CANADA AND INDIA NEED TO TAKE ON LEADING ROLE TO GUIDE THE G-20 TOWARDS A BETTER ECONOMIC FUTURE!!

G-20 Leaders gathering in London on 02 April represent 85% of the world's economy. At this meeting:

· The G-20 nations want to reach agreement on more co-ordinated action to revive the world economy, both through more interest rate cuts and more spending by governments to bring economies out of recession;
· Most of the G-20 countries will push for an action plan to prevent a future crisis by strengthening the international regulation of banks and other financial institutions;
· The Group also hopes to agree on a blueprint for future reform, including changes to the international organisations charged with regulating the world economy, such as the International Monetary Fund (IMF), to give a greater clout to poorer countries.

USA is on board with interest rate cuts and more spending by governments, but it is not articulating its views very clearly on reform of international financial architecture. And, on regulation of financial institutions, the US, if anything, is reluctant to appear to be strong proponent of stricter regulatory measures. US’s view on this issue has been at best muffled and confusing.

A report from the G20 working group on regulation has been reportedly leaked to the financial website breakingviews.com. Key recommendations include the strengthening of capital requirements, greater transparency, and more International Monetary Fund (IMF) oversight of systemic risks. It is said that the recommendations closely follow proposed reform of the UK's regulation.

This is where the problem is: A country which has itself made a mess of its economic management is trying to propose changes. The country is question is America’s lackey – Britain. Britain’s banks are in pathetic condition, the top ones needed the government to dole them out of trouble. Britain’s housing mortgage almost mimicked the disastrous American model.

Despite all this the wily schmuck British are trying to pre-empt other countries by drafting some document and throwing it out there. The Brits, whose international stature these days depends on the crumbs thrown their way by their patrons in Washington, generally try to propose something that pleases their American masters.

In case of the current economic mess the countries that have the legitimate credentials to offer changes regarding economic world order, regulation of financial systems are essentially two – Canada and India. The reasons are almost obvious to anybody who is non-partisan, unprejudiced and has some idea of international financial system.

Among the G-7 countries Canada’s banking system is the least affected by current economic turmoil. The financial regulatory framework in Canada seems to have acquitted itself fairly well. The Bank of Canada is presiding over the overall Canadian financial institutions in a reasonably competent manner – its Governor Mike Carney taking necessary steps to provide CPR to the Canadian economy. He also seems to be clued to the stimulus measures being rolled out by the Harper government.

Among developing economies, India has the best credentials, from various standpoints, to offer a suitable blueprint on regulatory framework as well as new economic world order. First, India has the 5th highest GDP (based on PPP) in the world (after US, China, Japan & Germany). India’s central bank has been implementing and managing necessary regulatory framework for the financial institutions in India in a very successful and effective manner for years.

When Asia Pacific countries reeled under currency meltdown in the 90’s, India remained unscathed simply because India’s central bank already had in place effective tools and regulatory structure to prevent any such disaster. India’s economy is predicated on one of the most sensible models – an economy which is around 60% based on internal consumption and rest on export. The Indian economic honchos have displayed a far greater sense of foresight and understanding than their peers in US, Germany, Britain, Japan and other G-20 countries.

USA has no moral or ethical standing to pontificate about new economic world order (including IMF, World Bank) and/or regulatory framework for financial institutions. The current economic global crisis has been engendered by diabolical mutilation of ethical dealings unleashed by the shameless greedy SOB’s of American financial institutions.

These shameless rogues of the US financial system seem incorrigible – they have the audacity to thumb their noses to present administration. The American public and the President et al were dealt with a resounding slap when the AIG executives pocketed bonuses in the excess of $200 Million – and horror of horrors, this amount coming out of government alms! Who knows what stratagems the other US banks and financial institutions are planning to bilk away huge bonus packets for themselves?

Of the other G-7 nations, Germany also seems to be floundering. Therefore, it is also not in the best position to lead any initiative for the required change. China doesn’t make a good candidate for being a leader of change because China’s regulatory framework is not backed by the checks and balances that a democratic country like India has. Brazil is still learning the ropes, and so are the other developing countries of the G-20 club.

In recent G-20 conclaves USA has been urging focus mainly on stimulus, and kind of downplaying need for expeditious action on changes in economic world order and regulation. It is a sad commentary of American intellectual level. A country which boasts of a string of Nobel Laureates in Economics is right now struggling to stay afloat and get back on track!

American budget deficits are turning cavernous by the week; Treasury Secretary Geithner is under pressure. He received implicit support though from his President in March but it will not be easy for him to grapple and subdue the gargantuan economic mess that engulfs the US. Moreover, the highly partisan skulduggery at the Capitol Hill tends to significantly weaken any policy initiative emanating from the White House.

So, in summary the G-20 meeting in April will be best served if Canada and India are given more leeway and opportunity to shape the economic framework of the future. If the US is allowed by the G-18 to ride roughshod over the sensible policy directions, and if their lackeys – the bootlicking schmuck Brits – get a freehand in drafting the policy directions, then God bless the world!

It is time the 18 countries of the G-20 club told the US and its poodle (Britain) to move over to the sidelines and let the more knowledgeable practitioners to fashion the economic future of the world. However, the US and Britain may offer meaningful suggestions, if they can. But if they resorted to dog-in-the-manger policy it will do no good to the current crisis, and it is the US which stands to lose maximum if the world economy goes in a deeper hole rather than come out it. President Obama and Gordon Brown would do well to lend their ears more rather than their tongues!

