the elastic thinker

Fare Thee Well, oh Blogosphere...

noreply@blogger.com (NM) — Mon, 20 Sep 2010 02:37:00 +0000

Usually after a prolonged hiatus on this blog I find some inspiration to write about a topic fresh on my mind or in the news. Only this time, however, I must bid farewell.

I recently began work at a news organization, and as such, will be suspending writing about subjects that I actively cover because of the potential of conflicts of interest and of course because I need to devote my energies to my employer. It's a sad thing but also a necessary thing in the world of journalism, where reporters should be held to higher standards of independence and balance. I hope to blog again in the future, but for now the elastic thinker is going on a bit of a sabbatical.

This was an enjoyable experiment in the blogosphere. While I had few readers, I would be remiss if I didn't thank consider, evaluate, act, Luc in Progress, and the budding anthropod for their loyalty and dedicated readership. For those of you who are reading this, I highly recommend you add them to your feeds as they cover some interesting subjects in British politics, science and environmental policy, sustainable development and other issues concisely and intelligently.

Thanks for your support, all!

Bottom-up Financial Reform

noreply@blogger.com (NM) — Wed, 11 Aug 2010 18:57:00 +0000

The financial reform bill recently signed by President Obama will attempt to attack numerous regulatory gaps and enforce new consumer protections to prevent the next global economic crisis.

But consider this thought from historian Niall Ferguson in his book "The Ascent of Money" (which, by the way, was written before the worst of the financial crisis hit):

"Politicians, central bankers and businessmen regularly lament the extent of public ignorance about money, and with good reason. A society that expects most individuals to take responsibility for the management of their own expenditure and income after tax, that expects most adults to own their own homes and that leaves it to the individual to determine how much to save for retirement and whether or not to take out health insurance, is surely storing up trouble for the future by leaving its citizens so ill-equipped to make wise financial decisions."

The financial institutions who duped unassuming home buyers into taking on mortgages they couldn't afford and the regulators who failed to identify the risks of doing so are certainly to share the blame for the recent economic turmoil. But a major missing piece in the recent regulatory reform bill, and in the general conversation about righting the economy, is an effort to improve basic financial and economics education - something that should be part of every primary high school and college curriculum. For most Americans, this education once came in the home, with parents teaching children about saving money, living within one's means, earning before spending.

But the expansion of credit over the last two generations has complicated this message: Spend, so long as you can pay the interest. Living beyond one's means is now possible - indeed a miracle of credit - but has created a sort of financial overconfidence in society.

In the principal-agent failure that took place in the recent crisis, the "principals" (bankers, etc.) with access and financial sophistication far above that of the average person were able to manipulate finance to make enormous profits, all the while knowingly risking stability of the financial system that enabled such tactics.

The new reforms notwithstanding, it is difficult to assume these mistakes won't happen again when the "agents" in society, ranging from local police pensions funds to average Joes, continue to be ignorant of the rapidly evolving world of finance.

The Romer Aftermath

noreply@blogger.com (NM) — Mon, 09 Aug 2010 15:43:00 +0000

The recent departure of Christina Romer signals a troubling future for the Obama Administration's economic policy team -- and does not bode well for the president's party before the crucial midterm elections this November as the American public grows weary with the nation's slow economic recovery.

After his election, the president was criticized for his selection of Washington has-been and politically connected Larry Summers and New York Fed boss Tim Geithner as his main economic policy henchmen. But he balanced these appointments with solid choices in Peter Orszag, former head of the non-partisan Congressional Budget Office, to head up the president's budget office (OMB), and Romer, an academic economist respected for her expertise on recessions, to run the Council of Economic Advisers (CEA). Obama also tapped former Federal Reserve Chairman Paul Volcker as an adviser, though Volcker's role in economic decision-making is not quite as clear or concrete. Orszag and Romer are now gone, both for different reasons.

Though Romer has denied it, it appears the CEA's role in economic policy advising was largely minimized with the presence of Summers, whose position , created ad hoc, seems to conflict the responsibilities of other officials such as Romer, whose role as chief economic adviser to the president was clearly defined.

Despite his many policy successes, President Obama has still yet to send clear signals to the markets as to what his economic policies mean for the American economy, as well as who is informing his policy-making. With Romer's departure, it has become more clear that certain heavyweights such as Summers are pulling more strings, while other advisers may be cut out of the process.

Taxes and Spending: A Moral Gulf

noreply@blogger.com (NM) — Fri, 30 Jul 2010 14:32:00 +0000

As a die-hard supporter of the Pittsburgh Penguins professional ice hockey team, I was, like every other supporter, ecstatic when it became official that city, county and state authorities approved a massive bond issuance to finance a new arena for the team a few years ago. The deal prevented the team's threatened move to Kansas City, a city with hardly any hockey culture. It came as no surprise, of course, because these days professional sports franchise owners easily have their way with local governments when demanding new facilities.

More importantly, though, part of the arena's financing would come from newly legalized slot machine casinos that the Commonwealth of Pennsylvania legalized to generate new revenues in a cash-strapped economy. On one shore of Pittsburgh's three rivers, just a stone's throw away from a world-class science museum popular among children, local residents could feed their gambling addictions in a new magnet for crime - and thereby help pay for the new arena. As a fan, I was happy to know my team would stay put - and win a championship one year later - but I also felt dirty knowing the means to that end.

The arena illustrated the paradox of the Reagan-era conservatism that has persisted in today's political culture: with a refusal to raise taxes as a means to finance growing government outlays including large public facilities like arenas and stadiums, you put pressures on governments to find revenue in other, less savory places. Conservatism as a means of preventing "big government" only forces governments to look elsewhere for the funds needed to pay for programs: so-called immoral activities, corporations, and in recent years, other countries with whom the United States shares few common interests.

Take, for example, an idea being pushed, ironically, by Democrats in Congress to legalize Internet gambling as a way of raising just $42 billion over 10 years. Such a sum is minuscule to the size of the federal budget deficit. But the new willingness of Congress to legalize Internet gambling - the addiction for which is probably more difficult to prevent because of the Internet's dispersion and anonymity - shows Congress has reached its last resort in an election year and has run out of ideas to combat real waste in government spending.

The Dangers of Austerity

noreply@blogger.com (NM) — Wed, 30 Jun 2010 20:19:00 +0000

If the recent Group of 20 summit is any indication, a reprise of the mistake of the 1930's may soon be on the horizon.

