Foreign ministers, finance ministers, and central bank presidents from Argentina, Chile and Venezuela and others attended the meeting to discuss a crisis which is threatening to severely hurt regional and global economic growth. Foreign Minister Celso Amorim of Brazil said at a press conference that there was a general consensus for the need for reform in "the architecture and the procedures of the international financial system." He did not elaborate on what kind of changes the officials were in favor of or exactly what they had discussed. But he stressed the importance of the region's states pulling together to better weather global financial storms that may lie ahead.
The IMF may soon lack the money to bail out an ever growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money. IMF's work in countries such as Turkey is only just beginning. The Fund is already close to committing a quarter of its $200bn reserve chest, with a loans to Iceland ($2bn), Ukraine ($16.5bn), and talks underway with Pakistan ($14.5bn), Hungary ($10bn), as well as Belarus and Serbia.
Five straight quarters of losses and a 70% slide in its stock this year haven't stopped Merrill Lynch & Co. from allocating about $6.7 billion to pay bonuses. Goldman Sachs and Morgan Stanley, both still on track for profitable years, have set aside about $13 billion for bonuses after three quarters, down only 28% from a year ago. Even some employees at Lehman Brothers, which declared the biggest bankruptcy in US history last month, will get the same bonus they received a year ago. The worst financial crisis since the Great Depression, a $700 billion taxpayer bailout, public outcry over excessive pay and the demise of three of the biggest securities firms won't deter Wall Street from offering year-end rewards. Goldman, the biggest and most profitable Wall Street firm, has set aside about $6.85 billion for bonuses, or an average of $210,000 for each employee, down 32% from $339,000 a year ago. Morgan Stanley, the second-biggest securities firm, has $6.44 billion for bonuses, or $139,000 per person, down 20% from last year. The money Merrill has set aside for bonuses equates to an average $110,000 for each of its 60,900 people, up from $108,000 a year ago because more than 3,000 jobs have been cut.
Iceland's central bank on Tuesday unexpectedly hiked its key lending rate by six percentage points to 18% in a massive reversal of policy. 15%? Down to 12%? Up to 18%? We don't have a freaking clue what we're doing.
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