that is the opinion of the imf which is generally -- the opinion of the imf on the recovery. there are challenges still being faced in the system. we risk systemic risk and even derailing economic recovery. >> as you know, this is something we cannot afford. >> the imf has already appealed with governments to coordinate their actions as they try to wean the lenders offer of taxpayer support. it is strained credit channels that has worried the imf. >> there is the global meltdown for banks and for non banks, financial institutions. this amounts for roughly $3 or 4 trillion dollars. >> the u.s. is further down the track, halfway towards their recovery. by contrast, european banks have been slower to get their houses in order. banks are backing the transaction with more capital. . >> the latest headlines for you on bbc world news but officials are saying up to 200 people might have been killed in a massive earthquake. -- the latest headlines for you on bbc world news. officials are stepping up to to wonder people might have been killed in a massive earthquake on indonesia. 60 ye

the emging markets don't trust the imf.the imf lost he legitimcy afr the asian fincial crisis in the 1990s and has not rebuild it. countries like china, korea and indonesia don't want to have oo boree from the imf it good the inf has more ney. but most he of them don't want toome to the im thre is nothing i see in this process at is going to rebui imf legitimacy, th absolutely key to e pot that eswar is addressing which you ned for a more stable world economy. >> in the last minute i would probably asked yo this after each summit but what is next, do the governmes go back and ntinue working on their own or is there a chance for a kindof coordination. >> wel they ref to nber of they matics to t misters of finance wl meet in novembe they neeto get a move on. they have toinstall the crs border issues what happens when big banks fail. they have not worked on. they say they do that at the end of010. that is too slow. raise capital climateand tell us the numbe in 2012, that is an eternity. they need get a move on. i thinkhey are

that is the opinion of the imf. they are worried that the system and not provide enough credit to. >> there are challenges still being faced. we are looking at systemic risks and even the prevailing economic recovery. >> the imf has had the governments to try to coordinate their actions. the bank balance sheets and a strained credit channels are most worrisome to the imf. >> there are global writedowns for banks and former nonbanks are rising from the crisis now stands at $3 or $4 trillion. this is around $600 billion lower than the last year largely as a result rising security values. >> the u.s. is further down the track, halfway toward a recovery in 2010. european banks have seen them get their houses in order. all of this is said to cut revenues with banks have been completed their transactions with more capital and spending more to insure themselves. >> the latest headlines for you on bbc world news. officials are saying up to 200 people may have been killed by a massive earthquake on the indonesian island of s

there is some confusion regarding to imf rights. the united states has asked for a change in the number of seats that would favor the european delegation. meanwhile, if financial regulation continues to be discussed at the summit, christine lagarde reiterated her support of the banking sector to cnbc. >> but i think the banking industry is very special, very special because it is a custodian of the public goods such as our currency and second it has an implicit guarantee that we're not going to let major financial institutions down and we're guaranteeing deposit. so that industry has a huge benefit out of that particular posture and position. we cannot do without that. >> well, a shift in voting power in the imf could give china and india a bigger say. china has welcomed the move. its foreign affairs ministry told cnbc that the key to an effective global economic governance framework is to represent the changes in the global economy and bring in the equal participation of developing nations. ensure their say and decision making powe

let's not forget, either, that the imf and what happened to communications like the imf will be discussed at this g-20 meeting, as well. the imf was promised a portion of money back in april and they want to make sure they get that portion of money that was sard to be allocated to them. these monies are just coming out right now. let's move on and show you what the markets are doing at the same time. viva is also speaking saying that the global recession is bottoming out. we had the eocd upgrading its outlook to growth globally, although they were holding back on growth in the uk. but we're keeping our eyes on these flashes as they're hitting the wires. viva also stating that a credible global exit strategy is needed. globally, we're hearing about the coordinated efforts needed. we're hearing a solid sounding from brown, sarkozy and merkel a these issues as we head into the g-20. european markets, having gained a little bit more here in the past haur hour. we're seeing autos being the main gaining sector. autos higher by 3.5%, followed by basic resources and banks. the weakest sectors, no