An interesting article in The New York Times details how governments worldwide are under pressure to begin scaling back their stimulus measures implemented in late 2008/early 2009 as a response to the global financial crisis. A rhetoric of austerity is the new modus operandi among governments who increasingly feel the political pinch from large budget deficits. The major economies in the 1920's and 1930's also attempted the same thing, thinking such a strategy of austerity would remove the ills of an overheating, inflation-bound economy, but with disastrous results.

The decision in the 1930's to deflate was borne out of a stubborn bias among the world's major central banks of the time - those of the United States, England, Germany and France - toward the international gold standard, which required countries during economic downturns with high inflation prospects to reduce aggregate demand, and therefore prices (wages) and stabilize trade flows, thereby stimulating gold inflows and bringing trade flows back into balance. It is widely believed by scholars, including current Federal Reserve Chairman Ben Bernanke, that this bias by central bankers toward the gold standard during the economic crash in the 1920's and 1930's inadvertently accelerated the descent into Depression because unemployment exploded and the banking system of the time could not handle the stresses of such economic uncertainty.

A major reason why central bankers held such a view was the relative political strength of Wall Street and other financial political-economic machines at the time. The 1920's spelled the official rise of New York as an international financial center, and helped catalyze a shift of political weight from Washington and the farmers to New York. This growing class of financial elite demanded government economic policies that were staunch against inflation, because deflation favors people with assets (bankers and other elite) and disfavors those with liabilities (everyone else).

Today, however, it is unclear whether the financial elite hold as much relative political power. It is therefore doubtful that governments, at least the U.S. government at that, will actually follow through on promises to impose austerity measures. Only in those countries where the financial or industrial sectors hold greater political power (the United Kingdom, for example), will governments actually implement real austerity measures - or at least create the political illusion of it. Indeed, the UK's coalition government proposed an austerity budget that could create drastic cuts in government ministries. Though each country has its own reasons for and against imposing austerity measures, such measures at a time of continuing economic weakness around the world could be disastrous and undo any of the progress made in the last year.

The Peg is Dead

noreply@blogger.com (NM) — Sun, 20 Jun 2010 14:36:00 +0000

China's controversial currency policy may finally be headed to the gallows, but what remains unclear is how this will affect and prompt movement on numerous politically sensitive issues in the United States, namely its large twin deficits, the current account and government primary deficit.

Make no mistake: China's move is largely motivated by domestic factors - the need to allow inflation to finally creep into its possibly overheating economy and re-balancing its export-based economy with a decidedly smaller dependence on other economies - but, certainly, it was also under pressure to allow the yuan to appreciate by external players.

But for this move to re-balance global economic flows, the United States will have to do its part in the medium to long term. That is, to reduce its deficits and minimize its dependence on foreign creditors to finance those deficits by cutting spending and boosting national saving. Some of this could be accomplished by the hoped-for re-balancing in the current account. But currency values alone do not dictate trade, and therefore current account, balances. The United States needs to go back to being a center of innovation in manufacturing for a real re-balancing to be meaningful. And, with the current crisis in the eurozone, there is even one view that the revaluation could actually backfire.

The Obama Administration and his Treasury have achieved a victory long-sought by the president's predecessor. But now that China has been tamed on the currency issue, the ball is in the American court to do what is necessary to allow the full economic results of a yuan appreciation to benefit those constituencies who yearned for it.

More on the ECB...

noreply@blogger.com (NM) — Sun, 30 May 2010 21:51:00 +0000

More soul-searching at the ECB...

http://www.nytimes.com/2010/05/31/business/global/31deflation.html

Banking on Europe - the ECB's Uncharted Waters

noreply@blogger.com (NM) — Mon, 10 May 2010 22:30:00 +0000

Just in time for the 50th post of this less-than-illustrious blog, the Greek debt crisis reaches a fever pitch and her European neighbors step in to save the day.

Late Sunday various leaders and finance ministers in the European Union and Eurozone as well as the International Monetary Fund announced the creation of an almost $1 billion fund to aid indebted countries in Europe, calming markets and soothing nervous politicians - especially German Chancellor Angela Merkel, whose delicate tightrope walk in leading Europe through troubled economic times has already cost her party in the polls in a recent regional election.

In the elastic thinker's view, while this move was a necessity in the short run to sustain the euro currency zone and calm market fears, it undermined a major institutional strength of the European Union: its autonomy on matters of regional economic policy.

The European Central Bank is widely praised as one of the world's most independent central banks, conducting monetary policy strictly on a singular objective of keeping inflation close to a target range and harmonizing economic growth throughout the currency zone with zero regard for political pressures in individual countries to keep interest rates high or low or to finance government debt. As a result of its independence, it cannot serve as a lender of last resort to Eurozone members like Greece that forgo their responsibilities to keep public spending and debt, and ultimately inflation, under certain levels to prevent a misalignment in the exchange rate parities that keep the European Exchange Rate Mechanism functional.

Instead, with the creation of this fund, albeit necessary, Europe has decided to make the ECB more of an activist monetary authority without explicitly calling it that. By creating a separate "fund," there will be an appearance that a separate body, not the ECB, will be stepping in and rewarding bad behavior by bailing out profligate spenders in the eurozone - when in fact the ECB has already started purchasing bonds to inject money into the banking system. It may continue to be statutorily independent, however it will undoubtedly have no choice but to support any move to bail out countries because such bailouts will ultimately have monetary implications that will influence future interest-rate policy.

By sacrificing the ECB's independence in the short run, the European authorities have mortgaged away the biggest strength of its currency. This will hurt the value of the euro in the long run and undermine the currency's prospect of rivaling the U.S. dollar as the world's reserve currency.

It will be interesting to see how these uncharted waters for the ECB and other EU economic policy-making bodies will evolve during this key test of Europe's institutional unity.

Financial System Reform in the U.S.: What Happens Next

noreply@blogger.com (NM) — Tue, 13 Apr 2010 17:33:00 +0000

Columbia University's Committee on Global Thought yesterday hosted a lecture with two movers-and-shakers, past and present, in the world of financial regulation in the United States: former Securities and Exchange Commission Chairman Arthur Levitt, and current Commodity Futures Trading Commission chief Gary Gensler. The topic: how to reform a regulatory system that fell asleep at the wheel and failed to detect a crisis.

The panel discussion - chaired by Nobel laureate Joseph Stiglitz - came to two key conclusions: financial markets need more transparency, and the United States needs to take the lead in developing smart regulations if the rest of the world is to sign on.

