Comments on: International Implications of the Citigroup Bailout

By: Aggressive Progressive » Following the Economic Crisis: Two quick updates from Baseline Senario

Fri, 28 Nov 2008 19:45:37 +0000

[...] Baseline Scenario International Implications of the Citigroup Bailout Written by Simon Johnson November 27, 2008 at 5:20 pm The Citigroup bailout was a good deal for [...]

By: Edgar

Edgar — Fri, 28 Nov 2008 18:28:55 +0000

When all this speculation will de-accelerate? So far the strategists to save the world economy have been based on speculation. Example: Let’s safe Citi to see if the markets stabilize, let’s inflate grow to get us out of the debts, let’s see how can we bailout the emerging economies and see what happen. It looks like if what governments and economist wants is that the mainstream continued getting more in debts. Nobody has talk about save neither for the government, nor for the consumers. Where is the balance here?

By: pillip

pillip — Fri, 28 Nov 2008 17:24:21 +0000

Re point 2: Counterparty risk is compelling all major market participants to demand some form of global regulation. In the current environment no one can trust anyone who is not covered by a government guaranty. Aa a result, markets are locking up. To free up markets and ultimately restore trading profits, greater global regualtion is required, will be tolerated and even welcomed. The real question is whether national governments are willing to lay aside petty provincial issues and create an effective regulatory structure.

Not surprisingly, Vikram Pandit has spoken out for global regulation to avoid regulatory arbitrage and the hodge podge of national regulatory schemes that global banks must navigate.

By: pillip

pillip — Fri, 28 Nov 2008 17:08:22 +0000

The recent attack on Citi shares was not random. It was precipitated by the recent and sudden collapse of the CMBS market. Citi is generally understood to hold a very large portfolio of commercial real estate loans on its books and off-balance sheet. Given Citi’s weak management, large size, large off-balance sheet holdings and opaque financial statements, it is not surprising that Citis shares collapsed so quickly. While other banks are equally opaque, most banks have a greater reserve of trust in management to draw upon in a crisis than Citi had.

By: adrian

adrian — Fri, 28 Nov 2008 14:48:05 +0000

can you tell us more about the impact of the crisis on emerging markets like India and China and what role will these economies play in the future after the crisis is over?

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By: Tom K

Tom K — Fri, 28 Nov 2008 03:22:51 +0000

As long as the federal government is throwing so much money around, it may as well match Japan’s effort and contribute $100 billion to the IMF. After all, if the funds contribute to the lessening of the global crisis, this country will see great benefits from that.

Furthermore, contributions from Japan and the U.S. will put the spotlight on China, which has tremendous reserves, to do its part.