The Dreaded Curse of the IMF!

It looks like the International Monetary Fund has been jinxed. It’s fated. It’s doomed! The next managing director should start wearing garlic around their neck already or at least burn sage in their office to ward off evil spirits. Seems these days that anyone that steps into the shoes of the Managing Director of the IMF ends up becoming fated, the object of all desire. The man (or woman) to be in the sites of all our guns. The one to be bumped off.

Christine Lagarde has defended herself. She has stated, declared, promised and reiterated countless times until she has gone blue in the face that she did not do anything untoward. “I always acted in the interests of the state and in conformity with the law” she said last night before she headed off at double-quick speed to chit-chat with her lawyer. All image! Outwardly calm and collected. Inwardly, terrifiée. She is an ‘assisted witness’ in the Adidas case, embroiling Bernard Tapie (and the 45 million euros that were awarded to him, which Lagarde never appealed against as Finance Minister of France) and Sarkozy’s (illegal?) election funding in 2007 and 2012. Being an ‘assisted witness’ is a nice way of putting it that you aren’t going to be prosecuted yourself, but you had some dangerous dabbling and fancy footwork going on and the judge knows more than you think. Why is it that the French always allow their past Ministers and Presidents to be ‘assisted’? I thought they hated their image of ‘assistanat’ (translate as: (state) dependency)!

Jacques de Larosière (yes, another Frenchman), Managing Director of the IMF from 1978 until 1987 once wrote about moral hazard. Moral hazard is the name given by insurers to people who take risks just because they are insured and that they wouldn’t have taken those risks had the insurance policy not existed. Maybe he should have got on the blower to Lagarde before she took the risk of toying with Tapie and told her that; and maybe he should have stunted Strauss-Kahn’s ardent desires in room 2820 of the Sofitel Hotel NY before he took the risks.

But Lagarde and Strauss-Kahn are not the only ones that have been involved in scandals. Some of the other Managing Directors have too (thankfully, not all of them, and not all of them while they were in office at the IMF).

  • Rodrigo de Rato y Figaredo (2004-2007)

He resigned for ‘persona reasons’. Listed as the worst CEO ever in 2012 of Bankia and charged in July 2012 for ‘accounting irregularities’.

  • Horst Köhler (2000-2004)

Had to resign from the Presidency of Germany because he said that Germany should be ready to go to war to defend their own interests of free-trade and to crush instability and regional insecurities in the world (so as to maintain standards of German revenue and trading possibilities), whatever the cost. Imperialism didn’t go down well.

  • Michel Camdessus (1987-2000)

Strongly criticized for his blinkered imposing of measures in East Asian countries and in Latin America. It caused unprecedented crises in countries like Argentina and rioting in Mexico. He resigned.

  • Jacque de Larosière (1978-1987)

Acquitted of any wrongdoing (but still involved) in the French Credit Lyonnais banking scandal. But, is there smoke without fire?

The other Managing Directors did nothing (bad, that is, apparently…unless, someone knows something the rest of us can’t find). Perhaps the reasons why the scandals involve the most recent MD is a telling tale of our modern times. Just for the record, here are the others.

  • H. Johannes Witteveen (1973-1978)

 

  • Pierre-Paul Schweitzer (1963-1973)

 

  • Per Jacobsson (1956-1963)

 

  • Ivar Roth (1951-1956)

 

  • Camille Gutt (1946-1951)

 

Of course, the IMF has long realized that they are in for a rough ride. They thought they had the right candidate in Lagarde (she was a woman, not a womanizer). But, they didn’t think she like the pesos more than the petting. Still, better to have Lagarde than to face another upheaval, so it’s not surprising that the executive board has backed her to the hilt. But, if all else fails, just wing it. Ride the wave and right out the storm. People love two things in life when it comes to reading about the people that govern us and run our lives up there at the lofty tops of society. We love a good scandal. We love a good scandal with loads of sex. We love a god scandal with loads of money. We love a good scandal with loads of money and sex. Monsieur Dominique Strauss-Kahn had the first: loads of sex. Madame Christine Lagarde got the second right. Third time lucky! Who will Mr. or Ms. X be that gets the full 18 rating? The new Mission Impossible! We’ll be watching you!

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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