Final Word from Monday, September 22, 2008



On the same day that U.S. authorities saved the world financial system (maybe), defense ministers from the U.S. and the CR signed a key radar agreement in London. On the surface, the two events are unrelated. Wouldn't it be wise, though, for the Czechs to consider the possible impact of the financial crisis on the missile-defense deal? Standard due diligence calls for looking into the financial strength of a potential partner. Would the U.S. pass the litmus test after taking on about $6-7 trillion in new liabilities in recent weeks? It's more than just a question of whether the U.S. can still afford the missile-defense project. What happens to U.S. foreign policy when Washington's biggest creditor, China, decides to impose more-stringent rules on its borrower, just as banks regularly do with their insolvent customers? Czech politicians have proven their willingness to defy Russia in backing missile defense; it might now be time to assess whether China is worth crossing too.[Czech Republic United States AIG Fannie Mae Freddie Mac money-market funds $180 liquidity Chinese]

Glossary of difficult words

due diligence - reasonable steps taken in order to satisfy a legal requirement, esp. in buying or selling something;

litmus test - a test that uses a single indicator to prompt a decision;

$6-7 trillion - Fannie Mae, Freddie Mac, AIG, $180bn in market liquidity, debt consolidation, guarantees for money-market funds, etc.;

stringent - (of regulations or requirements) strict, precise and exacting;

to assess - to evaluate or estimate the nature, ability or quality of something;

to cross someone - to go against or oppose someone.

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