Gensler's proposal is to bring more futures/derivatives trading into a central clearinghouse, allowing regulators to more easily monitor and assess risk in a market that is fragmented. Centralizing derivatives transactions into a more open, central clearinghouse will cut into the premiums earned by derivatives dealers but will also make the market less risky and more transparent, he contends.

Levitt, a veteran of the Clinton Administration, was decidedly pessimistic on the financial reforms proposed both in the U.S. House and Senate, saying they would do little to prevent moral hazard and a "too big to fail" mentality among major financial institutions. He also said Europe, the United Kingdom and other major financial centers will fail to tighten their regulations until the United States takes the lead. Gensler agreed, but admitted that after 18 years on Wall Street, he knows bankers will, in such a case, take advantage of the inevitable opportunity for regulatory arbitrage - that is, investors will put their money in jurisdictions where capital is less tightly regulated at the expense of American financial markets. These points illustrate that any kind of real policy coordination between the United States and the European Economic Community is an idealistic, rather than realistic, endeavor in such tight political and economic conditions.

What the panel failed to accomplish was finding a way to navigate through the alphabet soup of agencies that are already charged with regulating various segments of the American financial system. Very little was said about the Federal Reserve System, which despite being charged with regulating the banking system from a macroeconomic view, is widely criticized for failing to regulate and for creating the conditions that enabled the crisis through its loose monetary policy. And yet, the Fed remains a key player in any regulatory structure going forward and needs to be a keystone of any reform.

In the end, the discussion itself and the very presence of two speakers representing regulators that, in the grand scheme, have a small purview over the American financial system, revealed how broad a reform is needed. As such, is any discussion that contains only the SEC and CFTC even relevant?

The SEC, staffed with just 3,700 regulators, for example, has very little authority over financial instruments that fall outside the more traditional definition. And, how does an agency such as the SEC both target run-of-the-mill insider trading and securities fraud while also tracking systemic risk in a complex financial system? The failure to bring down Bernard Madoff before it was too late shows how overextended the agency already is.

In the meantime, as Gensler aptly pointed out, the CFTC only regulates futures markets, missing the important and growing piece that is over-the-counter derivatives, among which are the many mortgage-backed securities that were at the heart of the sub-prime crisis. The two in combination have little effect on monitoring a financial system that is increasingly global and increasingly spread over a variety of financial instruments.

Review: 'Videocracy'

noreply@blogger.com (NM) — Sat, 13 Feb 2010 16:08:00 +0000

A lot is known about the media empire that helped to create (and sustain) Italian Prime Minister Silvio Berlusconi's grasp on power. Erik Gandini's documentary "Videocracy" offers a deeper peek into the celebrity-obsessed culture of Italy, but only delivers a tangential indictment of a man who has turned Italy's democracy into a laughing stock of Europe.

Though director Gandini clearly has a knack for weaving images from Italian television, interviews with various well-connected television personalities and official press appearances by Berlusconi together into a single narrative, he misses a crucial opportunity to deliver a punishing blow to the public image of Berlusconi and educate people outside Europe about the dangers of a billionaire who controls the majority of Italy's television stations and newspapers also running a G8 country.

In some sense, "Videocracy" makes up for its lack of a clear thesis with an intriguing storyline; after all, the story of Berlusconi tells itself. Gandini gets extraordinary access to key players in Italy's media scene, many of whom regularly rub elbows with the prime minister. He spends time at the villa of Lele Mora, Italy's top television agent and a Mussolini admirer, and goes on a celebrity photo hunt with paparazzo-turned-fashion mogul/dark knight Fabrizio Corona. Gandini then gets incredible access to parties and events that attract the elite of Italy. And more importantly, he shows that Italian television capitalizes on sex appeal and thrives on objectifying women.

All of these figures, in one way or another, intersect with the narcissistic prime minister (or "president," as he is referred to in the film). These characters are seemingly used to show how Berlusconi, as a television puppetmaster, can shape Italian cultural norms and opinions. But at many points, these sideshow players become main characters in a film that the viewer yearns to see culminate in a central thesis: that Berlusconi's influence is dangerous and is destroying a democracy. Gandini offers the viewer some hope when he shows how a director of a television show on a Berlusconi-owned network is bullied into cutting his program short 10 minutes in order to cut to a Berlusconi speech. But, ultimately, the film only succeeds in making the 73-year-old leader look like nothing more than a womanizer, a charge that he would be proud to agree with.

The film is marketed as an expose of Berlusconi's media empire, yet does little to connect the television obsession of a large majority of Italians to the larger questions of the dangers of Berlusconi's hold on power and public opinion. This is because Gandini fails to illustrate why Italy is a special case. Celebrity obsession and sex-peddling on television programs is nothing exclusive to Italy. If anything, television programmers in the United States have become masters of a formula in which big boobs and long legs get good ratings. Berlusconi's control over outlets that offer these things is fairly innocuous. The more interesting story, and which is more imperative to tell the rest of the world, is how his media control damages any semblance of a free press in a country that so direly needs it.

Export Opportunism - Part II

noreply@blogger.com (NM) — Wed, 03 Feb 2010 20:19:00 +0000

An update on President Obama's pledge to increase American exports - the president today made reference to the country's trade relationship with China, providing further evidence that the administration could take the route of pressuring China on the currency devaluation issue to address its trade imbalance, a move that the Chinese government will likely be less-than-thrilled about:

http://online.wsj.com/article/SB10001424052748704259304575043171767767724.html

Export Opportunism

noreply@blogger.com (NM) — Thu, 28 Jan 2010 16:00:00 +0000

President Barack Obama finished his first State of the Union address last week with the same vigor and rousing rhetoric that helped win him the presidency 15 months ago. But politics were on bright display and there seemed to be little 2010 doubt that, despite Obama's calls for congressmen to set politics and ambition aside to do what their electorate sent them to Washington to do, political impasse would be the name of the game in a year of midterm elections.

The speech has been President Obama's most useful tool in tackling a political crisis. When it came to selling the health care bill or troop surge in Afghanistan, the slumping president has looked to his rhetorical skills to remind everyone how inspiring he is and why a large majority of Americans liked him in the first place.

In practical policy, however, Obama has numerous challenges he ambitiously set forth in his speech last week, the most peculiar of which is his goal to double exports from the United States in five years. It is a seemingly innocuous pledge in a sea of promises that define state of the union addresses, however, it is much more puzzling considering that doubling exports is a keystone of his strategy to repair the American economy.

