Sunday, November 06, 2011

"What do you think, Barack?"

So here's a line leading a Reuter's report on the financial crisis in Europe that caught my eye: "Use the Reuters Breakingviews stress test calculator to calculate how the Target core Tier 1 capital ratio and sovereign haircut levels affect the amount of capital banks need to pass the stress test."

Right.  Well, apart from George III instructing his barber to take a little off the sides, I have no idea what a sovereign haircut level could mean.  So I have no idea what's actually going on in the European debt crisis, except that if it isn't solved, it could mean another recession in the U.S.

President Obama was in France meeting with European leaders on the crisis.  Apparently there was a deal in the works that fell apart at least temporarily due to more problems in Greece.  President Obama had expected to be on hand to express support for the done deal, but as it turned out he became an advisor to the European leaders.  He essentially chaired a panel discussion, and offered advice based on U.S. experience with the banking crisis of 2008-9.  According to an aide, the leaders wanted to know "What do you think, Barack?"   Regardless of the ignoramuses who think America leads with bluster and intimidation or is weak, this indicates actual respect for our President (though they are certainly mindful of U.S. economic power.)  Partnership and mutual respect-- the way to a better future.

As to what actually did and didn't happen at the G20, this Monitor article seems a decent summary.

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