http://www.reuters.com/…

The credit crunch is not nearly as severe as the U.S. authorities appear to believe and public data actually suggest world credit markets are functioning remarkably well, a report released on Thursday says.

As a result, governments are pumping masses of public money into the economy across the world because of the difficulties of a few big, vocal banks and industries such as car manufacturing, which would be in difficulty anyway, according to the report published by Celent, a financial services consultancy.

“It’s just stabbing in the dark with trillions of dollars,” Octavio Marenzi, report author and head of Celent, told Reuters in a telephone interview where he questioned the depth of the analysis that preceded numerous fiscal stimulus packages.

The report, much of which is based on U.S. Federal Reserve data, challenges a long list of assumptions one by one, arguing that there is indeed a financial crisis but that, on aggregate, the problems of a few are by no means those of the many when it comes to obtaining credit.

“It is startling that many of (Federal Reserve) Chairman (Ben) Bernanke and (Treasury) Secretary (Henry) Paulson’s remarks are not supported or are flatly contradicted by the data provided by the very organizations they lead,” said the report.

Perhaps the U.S. central bank and treasury department, and authorities in other countries by extension, know something they are not telling anyone and which is far more worrying than the public data shows, the report says.

Or, more plausibly, they were generalizing erroneously from the bad experience of a limited number of big banks and companies that are in any case in difficulty.

“I don’t think they’re fabricating stuff but what I think they are doing is taking the situation of a handful of institutions and generalizing that to the market as a whole, incorrectly,” said Marenzi.

The picture appeared to be broadly similar in much of Europe and Japan, said the report, based on publicly available data on trends in bank lending to industry, households and among banks themselves in the so-called interbank markets.

ALL A MYTH?

Regarding U.S. business access to credit, the report says:

*Overall U.S. bank lending is at its highest level ever and has grown during the current financial crisies.

*U.S. commercial bank lending is at record highs and growing particularly fast since May 2007.

*Corporate bond issuance has declined but increased commercial lending has compensated for this.
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http://www.bloomberg.com/…

Oct. 10 (Bloomberg) — Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world’s financial markets while they “rewrite the rules of international finance.”

“The idea of suspending the markets for the time it takes to rewrite the rules is being discussed,” Berlusconi said today after a Cabinet meeting in Naples, Italy. A solution to the financial crisis “can’t just be for one country, or even just for Europe, but global.”

The Dow Jones Industrial Average fell as much 8.1 percent in early trading and pared most of those losses after Berlusconi’s remarks. The Dow was down 0.5 percent to 8540.52 at 10:10 in New York.

Group of Seven finance ministers and central bankers are meeting in Washington today, and will stay in town for the International Monetary Fund and World Bank meetings this weekend. European Union leaders may gather in Paris on Oct. 12, three days before a scheduled summit in Brussels, Berlusconi said today, while Group of Eight leaders may hold a meeting on the crisis “in coming days,” he said.

Berlusconi didn’t give any details about what kind of rules leaders were looking to change, except to say that leaders are “talking about a new Bretton Woods.”

The Bretton Woods Agreements were adopted to rebuild the international economic system after World War II in a hotel in Bretton Woods, New Hampshire. The aim of the agreements was to establish a monetary management system, initially by pegging currencies to gold. The IMF was set up later to help manage the international financial system.

A market holiday is bad enough… but a new monetary system is huge. The UK was king prior to WWII. Since it’s been the USA. Will the dollar continue to rule? Just about every currency is having problems. I’m really at a loss for what they would change. Perhaps an international currency?

Companies and organizations which very likely won’t be getting my business in the future.

• Target
• TIME
• Home Depot
• Bank of America
• American Red Cross
• Big Brother Big Sister
• Boys & Girls Clubs of America
• Habitat for Humanity
• “I Have a Dream” Foundation
• National Peace Corps Association
• Special Olympics
• United Way of America

This is a subset of the list available at BeTheChangeInc.org and is organizations that stood out for me. AARP, Target, TIME, The Home Depot Foundation and Bank of America are sponsoring the 2008 Service Nation Summit in NYC on… wait for it…. September 11-12.

Mark Edge of Free Talk Live has contacted Target to get their official position but as of last night’s show had not received a response.

I noticed that Americans for a National Service Act is a member of the Service Nation coalition. Comments after the jump.
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http://www.telegraph.co.uk/…

Ordinary Germans have begun to reject euro bank notes with serial numbers from Italy, Spain, Greece and Portugal, raising concerns that public support for monetary union may be waning in the eurozone’s anchor country.

Germany’s Handelsblatt newspaper says bankers have detected a curious pattern where customers are withdrawing cash directly from branches, screening the notes to determine the origin of issue. They ask for paper from the southern states to be exchanged for German notes.

People clearly suspect that southern notes may lose value in a crisis, or if the eurozone breaks apart. This is what happened in the US in the Jackson era of the 1840s when dollar notes from different regions traded at different values.

A group of leading German professors warned at the outset of EMU that the euro would tend to be weaker than old Deutsche Mark, and that it would fuel inflation over time. German citizens were never given a vote on the abolition of the D-Mark, which had become a symbol of Germany’s rebirth after the war.

Many have kept a stash of D-Marks hidden in mattresses to this day. A recent IPOS poll showed that 59pc of Germany now had serious doubts about the euro.

While I’m not sure how justified this action is but I support it regardless. Centralized control of the money supply is one of the most disgusting and insidious forms of theft and economic intervention. If people have lost faith in the money they generally use they should be free to replace it.