The United States has run a trade deficit every year since 1975, and contentious squabbles over the reasons why have dominated American international economic policy debates ever since. In the 1980s, it was Japan who bore the brunt of American criticism for weakening the yen and boosting exports at the expense of Michigan auto workers and other Rust Belt industrial firms. In the 1990s, the post-NAFTA "sucking sound" from Mexico was the scapegoat for another swath of American manufacturing job cuts and a drop in the number of things we consume that are produce at home.

The 2010 rhetoric signals that the United States will either enhance protectionist measures against foreign imports, or, more interestingly, take on the Chinese and pressure the world's fastest growing economy to halt its alleged currency devaluation, allowing the dollar to depreciate, boosting exports and reducing the trade deficit.

Either strategy would go contrary to the international economic policies that are in the country's best interest in the short term. The former would only jeopardize any hard-earned progress on recent trade negotiations, and the latter would further alienate the single most important country to America's economic future, in terms not only of trade but of finding a willing lender to finance America's massive debt-driven recovery. Or, it could just be a matter of semantics: the U.S. might well double exports in five years' time, but it might also double its imports, only worsening its untenable current account deficit.

Each of these potential reasons signals very little economic policy creativity; though it will be no small achievement if the United States can actually double its exports in five years.

Heated Debate

noreply@blogger.com (NM) — Mon, 14 Dec 2009 19:49:00 +0000

As expected, the meetings in Copenhagen have amounted to mostly talk and little action. While Europe has taken some steps to pledge financing to developing countries for taking a low-carbon growth strategy - far more than the United States has been willing to front - the prospects for agreement are no more firm than before the meetings began last week.

But perhaps what is lacking is a proper frame for the issue. Public acceptance of the existence of climate change is a moot point; the very existence of a world meeting on reducing carbon dioxide and other greenhouse-gas emissions signals it. But defining the issue as specifically one of temperature change, rather than as a broader dilemma of environmental conservation and biodiversity, is what is keeping the eco movement from achieving its full potential.

The 350 campaign and others have succeeded in putting carbon dioxide emissions in the public consciousness. Even the average person can understand CO2 emissions create a greenhouse effect, rising temperatures and effects ranging from subtle changes in seasons to outright climate catastrophes. The simplification of climate change has enabled a mass movement.

But this gives leaders an easy escape. Emission of greenhouse gases such as CO2 or CH4 (methane) can be tied directly to industrial or agricultural production, energy consumption or cows breaking wind. Therefore, this makes trade and protectionism the arena for debate; and the recent round of WTO talks has shown that this is where leaders from both developed and developing countries can drag their feet and blame the other side. But if environmentalists can successfully implant in the public's mind that it is not only climate change (temperature changes), but also environmental degradation, mass-extinction of species, turning our oceans and parks into oil wells and mines, and utter waste (does your mobile phone charger really need to come with 3 pounds of packaging?), they can successfully re-frame the issue into one of broader importance.

I'll conclude with one example. As a student of international affairs, I have many classmates who profess a devotion to saving the environment. Copenhagen must come up with positive results, they say. Yet, I can't even begin to count how many times I visit a sandwich shop frequented by many such students and see how wasteful our society can be.

When a customer buys a sandwich, the woman at the register puts it in a plastic bag. Not long after eating the meal, many of these students discard the perfectly pristine plastic bag - destined for a landfill after being useful for literally 7 minutes (the time it takes to walk the sandwich over to a place to sit, take it out of the bag, and eat it). Multiply that by the hundreds of students who visit this one sandwich shop in New York City.

The amount of waste is astounding, and it seems to me, at least, that few link waste and climate change as one issue about protecting the environment and reducing our consumption. Saving the environment is not just about maintaining a temperature.

The Lame Congress

noreply@blogger.com (NM) — Wed, 09 Dec 2009 15:32:00 +0000

When looking at President Barack Obama's tanglings with the Democratic leadership on Capitol Hill, one can start to see some virtue in Obama's predecessor's desire to consolidate executive branch power, even when he had a Congressional majority for much of his 8 years in office.

Congress just gets in the way.

The so-called "genius" of American democracy is the so-called well-functioning legislative branch. Unlike many traditional Parliamentary systems such as that of the Brits, however, the United States has a powerful lower house AND upper house. In time of political and economic struggle, this body of legislators has proven itself increasingly beholden to special interests.

Two of the most significant legislative breakthroughs in the current generation - health care reform and a commitment to greenhouse gas emissions reductions - are on the horizon. The Copenhagen meetings are moving ahead this week and health reform is in the United States Senate will a more-than-50-percent chance of passage.

On both accounts, however, President Obama is dramatically weakened by a gridlocked, polarized Congress. Right-wing Republicans, fearful of losing their party base in midterms next year, are holding ground on their "conservative" values of small government ($700 billion bank bailouts) and personal responsibility ($700 billion bank bailouts). Meanwhile, Democrats are doing more to hurt their own chances with a weak leadership at the helm (Pelosi and Reid).

The result is depressing. The Democrats have dropped the public option - the primary innovation in health reform - from the negotiations, and Obama will arrive in Copenhagen empty-handed and with only an argument that his Congress won't change the status quo no matter how much the United States is to blame for climate change.

President Obama has barely been in an office for about 11 months. While his potential for achievement is great, his Congress will likely have more to say about that.

A Bretton Woods Moment?

noreply@blogger.com (NM) — Sun, 29 Nov 2009 17:58:00 +0000

Sorry for my long absence from the elastic thinker. The demands of grad school have greatly weakened my brain's elasticity, and has rendered my gray matter into an examified/essayified amorphous pulp resembling baby food.

However, I recently contributed a post to The Morningside Post, a student-run newspaper/online blog at Columbia-SIPA, to re-whet your appetite!

http://themorningsidepost.com/2009/11/a-bretton-woods-moment/

The LDP Saga

noreply@blogger.com (NM) — Thu, 13 Aug 2009 14:38:00 +0000

The Financial Times yesterday finally published a graphic previewing the Aug. 30 Japanese general election, in which the mainstay Liberal Democratic Party (LDP) will likely lose power in most convincing fashion since 1955. I did the bulk of the research for the graphic and am happy it came out OK!