the imf says the global economy has turned a corner, but there's a warning. financial reform is still a priority. 60 years of the people's republic will be asking whether a grown up china is changing its role in the world. and by archaeologists are in a spec. got th>> it is 7:00 a.m. in washington, midnight in the somali capital, where we're still getting reports after the tsunami. more than 100 people are dead, but that number may rise. waves measuring 6 meters high in some cases. flatten the whole villages on the island of samoa and american samoa. president obama has declared a national disaster in american samoa. and the last half hour, we had reports of a separate earthquake. the u.s. geological survey put the strength at 7.9. it could be felt in the indonesian capital, liches several hundred miles away. there were no immediate reports of injuries. let's take a closer look at the south pacific region affected. the pacific tsunami warning center said this magnitude was eight. it was comprised of two separate entities, the nation of samoa and american samo

they're going to raise their vote in the imf, and i think china is going to start talking not quite so hostile to the dollar. >> is the u.s. rally over or is it just staaling right now? >> we can very well have a correction or even a small price correction. we're still in a cyclical bull market. short-term fluctuations, i don't know. >> thank you so much. coming up, i'll have a short last word on my friend kevin worsch. please stay with us. could someone toss me an eleven sixteenths wrench over here? here you go. eleven sixteenths... (announcer) from designing some of the world's cleanest and most fuel-efficient jet engines... to building more wind turbines than anyone in the country... the people of ge are working together... creating innovation today for america's tomorrow. thanks! no problem! ick today. > >>> wor warsh was right. they should look at forward-looking indicators not lagging employment. with cialis for daily use... a clinically proven, low-dose tablet for erectile dysfunction you take every day so you can be ready anytime the moment is right. tell your doctor about your

the imf story, that's a two to three-year story. but it is significant. they are selling an eighth of their holdings. remember, they are the third largest holder of gold besides the u.s. and germany. obviously, the united states is a willing participant to the imf to do that. so i do believe that is the story. because a lot of people right now saying you know what, the imf selling gold is not the story. i take the other side. >> but i heard tim at 3:30, stay away from the miners. i know joe talked about newmont mining 46 1/2. 49.84 high on june 1st. traded back up to 48 again. i think this thing is toppy. big valuation. their last quarter they reported wasn't great. if you want to be in gold, god bless, but don't be in gold vis-a-vis newmont mining. >> and that which was so bullish, which had barrick in the market buying back their hedges, newmont has a shelf registration in place, other guys could be coming to market. if you're a gold miner here there may be no better place to come in the market and raise some stock. not careful about that, there's some

the role of the imf or the world bank can be to alerts and to warn.in this case, i do not think it depended so much on the u.s. congress. it depended on some of the other u.s. institutions. so part of what i'm trying to say is that you can create things that can help you manage risk. they can help create institutional alerts and warnings. you clerked on the supreme court. the constitution is a framework for governing policy. one is talking about in the larger in varmint, one thing one can know for sure is one can be more alert to the interconnected these about some of the things i talked about in trade and finance. your second part, i think, is a critically important issue. i do believe that everything does not move to another country. it should be a win-win discipline. there is a tremendous amount of manufacturing capabilities. the united states has some advantages. you see an awful lot of people with potential employment. it is not all going to move to india. you have to help people adjust to change. i have been a long believer in the fact that this

wasimely and it delired onsomething, you know, quite important d difficult whicwas more resourcefor the imf. is summit isargely pointless. it would be good if they were pushing forfinancial relation, now would be the right time becausehe economy is starting turn around. the financial seor is stabilizing. now uld be the timeo lay out aggressive and ambitiousgenda for really tighteni the regulation around derivatives, for example. and around theinancial sector much mo broadly. but ere is no taste for that in e united states and the ropeans havelso i ink got distracted by the issues of execuve compsation and some other things. and the result no progress. >> l me ask you about executive -- you say the euroans are stracted. sounds like a important topic. it sounds ke something the g-20 should address why is it a distraction. >> i think it is a sympt ratherhan the unrlying cae. the undlying cause is the structure of the fancial system and its incenve. thfact you can operate with little capital. they don't cry big equity cushons against loes and as a result, when they take big risks, for example i

