Wednesday, 17 September 2008

Newspapers : 17th September (en)

French commandos rescue tourists from pirates. Henry Samuel, The Telegraph (en)
Georgia recordings renew dispute. Stefan Wagstyl and Catherine Belton, The FT (en)

ECB reaffirms inflation stance . Ralph Atkins, The FT (en)
" The fight against inflation has become even more important as a result of the financial market ­crisis, a senior European Central Bank policymaker said on Tuesday as eurozone price data strengthened the case for holding interest rates.
Mario Draghi, Italy’s central bank governor, argued in Berlin that some of the worst periods of financial distress in history – for instance Japan in the 1990s – “have been associated with – and sometimes aggravated by – the inability to control the inflation process”..."

" ... “Obviously, discussions with banks are now much more difficult. Banks are much more selective in the way they consider extending credit,” said Ernest-Antoine Seillière, president of BusinessEurope ..."

Russian bourses halt trading for second day. Catherine Belton, Charles Clover and Rachel Morarjee, The FT (en)
" ... Andrei Sharonov, managing director of Troika Dialog, a Moscow investment bank, and a former deputy economic minister, said: “This is a vicious circle,” said , .
“It is a situation of total mistrust. The liquidity crisis is being caused by a crisis of confidence in which people are frightened to borrow and frightened to lend.”..."

" ... Our own contribution to the international "meltdown", and the suffering our people will endure as a consequence, has been larger than it should have been thanks to Mr Brown's socialist economic policy as chancellor. He allowed the money supply to grow at an excessive rate that, at between 12 and 14 per cent over several years, far exceeded the combined rates of inflation and growth. This excess of liquidity was lent on relatively cheaply, and at unsustainable multiples of the recipients' asset values or income, by banks who thought they saw an opportunity to do what their shareholders expect: to make money ...
... liquidity should be reduced. The Fed has resisted cutting its interest rates to help America's tottering banks keep off the casualty list. We should go further. Inflation is roaring ahead, as yesterday's figure of 4.7 per cent ... It would seem blindingly obvious, given the weakness of both sterling and the savings ratio and the rate at which borrowing is soaring, that rates should go up. But we lack a leader who will confront that reality ... "

" ... After spending last week in Russia ... I have to conclude that, despite its technical victory, Russia has been left more damaged in almost every respect than its adversary ...
... If Russia was trounced in the PR war, the real war exposed more tangible Russian weakness. Its generals insist that their troops accomplished a textbook operation, and could – if that had been their objective – have taken the Georgian capital, Tbilisi, in four hours.
... As the deputy chief of general staff, Anatoly Nogovitsyn, admitted, Georgian troops were able to reach the centre of the South Ossetian capital, Tskhinvali, before Russia mounted its response. Russia then lost 64 troops and four planes in less than 48 hours. With superior – Nato-standard – equipment, including night-sight, the Georgians initially had the upper hand ... Russian intelligence was also defective. Georgia's offensive took the Russians by surprise ... "

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