IMF Says Advanced Economies Already in Depression

[Subdivisions]

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=a6aaWZ8ab8yU

Feb. 7 (Bloomberg) -- Advanced economies are already in a "depression" and the financial crisis may deepen unless the banking system is fixed, International Monetary Fund Managing Director Dominique Strauss-Kahn said.

“The worst cannot be ruled out,” Strauss-Kahn said in Kuala Lumpur, where he was attending a gathering of central bankers from Southeast Asia. “There’s a lot of downside risk.”

-snip-

“All this will work if, and only if, the different countries are likely to do what they have to do in terms of restructuring the banking sector,” he said. “And today it’s not done.”

-snip-

“There is hope that the fiscal and monetary stimulus measures being implemented around the world can help turn things around,” said David Cohen, Singapore-based director of Asian economic forecasting at Action Economics. “But there is still the risk it can be short-circuited by further financial turmoil.”

-snip-

And there's talk all over the web about a possible collapse of both the Dollar and the stock markets in the coming week.

[aquart]

1. Oh. Goody. What fun.

I don't know which direction to be frightened in first.

[CoffeeCat]

2. "Restructuring the banking sector." Hmmmm...

It feels as if the powers-that-be desperately want the banks nationalized.

The IMF is speaking with same sense of horror-based urgency that Bush used when
he led us into war with Iraq and that Hank Palusen used to convince us that the
banks needed a trillion dollars NOW.

[Selatius]

3. According to the U-6 unemployment number, about 16% of workers are now unemployed.

At the height of the Great Depression, the most conservative estimates pegged unemployment at about 25%.

[roamer65]

4. Next stop: Full blown currency crisis.

This economic steamroller is by no means finished. We should have been allowed to go into a normal recession in 2001-2002. Greenspan and Bu$h are to blame for this mess.