. >>> and coming up, the eu and imf are promising more stimulus, but when will it end? we'll hear from the imf and discuss whether we're headed for trouble. >> and the dollar got a bit of rhett respite today. more on the currency markets after this. sgha on the currency markets, today the dollar has gotten a bit of a respite. it was edging down towards the 90 level yesterday. euro/dollar is now back below .47. sterling/dollar, 1.6344. a short while ago, two bits of uk data, we saw the money supply and bank lending rising for august. then we also saw public sector net hitting 60.1 billion pounds, as well. that's the biggest august on record. so basically, we've got uk public surging and bank lending stalling. and it makes me wonder, sam stanley, of halo financial is with us, whether this actually -- when you look at the pressures in the uk, whether that makes sterling trade more with the dollar than anything else. >> well, quite possible. this week, we've seen the dollar weak against everything except the pound. the pound and the dollar are seeming to fall against the do

the imf will be critical to attending the macro-economic policy going forward. >> thank you. daniel organized the first g-20, there is a lot for them to talk about here in pittsburgh for the next 24 hours. wider structural reform, free trade, protectionism, balancing global growth and a lot more. >> thank you to you both. four other international business stories, it demonstrates how much they have on their plates that the g 20 -- g-20. the biggest car maker in russia is going to cut 30,000 jobs. layoffs amount to more than one- quarter of their work force? -- work force. japanese airlines is asking for a government bailout to stay in business. it lost $1 billion between april and june. diplomats are working overtime to restore manuel zalia to seek a resolution to the crisis of the military coup. we have this update. >> there is something of a sense of normalcy returning to the streets. but curfew has now been lifted, the international airport has been opened. the government is telling people to get back to work. there can be guaranteed by the police and the army, still felt

. >> imf announced $13 billion of gold sales. >> $13 billion of gold sales. >> in an orderly manner withouting the market. >> check's in the mail. no more gold. let's move on. >> how about the miners? how about the miners? are they overpriced? >> yes. >> gold miners, absolutely. >> 30 times earnings for guys that traded 20 times and a lot of places where you have people like barrick buying back their hedges, i don't think that's a great move, by the way, and i don't think other guys are going to rush in there. the miners scare me here. >> face it, when it's a chase you're going at someone else's speed, not your own, and when that happens, that is a great tell that you're going to be wrong. >> so many pockets in these markets these days are a chase. next trade, industrials closing out the week on a high note. ge, caterpillar leading the pack. ge ending higher by 13% for the week. caterpillar ending up more than 10% for the week. these are huge moves. where are we positioned in terms of going into next week? can we continue to hold on to 16? >> let me put an explanation point. i felt it could

there is talk that the imf would play a greater role. can you share your thoughts on how this would actually work and how we could make it enforceable on an international basis? >> it is hard to make it enforceable and it is probably not achievable. as we save more as a country, which we are already doing but we will have to do more going forward, they will have to find future growth more from domestic consumption in those countries. if they learn anything from this crisis, it is that basic imperative. the strategy we suggest is that we try to get countries to commit to reforms and the imf plays its natural role as an independent assessor of whether countries are doing things that will contribute to more balanced growth globally. you cannot expect sovereign states have basic responsibility over a committee of other nations. >> the german from georgia. >> thank you. -- the gentleman from georgia. >> thank you. if you do not make the right diagnosis, you cannot treat the patient correctly. to a point of diagnosis, there are some individual

the imf is being anointed as a global central bank.hey've issued debt for the first time in history. they're issuing sdrs. the last sdrs came out around 1980. when i say issuing, it's printing money. so i mean, this has to do with something that came out in 1960. they say they said in order to stimulate trade in the world economy, some has to run persistent large deficits. but if you run persistent large deficits, eventually you go broke. so he pointed out the dem ma in 1960, but didn't have an answer. 50 years later, the u.s. is getting closer to going broke. how do you get out of that? well, the u.s. can get its own house in order, but that would cause world trade to contract. what you need is to kick the problem upstairs. that way we can take the dorlt off in a corner and appreciate the dollar to sell our own debt problem. that's the unannounced play. >> does that mean that we're no longer the country that's fueling -- >> exactly. and that's the new dilemma. we have a solution for triffin slem ma which is sd rsc. we don't have a sol

at the same time, we understand that the imf will bank organizations which will be shifted to another system. these institutions would ask if we have precise plans. we have our proposals and discuss these. when the leaders met in london,, it is connected. countries are split. the communicated that. it is not the frustrating anymore. we need the dollar. but we cannot depend completely. before we create this, we need to understand that the country that provides these currencies behaves more accurately we had huge reserves. and we talk about the appreciation of the dollar, it could be we think that there is no absolute rule. we could try to find rules. for the moment, we do not observe this. the major economy is suffering. we need to complement each other. >> we thank you very much. [applause] once again, we think the ambassador for hosting us in this elegant facility. our colleagues as well. we think you for coming. this is a very important session we wish you success in your meetings in washington today. thank you very much. >> thank you and thank you for the book. >> we're going to ex

