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“I told you so!” Merkel tells U.S., Britain

September 22, 2008

German Chancellor Angela Merkel delivers a speech to members of her conservative Christian Democrats in Berlin, September 22, 2008. Wage gains in Germany have been moderate in recent years, and this will likely remain the case, Merkel said on Monday. REUTERS/Tobias Schwarz

German Chancellor Angela Merkel sent a clear “I told you so!” to the United States and Britain at the weekend, criticising them in unusually frank terms for resisting measures that might have contained the current financial crisis. The conservative leader of Europe’s largest economy reminded her partners that she had pushed for steps to boost the transparency of hedge funds during Germany’s presidency of the Group of Eight last year. ”We got things moving, but we didn’t get enough support, especially in the United States and Britain,” she told the Muenchner Merkur newspaper. Merkel expanded on her point in a speech in Austria, suggesting that both Washington and London were only now coming around to her view.

“It was said for a long time ‘Let the markets take care of themselves’ and that there is ‘no need for more transparency’…Today we are a step further because even America and Britain are saying ‘Yes, we need more transparency, we need better standards for the ratings agencies’.

Germany had made greater transparency a key theme of its rotating presidency of the G8, which includes the United States, Japan, Germany, Britain, France, Italy, Canada and Russia. Berlin had expressed fears that hedge funds could threaten the stability of the financial system through their heavy reliance on borrowing to finance risky trading strategies. But it ran into resistance from the United States and Britain, achieving little.

Whether Merkel’s G8 initiative could have averted or limited the current financial market crisis if it had been successful is certainly debatable. But reminding voters that she had sought to address the problem as early as last year could help Merkel score points on the domestic front ahead of a general election next year. Merkel’s Christian Democrats (CDU) rule in an uneasy grand coalition with the Social Democrats (SPD), and both sides have been trying to play up their own role as crisis manager in the current financial market turmoil.

Both Merkel and her SPD finance minister, Peer Steinbrueck, have tried to take credit for Germany’s efforts last year to agree better transparency rules for financial markets. SPD budget expert Carsten Schneider praised Steinbrueck’s efforts during Germany’s G8 presidency in a newspaper interview on Monday, adding: “At the time, the United States and Britain demonised every effort to agree more transparency and rules.”

As Germany’s election approaches, the “I told you so!” Berlin seemed to send to Washington and London on the weekend could turn into an “I told you so first!”-competition between Merkel’s CDU and her SPD rivals.

Comments

This woman overreaches with her influence regularly. When Germans were caught putting money away in tax havens like Lichtenstein and Monaco, she preferred to hold these other nations to her standards of “transparency”, rather than send a message to her shady citizens. What’s next?

Posted by LPD | Report as abusive
 

Transparency would have done nothing. Time and time again the European Union has invented rules and then flouted each and every one of them when it suits.

One also needs to remember that rules, when in the hands of politicians do nothing but dampen the growth of banking and commerce. Just look at the whole of Europe’s growth record under the European Union – slow, tired, highly constrained and sclerotic. Europe did not participate in the growth of and from the financial sector (or growth in any sector due to political medling) and is now slowing down again i.e. all downside with no upside in between.

Hindsight is a wonderful thing Scmerkel, especially when you are a politician.

Posted by Nick | Report as abusive
 

Actually, Chancellor Merkel is not “overreaching” at all (what a weak comment!).

Rather, she is expressing a view widely held throughout Europe and around the world, placing responsibility for this global financial disaster not only on the “free market” ideologists, but also at the doorstep of their enablers in the current US administration.

Many people here in Europe, such as Ms. Merkel, saw this crisis coming, and tried to avert it with timely action, which the Bush administration rejected.

In fact, while Bush, John McCain, and the loud crowd of “free marketeers” have been shouting the mantra of “unregulated capital markets” without pause, we have been lurching headlong from one speculative disaster to the next (dot-com bust, subprime bust, general housing bust, and now global financial bust). Now, we may finally have arrived at the edge of the next Great Depression.

US financial managers, politicians like George Bush and John McCain, and Secretary Paulson are today calling for governments around the globe to pony up hundreds of billions (more likely trillions) of dollars to bail out greedy Wall Street investment banks and hedge fund speculators.

They will discover, however, as is evident around Europe, that their call has become the biggest non-starter since Bush & McCain’s calls to join the ill-fated occupation of Iraq.

