Group items tagged

U.S. Treasury Secretary Timothy F. Geithner dined on Wednesday night with European Central Bank President Jean-Claude Trichet, a closed-door, no-public-comment session that placed the American official in the middle of an ongoing European debate: Which Trichet would show up?

US Treasury Secretary Timothy Geithner said he is not sure whether the bitterly fought debt agreement to be considered by the US Senate will avoid a downgrade of the U.S. top-tier credit rating.

The debate on "global imbalances" has gone back to the future. The proposal from Tim Geithner, the US Treasury secretary, to target the current account takes us back to the preoccupations of John Maynard Keynes at the Bretton Woods conference of July 1944. Keynes, representing Britain, was obsessed with the dangers of asymmetric adjustment between surplus and deficit countries. The US, then the world's dominant surplus country, rebuffed calls for a mechanism that would impose pressure on both sides. Now the US is in the other camp.

Political leaders and central bankers on both sides of the Atlantic struggled over the weekend to persuade jittery investors that Europe would pull through its sovereign debt crisis, saying that it would be helped by a stronger-than-expected economic recovery in the United States.

On May 20, the Senate passed its bill to reregulate Wall Street by a vote of 59-39, complete with a (watery) version of the Volcker Rule. The story of the legislation's passage can be told in a number of ways: a tale of conflict or compromise, triumph or capitulation. But on any reading, that story is only the climactic chapter in a larger narrative: how the masters of the money game fell out of love with-and into a state of bitter, seething, hysterical fury toward-Obama. The speed and severity of the swing from enchantment to enmity would be difficult to overstate. When Obama was sworn into office, Democrats on Wall Street rejoiced at the ascension of a president in whom they saw many qualities to admire: brains, composure, bi-partisan instincts, an aversion to class-based combat. And many Wall Street Republicans-after witnessing the horror show that constituted John McCain's response to the financial crisis-quietly admitted relief that the other guy had prevailed.

China and the United States opened three days of high-level meetings here on Monday meant to broaden and deepen the ties between the world's largest developed and developing economies.