the imf still reports that it's set to rise. last year, the walmart program offered ten different toys for $10 for holiday shoppers. the world's largest retailer is expanding the $10 program to over 100 toys. walmart's move comes as the chairman warnsative lethargic global economic recovery. this will be the case even though he still sees significant growth potential in china and india. his remarks echo those of ceo, who said it's likely to be the largest in decades. >>> working to try to find a solution for the nation's mounting deficit, john podesta, president and krechlt o, former white house chief of staff under president clinton. great to see you. thank you for joining us. >> good morning, becky. >> your message today is one of tough love. it's a little bit of a difficult message to dole out, but one that might be required right now. why don't you lay out what you're talking about, looking at higher taxes being necessary, but also some cut to costs, cost cutting on the other side as well. >> right. with the center of budget

we have the movement in china with renminbis and special rights in the imf. so there are a few factors that are just sort of waiting there to take the forerunner and the growth differential story has been there for quite a while. is that going to be the front-runner? i think it's too early to tell right now. >> hey, peter, this is christine. i'm going to ask you about a currency you don't normally look at. the kiwi dollar kept interest rates at a record low. should we be buying the kiwi at these levels? >> well, you know, i think a lot commodity currencies are relatively robust. i think the risk appetite story, the commodities story is one that's going to allow continued appreciation. the kiwi is, you know, up in the air in terms of whether the central bank is really concerned about the recent strength in the kiwi. they claim that it's going to undermine their growth story. they continue to put out hawkish rhetoric that has been keeping currency traders sidelined. overall, we don't think they're going to move into that type of quantitative easing. more for th

place here and also look at what happened last week with the chinese buying these sdr bonds from the imf, the first concrete sign people are diversifying away from the dollar. that helps gold. >> that is true. tim, as far as investing portfolio and a strategy, do i want to buy gold the raw commodity or through raw producers, the equities? >> i think you have two things playing here. first of all, underlying buying gold for the reasons we are talking about is a safe thing to do. i think it is a volatile asset but your long-term trade here is very much intact and part of an asset allocation and it is a very goody verse fication. the miners have had a better run than the underlying metal. that is a function of people grabbing the risk and grabbing higher returns. the gold miners are arguably in the best position they have been in in a long time because of the fact that a lot of their sales are at spot prices, not long-term contracts. that historically is not the case. when you layer in countries like south africa where a lot of the world's gold comes from, it is a currency where their cost

i was at the imf in the fall, and sunday night i received a call from secretary paulson asking, can you our -- a meeting tomorrow at 3:00 or 3:30 at the treasury. the answer to that is yes. so we go there.e. and he lays out a plan that he wanted, i think there were nine of us there, a plan that the federal government was going to put money into the system. he would like all of us to take that money, because he wants to have a very strong financial system, and he believed even though some of us said, you know, we really don't need it, he thought everyone should take it. and as we talked about it, it was clear it was the right thing to do. there was a little pushback from one of the banks on the west coast. but by and large, we all said, look, if this is what you want us to do, you see things we don't see, and they did, it was the right thing to do. and i think it did help the stability. >> do you think we'll see more consolidation in your industry? >> we've seen a lot of it already.y. i'm not sure where else we can consolidate. if you go aefr the last -- you pick the time, 40 years, 20 y

you remembethe asian crisis ich was the biggest crisis t imf ever had to dealith in the past. >> reporterthis is theate 90s, and sudnly all these cotries in asia - crashing. >> absolutely. korea, tiland, indonesia; and the was a lot of consequences. we are now lendg twice as much the i.m.f. did lend at thi time. o it shows the depth of the crisis. >> reporter: are you ill imposing those conoversial conditions that yoused to impose the past? i'm reading out iceland here and they're complaining y're driving up health-carcosts, you're dving up their interest rates, this is an atta on their sovergnty. >> you know, why do yobelieve that a country mes in and knocks on my door and ss, we need your lp? cause they are in trouble. if they are not in ouble, they are not coming; they don't ed us. nd if they are in trouble, may come partly fromhe global economynd environment and it comes very often, almostlways, because they he their own domestic problem, because th didn't run the rht policy. so, ofourse, when we are coming, we tell them, we are going to help yo but the iso use to help you , at the sa

