Conficker C, the April Fool's Day computer worm, is coming to a laptop near you and may wreak massive cyber-damage globally. Nobody knows how serious the threat will be or how benign.
Coincidentally just as the worm turns, the hapless leaders in the G20 gather to meet. They represent 85% of the world's economies, or what's left of them. And their thankless task will be to try and arrest the destruction caused by the financial "worms" which were created by those financial gunslingers who inhabited London and New York City's financial districts.
It is those "worms" that France's Nicolas Sarkozy wants to outlaw in the future by regulating the unbridled "Anglo Saxon" financial capitalism. He wants leaders this week to create a global financial regulator and is threatening to leave the assemblage if such a reform is not enacted.
Listen to the French guy
Sarko, never one to shrink from a stance, is correct on this one. Britain and the U.S. are not. Both favor regulation "lite" or in other words, business as usual which means, essentially, that the next generation of bandits will still be able to frolic financially in the global space without any curbs or cops in sight. In London and New York City no doubt.
This is pretty shocking given the fact that the Americans are the biggest culprits because they failed to regulate their mortgage or financial sectors.
They prefer publicly to blame human nature and the cyclical nature of capitalism, and refuse global controls on the basis that it represents an erosion of sovereignty. British Prime Minister Gordon Brown is less graceful and simply dismisses Sarkozy's demand as "ridiculous."
A compromise position could be to create an oversight body to insure that there are better domestic controls as well as to garner more cooperation among the world's regulators. Ironically, France has hardly been a shining example. The first dress rehearsal for the current catastrophe was the existence of a rogue trader at Societe Generale who blew billions under the noses of bank and official regulators, nearly busted a German institution then brought about a global stock market meltdown. A weekend rescue had to be cobbled together mounted by a handful of large countries.
Even so, Sarkozy is right to demand international refereeing. The so-called Anglo-Saxon model spawned unprecedented excesses, crimes and a flight to the global regulatory vacuum that eventually brought down the world's economic system.
Sarkozy, who treated Obama like a head of state before he was nominated, is no stranger to grandstanding. He is using this ploy to get attention to the fact that the Brits and Americans created the mess and should fix it now.
A failure to impose strict reforms will destroy the global economy because trust in fair play or the rule of law will be missing in action. And business cannot be conducted, nor can hockey, if there are no referees on the ice.
Maybe a game
Sarko is also indulging in a form of brinkmanship because his sudden departure would send markets, and plans, plummeting. President Barack Obama, faced with anti-global forces at home, may not be totally unhappy with such demands if, as I suspect, it will lead to tougher regulations to please the French and bigger stimulus packages by the Europeans to please the Americans.
Backdrop to all of this is the fact that today the OECD reported that unemployment will average 10% in 2009 and the drop in GDP for its 30 rich-club members will be ten times' worse than forecasted in the fall, or a decline of 4.3% in 2009.
More crackdowns and tax haven bans on Diane Francis blog