Thursday, May 19, 2011

DSK daily recap

Wow, so today was a full one on the DSK-related news front.
1) He resigned as the “head” of the IMF
2) He was granted bail
3) A grand jury voted to proceed with the indictment against him
Representing the defendant, William Taylor argued to the court that Strauss-Kahn was an "honourable man" who had only one desire at this time, "to clear his name". He presented the judge with the details of a New York security company, Stroz Friedberg, that would be responsible for ensuring that the former IMF chief would not flee the country.
Stringent conditions would include an electronic bracelet that would send a signal to the company and a police station the moment Strauss-Kahn left the property, video cameras to monitor him inside the property, and a 24-hour rotation of armed guards who would be physically present at the apartment.
Taylor said that Strauss-Kahn's wife, Anne Sinclair, had bought a property in Manhattan under her name, and that it had been scoped out and approved by the security company as a suitable location for him to remain under house arrest.
-The Guardian

Representing common sense, New York state Supreme Court Justice Michael Obus noted that, “If the defendant were to be able to leave the country it might very well be impossible to bring him back.”

Must be nice to:
1) Regularly stay in $3,000 a night luxury hotel suites
2) Be able to ride first class anytime without having to make reservations
3) Have the wherewithal to purchase any property in Manhattan, let alone on a few days notice
I can’t think of a worse candidate to grant bail to.
Actually, I can’t think of a better candidate to have his mugshot, or better yet a pic of him doing the perp walk, floating around on the internet.

As for his resignation, the posturing to name his successor started quickly.
European officials, who have picked IMF heads for 65 years under a deal that also gives the U.S. the lock on the top World Bank post, moved to retain the privilege, with Sweden backing French Finance Minister Christine Lagarde. Russia and South Africa have called for an emerging-market candidate, while some Asian policy makers suggested someone from their region.

At the risk of understating the obvious, this is very interesting.
Lagarde is the favorite for the job, according to odds at London-based bookmaker William Hill Plc. It is offering six pounds ($9.71) for every four pounds bet that Lagarde will be the next IMF head, down from odds of 20-1 previously.
Nout Wellink, a European Central Bank Governing Council member, told the Dutch talk show Knevel & Van den Brink late last night: “I know a fantastic candidate, that’s Jean-Claude Trichet,” whose term as ECB president ends in October.
Japan, which has the second-biggest share of voting power at the IMF with 6.25 percent, has yet to decide on its stance, Tetsuro Fukuyama, the government’s deputy chief cabinet secretary, told reporters in Tokyo today.
The U.S., which has the largest share of votes, at 16.8 percent, has also given no indication of a preference.
South African and Russian officials said yesterday the next head should come from an emerging economy. Trevor Manuel, head of South Africa’s National Planning Commission, is “highly respected in the world,” Finance Minister Pravin Gordhan said of his predecessor in an interview in Pretoria.
Russian central bank Deputy Chairman Sergei Shvetsov said a developing country should be given the chance to run the IMF to better reflect the role of those economies in global trade. South Korea’s central bank governor made similar remarks before the announcement late yesterday that Strauss-Kahn would resign.

Russia wants someone from the under-developed world eh?
What say you China?
BEIJING (MNI) - The new IMF leadership needs to reflect changes in the world economic order and be more representative of emerging market economies, Chinese central bank governor Zhou Xiaochuan said Thursday in his first public comments since the arrest of Dominique Strauss-Kahn.
"The senior management team of the IMF should better reflect changes in world economic patterns and should be more representative of emerging market economies," he said.
-iMarket News

Oh. Et tu China?
For some perspective on the enormity of what is at stake here, we turn to the ever-reliable Tyler Durden:
It is also safe to say that with China now unofficially Europe's backstopper (and there were those wondering why China is buying all those Spanish and Portuguese bonds), what China wants, China gets.
-Zero Hedge