across the wires about the imf john lipske, interviewed just a few minutes ago here on "street signs.s advanced economies are recovering but the growth is going to be below trend next year. now, what's interesting about that is it sort of speaks to more of an l-shaped recovery, not that v, which would give you maybe above trend, at least for a little while. let's get the market view, the trader's view of that statement. managing director at wells fargo and warren meyers is here on the trading floor. warren, is the market pricing in a v or is the market pricing in more of what john lipske told us, which would be things are getting better, but slowly? >> i'll tell you, the way you look at the market, the way it's bounced off the lows in march, it's certainly looking an awful lot like a v shape to me. i think the markets have gotten a little bit ahead of the overall economic numbers and results that we've seen. and it's been in a v shape, where maybe the economy should be dictating a little bit more of an l shape. i think the movements in the market thus far has been v. it wouldn't surpr

of what it would like at the end rather than leaving it as we go into the agm of the world back and imf this weekend, in other people's court to play with? >> yes. certainly i think the u.s. has to promote more globalization and free trade, this issue with chinese tires is a concern. we are concerned that breaks out into perhaps a more full-fledged type of trade war. but the u.s. dollar we think is likely to continue sliding regardless of u.s. action, until the fed hikes interest rate, or gives an imminent signal of that. we think the euro dollar could end at 155 and turn around next year at 135. >> good conversation. we so appreciate it. thanks very much. >> thank you. >> we'll see you soon. 35 minutes before the closing bell sounds for the day. the dow jones industrial average up better than 130 points. nasdaq also positive. >> with the holiday season, the shopping season still a couple of months away, already we're getting some positive predictions about this year's retail outlook. the story next on "closing bell" from new york. [ telephone rings ] [ ring ] [ "catch the wind" plays ]

the asian financial crisis began, the clinton administration was slow to summoned we don't need the imf we're going to create our own asian fund. he's a product of the major ideological collisions between the u.s. and japan from the lat '80s and early '90s when we thought we had totally different models and we were adversaries. another prominent advisor who was at the brookings institution for a long time. again fluent in english, lots of american friends. i would not callim anti-american at all. he advis in the early '90s -- and i think it was based in part upon the time spent here that pan needed to continue its coverage vis-a-vis the u.s. at the time when the administration was 10 feet tall. in that context he started arguing that japan ned to align more closely with china to balance more influence. and for a while when he was prominent as the leader of the dpj ten years ago he sort of liked this idea, this triangular relationship. and you can see, i think, quite clearly in this new york sometimes "new york times," you can see especially those o you who lived throw it, you can see a

we have to change the role of the imf. we have to change the role of the world bank. and we have to control the international financial system. control it in the sense that we should not allow that they leverage many times more than their net worth. which is -- gives -- serves as a collateral for a bank to be sound and solid. i'm always very optimistic. it's always difficult. because each one has their own domestic public. there's elections in one country, so people are always a little bit afraid to cause damage to their domestic public. but as a leader, you cannot just think of domestic, if you're a leader, you have to think what will help to solve a problem of a world that is weakped in the financial sector. >> i understand what you're saying about leverage. obviously the entire system and particularly in the united states got out of of control. but at this moment in time, do you worry that we could have too much regulation and too much government ownership of business given the fact that the pendulum will swing too far, because of what has just gone on? >> translat

is the united states giving up its authority to this peer review board which might be the imf in drag? how do you read that? >> that is certainly something to worry about. there's been a lot of talk in recent -- as you've noted, in recent months about the need for a new global currency that somehow is going to magically cure what ails the world economy and reduce these mass imbalances. the problem with all of this thinking, and the reason i use that word magical is that that only work it is there is global economic consensus on issues like monetary policy and trade policy and exchange rate policy. >> are we getting there? are we making the headway we need to make? >> i see almost no signs of that and i look especially toward china. china needs, as everybody seems to agree, to rebalance its own economy more toward consumption, less toward exporting, but the problem is the chinese leaders politically can't do it, because if they reduce their exportive soci session, they will increase unemployment dramatically that terrifies them, that could throw them out of power. >> bill isaac, china

