Woke up this morning with the sound of the birds twittering by the window as the sun shone through the dappled dawn, softly lighting the bedroom.
As I rubbed the sand from my eyes, my beautiful wife gave me breakfast in bed.
The dog walked himself and the children packed themselves off to school without a sound.
I dressed and turned on the news.
“Today, Barack Obama becomes President of the United States of America”
I smiled and grabbed the paper.
“Bank stocks rally as new President walks on water”
“US economy set for major growth thanks to Obamanomics”
“Obamania takes over world and everyone is happy”
If only it were true.
Instead, my wife tells me to get out of bed and get the kids off to school, the dog chewed up the morning papers and peed on our new shagpile carpet, and the kids were fighting each other, breaking the new 60-inch TV we just installed that cost more than Gordon Brown’s latest bank bailout package.
I grimace and grab the bits of the papers that are left:
I undress and go back to bed.
Woke up this morning with the sound of lickle twitty birds singing by the window as the sun shines through our lovely lace curtains.
Our faithful dog brings us breakfast in bed and then packs the kids off to school.
I dress and turn on the news.
“Today, Barack Obama begins his second term as President of the United States of America”
I smile and read the papers on my Kindle:
“Obama’s second term challenge: growth”
“How Team Obama made America good again”
“UK finally sees growth on back of America’s rally”
I read the editorial in the K-Times:
Barack Obama begins his second term in office
After four years in office, President Barack Obama begins his second term today.
Looking back over the past four years, there have been several milestone achievements that made this second term a certainty. In particular, we could cite the declaration of peace and withdrawal of American troops in Iraq; the brokering of the New Deal between Israel, Palestine and Iran, an agreement believed to have been impossible only four years earlier; and the US mission to Africa which managed to bring about the new African Union.
These are all unbelievable developments in an administration that changed the face of the American and world economy, but it is this last piece – the economy – that stuns us all today, as we look back over the last four years.
When President Obama took office, the world was in crisis economically and politically.
America's banks were on the brink of collapse, and only the day before the UK Government nationalised one of the biggest banks in the world: the Royal Bank of Scotland.
Everyone believed the world was doomed.
What did Obama’s administration do to save the economy and what will he do next?
The first thing he did was focus upon fixing domestic issues of employment, health and business and, within six months of taking office, the Democrats economic stimulus plan started to reap results.
More important however, was the recognition of the weakness in the banking system and Barack Obama's leadership, along with his delegation of Treasury Secretary Tim Geithner and Federal Reserve Board Chairman Ben Bernanke, at the G20 Summit in April 2009.
The clear line in the sand that President Obama brokered with European and Asian leaders to allow all banks to move bad debts into a Global run-off fund was critical.
It was only when President Obama made clear why the fund was needed and would work, and gained the G20 agreement to create it, that the world could gain clarity of the exact enormity of the debt all nations were burdened with.
This debt was made clear just the day before President Obama took office, in an article that appeared in the Financial Times:
“The scale of that threat is indicated by a chilling little exercise from Merrill’s bank analysts. This involved measuring European bank assets as a proportion of Europe’s gross domestic product over the years. The analysts then made the arbitrary but not unreasonable assumption that the ratio should revert to the pre-credit bubble levels of 2002-03. That would apparently mean European banks shrinking their assets – in effect, their loans – by €5,500bn. The reduction so far has been €800bn, leaving €4,700bn to go.”
During the G20 meeting, President Obama made it clear that the estimate for debts was likely to be more than $10 trillion of bank assets that needed to be taken out of the system, before things could return to stability.
He had the documentation, analysis and support to be able to demonstrate that this $10 trillion bill was not America's or Europe's or Asia's, but that of all nations.
The fact that President Obama’s administration recognised the seriousness of the size of this debt burden, and found a solution, proved to be his masterstroke.
The solution was an unusual one, but it made sense in retrospect.
As mentioned, key banks in EU and US markets were folding daily by the time of the G20 Summit, and governments worldwide had already pumped $5 trillion into the global bank system. Another $5 trillion was needed, possibly even more, and the agreement to create a globally recognised run-off fund for debt easing, supported and managed by the United Natio
ns, was that masterstroke.
The run-off fund allowed banks worldwide to wipe-out their concerns over counterparty risks and exposures overnight, whilst the UN Financial Council effectively became the peace-keeping economic force for those funds. Although nations were still accountable for their debt, the fact that they could move it out of national bank balance sheets and into the run-off fund allowed everyone to breathe and move on.
That was Obama’s masterstroke, and set the tenure for his administration for the last four years. The agreement to partner with the UN to solve the economic war, allowed President Obama to create the agreements with Iraq, Iran, Israel, Africa and more.
Now we’re not saying that President Obama has created World Peace, but he certainly has made a difference.
The next four years will now prove how much of a difference as the economy moves back into a growth cycle.
We just trust in our leadership to get that part right too.
Even though the dog has been out for his walk, I feel so good now that I decide to go out for a stroll and take him with me.
The dog and I both have a spring in our step and are feeling goooooooooooooood.
That's why, as I pass a lonely tramp with a rusty tin, I throw a five euro coin into the tin (yes, the UK converted to euro in 2010 as the economy stank worse than this tramp).
Then I notice the sign the tramp is holding:
“Former Bank CEO, homeless and hungry”
I take the five euro back and feel even better.