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Lagarde A Shoo In? Not So Fast...

Tyler Durden's picture




 

Following an earlier report by Handelsblatt which made it seem that Christine Lallouette Lagarde's (henceforth CLL) ascent to the head of the IMF was a fait accompli, here comes Reuters to spoil the party. As was disclosed deep in the footnote area of the German article, Christine has a bit of a legal cloud of her own to deal with. To wit: "Her prospects could be undermined by a legal row, unlikely to be resolved before June at the earliest, over her decision to settle a dispute between the state and businessman Bernard Tapie, a personal friend of President Nicolas Sarkozy. Lagarde denies any misconduct, and there is no suggestion of personal profit. But legal trouble could delay her appointment or even make her unacceptable to the IMF as it tries to polish its image after Strauss-Kahn's dramatic fall from grace." And once again nothing is ever easy for Europe: the continent which would be very glad to never again see a male figurehead atop the IMF following the latest humiliation (even though technically the IMF has the US as its key source of capital, European countries add up to well over the US stake) will likely not be willing to risk a court defeat which would likely come only after the critical decision will have to be made. Perhaps it is time to buy some puts on CLL white smoke chances after all.

More details on CLL's legal troubles:

On May 10, a public prosecutor recommended a full judicial inquiry into Lagarde's role in awarding a 285 million euro payout to Tapie, a former left-wing minister whose support for Sarkozy's 2007 presidential campaign helped to discredit his Socialist rival.

Tapie had sued the government, alleging that the former state-owned bank Credit Lyonnais had defrauded him during the sale of his stake in the sports company Adidas in 1993.

Opposition deputies accused Lagarde of abuse of authority after she dropped a legal battle with Tapie in a bid to end the long-running case and submitted it to an arbitration panel, overruling officials in her ministry.

The prosecutor alleges that Lagarde ignored recommendations to check if the arbitration process was legal, and refused recommendations to appeal against the hefty compensation award.

Three judges now have to decide whether to proceed with the case against her or drop it.

"There is no deadline on the statutes but this should take around a month," said a prosecutor. "It's almost impossible for them to take a quick decision, given how technical the case is."

Timing could be crucial. If the IMF seeks to fill the post quickly to turn the page on the sex scandal and press ahead with its European rescue packages, that could rule Lagarde out.

"It could take a while until she's clear and that could be a problem as far as the IMF is concerned," said Jacques Reland of the Global Policy Institute.

U.S. Secretary of State Timothy Geithner appeared to give Lagarde breathing space on Wednesday by suggesting the IMF should name an internal head on an interim basis.

But Merkel said on Thursday that, while she wanted a European in the job, it was important to find a quick solution.

A final deadline could be September 1, when acting managing director John Lipsky's term ends. This could leave the IMF rudderless as the naming of a new deputy is the prerogative of the managing director, not the Board.

Among CLL's skills are "stamina, negotiating skills and English" - who knows. Perhaps that is enough.

Though Lagarde is not a trained economist, her strengths include stamina, negotiating skills and flawless English.

Lagarde has refused to comment on reports of her candidacy, though she is understood to welcome the prospect of a return to the United States, where she worked as the first female head of the Chicago law firm Baker & Mckenzie before being recruited in 2005 by France's then-prime minister, Dominique de Villepin.

One senior European source said Lagarde already had backing from Washington and several large developing countries.

The court case is one of very few blemishes in Lagarde's four years as minister -- the second-longest tenure of any French finance minister of modern times.

She has made a handful of gaffes -- angering the French by telling them to take to bicycles when fuel prices rose -- and recently had an investment called briefly into question.

Bottom line: more theater over absolutely nothing. When push comes to shove, and it will, and there is a slam of $6.5 trillion dollars repatriating following the terminal risk OFF episode, the IMF will be curled up in a fetal position in the corner unable to do jack, while the Fed will once again have to rescue the world.

But for some reason in our day and age of 15 second attention spans, everyone is fascinated with smoke and mirrors...

 

 

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Thu, 05/19/2011 - 14:39 | 1292634 Rodent Freikorps
Rodent Freikorps's picture
Definition of SHOO-IN : one that is a certain and easy winner
Thu, 05/19/2011 - 15:00 | 1292769 falak pema
falak pema's picture

Lagarde is US friendly , like Sarkozy...big card....