ranging from the news from barrick gold to the imf selling gold to the federal reserve itself and getting a little bit of a bid in the u.s. dollar. gold just has not gone down. and gold should go down. and when gold goes down, it goes down violently. and it has not done so. that is why i believe the trade here to the up side. >> listen, and you can make the same argument that it had every opportunity to go up and it didn't. it's definitely a tug of war right now on the gold market. it had a nice reversal today. it should break out from where we are right now. it has no reason to stop going higher. it does scare me, though. >> it's about inflation fears, right? >> i'm going to take a pause because we do have some breaking news here. we have been speculating in the past will ken lewis make it through the year? no better guy to talk about this than charlie gasparino. charlie, what is the latest? >> our long national nightmare is coming to an end. not really. he has notified the board of directors of bank of america that he will step down by the end of the year. sources tell cnbc this was his

. >> imf announced $13 billion of gold sales. >> $13 billion of gold sales. >> in an orderly manner without disrupting the market. >> check's in the mail. no more gold. let's move on. >> how about the miners? are they overpriced? >> yes. >> gold miners, absolutely. >> 30 times earnings for guys that traded 20 times and a lot of places where you have people like barrick buying back their hedges, i don't think that's a great move, by the way, and i don't think other guys are going to rush in there. the miners scare me here. >> face it, when it's a chase you're going at someone else's speed, not your own, and when that happens, that is a great tell that you're going to be wrong. >> so many pockets in these markets these days are a chase. next trade, industrials closing out the week on a high note. ge, caterpillar leading the pack, ge ending higher by 13% for the week, caterpillar ending up more than 10% for the week. these are huge moves. where are we positioned in terms of going into next week? can we continue to hold on to 16? >> let me put an explanation point. i felt it could get through 1

trace: imf california boy, and good luck running the state, but governor schwarzenegger ran on the samebeaten down, because it is a democratic-controlled legislature, public unions are crippling the system. how do you hope to change something that he failed at? >> past governors have done a better job. the state was in pretty good shape when pete left. this is all about leadership and focus. i want to focus on three things doing extraordinarily well. fixing the business climate, creating jobs. the way to do that is focused. work with the legislator, take accountability for what we are going to fund and what we are going to cut. if you have a huge need to be liked by everyone, this might be a bad fit. martha: what are you going to do about the fact that a lot of people out of the business world did not know you and say, she has never held public office before. why should i vote for her? >> i think it is an advantage right now. i have traveled up and down the state of california and they are really angry at sacramento. they are tired of the politics. they want someone with a fresh set of

now, according to the imf, if the whole of the banking system u.s. and europe were to get back to capital ratios seen in the mid-90s, that would be something like $1.7 trillion u.s. in fresh capital versus the, the point is they're not being cleared up and that has negative implications for the real economy. >> if julian's right, still huge amount to do on banks. >> well, i think julian is right. and i read and all of your viewers follow markets much more closely than i do, but i read that the indices that measure subprime securities are at very, very low levels even for aaa rated packages down at 38 cents on the dollar and for aa it's something like 4 cents on the dollar. if these figures are remotely right, that means these amounts have to be written off. and i think julian is right, the balance sheets of banks from what i read are not being cleaned up quickly enough. this means that obviously balance sheets are not strong enough, meaning lending will be restrained. it means we will have for some years to come a very slow very gradual recovery. >>

once they use the more current imf/gdp data which is expected to see a nearly 3% increase. we may see it raise higher. the inventory report comes out at 11:00 a.m. change in the time due to the labor day holiday. rick santelli, over to you in chicago. >> thank you, sharon. we can hit all the same dynamics that we continue to monitor. of course, the cap off the week, which is going to hit 70 billion outside of all the t-bills. if you look the interest rates, down several basis points. they're down maybe 1, 1 1/2 basis points since the 8:30 release of the lower initial and continuing claims. tissue answer is, of course, 0 what is driving that. part of benefits is running out. as mr. liesman pointed out, we need a bigger drop to get to the point where the job losses start to mitigate out of the system on our first friday of every month. the dollar, key level, again, second day in a row. key level was 77 in the dollar index. one-year, mark, since we last spent time at these levels. mark haines, back to you. >> thank you, rick santelli. >>> most asian markets rising. japan's nik

caller: imf first-time caller. -- i am a first-time caller. policy these days is all about parties, republicans and democrats, not about america, as a whole. what i mean by that is in the past couple of weeks, months, there have been so many problems happening in the country because no government involvement and the running of the economy, like the issue we are talking about this morning, the financial markets. they have gotten us into this mess we are in. and yes, this new administration is trying -- seven months -- to correct this long problem, whether it is health care or the financial institution. host: thank you. chuck hawkins, do you want to respond? guest: in terms of financial regulation, that is certainly a good point. the obama administration has put forward a fairly aggressive reregulation for financial overhaul plan, and so far not much has happened in congress. i know they are back now and barney frank says that they will be moving forward, but some of the most important parts of the plan that the administration is pushing the har

