IMF Head Warned World Teetering on 'Brink of Systemic Meltdown'

Not exactly what one would term a cold case, the October Surprise of 2008, but much has changed as we look back on it. It was that Sunday, October 12, 2008, that we heard this dire warning from Dominique Strauss-Kahn, head of the International Monetary Fund (IMF):

The world financial system is teetering on the "brink of systemic meltdown".

The BBC further reported:
Mr Strauss-Kahn was speaking in Washington after talks with US President George W Bush, G7 finance ministers and the World Bank. Earlier, G7 ministers had released the five-point plan to free up the flow of credit, back efforts by banks to raise money and revive the mortgage market.

"Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," said Mr Strauss-Kahn.

He later told a news conference: "The first co-ordination between advanced countries and the rest of the world is now on track." The IMF chief's strong words reflect a belief that the global financial crisis can be contained, says the BBC's economics correspondent Andrew Walker in Washington.

Mr Strauss-Kahn was joined at the White House by finance ministers from the US, Canada, France, Germany, Britain, Italy and Japan, as well as World Bank President Robert Zoellick. Following talks with the economic leaders, Mr Bush also pledged co-ordinated action, saying it was serious global crisis which demanded a serious global response.

Panic selling
The meeting came a day after Asian, European and US markets continued to panic sell despite rate cuts and cash injections by central banks, amid widespread fears of a global recession.

Late on Friday, US Treasury Secretary Henry Paulson said the US planned to invest directly in banks for the first since the 1930s, following a similar UK programme of partial bank nationalisation.

The G7 had earlier not ruled out adopting another part of the British plan - to guarantee borrowing between banks - as they issued their plan in Washington. The G7 also left the door open to further reductions in interest rates, which six central banks this week jointly cut by half a percentage point. But our correspondent says there is some disappointment that the G7 plan lacks detail. Ahead of the emergency summit of eurozone leaders, UK Prime Minister Gordon Brown will hold talks with Mr Sarkozy. Chancellor Merkel said governments must "redirect the markets so they serve the people, and not ruin them". The heads of the EU's four biggest economies - Britain, France, Germany and Italy - held a first crisis summit last week, but were split over the need for a common plan.

Analysts say another week of plunging stock markets has focused minds and the real test of this weekend's scramble by world leaders to shore up the international financial system will come once markets reopen again on Monday.
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UPDATES

Still warning of war but for other reasons, the Socialist Party IMF's chairman's name appeared in news stories again today:

IMF, warning of war, says ready to help Egypt

Feb. 1, 2011
The International Monetary Fund stands ready to help riot-torn Egypt rebuild its economy, the IMF chief said Tuesday as he warned governments to tackle unemployment and income inequality or risk war.

Dominique Strauss-Kahn also said rising food prices could have "potentially devastating consequences" for poorer nations, and warned that Asia's fast-growing economies faced a risk of a "hard landing".

Overall, according to the IMF managing director, widening imbalances across and within countries were sparking tensions that threaten to derail the fragile global economic recovery -- and could even spark armed conflict.

Xe Services, LLC (Formerly Blackwater) Sold to USTC Holdings, LLC

At least when Blackwater was owned by Erik Prince, there was a face to go with the money. Now there are only unnamed partners in equity firms that are part of a consortium. One article announced: "The company going forward will be managed by a board appointed by the equity owners which will include independent, unaffiliated directors. The New York Times reported Friday the sale came after the State Department threatened to stop awarding contracts to the company as long as it was owned by Prince, a former Navy SEAL." The man who will be managing the company, however, is a long-time friend and business associate of Prince in the former Blackwater.

Companies mentioned in this article: USTC Holdings, LLC

Blackwater (Xe)

Stock of Erik Prince

NEW YORK -- (BUSINESS WIRE) -- USTC Holdings, LLC, an investor consortium led by private equity firms Forté Capital Advisors (“Forté”) and Manhattan Partners (“Manhattan”), announced today that it has acquired Xe Services, LLC (“Xe” or the “Company”) and its core operating subsidiaries. Xe is a leading provider of training and technical services focused on worldwide diplomatic security operations. The terms of the agreement were not disclosed.

What Ever Happened To Peter Videnieks and Joseph Cuellar?

The Octopus: Secret Government and the Death of Danny Casolaro

by Kenn Thomas and Jim Keith                             

Copyright (C) 1996                             

    "In the middle of the journey of life, I found myself in a dark wood, having lost the straight path." 

-- Quote from Dante's Inferno -- written in Danny Casolaro's notebook.

   Rounded edges of the Octopus tentacles arose briefly from under the relatively calm waters of a new administration's first year in office. Danny Casolaro was two years gone and the key players in the investigation he began ostensibly had left power after the 1993 election. Casolaro's work was left unfinished, however, and his metaphorical sea monster still swam in the sea of current events.

     Columnist William Safire reported [column reprinted below] that Bill Clinton and George Bush struck a secret deal after Clinton's election that the former president would withhold criticism of the new administration for one year in exchange for Clinton's soft-pedaling of the Iran-contra investigations. A month before the end of that deal, a month before the former Arkansas governor's first anniversary as president, the Clinton administration re-opened the Inslaw investigation. In December 1993, the FBI began again to interview Casolaro's close associates and friends with an eye toward resolving the question of his death--was it a suicide or murder?

What Ever Happened to BioRad?

This post has been updated here..