In case anyone has no place to go as the holiday winds to a close….
Something to chew on:
The global economy will slow close to a halt this year as more than $2 trillion of bad assets in the United States help sink economies from Russia to Britain, the International Monetary Fund said Wednesday.
Bank losses worldwide from toxic U.S. assets may reach $2.2 trillion, the IMF said in a report, more than the $1.4 trillion that the fund predicted in October. World growth will be 0.5 percent this year, the weakest postwar pace, the fund said in a separate report.
The reports signal that write-downs and losses at banks totaling $1.1 trillion so far are only half of what’s to come and that already contracting economies may worsen. Advanced and developing countries need to be “even more supportive” of demand than they already have been, with lower interest rates and fiscal stimulus, the lender said.
“Unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth,” the IMF said.
I remember one commenter saying snarkishly, “The sky is falling!” Well, guess what?
Richard Burger is the author of Behind the Red Door: Sex in China, an exploration of China's sexual revolution and its clash with traditional Chinese values.