. >> more of like imf and world bank, trying to figure out -- >> not in that context. >> will the president missile the fence shield and either the general assembly session or the security council session on thursday? why does it appear the president did not really reach out and talk to either the czech republic of polish leaders to about until the night before announced it here? >> we have been in regular consultations with our allies in the czech republic and poland going back many months. this is a dialogue that the not begin this week. i think there are misperceptions about the extent of the engagement and interaction on this subject. i used with the president wanted to reach out in advance of any announcement and do so at his level and did so i think, quite appropriately. what did this comes up in the course of next week, i think probably not likely to be a major theme. i cannot exclude that it will come up, but not directly germane to the main things. >> giving the evil eye, so i will call on her. [laughter] >> and her beautiful smile. >> thank you. that is what i'm talking about. amb

significant pledges as to the imf. and the dpj in their manifesto one of the ldp and what they have pledged to date. they will find it very hard but they're definitely setting their step far forward on climate change. on nuclear power, it will be interesting. the dpj has a bit of a mixed set of views on nuclear power in japan. but japan will generally keep moving in the direction of more nuclear power. they have pointed out a lot as signals that they wanted to more on reducing weapons on article 6 of the treaty. not a lot of specifics yet come but a lot of potential there for u.s. and other countries to work to see what japan can do in terms of realistic policies to reduce nuclear weapons and to deal with proliferation. i agree with what they have put out, but the mainstream in japan is still very concerned about the credibility of an extended nuclear deterrent. we should not be confused by this. there is an idealistic overlay and the environmentalists, [unintelligible] this is a really ripe area for us to not only rea

>> guest: well, we started first looking several years ago when we were at the imf, at debt crisis. and crisis or not your everyday occurrence tochlt get a real flavor of of what a crisis looks like you have to have enough of them and live through enough of them. since we don't live through enough of them, you have to look further back into is the past. that is useful for looking at the current crisis. this is the first global crisis that we have had since world war ii. >> host: how often on average do economic, major economic crisis occur? >> guest: major as in global? since the 1930s in terms of the frequency it depends what countries you are looking at in emerging markets. they turn to me a lot more frequent. some countries have had crisis every 10 years, but as a general rule, they're quite rare events. >> host: are the roots similar? >> guest: the roots are similar. >> host: what are they? >> guest: the roots are generally to be found in great availability of credit so that baroing, household consist borrow a lot, business consist borrow a lot. when there is a lot of of credit

the three largest banks in that country, put them into receivership and requested assistance from the imf and from other nordic governments. this was authorities announced a rescue package for ubs that consisted of a capital injection and a person of assets. the growing pressure was not limited to banks with significant exposure to u.s. or u.k. real estate or to securitized assets. unsubstantiated rumors circulated in late september that some large swedish banks were having trouble rolling over wholesale deposits, and on october 13 the swedish government announced measures to guarantee bank debt and to inject capital into banks. the rapidly worsening crisis soon spread beyond financial institutions into the money and capital markets more generally. as a result losses on lehman's's commercial paper, a prominent money market mutual fund announced on september 16 that had broken the buck, that is, its net asset value had fallen before -- below $1 a share. conditions in short-term funding markets including the interbank market and the commercial paper market deteriorated sharply. equity price

rescue the three largest banks in that country, put into receivership and requested assistance from the imfand other nordic governments. in mid october, the swiss authorities announced a rescue package for ubs, one of the world's largest banks, that consisted of a capital injection and purchase of assets. the growing pressures were not limited to banks with significant exposure to the u.s. or u.k. real estate or to securitized assets. for example, unsubstantiated rumors circulated in late september that large swedish banks were having trouble rolling over wholesale deposits. on october 13, the swedish government announced measures to guarantee bank debt and inject capital into banks. the rapidly worsening crisis soon spread beyond financial students into the money and capital markets more generally. as a result of losses of lehman brothers' commercial paper, a prominent money-market mutual fund announced on september 16 that it had "broken -" -- its net asset value fell below $1 per share. conditions in short-term funding markets included the interbank market and commercial paper market, de

