WHA' HAPPENED?

I guess there was a G-20 meeting in Pittsburgh last week but for the life of me I can't quite figure out what went on if anything.
That isn't a surprise of course, little if anything has been accomplished at any the the predecessors to one of these things when they were called the G-5, the G-8 or the G-14. We are now fulfilling the wishes of The Leader by making all things more inclusive and inviting half the world that has two sous to rub together which of course insures that nothing from this point forward will ever be accomplished. This new mob apparently did agree to peer review of their policies, however, which I guess means that the policies of the U.S. of A will now be subject to the oversight of...Argentina? Makes sense.

On the regulatory front, The Suit apparently laid out his idea for insuring that the financial melt down of last year will never again occur and from what is being reported it seems to all start with increasing bank capital around the world and chucking Basel II. Now that's not a bad idea--it's not particularly a good one but it will probably not do a great deal of harm but it also tacitly recognizes that The Suit and the boys have thrown up their hands on the issue that everyone wishes to address which is TOO BIG TO FAIL (TBTF). So, what these guys have done is to attack the problem that last occurred rather than focusing on the looming dangers ahead of them. More on that at another time. The Euros are reportedly not too happy with the capital approach and what The Suit has missed is the fact that the great populist rant that exists in this country against financial institutions is far more muted in Euroland where finance and the governments have been traditionally far more closely linked and where at least tacit governmental support for financial institutions during difficult periods has always been accepted if not actually acknowledged; take for example the case of the Landesbank network in Germany, half of which has been bust for 20 years and yet survives. We shall not even get into the case of China where if there has ever been a poster child for running a financial sector without tangible capital or net worth, this is it. But, he seems happy and if The Suit is happy, I'm happy.

Then of course is the issue of the incredibly shrinking dollar which apparently received little or no consideration over the course of two or three days. Ah yes, we must all adjust our economies says the communiques and there stands Argentina to assist us with doing just that so I suppose I shouldn't worry too much but somehow I do. My really smart friend Larry has written about this over the weekend so I'm going talk to him before I get off on this but Larry still believes that the Chinese are in a dollar trap. I'm going to ask him if they are in one or have they set one? I'll find out and let you know. Later.