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IMF Warns of Pending Global Downturn

Posted on Oct 8, 2008
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The IMF report warns of recession and slow growth in both developed and developing countries until mid-2009.

With all the negativity in the ether regarding the stability of the world economy, it’s surprising that the International Monetary Fund took so long to throw its two cents into the fray. Never the fund to disappoint, the IMF issued a report Wednesday that warns of a pending global downturn following the U.S. credit crisis, as confidence falters in finance and credit markets around the world.

Read the actual IMF report here.

The New York Times:

In its bleakest forecast in years, the International Monetary Fund said on Wednesday the world economy was set for a major downturn with the United States and Europe either in or on the brink of recession.

The IMF said a still-developing financial upheaval—the most violent since the 1930s—would exact a heavy economic toll as markets wrestle with a crisis of confidence and global credit is choked off.

The IMF’s assessment was written before a globally coordinated interest-rate cut of half a percentage point on Wednesday by the Federal Reserve, European Central Bank, Bank of England, Switzerland, Canada and Sweden.

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By Christopher Robin, October 9, 2008 at 1:02 pm Link to this comment
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The IMF is great at looking out the window and telling you what the weather looks like.

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By thebeerdoctor, October 8, 2008 at 1:06 pm Link to this comment

As Art Cashin recently pointed out: “The market has lost its religion.”

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By lawlessone, October 8, 2008 at 12:35 pm Link to this comment
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Why do so many reporters, pundits and politicians keep referring to the “700 Billion dollar bailout” when that was changed to 840 Billion?  In fact, shouldn’t we really be referring to the 1,180 Billion dollars granted in just the past month or so counting the Fannie Mae/Freddie Mac, AIG, Bear Stearns, and Auto Industry funds and guarantees?  Weren’t those also bailouts (or “rescues” as the Republicans wanting to continue in power would obviously prefer to have them called)?  Worse yet, I don’t believe that $1,180,000,000,000.00 subtotal includes the FDIC bailout of several banks which has crashed.  If not, then shouldn’t those be added as well?

If we also added in the 18 Billion dollars for the Airline Industry bailout in 2001 and the 293 Billion dollars in bailouts handed out for the Savings and Loan Industry collapse in 1989 (which by the way were also during Republican Administrations if I recall), that bumps the total of handouts by Republican White House occupants to mostly Republican run, owned and/or “regulated” entities in the last two decades up to about a Trillion and a Half dollars at the very least.

No wonder the Republicans sneer at Democrats.  In comparison when it comes to raping the Treasury, the Democrats seem to be bush league players.

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By troublesum, October 8, 2008 at 10:12 am Link to this comment

This means that the nearly $1 trillion in bailouts was meaningless in terms of getting the economy back on track but it effectively undercuts the governments ability to help the public sector later on, when inevitably, push comes to shove.

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