The State of the World. . . .

[Bird of Prey]

World economic leaders act to counter financial, food crises

by Veronica Smith Mon Apr 14, 3:55 AM ET


WASHINGTON (AFP) - World economic leaders have taken steps to alleviate the worst financial shock in decades and a food price crisis that is sparking deadly unrest in developing countries.

In three days of meetings that ended Sunday, finance ministers and central bankers grappled with the credit squeeze and inflation emergencies against the backdrop of an apparent US recession and a sharply slowing global economy.
The Group of Seven industrialized countries set the alarmed tone on the eve of the annual spring meetings of the 185-nation International Monetary Fund and its sister institution, the World Bank.
Confronted by what the IMF head says is the worst financial crisis since the 1930s Great Depression, finance chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States decided only greater transparency in the financial system could restore normalcy to the markets.
The G7 endorsed recommendations from an international forum and set for some of them a deadline for implementation unprecedented in its brevity -- 100 days.
Recommendation is a "gentle word," said Bank of Italy governor Mario Draghi, who also chairs the Financial Stability Forum that made the proposals. "In fact some of these recommendations are actually policy decisions."
The sudden nosedive in the global economy after several years of robust growth "even six months ago would have been unthinkable," he added. . . .
http://news.yahoo.com/s/afp/20080414/bs_afp/imfworldbankeconomyg7_080414075530;_ylt=Ajy_HaN08N re2RTqB0LJop.FOrgF

So, the question is, are we headed for financial disaster or can the IMF and the World Bank head off the crisis?

Or is there something to the Mayan Calendar?

Or is it just that rampant greed and excessive wealth doesn't work?

[Miguelito]

It's a perfect storm: high energy prices, high food prices, and the banks writing down assets like crazy. Having said that, so far, it seems to only have decreased their profits and for the most part hasn't driven them into the red -- that's reassuring. Then again, there's alot more writing off to come according to the IMF.

Still, it's probably going to be a prolonged recession -- there's a major restructuring going on with how banks lend money to customers and how those customers handle that money. There's also the inflation danger. It should take years to work that out.

Worse than a recession? Doubt it. The overall fundamentals of the world economy are good. You'd need a major constriction of something important (like energy) but that's not going to happen in the next decade.

[MichaelDeVere]

It's simple really.

In a free market, economic cycles happen.

[Bird of Prey]

The IMF doesn't agree with either of you.

[MichaelDeVere]

I don't care about the IMF.

I care about MYMF.

[robeiae]

So...it's a "perfect storm" without any wind and just a little rain? That's puzzling.

There's no "perfect storm" or anything of that type, here. Man, I hate that catch-phrase! No offense.

But the folks are right: greater transparency is needed and has been needed for quite some time. Of course, that's not going to "fix" anything in the short term. Really, nothing will do that.

Will the recession be very long? Maybe, maybe not. Economics is hardly a predictive field of inquiry. No one can know with certainty what is beyond the horizon in the economy, as has been demonstrated time and again.

But considering the bubbles of the last twenty years, this kind of thing is hardly out of the ordinary or unusual.

As to "rampant greed and excessive wealth" not working, well we have higher standards of living across the board, even as the the world's population continues to grow, than have existed at any time in the past. I'm hard-pressed to write that off as a failure of greed and wealth.

BoP, you would probably be interested in this: http://cormas.cirad.fr/en/applica/sugarScape.htm

It's quite fascinating, as an attempt to see the consequences of open free market systems. The results--especially in the most complex system--are consistent with what you are constantly deriding: a society of very, very few mega-wealthy, a decreasing "middle class" and an increasing separation between the rich and poor.

But--at the same time--the relative wealth of the poor is far greater over time, i.e. standards of living continue to increase.

[Bird of Prey]

I don't care about the IMF.

I care about MYMF.

Ah. Well if it's in dollars, it's not worth much.

[MichaelDeVere]

Ah. Well if it's in dollars, it's not worth much.

You never really know on this here interweb do you.

[small axe]

It's the End Times. I saw it on KING KONG last night. Pretty girls are reduced to stealing apples and Burlesque. Giant apes climb up skyscrapers and swat down approaching airplanes.

[Joe270]

So, the question is, are we headed for financial disaster or can the IMF and the World Bank head off the crisis?

:ROFL:

IMF and the World Bank?

Oh, that was great. I haven't laughed that hard in a long time. Thanks, I needed that.

[billythrilly7th]

Oooooh, the economy is collapsing.

Ooooh, we're going into a great depression.

http://varifrank.com/images/acoffee.jpg

Free coffee, donuts and soup?! Nothing depressing about that.

Sign me up.

[johnnysannie]

Oooooh, the economy is collapsing.

Ooooh, we're going into a great depression.

http://varifrank.com/images/acoffee.jpg

Free coffee, donuts and soup?! Nothing depressing about that.

Sign me up.

You DO know that the soup kitchen pictured was the one opened and paid for by gangster Al Capone, don't you?

This was the first but there were others, operated with Capone money. They provided three meals a day and vouchers for working men to get new clothing so they could get a job.

[whistlelock]

we're screwed. it's just that simple. we've been polishing the brass on the Titanic, and now the ice water at our feet.

So, strike up the band.