United Discontent

Meeting Notes

Kissinger believes that the Israelis are in a panic and will
attack Iran. Erdogan has made it clear to him that he plans to
break with Israel at some point and reorient toward the Islamic
world. He intends to be their leader. Paul Volcker regards the
Greek crisis as potentially a mortal blow for the EU. He would
like to see an IMF tranche. He also said that Nicholas Brady is
behind both this and the Volcker principles Obama adopted. When
I asked Brady how he expects to get the the U.S. to go along
with an IMF bailout, he shrugged and said they won’t, but that’s
the only choice. Volcker is now doubtful the Euro can survive.
Brady is convinced it will. Kissinger thinks Volcker and Brady
are missing the real crisis which is in Iran and potentially
Russia. Volcker also says that the Bank of England and the
French will go along with the Volcker rules on an international
basis–that is returning to a variety of Glass-Steagal. The
Japanese will do whatever is said, and in Germany only Deutsche
Bank really makes decisions. Sarkozy told him he would come in.
So there may be an international convention on restructuring
banks under way–Volcker is pretty careful in what he says and
doesn’t promote himself more than the average bear, so this may
be the case. Nick Brady thinks so too.”