You can view it here: http://www.ft.com/cms/s/0/ce4c5268-8745-11de-9280-00144feabdc0.html

Call centers to plowshares

noreply@blogger.com (NM) — Mon, 03 Aug 2009 20:19:00 +0000

In the last couple of weeks, new developments have shown that drought has severely impacted India's agricultural sector. But this has failed to grab major headlines until recently, when the situation became especially dire.

The situation should call attention to the still-pressing needs of India's farmers, who are less able to benefit from the economic expansion that has made India an emerging hub for call centers, software development and other "business processes." India largely remains an agricultural country - agriculture, forestry and fishing account for 17 percent of GDP - and should therefore promote the development in rural areas as much as it should focus on its "knowledge" sector, which generates more wealth and investment but also employs far fewer people.

Why bankers rule

noreply@blogger.com (NM) — Fri, 31 Jul 2009 16:57:00 +0000

In the past couple of days, much anger has arisen regarding bonuses paid to bankers on Wall Street or in the City of London among populist good-for-nothing welfare-state leeches like poor people and the uber-liberal-Sarah-Palin-hating "mainstream media" who, in between their worship of Barack Obama's statuette, find it so easy to bash anyone or anything that has a connection to financial services!

In an unusual effort to quell these outrageous attempts by all those pesky median-income or minimum-wage earners out there who can't get enough of taking a free ride off the hard work of rich people (all of whom got rich only by the virtues of hard work), the elastic thinker has decided to produce a list of 8 reasons why there is no problem paying out massive bonuses to bankers during an economic crisis that has produced unemployment of 9.5% (and rising):

1. Contrary to public opinion, bankers are actually the smartest people in the world. Unlike the money you earn, theirs requires $60,000/year MBAs, which means they're really, really smart. They actually earn their money, 'cause they figure out how to make money using other people's money.

2. Bankers work harder than you do. What? You want a bonus during a recession? Mortgage tough to pay? Well, bud, you shouldn't have bought that house. If you were smart enough to read that 10-K filing or actually turn on that Bloomberg terminal you have at home, you would've seen all this coming. What's that you say? You don't have a Bloomberg terminal? You snooze, you lose.

Again, that's why they get paid more than you, because they are actually smarter! Don't you know economics? Skill and its scarcity in the labor market are rewarded largely through compensation. That's why you make less, because you just couldn't make the cut.

3. Had Goldman Sachs and all the other God-affiliated institutions didn't pay bonuses, they couldn't attract such amazing talent! If they didn't pay bonuses, some other bank would find a few million to throw at them. That would risk a massive brain drain.

4. Bankers are prophets and decipherers of mysterious information that normal people simply are too incompetent to understand. I mean, come on, this is why one day the markets jump and the dollar gets stronger, and the next day the opposite happens based on new information. Let's leave figuring all that out to the bankers. They know best.

5. If it weren't for bankers, we would not have the movie "Wall Street," the actress Darryl Hannah, or the name Gordon Gecko in our vocabularies.

6. Bankers have more culture than you. They drive better cars, eat better food, wear better clothes, use BlackBerrys and go to better gyms than you. Not only that, they don't have to sit with the commoners at sporting events. They can get their caesar salad, Chardonnay and chicken fingers with dijon mustard dipping sauce in an air-conditioned box while you stand in line for 15 minutes to get your aluminum-foil-wrapped hot dog. Remember, perks like this are necessary to keep bankers happy. They are very busy people and need to relax every now and then to blow off some steam. Strip clubs help, too.

7. Bankers represent what the American economy's future is all about. Who needs to make useless widgets when you make knowledge?? It's the knowledge economy, baby!

8. Bankers are the backbone of America, generally speaking. When national challenges arise, they are the first to go to war ('we rate Halliburton a strong BUY'), show their patriotism (speculating on foreign currencies), and campaign for a cause ($240 million in lobby spending in election year '08!)!

The Unforgettable Fire

noreply@blogger.com (NM) — Mon, 27 Jul 2009 22:28:00 +0000

Last weekend I had the opportunity to live a dream -- twice. My sister gifted me with the immaculate graduation gift - tickets to see one of my favorite bands in their home city. And so it was, my sister, myself, and our friend Brennan on the Emerald Isle to hear one of the greatest rock bands of our time "melt some faces" (Jack Black).

U2 at Croke Park in the north side of Dublin, Ireland, did not disappoint. These guys, more than 30 years on, still have it.

The first show we saw was on Friday July 24 - we had pitch (standing) seats...we couldn't get enough so the next day, we got scalper tickets and sat on the upper levels!! Both shows were incredible.

Among the highlights:
- seeing my sister go absolutely nuts :)
- hearing some of my favorite songs live by the band that wrote them!!
- watching the Edge, Larry Mullen Jr., Adam Clayton and Bono play like they're back in 1983
- an acoustic version of "Desire"
- a techno remake of "I'll Go Crazy if I Don't go Crazy.."
- "Sunday Bloody Sunday" under the green lights to honor protesters in Iran, with a little "Rock the Casbah" intertwined

Here is a sampler video - I intentionally did not take too much video of one particular song because I only had one memory card and wanted to get as much as I could (most of it is on YouTube anyway) - just thought you might like to see it from my perspective!

Taro Aso's Nightmare

noreply@blogger.com (NM) — Tue, 14 Jul 2009 20:19:00 +0000

Less than one year after Japanese Prime Minister Taro Aso took the reigns of the hobbling Japanese government and economy, he is faced with a daunting prospect - the end of his term as Japan's leader, and of one-party rule in Japan.

While Aso is well regarded by foreign leaders, his tenure is sure to come to a close now that Tokyo municipal elections delivered a smashing blow to Aso's party, the Liberal Democratic Party (LDP), in favor of the rival Democratic Party of Japan (DPJ).

As various news outlets have reported, Aso has attempted to use pork barrel spending - a time-worn tradition in modern Japanese politics - to assuage voters ahead of the election he has called for Aug. 30. And recent economic data show Japan's slump could be nearing an end. Aso hopes these factors will renew some public trust in the LDP's national leadership in the next month.

The elastic thinker thinks Japan deserves and is ready for political change. The LDP has not necessarily squandered Japan's economic might - but it has certainly allowed back-room politics to become even more entrenched. Whether the DPJ will bring fresh ideas, or serve simply as the "anti-LDP," is a huge question mark, but one that the Japanese people deserve an answer for after years of LDP dominance. The biggest risk from DPJ election gains, of course, is a government that much more politically polarized that solving Japan's myriad economic issues will become even more onerous.

