Worst of financial crisis yet to come: IMF chief economist

[FRED]

Worst of financial crisis yet to come: IMF chief economist
Nov 22 07:04 PM US/Eastern (Breitbart)

The IMF's chief economist has warned that the global financial crisis is set to worsen and that the situation will not improve until 2010, a report said Saturday.

Olivier Blanchard also warned that the institution does not have the funds to solve every economic problem.

"The worst is yet to come," Blanchard said in an interview with the Finanz und Wirtschaft newspaper, adding that "a lot of time is needed before the situation becomes normal."

He said economic growth would not kick in until 2010 and it will take another year before the global financial situation became normal again.

The International Monetary Fund on Friday promised to help Latvia deal with its economic crisis after it assisted Iceland, Hungary, Ukraine, Serbia and Pakistan.

But Blanchard said the IMF was not able to solve all financial issues, in particular problems of liquidity.

Withdrawals of capital leading to problems of liquidity "can be so significant that the IMF alone cannot counter them," he said, adding that massive withdrawals of investments from emerging countries could represent "hundreds of billions of dollars.

"We do not have this money. We never had it," he said.

The IMF had spent a fifth of its 250 billion dollar (200 billion euro) fund in the last two weeks, Blanchard added. more...

[grizam303]

Re: Worst of financial crisis yet to come: IMF chief economist

(more is only two lines)

He also urged central banks around the world to cut interest rates, after the Swiss National Bank made a surprise one percentage point rate cut Thursday.



The central banks "should lower interest rates to as close to zero as possible," he said.

I think there are going to be a couple of pivot points:
1 - when it stops getting more worse (economy deteriorates at a slower rate than what it has been)
2 - when it stops getting worse (economy stops deteriorating)
3 - economy starts getting better

That being said, I think we should hit 1 before talking about 3.

[FRED]

Re: Worst of financial crisis yet to come: IMF chief economist

(more is only two lines)


I think there are going to be a couple of pivot points:
1 - when it stops getting more worse (economy deteriorates at a slower rate than what it has been)
2 - when it stops getting worse (economy stops deteriorating)
3 - economy starts getting better

That being said, I think we should hit 1 before talking about 3.

These are perhaps points 7, 8, and 9 . Before any of these the economy becomes virtually unrecognizable compared to today.