This crisis has a long course to run, and will likely extract a huge price from citizens around the globe.

But perhaps the most intangible consequence of this crisis will also be the most significant:

—the accelerating erosion of American credibility and influence around the globe,

—and the rapidly increasing cultural, political, economic and military isolation of the US among the world’s peoples.

For Americans, who have the opportunity to vote in a few short weeks, this world crisis should be the ultimate wake-up call to junk the failed, discredited, and disastrous policies of George Bush and John McCain.

It is time for Americans to vote for serious change, elect Barack Obama for President, and become responsible and respected members of the world community again.

 

I could not agree more with the comment posted by fbla1895. Following the policies of the American government makes me sometimes wonder why this crisis is coming so late. Ms. Merkel was only trying to warn the US and UK, but these governments did not want to listen. However, instead of sending the right signals now, the US government will pay off “faulty loans” and will not punish the people who have caused this crisis.

Let’s see what will happen next …

 

GEORGE BUSH IS SO MISGUIDED THAT HIS ONLY INTEREST IS TO WIN IN IRAQ. ALL OTHER, EITHER POLITICAL AND SPECIALLY ECONOMIC ISSUES ARE SECONDARY FOR THIS MISGUIDED PRESIDENT.
GEORGE BUSH’S (SIMILAR TO THE OLD MAN JOHN McCAIN”S) ONLY INTEREST IN THE WORLD AFFAIRS IS A MILITARY VICTORY, AT ALL COSTS, IN IRAQ. THIS IS THE BREAD AND BUTTER FOR BOTH REPUBLICANS.
GEORGE BUSH AND OLD MAN JOHN McCAIN UNCONDITIONALLY SUPPORTED THE CORRUPT EX-PRESIDENT OF PAKISTAN, NAMELY PARVEZ MUSHARRAF AND HIS MILITARY THUGS. ACTUALLY WHAT GEORGE BUSH GAVE TO PAKISTAN, OVER 0NE BILLION US DOLLARS, TO KEEP PAKISTAN ON HIS SIDE FIGHTING THE TERRORISTS, WAS INDEED A BRIDE TO PARVEZ MUSHARRAF AND HIS MILITARY TUGS TO KEEP THEM IN POWER AND EXECUTE GEORGE BUSH’S ORDERS.
WHEN THE END CAME, MUSHARRAF IS GONE AND NOW THE BIGGEST ISSUE AND HEADACHE FOR THE CURRENT PAKISTANI REGIME IS “”WHAT TO DO AND HOW TO FIGHT THOSE WHO ARE AGAINST THE AMERICAN IMPERIALISM”". INDEED, THE ISLAMIST IN PAKISTAN HAVE THE UPPER HAND AT THE PRESENT TIME AS LONG AS AMERICAN MILITARY FORCES INTERFERE IN PAKISTAN. THE CURRENT PAKISTANI MILITARY “PROPAGANDA” OF NEGATIVE REACTIONS AGAINST THE AMERICAN INTRUSIONS INTO PAKISTAN N.W. FRONTIERS WILL NOT HAVE ANY EFFECTIVE RESULTS BECAUSE THE PAKISTANI MILITANTS, TOGETHER WITH THE SUPPORT OF NEXT DOOR AFGHANI MILITANTS WILL SOON HAVE THE UPPER HAND IN BOTH, PAKISTAN AND AFGHANISTAN.
ANOTHER PUPET, THE PRESIDENT OF AFGHANISTAN,NAMELY PRESIDENT KARZAI’ LONGITIVITY AND DAYS OF PRESIDENCY ARE NUMBERED.
NOBODY IS PREDICTING THE EXPLOSIVE SITUATION OF THE REGION. NEITHER PRESIDENT GEORGE BUSH AND OLD MAN JOHN McCAIN, NOR PRESIDENT SARKOZI OF FRANCE UNDERSTAND AND HAVE THE EXPERIENCE TO DEAL WITH THE EXPLOSIVE SITUATION OF THE REGION. HAVING MORE “”NUMBERS”" OF MILITARY POWER WILL NEVER SOLVE THE PROBLEM.
UNDER THE EXCUSE OF “”PAKISTAN BEING A NUCLEAR POWER COUNTRY” AMERICA WILL YET COMMIT ANOTHER BIG MISTAKES.
AMERICA AND NATO INDEED HAVE TOO MUCH OPPOSING POWER ACTING AGAINST THEM IN THAT REGION OF THE WORLD.
YOU NEED TO HAVE PREDICTIONS ABOUT PAKISTAN AND AFGHANISTAN, PLEASE FOLLOW THE ACTIONS OF THE PAKISTANI MILITARY ACTIVITIES.
MORE TO COME.