But the Japanese public, who are about to descend in what could be another "lost decade" of economic stagnation, most likely want change. It appears they will get it this time around. This will prove to be a significant development in world politics, and in the world's second largest economy.

(A) judgement cometh

noreply@blogger.com (NM) — Thu, 09 Jul 2009 17:23:00 +0000

When Rupert Murdoch's News Corporation purchased The Wall Street Journal in 2007, promises were made by Murdoch, the world's 21st-century William Randolph Hearst, that the Journal's sterling editorial integrity and independence from ownership would go unscathed.

Even when a popular managing editor in Marcus Brauchli was replaced after the acquisition with Murdoch's choice, Robert Thomson, there were few other conspicuous signs that Murdoch had the same sort of stranglehold on the Journal's day-to-day news coverage which he has shown with his other newspapers. In the initial months of News Corp.'s ownership of the Journal, it seemed Murdoch would keep his promise.

But recent developments will truly test the mettle of the United States' second-largest newspaper by circulation. A report by one of the few daring newspapers left in the English-language news media, The Guardian, revealed evidence that the News of the World and other trashy News Corp. tabloids illegally hacked into the phones of British politicians and other public figures. While the news has caught international attention, the Journal's coverage has been markedly muted, and is limited to an un-bylined "Wall Street Journal Roundup" - likely extracted from a wire service. This article makes no disclosure statement that the Journal itself is owned by News Corp. until the 8th paragraph, by which time most readers have already moved their attention to YouTube, Hulu.com (d'oh, also jointly owned by News Corp.!) or Facebook. It is a highly unusual way to cover a highly newsworthy event involving the world's best-known media mogul, no?

Indeed, it's another example of a news organization struggling with its corporate parent, a time-old challenge of keeping big business out of the truth's way (see NBC trying to cover General Electric, or ABC trying to report on Disney - it just doesn't happen). I suppose we shouldn't be surprised.

Morally hazardous waste

noreply@blogger.com (NM) — Tue, 16 Jun 2009 13:40:00 +0000

As policymakers in the United States mull over new ways to regulate an ever-changing, ever-widening world financial landscape, it is important to create legislation that is not only reactive, but addresses the deeper issues of the structure of the increasingly concentrated American financial system.

Previous financial crises teach a valuable lesson - that moral hazard, or the willingness of market agents to take excessive risks with knowledge of a high likelihood of government crisis protection or intervention, is endogenous to world financial markets whether we like it or not. It's a matter of learning how to mitigate moral hazard, rather than eliminate it, that can help reduce that chances of future financial catastrophes. Most people, I think, would agree that the lessons from the current world meltdown will go largely ignored when (or if) boom times come around.

While new regulations are necessary, the Obama Administration must also look proactively at legislation passed during the last 15-20 years that have created a commercial banking sector that is, indeed, "too big to fail."

Nevermind the repeal of the Glass-Steagall Act, which once created a firewall between deposit-taking commercial banks and risk-taking investment banks - something that would have come in handy in the last few years. The Riegle-Neal Act was the most significant piece of legislation to deregulate commercial bank consolidation and provide an environment conducive to a deeper banking crisis. The Act relaxed regulations on the ability of banks to merge with other banks, leading to widespread banking mergers and the swallowing of smaller, usually state-chartered "relationship" banks into larger banks with national and international reach. The consequence was greater market concentration for the larger banks in markets nationwide.

The mergers of inefficient businesses into larger, more efficient ones in itself is not inconsistent with "economic efficiency." But when such businesses are crucial to the economy's systemic viability, such legislation should have been evaluated carefully. As banks consolidate and grow larger, a larger number of players becomes "too big to fail," leading to the impetus for larger bailouts and greater regulatory capture. In addition, when a large corporation such as Bank of America owns branches and takes in deposits in a wider range of geographies - mistakes made at the top of the corporation could have spillover effects in each of those markets where a BofA branch might be.

The Obama Administration may not wish to reverse the trend of bank consolidation - indeed, it is probably too late. But banks that have larger systemic importance should be held accountable for excessive risk-taking. A more stringent cap on market concentration would also be prudent to maintain the diversity of commrcial bank competition in markets nationwide.

The London G20 Summit gives IMF Massive Boost, but Circumvents Key Issues

noreply@blogger.com (NM) — Sat, 25 Apr 2009 10:51:00 +0000

The following is my coverage of the recent London G20 Summit. This was to appear in "Rationale," the LSE Economics Society's magazine, but from all indications the publication, which has a notoriously disorganized editorial staff, is several weeks behind schedule and may not even come to print. So I wanted to get this out so that at the very least, the three people who actually read this blog can see it and offer comments.

LONDON - British Prime Minister Gordon Brown has put the executioners on notice: send the West’s free-market policy orthodoxy to the gallows.

“The old Washington Consensus is over,” declared Brown, minutes after concluding contentious negotiations at the Group of Twenty (G20) Summit in East London on April 2. “Today we have reached a new consensus to take global action together.

“We have resolved that from today we will together manage the process of globalisation.”

Seizing on the symbolism of the first international summit since the American credit crunch spread its contagion worldwide, the British leader recognised the changing structure of world power – one in which one prominent leader can openly blame “blue-eyed, white” bankers for the global recession, for example, and another can openly challenge the U.S. dollar’s credibility with little backlash, denial or impunity.

But for all the sensational rhetoric surrounding the apparent decline of American capitalism, April’s meeting signaled the most sweeping expansion of the very organisation that has served as the Washington Consensus’s guiding light and lightning rod alike: the International Monetary Fund.

The G20 nations stopped short of reforming international finance on the scale of Bretton Woods, but still made a bold pledge of $1.1 trillion in new funds for the global economy to boost liquidity in a time of declining trade and growth.

As anticipated, at least $500 billion will go toward restocking the IMF’s financial war chest to $750 billion, making the Fund larger than the economies of four G20 member states. Japan, which already pledged $100 billion to the IMF in February, is joined by the European Union and China in providing $250 billion of this capital infusion.

The G20 have also pledged $250 billion to support trade finance. Another $250 billion in the IMF’s neutral currency, Special Drawing Rights (SDR), will be allocated to countries based on their IMF quotas to provide an extra buffer as trade declines. The multilateral development banks will also benefit from an additional $100 billion for additional lending.

At least $19 billion of the new SDR will be available to low-income countries, said IMF Managing Director Dominique Strauss-Kahn, and countries with surplus SDR will be able to sell them to other countries that have balance of payments or liquidity challenges.