Thu, 05/19/2011 - 15:30 | 1292884 destiny
destiny's picture

Lagarde is serf of Sarkozy, an idiot and a stupid and patronizing liar...that from a French point of view !! 

Thu, 05/19/2011 - 14:40 | 1292637 Jason T
Jason T's picture

I read over at LaRouche's website, the ECB is holding so much junk on its balance sheet that a Greece default would wipe it out.  Now, they are suggesting that there is big disagreement at the ECB and IMF and many bankers would have loved to see DSK go out like this.. http://larouchepac.com/node/18211

Thu, 05/19/2011 - 14:41 | 1292642 bogey4
bogey4's picture

or "shoo-in" whichever you prefer!

Thu, 05/19/2011 - 14:39 | 1292653 Rodent Freikorps
Rodent Freikorps's picture

ZH is international.

Some grace must be granted.

English is not rational.

But it is funny sometimes.

Thu, 05/19/2011 - 14:44 | 1292655 TruthInSunshine
TruthInSunshine's picture

It's official: The world will end on the 21st.

Jimmy Jam Cramer just did a live CNBsC interview with Amanda 'TaTas' Drury, and called LinkedIn's IPO valuation 'ludicrous,' comparing it to TheGlobe.com

He says it's "outrageously overvalued and preposterous" and that it's the most ridiculous IPO since TheGlobe.com and CBS MarketWatch.

 

So, since he and I are in agreement...

 

Thu, 05/19/2011 - 14:52 | 1292699 NotApplicable
NotApplicable's picture

Oh, fuck...

Thu, 05/19/2011 - 14:56 | 1292709 Arius
Arius's picture

that a sign of times...thats definetly Bullish!

BOOYAA!!!

Thu, 05/19/2011 - 18:18 | 1293629 dark pools of soros
dark pools of soros's picture

oh.. I thought he was going to say it was as bad as TheStreet.com..  and then laugh at all the old bagholders

Thu, 05/19/2011 - 14:43 | 1292671 ebworthen
ebworthen's picture

 

Smoke and mirrors?

*cough*

? niaga yas uoy did tahW

 

Thu, 05/19/2011 - 14:46 | 1292678 equity_momo
equity_momo's picture

The cunt is dead long live the cunt.

 

Whoever heads the piece of shit that is the IMF its irrelevant.  

Thu, 05/19/2011 - 14:49 | 1292700 Atomizer
Atomizer's picture

Yep, this will haunt the IMF for years. Reminds me of the United Nations Oil-for-Food scam.

 

Thu, 05/19/2011 - 14:52 | 1292713 equity_momo
equity_momo's picture

No it wont.  The IMF exist to do the scumbags bidding that control the 600 trillion dollar deriv market.   Nothing haunts these fuckers apart from their own hubris and when that bubble bursts , we are all living in mudhuts (those of us not fortunate enough or with not enough foresight that is)

Thu, 05/19/2011 - 14:56 | 1292740 NotApplicable
NotApplicable's picture

I was going to reply that we could only hope. But the marginal utility of Hopium is quite low these days, if not negative.

Thu, 05/19/2011 - 15:16 | 1292827 Rodent Freikorps
Rodent Freikorps's picture

That was Kofi's pay-off for not using the G word in Rwanda.

Thu, 05/19/2011 - 15:15 | 1292809 Rodent Freikorps
Rodent Freikorps's picture

This chick looks like Hillary's ugly brother.

I predict women will still be at risk of abuse.

Fri, 05/20/2011 - 08:04 | 1294962 falak pema
falak pema's picture

hey Rodent, you're still wearing your steel heeled boots....

Thu, 05/19/2011 - 14:46 | 1292683 cougar_w
cougar_w's picture

Bah they are all dirty. The IMF will dither a bit about "the perfect fit" but really they are just waiting for the attention/heat to move on to the next international crisis. Then they'll appoint someone just as slimy as DSK.

The leadership has to be corrupt otherwise the rest of the organization doesn't know which way to jump.

Thu, 05/19/2011 - 14:48 | 1292692 RobotTrader
RobotTrader's picture

Wonder what the "Fast Money" guys will be talking about after the close?