STIMULUS PACKAGES GALORE WORLDWIDE, BUT WHAT ABOUT PUNISHING THOSE RESPONSIBLE FOR THIS ECONOMIC MESS?

Two words have become household words all around the globe – 'stimulus package' – as the world tries to grapple with the worst economic situation since the 1930’s. US President Obama made several pit stops to campaign for quick passage of the stimulus package his administration put together. Eventually, a package watered down to USD787 Billion was passed by the US Congress.

Similarly, European countries are also implementing their stimulus packages. Situation in eurozone is also spurring urgent action after some quite dismal economic news. European economies contracted in the fourth quarter of last year, with some countries registering the worst figures in decades. The eurozone economy shrank by 1.5% in Q4 2008 and 1.2% on the year. Germany's economy shrank by 2.1% compared with the previous quarter, its worst quarterly performance since 1990.

Canada announced its own economic stimulus package recently in their parliament. Australia too made known their economic measures. China has already put in to motion a huge two year stimulus package to arrest downward slide of their economy. India has also implemented its own package in two instalments, some more may follow.

The G-7 meeting of its Finance Ministers and heads of the central banks in Rome on 14 Feb agreed to avoid protectionism and work in concert to pull the world out the current economic morass. The next meeting will be of G-20 countries in April to review progress of the steps agreed to by the Group in Dec 2008 meeting in Washington.

The above is a quick recap of steps being taken by the countries, which control more than 80% of world economy, to come out of the economic woes the world has gotten into. All this news is encouraging for the millions who lost their jobs, lost their homes, went in to bankruptcies, and went from a life of hope to despair.

But amidst all the abovementioned frenetic activities and hullabaloo to get the world economy back on track, has the world forgotten about the people who brought about this situation in the first place? What about bringing those blighters to justice and punishing them? How can those ‘canine-offsprings’ just say sorry and wash their hands off the accountabilities they carried with their responsibilities?

Because of the unbridled greed of some money spinning wheeler dealers in US (and to some extent in UK, and Germany) a housing bubble got created and this bubble gobbled up trillions of dollars. Between 2004 and 2006 US interest rates rose from 1% to 5.35%, triggering a slowdown in the US housing market.

Homeowners, many of whom could only barely afford their mortgage payments when interest rates were low, began to default on their mortgages. Default rates on sub-prime loans - high risk loans to clients with poor or no credit histories - rose to record levels. The impact of these defaults were felt across the financial system world over as many of the mortgages had been bundled up and sold on to banks and investors.

The questions are: what the hell was the US Fed Chairman doing during the years (2004-2006) when the seeds of the global disaster were being sown? Why could he not get out of his self imposed dogmatic intellectual strait-jacket of free-market mechanism principles? Why the hell was there no oversight of what was going on in the American financial market?

The people who have lost their jobs, their homes, their hard earned savings and probably many years of their future would like to know who were those female parent-fornicators who authorised the sub-prime racket to start! Who were those wedlock-products who encouraged this greed infested activity to engulf the society? Who was authorising the sub-prime mortgage business in Freddie Mac or Fannie May?

Why in God’s name nobody – either from Fed Reserve or SEC or some other Federal agency – bothered to take notice of what was going on in the sub-prime market? The sub-prime racket was not just a 4-6 month event which could have gone unnoticed. It went on for months, and yet nobody took notice?

Why did somebody in the Fed not take notice of the warning bells rung by Prof Krugman (who won Nobel Prize for Economics in 2008)? Prof Krugman was repeatedly warning about the dangerous path US economy was treading on.

And then, who were those female parent-fornicators in the big banks of US and Europe who blindly authorised investing in securitised mortgages? Some of these wedlock-product bank executives took home millions of dollars as bonuses!! Why and how are these canine-offsprings allowed to go scot free and not punished?

So, the question is: why have those people responsible for bringing about this financial mess in US, which caused domino effect world over, not been brought to justice? Why should they not be punished? In fact, why are they not being punished? Why should they not be thrown in to some Gitmo kind of prison and made to ruminate over the cataclysmic financial disaster they caused to happen?

Are these people not some kind of criminals? They may not have committed homicide, or rape. But the truth is that they have ‘raped’ the financial system. Their rapacious greed has robbed millions of innocent investors of their hard earned savings. The sub-prime mortgage can be compared to an organised ‘racket’ to ‘swindle’ millions of ordinary people who were ‘enticed’ by the rosy situations.

These people are responsible for having caused untold miseries to millions around the world, why should they not be flogged - publicly? It would be primitive, is it? Let it be primitive, but at least it will send a strong message to the world. Go ask the laid off worker what is primitive or not primitive – he doesn’t bother for all this intellectual debates which are luxury of the well-heeled. He/she wants secure economic future!

So, what is the plan for bringing these perpetrators of the current financial wrong-doing to justice? Is there no law under which these cold-blooded white collared diabolical schmucks can be tried and punished? Can these female parent-fornicators just say ‘I’m deeply sorry’ and can go un-punished?

The millions of people affected by the current economic upheaval are cursing those rascals day in and day out. Whether or not the actual perpetrators of current economic crisis (and those who were supposed to keep an oversight on them, and didn’t do their job) get punished by the law of this planet only time will say, but one thing is clear that if there is something called ‘natural justice’ these gutter insects will burn in the hell fire during their lifetime.