Archive for the ‘2009’ Category

World Bank Says Global Economy Will Shrink in ’09

March 8, 2009

The economic crisis that started with junk mortgages in the United States is causing havoc for poorer countries around the world, not only stifling their growth but choking off their access to credit as well, the World Bank said on Sunday.

By Edmund Andrews
The New York times

In a bleaker assessment than those of most private forecasters, the World Bank also predicted that the global economy would shrink in 2009 for the first time since World War II. The bank did not provide a specific estimate, but bank officials said its economists would be publishing one in the next several weeks.

Until now, even extremely pessimistic forecasters have predicted that the global economy would eke out a tiny expansion but had warned that even a growth rate of 5 percent in China would be a disastrous slowdown, given the enormous pressure there to create jobs for its rural population.

The World Bank also warned that global trade would shrink for the first time since 1982, and that the decline would be the biggest since the 1930s.

The report, released on Sunday, was prepared for a meeting next week of finance ministers from the 20 industrialized and large developing countries. It warned that the financial disruptions are all but certain to overwhelm the ability of institutions like itself and the International Monetary Fund to provide a buffer.

The bank, which provides low-cost lending for economic development projects in poorer countries, pleaded for wealthy governments to create a “vulnerability fund” and set aside a fraction of what they spend on stimulating their own economies for assisting other countries.

“This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis,” said Robert B. Zoellick, the World Bank’s president. “We need investments in safety nets, infrastructure, and small and medium size companies to create jobs and to avoid social and political unrest.”

The bank said that developing countries, many of which had been growing rapidly in recent years, are being devastated by plunging exports, falling commodity prices, declining foreign investment and vanishing credit.

Read the rest:
http://www.nytimes.com/2009/03/
09/business/09bank.html?_r=1&hp

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Vietnam beomes more poor:
http://ph.news.yahoo.com/afp/20090308/tbs-
finance-economy-vietnam-poverty-a179076.html

Related:
Stimulus Too Late, Wasteful, Reckless; Toxic Assets and Banks Still Unaddressed

NYT Interviews Obama; No Economic Recovery This Year

 NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

NYT Interviews Obama; No Economic Recovery This Year

March 7, 2009

Michelle Malkin is reporting that eyebrows are being raised at the lavish spending at the White House and by Team Obama since our new presidency commenced.

But if there is a party at the top of the U.S. government, that would be about the only festival going on.

In my neighborhood we are seeing foreclosures, stores closing, more people standing around without work, and the prospect of higher taxes and higher prices on everything as inflation could set in due to all our government debt.

And our mortgage interest write off will be reduced along any savings from the IRS we used to get for charitable deductions.

In an interview with the New York Times, President Obama offered little hope of an economic recovery this year.

And we know from several news sources that despite the president’s grim use of language about the economy, including the use of the word “catastrophe,” many have urged Mr. Obama to paint a brighter picture.

Here’s how the New York Times covered the president’s remarks on the economy today:

The president said he could not assure Americans the economy would begin growing again this year. But he pledged that he would “get all the pillars in place for recovery this year” and urged Americans not to “stuff money in their mattresses.”

“I don’t think that people should be fearful about our future,” he said. “I don’t think that people should suddenly mistrust all of our financial institutions.”

As he pressed forward with ambitious plans at home to rewrite the tax code, expand health care coverage and curb climate change, Mr. Obama dismissed criticism from conservatives that he was driving the country toward socialism. After the interview, which took place as the president was flying home from Ohio, he called reporters from the Oval Office to assert that his actions have been “entirely consistent with free-market principles” and to point out that large-scale government intervention in the markets and expansion of social welfare programs began under President George W. Bush.

Read the entire NYT article:
http://www.nytimes.com/2009/0
3/08/us/politics/08obama.html

It seems almost as if the New York Times is being used to slowly get the word out that the economy will remain dead until at least next year….

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Related:
Obama: Crisis is time of ‘great opportunity’

 President Pelosi?

 Obama, Socialism, Fear, Lack of Confidence: Tanking Stocks, Skyrocketing Debt, Recovery Doomed This Year

Michelle:
http://michellemalkin.com/2009/03/07/this-p
arty-atmosphere-sends-the-wrong-message/

Obama May Bring Hope But One Third of Global Citizens Expect Worse Year

January 3, 2009

One third of adults around the world are worried about what the year will bring, according to the Voice of the People survey released by Gallup International. 35 per cent of respondents in 46 countries expect 2009 to be worse than 2008.

The proportion of respondents who expect the next year to be “the same” has remained stable in the past three annual surveys. In 2006 and 2007, roughly two-in-five respondents expected the next year to be better. The proportion has dropped to 27 per cent this time.

At least 48 per cent of respondents in Kosovo, China, Australia, Lebanon and Colombia expect a better year, while at least 60 per cent of those in Hong Kong, Iceland, Singapore, Ireland and Greece believe conditions will deteriorate.

Angus Reid Global Monitor

Since 2007, defaults on so-called subprime mortgages—credit given to high-risk borrowers—in the United States have caused volatility in domestic and global financial markets and raised concerns that the U.S. economy could fall into a recession. A recession is defined as two consecutive quarters of negative growth. The crisis has affected the global financial and credit systems.

On Dec. 31, outgoing U.S. treasury secretary Hank Paulson discussed the crisis, saying, “We’re dealing with something that is really historic and we haven’t had a playbook. The reason it has been difficult is first of all, these excesses have been building up for many, many years. Secondly, we had a hopelessly outdated global architecture and regulatory authorities in the U.S.”

Read the rest:
http://www.angus-reid.com/polls/view
/32541/a_third_of_global_citizens_ex
pect_worse_year

2009: Global Economy to Contract in ‘Severe’ Recession

December 20, 2008

The global economy likely will contract next year for the first time in decades in a “severe” recession as the credit crunch bites, an international banking group said.

The Institute of International Finance (IIF), the Washington-based association representing more than 375 of the world’s major banks and financial institutions, projected the world economy would shrink 0.4 percent in 2009, after 2.0 percent growth this year.

From China Daily

Euros and US dollar banknotes in a cash register. The European ...

Charles Dallara, the managing director of the IIF, called it “the most severe, globally synchronized recession in modern economic history.”

The global crisis requires a global coordinated response, he said at a news conference.

Dallara said the economy was mired in a negative feedback loop of weakening economic activity and intense financial market strains.

“You’ll see much more bang for the buck” with a coordinated response, he said, hailing US government monetary and fiscal efforts to unblock credit and stimulate growth.

“It will be important that these measures be complemented in Europe and in Japan,” he said.

In a grim assessment, the IIF said in its monthly Global Economic Monitor report: “It should be emphasized that an overall contraction in the global economy is a truly weak outcome, and the first time this has happened in the post-1960 period.”

Philip Suttle, the IIF macroeconomic analysis director, said that data as far back as the early 1950s do not show a contraction in the world economy .

Mature economies — the United States, the 15-nation eurozone and Japan — that are now in recession were forecast to contract a hefty 1.4 percent amid the worst financial crisis since the Great Depression.

Growth in those economies was seen at a mere 0.9 percent this year as the global credit crunch that began in mid-2007 exploded in September with the collapse of Wall Street investment bank Lehman Brothers.

The US economy, the world’s largest and the epicenter of the financial tsunami, would shrink 1.3 percent in 2009 after growth of 1.2 percent this year, according to the IIF projections….

Read the rest:
http://www.chinadaily.com.cn/world/2008-12/1
9/content_7323603.htm