"Risk Off?"

Linkedin?

Or the IMF??

Thu, 05/19/2011 - 15:01 | 1292760 Careless Whisper
Careless Whisper's picture

LNKD

party... like it's...

http://www.youtube.com/watch?v=pnuijDieOvY

but, as of 3 pm, it has a broken chart pattern. so it's red alert.

 

 

Thu, 05/19/2011 - 15:04 | 1292779 equity_momo
equity_momo's picture

Well my broker cant borrow the shares so i cant short it. Maybe it will take until t+3 to get that baby off.

Thu, 05/19/2011 - 15:47 | 1292953 Careless Whisper
Careless Whisper's picture

there's a certain time period that ipo's can't be shorted.

Thu, 05/19/2011 - 18:20 | 1293637 dark pools of soros
dark pools of soros's picture

it will be paraded around for a year and a half so they can push out all the others...  Pandora... Zillow..  Facebook...  

 

hide your 401ks!!!

Thu, 05/19/2011 - 14:49 | 1292695 GottaBKiddn
GottaBKiddn's picture

 

Ultimately the IMF is a creation of the Banksters, and they will pick whom they will. It is highly unlikely that it will be anyone that has the well-being of mankind in mind. After all, it is all about the creation of debtors.

 

 

Thu, 05/19/2011 - 14:53 | 1292701 dracos_ghost
dracos_ghost's picture

It's mind boggling that International Banksters are so concerned over the integrity of its officials. At least superficially.

Bankster and integrity are mutually exclusive concepts. Get over it. Try and restore a modicum of confidence in the world markets instead of showing how amateurish these hacks are. I could care less as to whether it's a European, American, Chinese or Pogo Pogo national who runs the show. Stop the bleeding and get back to business already.

Jesus, you couldn't make this shit up.

Thu, 05/19/2011 - 14:54 | 1292728 NotApplicable
NotApplicable's picture

Wait, now!

Pogo Pogo, well, that's a game-changer.

Thu, 05/19/2011 - 14:55 | 1292714 NotApplicable
NotApplicable's picture

The drama is so thick that this charade almost seems real.

Banksters vs. Banksters: two wrongs don't make a right, but a fight.

A winner is me! (well, not really, but it's fun to pretend)

Thu, 05/19/2011 - 14:56 | 1292719 Careless Whisper
Careless Whisper's picture

who gonna take over for tony soprano, paulie walnuts or big pussy?

 

Thu, 05/19/2011 - 14:58 | 1292732 naiverealist
naiverealist's picture

I have recently read of a Goldman alum who is high up in the IMF, although I can't remember his name or find the reference (although it was in ZH's comments on a related story).  I'll put my odds on him.

Thu, 05/19/2011 - 14:58 | 1292735 Atch Logan
Atch Logan's picture

So who the fuck cares. The whole thing is a rigged game.

Thu, 05/19/2011 - 14:58 | 1292744 DrunkenMonkey
DrunkenMonkey's picture

Tapie (or Nanard as he is affectionately known in France) caused a lot of resentment because he was a 'socialist' minister and popular amongst ordinary people for his 'no-bull*hit' opinions.

He was 'relieved' of a profitable company by a disreputable bank and won the case to be compensated after being ripped-off by politically motivated shysters.

The butthurt whiners are all on the far-right anyway, so f*ck them.

Thu, 05/19/2011 - 15:00 | 1292748 rayban
rayban's picture

She'll get the job. A fait accompli. She's lived in the US long enough and she is very unlikely to rape another Sofitel maid.

Thu, 05/19/2011 - 15:00 | 1292767 lizzy36
lizzy36's picture

The best thing about CLL (other than being a women) is that she is NOT a trained economist. Haven't we had enough of those?

Thu, 05/19/2011 - 15:08 | 1292772 LMAO
LMAO's picture

Smoke and mirrors to pave the way for

Linda Green

Change we can believe in.

Unpractical to have these elitist with pretentious over the top names running the show. Let's go for something plain.

 

LMAO

Thu, 05/19/2011 - 15:41 | 1292928 ReallySparky
ReallySparky's picture

Perfect, she could sign the contracts and checks.