Posted by JOHN DEAN, A REPUBLICAN FROM FLORIDA | Report as abusive
 

I agree with Nick. US & UK have time and again changed rules to their benefit and try containing the markets … I think this rules are made more with a vote bank view point rather creating a stable environment.

The US first brought in the “Stegall act”, due to which MS was born… now they going back to square one nationalizing institutions and bailing them out all at risk of taxpayers money …

I really am amazed that there is no one in the value chain to object such adventures by the ruling party…

What a shame !!

http://vikramsjourney.blogspot.com/

Posted by VN | Report as abusive
 

Down with Merkel! Take care of your own stupid country and leave American and British policy to the Americans and the British!

Posted by Seth | Report as abusive
 

Seth – agreed. Merkel & co did take care of their own countries and look at the no growth zone Europe turned into!

Europe is also still floundering over what to do during this crisis whilst Paulson & Co have already proposed a solution (alright its not perfect, involves pain for plenty but it is a step in the right direction). Eurocrats are still arguing which country the butter should come from to put on their cakes before they start talking about discussing a solution.

Views are nothing without action so stop Bashing America and American politicians for everything in the universe and beyond and start taking some responsibility that results in action.

Posted by Nick | Report as abusive
 

Merkel may have sought to address the problem earlier last year, but lets not forget that this has been at issue in the Senate Banking Committee since 2005, at least.
For example: http://www.aei.org/publications/pubID.21 977/pub_detail.asp
I blame Bush first. But, I also blame the house and senate. Where was the Democratic majority? They neglected to fulfill there constitutional obligation to pass laws in the interest of the people – ones that should have required transparency and appropriate regulatory controls over GSEs like Fannie and Freddie. Bush and Pelosi both ignored legion warnings from at home and abroad.

Posted by Kevin | Report as abusive
 

Nick & Seth,

Time will tell as to who is right; but for my money I’d rather have low & slow growth with my portfolio intact, rather than exponential growth with a tanking economy and taking a massive haircut.

Unless, of course, you guys are part of the manipulating crowd on Wall Street, in which case you better move to a country with a non-extradition policy when the s**t hits the fan and the great unwashed are out for blood.

The Germans have proven time and time again that they know how to manage money and an economy. Germany is after all the world’s largest exporting country, with roughly 1/4 the population of the USA and very few natural resources left.

There is a very good reason why the ECB is located in Frankfurt and not in London or Paris.

BTW this USA bail-out is not the first one; IIRC it was also necessary in the 1970′s or thereabouts. At that time the USA still had credibility and the Europeans and Japanese pitched in.

This time around I wouldn’t hold my breath.

H.F. Wolff

Posted by H.F. Wolff | Report as abusive
 

Two words for ya: RON PAUL!

Posted by Rich | Report as abusive
 

To those of you who believe that we Americans can change the current situation, I am sad to report that we can’t. The RNC was a complete joke, taken over by NWO henchmen when McCain did not get the nod on the first ballot. (Ron Paul actually won). These goons shut the convention down and threw out everybody that would not vote for McCain. That is how he got the nomination.

Our voting machines are also rigged in many states. We (the citizens) have proven this time and time again, but to no avail. Unless you want the Bush family running the world (their longterm goal) and spreading their system of corruption and deviance to the world, I would push your leadership to bring charges against the entire cabal that is pushing the freemarket foldup of all wealth into their pockets.

 

to all you clowns touting ‘growth in the u.s., i hope you’ll enjoy your jobs hauling garbage out of your local big mac shops. brain dead without a doubt.