“It is the beginning of increasing the role of the IMF not only as a lender of last resort, not only as a forecaster, not only as an adviser in economic policy in an old traditional role,” Strauss-Kahn said, “but also of providing liquidity to the world, which is the role…of a monetary institution like ours.”

The IMF expansion aside, the G20’s final communiqué also features stated commitments to continued monetary and fiscal expansion to the tune of $5 trillion worldwide by the end of 2010, adoption of new global financial regulations, and protecting international trade and development.

The six-point agreement from the G20 communiqué, as laid out by Brown:
· Set new principles for the global banking system: bring shadow banking system, i.e. hedge funds, into regulatory framework; improve accounting standards; provide oversight of credit ratings agencies; and “name and shame” non-compliant jurisdictions that serve as tax havens. Part of this will entail the creation of “colleges” of regulatory agencies and the creation of the Financial Stability Board to report on developments in global financial markets.
· Clean up banks’ toxic assets through a common global approach.
· Collectively implement $5 trillion in macroeconomic stimulus by end of 2010; pledge central banks to monetary expansion; infuse capital into IMF for increase global liquidity and crisis response capacity.
· Continue to strive for poverty reduction through Bretton Woods institutions, necessitating increased accountability, transparency and fair representation of developing countries in these institutions’ governance; heads of staff should be appointed through a competitive, merit-based selection process.
· Protection of trade, 90 percent of which depends on finance; and a pledge of $250 billion in trade finance and additional funds through multilateral development banks.
· Promotion low-carbon growth and a move toward creating a post-2012 worldwide climate change regime.

Sir Nicholas Bayne, a former top economic diplomat with the British Foreign and Commonwealth Office and lecturer at the London School of Economics and Political Science, said the summit was a success in that delegations were ready to work together and put their main focus on aiding countries in the most difficulty with capital boosts for the IMF.

“But the key point will be to get the promised sums delivered,” Bayne said.

Just as significant as the results of the summit is what was noticeably absent from the communiqué. The G20 agreement lacked teeth on several specific issues such as climate change, specific financial regulations, and politically charged issues such as exchange rate policies and over-consumption in the United States, phenomena that may have helped produce unsustainable financial bubbles.

Ed Miliband, the British government’s climate change and energy secretary, said the G20 summit was a good opportunity to begin deliberations on climate change, but admitted there is another forum for that issue.

“The G20 shows that there is an understanding among world leaders that the world economic crisis and climate crisis can be solved together,” Miliband said. “It is promising but challenging to get an ambitious climate agreement. There are frameworks for climate change discussions (such as the United Nations) and we need to respect that.”

‘The IMF is Back’
U.S. President Barack Obama may have been the last leader to take the press limelight following the summit, but the IMF – which not long ago was fighting futility - was the real star.

“Maybe some of you were in the IMF press conference at the end of the annual meeting last October,” a beaming Strauss-Kahn said. “Some of you may remember what I said at this time was the IMF is back. Today, you get the proof.”

The massive expansion of the IMF’s coffers also enhances its role as forecaster and monitor of international economic developments. The progress of the G20’s initiatives will be measured against IMF projections and forecasts, building a stronger case for economic information to flow through the Fund’s research department.

“I’m really happy to be the head of an institution, which more than year ago in Davos, asked for a global stimulus,” Strauss-Kahn said. “Nobody, no other institution, was able to see that the crisis would be so deep that we would need a global stimulus. We asked for that and we have been followed.”

With the IMF’s expanded role, the complexion of the world’s response to the global economic crisis will have a distinct IMF flavour. The United States, unable to extract pledges of additional fiscal stimulus from skeptical France and Germany, must now look to the IMF as its last instrument of economic power during the crisis.

A less-publicised but equally powerful prong of the IMF’s post-G20 response will be the expansion of its new Flexible Credit Line, which does little to hack away at Washington Consensus orthodoxy and in some sense reinforces it.

The FCL is intended to provide “pre-conditional, precautionary” IMF financing to countries with “good” IMF track records, which would include countries that successfully implemented IMF adjustment policies and have a history of successful repayment of IMF loans. Mexico recently became the first country to take advantage of the FCL, gaining access to $47 billion in IMF credit.

In one attempt to balance its growth while enhancing its accountability and transparency, the Fund will also end a longstanding, informal tradition of elevating a European to manage the Fund. Now, as the communiqué points out, IMF staff will be selected through a competitive, merit-based process.

The G20 also agreed to accelerate reform of the IMF quotas that determines how much of a voting share a country may have on directing IMF programmes.

A review on the realignment of IMF quotas, which currently give the United States an effective veto with 17 percent of the vote (85 percent majority is needed to pass an IMF package), will now be due in 2011 rather than 2013.

“They are right to say quotas need to be changed but there is a timetable for that,” Brown said.

The IMF stopped short of recommending a transition away from the U.S. dollar as the world’s reserve currency, although Strauss-Kahn stressed the “symbolic” value of the SDR allocation. Prime Minister Brown denied there is any threat to the existing monetary order, especially considering recent renewal by China and Russia of time-old criticisms that the United States is an irresponsible custodian of the world’s reserve currency.

“Issues about international currency have not led to detailed proposals from anyone,” Prime Minister Brown told reporters.

The U.S. veto at the IMF will therefore remain during these crucial years of IMF expansion. The Washington establishment and its policy consensus likely still hold the keys to the car.

“The IMF is also back as a policymaker,” Strauss-Kahn said. “I’m not saying the different governments of the G20 are going to do all the time what we think is the right thing to do, but at least we are the partner to discuss with and analyse what kind of policy should be implemented.”

The American Chastening

On a day meant for concrete solutions to a rapidly spreading economic crisis, there was no shortage of symbolism and cynicism as new global powers came to the world stage.

On the morning of the summit, a journalist representing a Saudi newspaper put it this way.

"The world's problems will be saved all in a building that is owned by the Emirates," he said with a smirk, referring to ExCeL London, the East London Docklands convention centre owned by the Abu Dhabi National Exhibitions Company.

Even the London Summit logo indicates a shift in political and economic power. It depicts the earth and sun shining brilliantly along its arc. Europe is on the verge of rotating into the darkness of night, joining its friends in the United States, while a beacon of light emerges from the East. “Stability, Growth, Jobs” is the tagline.

