UK Telly Picks Up IMF Lending Limit Problem Bloomberg Concealed and AP Missed or Ignored
Sometimes, I think that we wouldn't have a useful press at all if it weren't for the British press.
The big news out of the International Monetary Fund this weekend was, as reported by the UK Telegraph, that it "may need billions in extra funding." Specifically, it "may have to tap its members – including Britain – for billions of pounds of extra funding to stem the European debt crisis."
In other words, the IMF doesn't have enough money to address the potential problems it sees on its own:
Story Continues Below Ad ↓The head of the IMF has warned that its $384bn (£248bn) war chest designed as an emergency bail-out fund is inadequate to deliver the scale of the support required by troubled states.
... In a document distributed to the IMF steering committee at the weekend, Ms Lagarde said: "The fund's credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-case scenarios. Our lending capacity of almost $400bn looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders."
Headlines at U.S. establishment press outlets indicating the potential degree of the IMF's problems are notably absent.
Now, to its credit, Bloomberg opened a Saturday evening story as follows:
The International Monetary Fund’s $384 billion lending chest may not be enough to meet all loan requests if the global economy worsens, Managing Director Christine Lagarde said.
That's nice, but (you won't believe this), the story's headline ("European Stocks Decline as Fed Sees ‘Significant’ Global Economic Risks") is a carryover from Friday (partial screen cap here for future reference). The words "stocks" and "Fed" don't even appear in the article. This would explain why the item escaped Matt Drudge's eagle eye until several hours ago. Bloomberg's snafu seems like a major screwup, but it's awfully convenient, given that it might have been a hot topic for the past 24 hours otherwise.
Meanwhile, over at the Associated Press on Saturday afternoon (2:12 p.m. per this link), Marty Crutsinger either didn't have a clue or avoided mentioning the problem, as seen below:
I would suggest that the final word of the final sentence should really be "needed."
A longer AP report by Crutsinger and Gabriele Steinhauser datelined Saturday evening ("World powers seek to contain Europe debt crisis") also avoided the IMF's fundamental problem, unless you count the following paragraph as getting close -- which I don't:
The IMF statement said the fund stood ready to back further efforts to deal with the crisis beyond bailout support for Greece, Portugal and Ireland.
If you add "if its gets extra money from other countries," you might be in the neighborhood.
But, as has been seen so many times before, to get the full report, one has to cross the Atlantic.
Cross-posted at BizzyBlog.com.
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Comments
Typica Eurosocialist propagandizing.
Submitted by drsamherman on Mon, 09/26/2011 - 12:40am.
Lagarde says something and the AP immediately censors it for the US market to soften the impact for political correctness. In other words, even the IMF lacks the resources to stabilize the Eurotoilet financial market and Lagarde expects the US to pick up the tab for EU social experimentation gone awry.
The IMF is in the business of
Submitted by rbosque on Mon, 09/26/2011 - 12:42am.
The IMF is in the business of keeping poor nations dependent on the West and the money comes from U.S. taxpayers. It should be disbanded.
We are the largest backer of
Submitted by jdhawk on Mon, 09/26/2011 - 1:06am.
We are the largest backer of the IMF supplying approximately 27% of the resources to keep it afloat. Note, the French banks have the most to lose if Greece defaults. Legarde was the French Minister of Finance.
Meanwhile, Sarkozy (France) has failed to convince Merkel (Germany) to back a Euro Bond. This Euro Bond would be used by the PIIGS to supplant their own countries' bonds. The problem for Merkel and Germany is that if she was to agree to the Euro Bond, her country would by on the hook for approximately 57% of the whatever debt was run up using them. She has so far refused to go along.
So, what I see is Legarde acting not in the interest of the IMF, whatever they are, but in the interests of France. Since the Euro Bond idea isn't working, she is attempting to drum up support for a massive infusion of capital into the IMF. The end result would be the same - to save French banks. Of course, instead of Germany holding the vast majority of the shit bag of the PIIGS' bad debt, the United States would. And, Timmy "Turbo Tax" Geithner is likely to go along with it!
Excuse my French . . . .
Pigmies on my left, midgets on my right
Submitted by MinneMike on Mon, 09/26/2011 - 3:37am.
Since we have no adult supervision at the Treasury, Fed or WH, we will be on the hook again.
The pesky laws of math...
Submitted by c5then on Mon, 09/26/2011 - 8:42am.
They are coming back to bite the progressive economists who "thought out of the box" and came up with a way to spend more money than they took in in perpetuity.
When you create a fiat currency and then administer that according to the theory of fractional reserve banking, what you get is where we are today. You get national debts that exceeds the total amount of currency in circulation. Bail-outs are an absolute sure thing in that environment because some entity (or ten) is going to need the cash when others are not yet done with it. Of course the only way "out" of this emergency is to print more money so there is enough available to stem the crisis.
So the answer will always be in the form of the Marxist principle of "from each according to their ability to each according to their need". In this case we see that the institution set up to be the conduit of that principle is itself in danger of collapsing. It is certaintly true that we do not actually need the IMF but we are being told that we must save it. The idea is to set up the system whereby the occasional and inevitable crises will "force" the wealthy countries to send their money to the poor countries. The important thing is not to setup any kind of direct flow but to establish intermediary institutions that can take their cut of the flow.
This whole "system" only works if there are enough entities that are producing wealth and not consuming it. Today there are precious few countries that are actually producing wealth. Most are in the process of consuming as much of it as they can get their hands on.
Most pyramid and ponzi schemes are not discovered until they start to collapse. This one is beginning to collapse.
Madison and Jefferson and Franklin built a Republic - Roberts killed it!
Whoever came up with the IMF
Submitted by jessieH on Mon, 09/26/2011 - 9:54am.
Whoever came up with the IMF must have been an intellegent moron.