@cicerone imposter,
listening just now to commentators from the TSX (toronto stockmarket) .
since the market has been up for 5 days in a row , the question was : is it the beginning of a rally or a bear-trap ?
the consensus was that it was NOT the beginning of a rally , but neither a bear trap .
the opinion was that the market had by now underpriced many of the "solid" canadian stocks heavily - by as much as 20 t0 30 % .
unless there is a "major" bump in the world market , they did not think "a few billion one-way-or-the-other" would make much of a difference one way or the other .
they also spoke of the expectations that the western countries have re. the chinese "helping" the western economies .
apparently china has been invited to full membership in the IMF - but has gratefully declined . the chinese think that they will be blamed for the problems of the western economies and would prefer to stay on the sidelines .
(must say that i cannot really fault them for not wanting become entangled in the western economic system - it's shown to be extremely weak and will likely need a major overhaul ) .
hbg
report from the ECONOMIST :
Quote:SINCE the financial crisis went truly global in the second half of 2008, the resources of the International Monetary Fund, the principal firebreak against global contagion, have looked increasingly inadequate. The fund has about $250 billion of usable capacity at its disposal to lend to countries in distress, but a lot of that has now been spoken for. The IMF has called for its ability to lend to be doubled.
The big countries that are the IMF’s main shareholders agree in principle, but there has been no consensus yet on just how to go about boosting the fund’s resources. On Wednesday March 11th Tim Geithner, America's treasury secretary, proposed boosting the IMF’s credit line with rich countries to an impressive $500 billion from its present $50 billion. It will be considered at this weekend's meeting of G20 finance ministers.
There are three possible methods of boosting the IMF's resources on the table. One is an increase in member countries’ “quotas”, which are analogous to shareholder capital and make up the IMF’s permanent funding. But such increases are laborious to arrange and politically difficult to push through. Congress must approve America’s quota increase and, by extension, everybody else’s increased quota too, since America is the IMF’s largest shareholder. Another option is for the IMF to issue its own promissory notes; it has the authority to do so but has never wielded it.
A third method is borrowing from its member countries. In February Japan lent the IMF $100 billion and other countries with ample reserves, most notably China and Saudi Arabia, have been urged to follow suit. But those countries are unlikely to put their hands in their pockets without getting something in return"for example, more say in the governance of the fund, or less criticism of their policies (such as China’s exchange rate). America supports, in principle, the idea of giving emerging markets more say in the IMF.
A less ad hoc way of lending the IMF more money is expansion of the General Arrangements to Borrow (GAB) and New Arrangements to Borrow (NAB). These are stand-by lines of credit that the IMF maintains with its richest member countries. The GAB was boosted significantly following the Mexican crisis of 1994 and now both pots stand at about $50 billion. It is the NAB that Mr Geithner has proposed expanding.
report in full :
http://www.economist.com/finance/displaystory.cfm?story_id=13278629
