Expect the World Economy to Suffer Through 2009

WSJ ^ | January 23, 2009 | IAN BREMMER and NOURIEL ROUBINI

[yoe]

Some optimistic experts are now saying that though this will be a turbulent year for global markets, the worst of the financial crisis is now behind us. Would it were so. We believe that 2009 will be tougher than many anticipate.

We enter the new year grappling with the most serious global economic and financial crisis since the Great Depression. The U.S. economy is, at best, halfway through a recession that began in December 2007 and will prove the longest and most severe of the postwar period. Credit losses of close to $3 trillion are leaving the U.S. banking and financial system insolvent. And the credit crunch will persist as households, financial firms and corporations with high debt ratios and solvency problems undergo a sharp deleveraging process.

Worse, all of the world's advanced economies are in recession. Many emerging markets, including China, face the threat of a hard landing. Some fear that these conditions will produce a dangerous spike in inflation, but the greater risk is for a kind of global "stag-deflation": a toxic combination of economic stagnation, recession and falling prices. We're likely to see vulnerable European markets (Hungary, Romania and Bulgaria), key Latin American markets (Argentina, Venezuela, Ecuador and Mexico), Asian countries (Pakistan, Indonesia and South Korea), and countries like Russia, Ukraine and the Baltic states facing severe financial pressure.

[snip]… That's not going to happen, because politicians design stimulus packages with political motives -- to satisfy the needs of their constituents -- not to address imbalances in the global economy.(e.m.) This is as true in Washington as in Beijing. That's why politics will drive the global economy more directly (and less efficiently) in 2009 than at any point in decades. Its politics that is creating the biggest risk for markets this year.

[yoe]

The money in stimulus packages goes where? Demand an accounting of every taxed dime.

[TaraP]

As long as we have trees and can make paper we have the crisis solved,as we make bunches and bunches of imiginary money on our trustworthy handy dandy money making machine..

The Obama Administration...

We solved the problem!

YIKES!!!!!!!!!!!

[silverleaf]

That's not going to happen, because politicians design stimulus packages with political motives -- to satisfy the needs of their constituents -- not to address imbalances in the global economy

Several problems here

First, the majority of Americans OPPOSE these massive spending bills or are starting to- whether Congress calls them "bail outs" or "stimulus packages". Ordinary Americans (90% who are paying their mortgages and credit card bills on time) pay their bills with money they know they have, and they pay their taxes too. Congress cares about neither.

Second, even dummies are starting to recognize that these bogus "stimulus" plans won't stimulate anything except special interests like welfare recipients, labor unions, social engineering programs and other liberal front groups.

[PeterPrinciple]

As long as we have trees and can make paper we have the crisis solved,as we make bunches and bunches of imiginary money on our trustworthy handy dandy money making machine..

---

No trees were harmed or destroyed to make this money but a few electrons were pushed around.

[RSmithOpt]

Nahhhh, come on WSJ...is O gonna make the entire world sacrifice just for him?

[Jubal Madison]

Good luck with that. They didn’t listen to us about the bailout, do you think they care if we have an account of where the money goes? We should all call our elected officials and let them have it, though. They might not understand common sense but they may understand irate voters.

[nicola_tesla]

http://market-ticker.org/archives/732-TEA-PARTY-February-1st.html

Try this.

Tea Party Feb 1st - send a teabag to all your CONgresscritters, leaders etc etc.

If you don’t want to send the real thing, send/email/fax this: http://www.facebook.com/photo.php?pid=2347357&id=577160906&op=1&view=all&subj=58862492776&aid=-1&oid=58862492776

[Wayne07]

And what’s the carbon footprint of the computers that were used to push those electrons?? Stimulus causes global warming, and must be stopped!

[pallis]

I expect the economy to go straight down the crapper, and beltway Republicans will hold open the lid for Mr. Obama.

[kingpins9]

This mess isnt going to improve until 2011. And the gov’t knows it. Too many bad loans coming.

[familyop]

"because politicians design stimulus packages with political motives -- to satisfy the needs of their constituents -- not to address imbalances in the global economy."

...their constituents who continue to skim bribe loans from trade imbalances. They don't want to let their malfunctioning global machine fall apart, because resulting domestic competition would end further attempts to establish such radical imbalances for a long time.

[Jubal Madison]

Hey-This is a good idea! Thanks.

[Ciexyz]

Isn't the UK on the verge of bankruptcy?

[AndrewB]

No trees are used...flax maybe.

[Big Horn]

I think the economy will get better when the MSM says so. You can be out of a job and house ,but if the guy on the screen says its good it must be good.