Grown men fighting for the privilege of vapourising Christine Lagarde
Isn’t it funny how a new job changes one’s perspective?
24th March 2011, The Guardian:
French finance minister Christine Lagarde has launched a scathing attack on Britain’s financial watchdog for undermining a proposed system of regulating EU banks. She accused Lord Turner, the chairman of the Financial Services Authority (FSA), of unwarranted criticism of the new stress tests on Europe’s banks.
Lagarde said: “I respect the fact that he wants to be more demanding and thorough, and have reforms that are deeper and better than today, but the way he is going about it undermines confidence in the process…..the type of stress that will be used to test the capital ratios of banks is much stricter than last time. It is sufficiently stressed to be an unrealistic expectation of what they will face.”
Today, Christine Lagarde is the head of the IMF. This from the FT (£) reporting from Jackson Hole yesterday, 27th August 2011:
Lagarde calls for urgent action on banks.
European banks may need forced capital injections to stop the spread of the eurozone’s sovereign and financial crisis, Christine Lagarde has said….“There remains a path to recovery, but we do not have the luxury of time. European banks need urgent recapitalisation to stop the spread of the eurozone’s sovereign and financial crisis….They must be strong enough to withstand the risks of sovereigns and weak growth. This is the key to cutting the chains of contagion. If it is not addressed, we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis.”
Aaah…right, now I understand, Chrissie ma chere: we need urgent action to help these perfect capital ratios face the very thing they will never have to face.
I must say, you have to respect a person who changes her mind so decisively, so suddenly, and, um, so completely.
There remain some out there in threading land who think my incessant attacks on Christine Lagarde might be anything from arrant sexism to vindictive envy of her suntan. And it’s true, I have been slagging her off for some time. In fact I’ve been laying into this silly woman ever since this BBC piece
on 4th July 2010:
French Economy Minister Christine Lagarde said the results of tests, designed to boost confidence in the sector, will be known on 23 July. And she predicted the tests will show European banks are “solid and healthy”.
“All I will say is that, number one, as far as my banks are concerned, the French banks, I am very confident about the results…”
Now call me wacky here, but I don’t see anything in Lagarde’s statement at Jackson Hole to suggest that it’s all a terrible mess and please can we hurry up please except for the French banks. And as we now know, of course, two of France’s largest banks are the most exposed to Greek catastrophe….from which we may only be days away. Days away, in fact, from “an unrealistic expectation of what they will face”.
This is the same woman who, in 2008, forecast four periods of French growth from late 2009 onwards….none of which were right to within 70% of the actuality. This is the very same woman who left French finances in such a dire state, two weeks ago President Sarkozy was forced to declare emergency plans to immediately curb expenditure.
The world is on the brink of the worst econo-fiscal disaster in modern human history. And in this pre-apocalyptic situation, the US Fed is being run by Chance the Gardener, while the International Monetary Fund is headed up by a giant freckle.
When ordinary, commonsense people allow important positions of power to be handed to those who are useless (and thus unlikely to threaten They Who Must have Everything) it is going to end in tears. The only amusing irony I can see in all this nonsense is that future historians may well put the collapse of Western liberal capitalism down to Nafissatou Diallo.