Posted by basho | Report as abusive
 

Good idea…but way, way, way TOO LATE; We needed increased transparency back in the early 1990s(pre-Nick Lesson),not in 2007;The Everest-size derivatives mountain had already reached the $1,000,000,000,000,000 mark by late last year;Ms.Merkel’s belated adice only came AFTER the sub-prime crisis had already kicked-off in August’07; She’s now trying to say “told you so” when she was as silent + as ignorant as everyone else back in the 1990s,at a time(pre-Tech bubble crash)when sometime could still have been done! The only prominent person who is justified in saying “told you so” is Mr.Warren Buffett,who described complex financial instruments as being “Weapons of mass financial destruction” back in 2002; What, in 2002, did Merkel have to say about anything? Too late, Merc~ The horse had long since bolted…long before you started preached from on high.

 

Good idea…but way, way, way TOO LATE; We needed increased transparency back in the early 1990s(pre-Nick Lesson),not in 2007;The Everest-size derivatives mountain had already reached the $1,000,000,000,000,000 mark by late last year;Ms.Merkel’s belated advice only came AFTER the sub-prime crisis had already kicked-off in August’07; She’s now trying to say “told you so” when she was as silent + as ignorant as everyone else back in the 1990s,at a time(pre-Tech bubble crash)when sometime could still have been done! The only prominent person who is justified in saying “told you so” is Mr.Warren Buffett, who described complex financial instruments as being “Weapons of mass financial destruction” back in 2002; What, in 2002, did Merkel have to say about anything? Too late, Merc~ The horse has long since bolted…long before you started preaching from on high.

 

“Where was the Democratic majority? They neglected to fulfill there constitutional obligation to pass laws in the interest of the people” (kevin)
It is time to expose the corruption of both houses of Congress by AIPAC, the Israeli lobby. Every single member has been bribed and tainted. Pelosi has even admitted she did not impeach Bush because Israel asked her not to”. It’s too late now: The stranglehold by Israel has now destroyed this country.

Posted by mystic | Report as abusive
 

Transparency would be nice. But complete transparency would be shocking: “The bank hath benefit of interest on moneys which it creates out of nothing.” – William Patterson, Founder of the Bank of England, 1694.

“I am afraid that ordinary citizens will not like to be told that the banks can, and do, create and destroy money, and they who control the credit of the nation direct the policy of governments.” – Reginald McKenna, Chairman of Midland Bank of London

“Banks lend by creating credit. They create the means of payment out of nothing.” – Ralph M. Hawtery, Former Secretary of the British Treasury.

“Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower’s IOU.” – Modern Money Mechanics, Federal Reserve Bank of Chicago, page 19.

“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented.” – Major L. L. B. Angus.

“Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower’s IOU.” -Modern Money Mechanics, Federal Reserve Bank of Chicago, page 19.

“By a continuing process of inflation, banks can confiscate, secretly and unobserved, the wealth of citizens– and not one man in a million will detect the theft.” – John Maynard Keynes, Father of Keynesian Economics.

Posted by namerequired | Report as abusive
 

All money today is funny money. The only thing that makes it worth something is enforcement by the military, police, and courts. In terms of real value, paper assets (bonds, securities, federal reserve notes a.k.a. dollar bills) are actually worth nothing.

Real value is in land, energy, water, food, labor, talent, industry, materials, factories. These things WE create, and THEY buy it with paper.

Now, they want us to believe they own it all? They own the factories, the mines, the resources, the corporations? No no no… we built all these things; the people are going to take back what was stolen from us. Those rich, moneyed vultures whose only talent is deceit and spending counterfeited money are nearing the end of their reign. If I were one of them I would not be able to sleep at night and feel safe. I don’t think there’s a corner of this world they could hide once everyone wakes up to the monumental fraud they have perpetrated on all of us…

Posted by namerequired | Report as abusive
 

You have to love “growth.” The only thing that has grown in the US is corruption and the supply of that sedating fiction called the dollar. Growth has given us a declining manufacturing base, a questionable agricultural base, unaffordable medicine, a disappearing skills base, an evaporating educational standard and millions of new jobs for illegal aliens. Oh yeah, but we did build a lot of vinyl-sided tents that we nowadays call houses. The standard of living as been falling since the early 70s as the vampires were slowly sucking the blood out of us. Now they’ve decided to slaughter the turkey and eat the whole thing raw.