the west ba economy, according to the imf, is growing at 7%. if we meet and talk, we can make it grow double digits, and that is good for peace. it's not a substitute. >> but your critics say you say that you're willing to talk to the palestinians without preconditions, but by refusing to freeze settlements on the west bank, they say that that's a hollow promise, that you know you have basically stopped peace talks before they can begin. how do you respond to that? >> this is an amazing claim. we've been talking to the palestinians from 1993, which is, what, 16 years. successive israeli governments to successive palestinian administrations. there's never been this precondition of freezing settlements. it's just been put up now artificially. look, i'm willing to make gestures to make this possible -- >> how big a gesture? have wel >> well, we'll get there very soon, i suppose. but i can't freeze life. there are 250,000 people there in these communities, called settlements. they're really bedroom suburbs of tel aviv and jerusalem. they need schoo

guest: we started first looking several years ago at the imf that debt crises. crises are not your everyday occurrence, so to get a real flavor of what a crises hot -- what a crisis looks like, you have to have enough of them and live through enough of them. since we do not live through enough of them, we have to look further back into the past? i that has been particularly useful for looking at current crisis because this is the first global crisis that we have had since world war ii. host: how often on average two major economic crises occur? guest: major as in global? well, it has been since the 1930's. some countries have had crises every 10 years. but as a general rule they are quite rare events. host: are the roots similar? guest: the rates are generally to be found in great availability of credit, so that borrowing, households can borrow a lot, business can borrow a lot. when there is a lot of credit to be had, you typically have bubbles, be it in the stock market, the real-estate market, or both. but ample credit bubbles are usually side-by-side very goo

the role of the imf or the world bank can be to alerts and to warn. in this case, i do not think it depended so much on the u.s. congress. it depended on some of the other u.s. institutions. so part of what i'm trying to say is that you can create things that can help you manage risk. they can help create institutional alerts and warnings. you clerked on the supreme court. the constitution is a framework for governing policy. one is talking about in the larger in varmint, one thing one can know for sure is one can be more alert to the interconnected these about some of the things i talked about in trade and finance. your second part, i think, is a critically important issue. i do believe that everything does not move to another country. it should be a win-win discipline. there is a tremendous amount of manufacturing capabilities. the united states has some advantages. you see an awful lot of people with potential employment. it is not all going to move to india. you have to help people adjust to change. i have been a long believer in the fact that thi

still the second or if you like the third largest economy, second largest contributor to the world bank imf all the major institutions that uphold the new liberal system. the basis for american presence and engagement in asia and quietly one of the closest partners the united states has been the key 20 process and the g-7 process. and in the security counci when japan is on the security council. wh i want to try to answer today are four questions which are onveryone's mind i think, first how did this happen? how did the ldp go from 300 seats and theowerouse, the 480 seat which is the more powerful house, the part of the diet that besides the prime minister, how did it go from 300 to 119? and how did the opposition demoatic party go from 112 seats to 308 basically switching positions? secondly, what does this mean for the future of japanese politics we at the beginningf the end, the end of the beginning, this revolution, where does this put us in terms of the next epoch in japanese politics? third, what does this mean for japan's foreign policy relationship with the united states with asia a

still the second or if you like the third largest economy, second largest contrir to the world bank imf all the major institutions that uphold e new liberal system. the basis for american presence and engagement in asia and quietly one of the closest partners the united states has been the key 20 process and the g-7 process. and in the security council when pan is on the security council. at i wt tory to answer today are four questions which are on everyone's mind i think, rst how did this happen? how did the ldp go from 300 seats and the lower housethe 480 seat which is the more powerful house, the part of the diet that besides the prime minister, how did it go from 300 to 119? and how did the opposition democratic party go om 112 seats to 308 basically switchg positions? condly, what does this mean for the future of japanese politics? at the beginning of the end, the end of the beginning, this revolution, where does this put us in terms of the next epoch in japanese politics? third, wt doeshis mean for japan's foreign policy relationship with the united states with asiand the japanese