ready to “take appropriate actions, individually and collectively, in order to secure stability and growth”." FT.

"Le marché immobilier résidentiel américain devrait notamment subir "une plus ample détérioration", craint le G7. Pour faire face à cette mauvaise conjoncture, les pays du G7 se disent prêts à "prendre les actions appropriées, individuellement ou collectivement, de façon à assurer la stabilité et la croissance de (leurs) économies" et celle des marchés financiers. Les pays du G7 ont également exhorté les agences de notation financière à" empêcher les conflits d'intérêt potentiels". Les agences de notation sont chargées d'évaluer les capacités de remboursement des entreprises et des institutions publiques qui s'endettent." Afp.

"The Financial Stability Forum called on financial institutions and credit rating agencies to improve their information disclosure practices to fight growing market uncertainty". Nikkei where there is still no report on the G7 meeting 24 hours after the "event".

- Bon et alors? Branding a summit is one thing, succeeding in answering world populace is an other. Equally surprising the lack of respect of some officials in charge of the press briefings. Some could attend some other media could not. We will long time remember the clash between a dozen journalists duly accredited and one IMF officer refusing to let the press go to ask questions to his boss Mr. Strauss-Kahn, all except one financial paper. But this happens all the time in Japan as there is this difficult press club system, made to discriminate and censor the free flow of information.

- On other subjects, the thing we certainly heard, is that French minister Christine Lagarde said that she would not resign contradicting a rumor spread just before her departure for the G-7 related to difference of views with President Sarkozy on some issues. Quite nasty news just before an international summit. "Fariboles" she told me as I interviewed the French minister just after the summit "communiqué final."

FR: "Je travaille, je travaille dur pour défendre les principes, idées et propositions de mon président. Et il n'y a pas la moindre différence entre ce que sont ses vues et les miennes", m'a-t-elle déclaré, au micro d'une grande radio française. Selon elle, le G7 Finances de Washington avait été "celui du diagnostic", et celui de Tokyo celui du "plan d'action". "Le travail que nous avions amorcé dès le 15 août avec la lettre du président de la République à la chancelière Merkel, dans laquelle figuraient déjà un certain nombre de points concernant la gouvernance, la transparence et la régulation (...) a poursuivi son chemin" pour aboutir à une "convergence très forte de vues sur les mesures concrètes" nécessaires pour faire face à la crise des subprime. La ministre a toutefois laissé entendre que la crise des "subprime" n'était probablement pas terminée: "il y a encore un delta qui n'est pas encore attribué, évalué. C'est le sens de notre appel à la transparence sur les pertes des banques et leur exposition aux prêts hypothécaires à risque américains, figurant dans le communiqué final. "

Christine Lagarde, la seule femme de ce G7 (G7 teinté de sinistrose), elle, est aux commandes... et tout le reste sur sa démission, c'était donc des "fariboles?" [Faribole: Définition: nom féminin. Sens: Propos sans valeur, frivole. Familier: bricole. Anglais: nonsense. Synonymes baliverne, billevesée, bricole, calembredaine, fumisterie.]

- One day and 104 years ago, it was the war between Russia and Japan kicked on February 10th 1904. Coincidences, the Russians were not invited at the G-7 Finances summit, this is why it is a G-7 and not a G-8 but some others were invited, Chinese, Indonesians, etc. Nevertheless a Tupolev did invite itself to Japan for 3 minutes flying over the Pacific. A bit too close to Japan's territorial waters, prompting 22 Japanese military aircraft to scramble, including a squadron of F-15, who asked the bomber to "go away." Flying from north-east to south west, the "Soviet-era" Tupolev Tu-95 bomber flew over the rocky island of Sofugan, some 650km south of Tokyo, in the Pacific ocean, for about three minutes from 7:30:36, sharp! I imagine the panic at Ichigaya's ministry of Defense underground headquarters, early morning of the G-7 summit, an authentic Soviet Russian bomber. Holly smoke, a real one or a TU sold to a Sovereign Funds' billionaire and Soviet era collection's lover on his way to Bali?

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