Posted by Farmer Bob | Report as abusive
 

Hedge funds had a role to play in this mess but the clear culprits were the investment bankers, mortgage lenders and the fed itself for artificially low interest rates and the US gov’t for not disclosing the problem to the public and not stepping in to stop it. Even it’s own institutions Fannie Mae and Freddie Mac were clear purpetrators of the problem.
The gov’t is not the bad guy with it’s program of corporate socialism and bail out programs for banksters. If I was an American I would be mad as hell having to pick up the tab and pay the bonuses to the corrupt banking institutions and their flawed business models.
This bailout money could be used on infrastructure and medical programs for americans. Instead the government is setting america up for a failed currency, a failed economy, hyperinflation and a new currency to further the agenda of the NWO.

Posted by John Taylor | Report as abusive
 

This women, along with leaders in other nations,(France,etc)have not been overreaching on anything. They have been warning the Western markets, especially the U.S. and U.K. as the headline says, to stop the phony financial dealings. The derivatives, the sub-prime mortgages created by the Clinton Administration as part of the democrats diversity politics, while they knew full well that most of the low income groups these mortagages where created for, would not be able to pay them. This along with the unmitigated greed of Wall Street criminals is the reason we are in the shape we are in.

Posted by Bobby | Report as abusive
 

Mystic the Democrats and Republicans are the cause of this whole mess, because they are bought and paid for. Only the wholesale removal of these corrupt criminals in the Congress and Senate, can change things along with total transparency as some posters have recommended. No more back room deals behind the backs of the hard working American citizenry. It’s criminal.

Posted by Bobby | Report as abusive
 

Seth and Nick, you must both be off your rockers. Forcing the citizemry to save the criminals on Wall Street is a joke. In fact, all it will do is allow the criminals to keep their ill gotten gains, and the economy is still going to tank. You guys should rethink your position.

Posted by Bobby | Report as abusive
 

For gods sake, if at this point it isnt perfectly clear RON PAUL is the only hope we have, it never will be.

 

However one looks at this, the bottom line is the US is probably going down with additional massive debt, higher inflation, a worthless US dollar, and a flight of foreign investment from US bonds (at the current low rate). How can the US possibly continue all the illegal and costly occupations and invasions into sovereign territories and not pay the price. This collapse of the financial markets was planned well ahead with risk takers fully aware that the US taxpayer will socialize their losses. Fortunately this happened during the Bush watch and not with the next president. Indeed, the world is rejoicing at the demise of the US.

Posted by Zapata | Report as abusive
 

Merkel is right. I say that as an opponent of her Afghanistan policy, and more than that.

Posted by Magnus Göller | Report as abusive
 

In the US, its kill the messenger. Look what happened to Elliot Spitzer when he tried to bring attention to the coming crisis in the mortgage and loans. He was destroyed because he was getting ready to blow the whistle on lending practices, and made the bankers real nervous!

Posted by Jonah | Report as abusive
 

Only a fool (and a criminal on the inside of the profit ring) would be against more transparency. It is clear the criminal elements in the US and Britain have had the last two decades to pilfer the US and British Treasuries. This game is OVER, and they will be held accountable. All of their crimes are exposed on the secret, so-called Level 3 balance sheets that these large banks were not obligated to report. Well, that is now coming to light and these criminals will be exposed.

Posted by Eric | Report as abusive
 

The writing was on the wall at least three years ago. Many people in the US were getting concerned that things were going to go to hell. World banks were passing notes to get their affairs in order because there was a coming problem. This economic crisis was intentual and the bail out plan is just another coverup to steal more money from tax payers. Now that Nancy Palosi is having a full blown investigation, maybe the truth will finally come out. Just as corrupt Enron, many more this time may end up in a the cross bar hotel called jail.

Posted by Doc Holliday | Report as abusive
 

The crisis is clearly based on corruption and the lack of transparency. I agree with the analysis of independent presidential candidate Ron Paul who is the only candidate who actually understands the underlying problem.

Posted by Dan | Report as abusive
 

What we need is a leader who will start a revolution. We should take to the streets in a massive demonstration of protest and hold them accountable for their thefts and throw all of them out of office. They are all rotten, the Republicans and Democrats, and their candidates are just as bad.

The apathy of the people is incredible, what will it take to wake them up?

How much abuse can we take?

People rise up. Let’s start a revolt!!!

Posted by Spas Modic | Report as abusive
 

Greed destroys.

 

Nancy Pelosi having an investigation of the very people she has been supporting for years. That’s funny. Throw them all out–wholesale.

Posted by Bobby | Report as abusive
 

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