From Roubini Global Economics newsletter:

RGE - The world is at severe risk of a global systemic financial meltdown and a severe global depression

The US and advanced economies' financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.

Thursday midnite update: A few hours after I had written this note the market crash that I warned about is underway in Asia: the Nikkei index in Japan is down 11% and all other Asian markets are sharply down. This reinforces the urgency of credible and rapid policy actions by the G7 financial officials who are meeting in a few hours in Washington and the need to also involve in such global policy coordination the systemically important emergent market economies.

On February 20, in the Financial Times, Martin Wolf finally acknowledged the situation of the American economy and the seriousness of the threats it is facing: America's economy risks mother of all meltdowns.

Quoting extensively Nouriel Roubini's February 5 publication The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster, he paints a very scary picture of America's economic future.

Nouriel Roubini is a Professor of Economics at New York University's Stern School of Business and is also the co-founder and Chairman of RGE Monitor (access to the blog is possible through free registration). He was one of the few economists who predicted an American recession as soon as 2006. At the time, he has been dismissed as a bear and excessively pessimistic.

Lucie Aubrac, one of the great figures of the French Resistance, has passed away yesterday at the age of 94.

Lucie Aubrac was born Lucie Bernard on June 29 , 1912 in the region of Mâcon. Before the war, she studied History at the Sorbonne University from which she received the highest teaching diploma. She then started to teach History.

As soon as 1940, she engaged in the Resistance in Lyon with her husband, Raymond Aubrac and she contributed to the founding of one of the first resistance movements, Liberation-South. Together with Emmanuel d'Astier de la Vigerie, they founded one of the most important clandestine newspapers: Libération. As the head of an armed commando, she carried out, among other actions, a military action to liberate her husband from the hands of SS-Hauptsturmführer Klaus Barbie, head of the Gestapo in Lyon. After the success of this operation, the couple left France in February 1944 to join de Gaulle in London and then in Algiers.

After the war, in 1945, when the French women obtained the voting rights for the first time, she created the Privilège newspaper of women, which lasted for a few months.  She was a member of the Consultative Assembly resulting from the Resistance and charged with supervising the Departmental Committees of Liberation.  She then resumed the teaching of History and kept campaigning for Human Rights. After she retired from teaching, Lucie Aubrac kept relentlessly going to high-schools to explain the resistance to the students.  

Lucie Aubrac published several books, among which was one published in 1984, "They left, wild with joy", an account of the escape that she organized to liberate her husband from Klaus Barbie.  

For those of us non-Americans who, like me, have been following the evolution of US politics and the Progressives' fight against the Bush/Cheney administration, the 2006 mid-term elections landslide has been a great relief, and I am grateful to the American progressives for their contribution to the Bush/Cheney defeat. It will be an even greater pleasure when, as seems likely (I cross my fingers), Democrats will win the 2008 presidential election and get rid of the worst administration ever.

So, everything seems going all right? Well, not exactly. The hubris of the Bush/Cheney administration has brought such a maelstrom of failures, corruption and crimes, it has lead the world so close to a global disaster (it could still happen...) that, in comparison, any other administration will look like angels come on earth to save us. But I don't believe in angels.

While I reasonably (optimistically?) trust the Democrats for restoring democracy and civil liberties, implementing (slightly) more responsible socio-economic policies and promoting environmental awareness within the United States, I still wonder if they will bring any change to the United States foreign policy doctrine. So far, I have little hope.

My doubts have been nurtured by Tony Smith's editorial in the March 11 issue of the Washington Post (thanks to BooMan)

Democrats don't have an agreed position on what America's role in the world should be. They want to change the Bush administration's policy in Iraq without discussing the underlying ideas that produced it. And although they now cast themselves as alternatives to President Bush, the fact is that prevailing Democratic doctrine is not that different from the Bush-Cheney doctrine.

Many Democrats, including senators who voted to authorize the war in Iraq, embraced the idea of muscular foreign policy based on American global supremacy and the presumed right to intervene to promote democracy or to defend key U.S. interests long before 9/11, and they have not changed course since. (snip)

...if the Democrats do win in 2008, they could remain staked to a vision of a Pax Americana strikingly reminiscent of Bush's.

French troops had bin Laden in sights (Yahoo)

PARIS (Reuters) - A documentary says French special forces had Osama bin Laden in their sights twice about three years ago but their U.S. superiors never ordered them to fire...

The documentary, due to air next year and seen by Reuters on Tuesday, says the troops could have killed the al Qaeda leader in Afghanistan but the order to shoot never came, possibly because it took too long to request it.

"In 2003 and 2004 we had bin Laden in our sights. The sniper said 'I have bin Laden'," an anonymous French soldier is quoted as saying.

The documentary 'Bin Laden, the failings of a manhunt' is by journalists Emmanuel Razavi and Eric de Lavarene, who have worked for several major French media outlets in Afghanistan. A cable television channel plans to air the documentary in March.

Razavi said the soldier told them it took roughly two hours for the request to reach the U.S. officers who could authorize it but the anonymous man is also quoted in the documentary as saying: "There was a hesitation in command." Razavi told Reuters several sources told them the sightings were six months apart and they declined to be more specific.

French armed forces spokesman Christophe Prazuck said "that never happened" when asked about the bin Laden sightings.

Bin Laden, the mastermind behind the September 11 attacks on the World Trade Center and the Pentagon, is believed to be hiding in the mountains along the Afghanistan-Pakistan border.

France has roughly 200 elite troops operating under U.S. command near Afghanistan's border with Pakistan. Paris announced on Sunday it was withdrawing them at the start of 2007.

French soldiers say they identified Bin Laden both visually and audio (voice). The first time, they thought that not getting orders from the Americam command came from a communication problem. The second time, they started to wonder...

Welcome to a French breakfast on a sunny morning.

What are you doing on a saturday morning?