Thu, 05/19/2011 - 15:06 | 1292788 lizzy36
lizzy36's picture

Because the headline made me LOL:

WSJ: Berlusconi Backs France's Lagarde To Head IMF Italian Prime Minister Silvio Berlusconi on Thursday said French Finance Minister Christine Lagarde was the "optimal choice" to head the International Monetary Fund in the wake of Dominique Strauss-Kahn's resignation.
Thu, 05/19/2011 - 15:09 | 1292789 Crabshack
Crabshack's picture

It will be the Canadian dude.  A compromise all will live with; not US or Europe and not Emerging market.  The US will like it because they can push around softy if they need to.  BRIC will not consider it their first choice but will be the lessor of about 3 or 4 evils.

 

 

Thu, 05/19/2011 - 15:22 | 1292860 monopoly
monopoly's picture

Good call crab. I agree with that. But, not so sure they can be pushed around much anymore.

Thu, 05/19/2011 - 15:07 | 1292791 PulauHantu29
PulauHantu29's picture

Charlie Sheen says,"Not so fast...!"

 

Thu, 05/19/2011 - 15:18 | 1292813 GoinFawr
GoinFawr's picture

Canada says they're in the running, as an 'emerging market' apparently that means Mark Carney is a candidate.

Or not

Thu, 05/19/2011 - 17:21 | 1292825 Miles Kendig
Miles Kendig's picture

I for one would just love seeing CLL work the American media.   Amazing, and not so that after a career like hers the final deciding factor in favor of CLL will be her capabilities with the media.  We are in an image age fo sho and few could match the total package CLL brings to the table at this time.  Besides, if she doesn't get the job we'll be forced to suffer JCT, JCJ & Nick all holding their breath like JCT & JCJ are doing with one other now.  CLL has the goods, knows the book and can put a proper face on things.  I'm sure France & China will reach an arrangement since they seldom fail to.

Thu, 05/19/2011 - 15:20 | 1292848 monopoly
monopoly's picture

And what difference will it make whoever is in charge of the IMF> Don't they still get the memos from our illustrious Geithner. Sickening.

You guys agree, this is one of the most boring market days in a while. Done nothing. Got lots of confetti readly to tear up. Zzzzz

Thu, 05/19/2011 - 15:30 | 1292886 monopoly
monopoly's picture

Lnkd now at 96 on its way to 25. What a waste. Kill the specs. 0

Thu, 05/19/2011 - 16:19 | 1293091 Hephasteus
Hephasteus's picture

Somebody needed some easy money fast.

Thu, 05/19/2011 - 16:25 | 1293122 dracos_ghost
dracos_ghost's picture

As a Karate expert myself, I nominate Jimmy McMillan.

http://www.youtube.com/watch?v=x4o-TeMHys0

Thu, 05/19/2011 - 20:27 | 1293980 carbonmutant
carbonmutant's picture

The IMF has done French. The world wants something else.

Fri, 05/20/2011 - 04:46 | 1294836 silberblick
silberblick's picture

Click below to watch YouTube's Harisebon7777777 short videos. He should be commended for his work on measuring the radiation levels in Tokyo. The device he uses costs about $1000, which I am sure he has paid out of his own pocket to provide us with the truth of what is really going on in Japan.

It is eerie to watch his videos. Typically, his hand is shown holding a geiger counter in some public place with people walking all around him as if there was nothing of importance going on; while all along, the geiger counter in his hand reveals what is really happening. Harisebon is documenting the slow irradiation of the Japanese archipelago. A visual unfolding of a tragedy.

While watching these videos. it is hard not to wonder how many of the folks one sees walking down the street will come down with cancer in 10, 20 or 30 years. In fact, the videographer's life itself is in peril. Poignant.

Go to Harisebon's YouTube channel and give him a shout-out. He deserves it.

http://fukushimadisaster.blogspot.com/2011/05/radiation-harajiku-omotesa...

Next, click below to read about the Orwellian steps taken by the Japanese government to hide from the foreign press (and its citizens) what is really going on in Fukushima:

http://fukushimadisaster.blogspot.com/2011/05/japanese-government-takes-...

Do NOT follow this link or you will be banned from the site!