And the U.S. president, known for his talents with the spoken word, was also battling a cough and cold that brought his normally rousing speeches down to earth, much the same way his country’s financial sector has been stricken by infectious leverage and toxic assets. Ultimately, President Obama was left atoning for the alleged sins of Wall Street, which are partly to blame for a crisis that will drop world GDP growth between 0.5 and 1 percent in 2009, according to the IMF.

“We exercise our leadership best when we are listening, when we lead by example and show some element of humility,” Obama told reporters.

“There were occasional comments [by other delegations], usually wedged into some other topic that indicated from their perspective that this started in America or this started on Wall Street, or this started with particular banks or companies,” he added. “Perhaps what helped was my willingness to acknowledge that - and it's hard to deny - that some of this contagion did start on Wall Street.”

While the summit revealed a new global economic landscape, it by no means created a permanent transformational shift. The United States and United Kingdom had considerable bargaining power during the summit, and used the fact that the summit was limited to one day of discussions to create pressure for parties to come to agreement. British officials reflected to that sentiment as they assured the media that G20 delegates would nail down an agreement.

“I don’t think we’ll get that many people back around the table soon so we’ve got to take action today,” said Lord Peter Mandelson, British business secretary, hours before G20 leaders were to emerge from the discussion room.

“There is some lively discussion but we are going to reach an agreement today,” added Stephen Timms, Labour Member of Parliament for East Ham and financial secretary to the Treasury. “Everybody recognises that we need to deliver.”

The Saudi reporter, who was less impressed than most by Obama’s international popularity, predicted the summit would be about the United States and its allies pushing creditor countries to finance fiscal expansion in the United States and elsewhere.

“I think it is the sort of thing where Saudi Arabia, Japan and China will be told, ‘look, you have to pay up,’” he said.

Bayne said there is more coordination between non-G8 participants on forming policy than is usually reported, but he added that countries may not be ready to assert themselves in the G20 environment.

“So far this has not led to major initiatives in the G20 or elsewhere,” he said. “They are biding their time and testing the water. China's reserve currency idea is a first indicator. More may surface when Korea takes over the G20 chair in 2010.”

What Comes Next

The lessons of the past and present may show that international cooperation is crucial to solving global economic crises. But just as important is the legitimacy of the organisation shepherding such cooperation.

President Obama has garnered praise from allies such as Turkey and Mexico for reaching out to the developing world. But as the G8 prepares to meet in Italy in July and the G20 again in Pittsburgh in September, other nations are justifiably concerned that they are yet again confined to the backseat of global decision making.

As pointed out by Daniele Archibugi, a research director at the Italian National Research Council in Rome, the G20 represents 85 percent of global GDP but also includes only one country from Africa. Spain and the Netherlands have greater GDP than Saudi Arabia and Argentina, and while the former were invited to the G20, they are not officially included in the G20 while the latter two are. Countries with large populations but small aggregate economies, such as Bangladesh, do not even receive invitations to the summits that determine so much of their future.

“The inability of the G20 to come up with solutions is largely dependent on its institutional nature,” Archibugi wrote in The Guardian on March 28. “In a world that demands greater accountability in world politics it is inconceivable that everyman's problems should be addressed in summits held outside the confines of democratic logic.”

Bayne said the G8 is not necessarily obsolete. While the G20 has been engaged primarily with financial and macroeconomic issues, the G8 has a much broader scope of issue areas to work on.

“If the G8 can effectively co-opt the leading emerging markets they can still play an effective agenda-setting and initiatory role,” he said. “The Japanese chair did not do this in 2008, for fear of China. Italy this year and Canada next year may do better.”

Strauss-Kahn and Obama also endorsed an increasingly multilateral approach to the economic crisis response, but it remains unclear how this will be put into practice before the next major institutional reform, the 2011 IMF quota review, comes through.

"Last time you saw the entire international architecture being remade," Obama said of the Bretton Woods meetings following World War II. “Well, if there's just Roosevelt and Churchill sitting in a room with a brandy, that's an easier negotiation. But that's not the world we live in, and it shouldn't be the world that we live in.”

Strauss-Kahn said extending the G20 to be G24 or G25 with the addition of several “low-income countries” would provide an accurate representation of the world economy.

“Everybody has their own recipe – there was 12, then 13, 14, 15 and finally it has been the G20,” Strauss-Kahn said. “If we really want the G20 to be a body of governance of globalisation, then we certainly need the G20 to be increased to include some country representatives of the low-income countries.”

The rest of the world, still declining into recession, may not be able to wait that long. **

You can view the G20 communique at http://www.londonsummit.gov.uk/en/summitaims/summit-communique.

The G20’s Specific Plans for Strengthening the International Financial System: http://www.londonsummit.gov.uk/resources/en/PDF/annex-strengthening-fin-sysm.

IMF Resources and the G20 Summit: http://www.imf.org/external/np/exr/faq/sdrfaqs.htm.

G-20 Wrapped Up

noreply@blogger.com (NM) — Thu, 02 Apr 2009 18:50:00 +0000

Just got out of President Obama's press conference, which effectively concluded the major proceedings of today's G-20 summit. The president was clearly the main event, and used it as an opportunity to reassert American leadership - his press conference was not only significantly longer than that of Summit host Gordon Brown, but his was the last to finish it off.

The G-20 established a communique, some of it specific, most of it broad, to address the financial crisis. The highlight is the effective tripling of the International Monetary Fund's resources thanks to Japan, the European Union, and other unnamed donors -- it is unclear how much China or Saudi Arabia have provided, but it's likely they're a big part of it. In the words of IMF Managing Director Dominique Strauss-Kahn, "the IMF is back."

Partially due to recent economic data but also because of the apparent success of the Summit, stock markets in Japan, Europe, London and the United States rallied. Is this the end of the crisis? Will this improve confidence in the world economy? And will this help the poorest in the world?

This writer is skeptical. The Communique as such lacked meat on several key issues such as climate change, poverty reduction and corporate governance - it will be interesting to see if the 20 governments involved also will be to ratify or enact key parts of the deal. Agreeing to agree may not be enough.

Press conferences

noreply@blogger.com (NM) — Thu, 02 Apr 2009 11:00:00 +0000

After sighting Robert Gibbs, President Barack Obama's press secretary, I was able to find eke out a few more details on events at the G20 from the uncooperative, tight-lipped media team at the G20.

4pm - The European Union/European Commission will hold a news conference
4:30pm - President Zapatero of Spain will hold a news conference