hmm, not good

[llachglin]

The G7 met in Washington today and issued a vague "communique" about the world financial crisis that amounted to a failure to agree on a coordinated response. According  to Paul Krugman's analysis, it appears as if Secretary Paulson wasn't willing to commit to a coordinated capitalization plan and wanted to hold out hope for private

Comments

[king_chiron]

I think Krugman is off base, everything I've read is that the public recapitalization plan will happen soon, within a week or two.

[llachglin]

What's needed is a coordinated plan on a massive scale, not a selected partial recapitalization of Goldman Sachs and Morgan Stanley or a few others here and there. Paulson seems to be aiming for the latter. I hope I'm wrong.

Nouriel Roubini called for "credible and rapid policy actions by the G7." We didn't get that, at least not yet. I'm curious to see his take on today's G7 meeting.

There's still a chance for a coordinated plan to be announced on Sunday, when European leaders meet. One can only hope that they'll spend the next couple of days getting Paulson to turn around so that the US can announce its own plan in tandem with the Europeans and Japan.

ETA: a week or two is going to be too late. We need action this weekend.

[king_chiron]

On what basis is Krugman is claiming that Paulson is the problem? If anything the Europeans aren't willing to sign up to such a deal because none of them are willing to bail out banks in other countries. Hell, they couldn't even agree to coordinate deposit guarantees with each other, so when the Irish did so unilaterally money flew out of other countries

[llachglin]

What he actually said, minus my interpretation, is "Paulson says he’ll move ahead on recapitalization, but also seek private capital. So the communique represents the United States arguing with itself, as well as with others

[chessdev]

I tend to agree with you