While most headlines in the financial media recently reported economists and institutions projecting the end of the recession in the second half of the year, the IMF said Monday the worst of crisis may be yet to come. While those who think we are out of the woods believe this recession will have just one dip, the IMF seems to advocate what is known as a "double dip" recession. They believe that the expected upward swing in Gross Domestic Product for developed nations will just precede yet another economic collapse in the first half of next year.
The World Bank noted last week that because of the risks in the credit and financial system, the availability of capital will remain tight, which could curb any potential recovery. That said, International Monetary Fund chief Dominique Strauss-Kahn believes that "The worst of the global economic crisis may be yet to come." Strauss-Kahn believes that the stimulus package has been too light and hasn't been around long enough to ensure rapid GDP growth.
24/7 Wall St.'s Doug McIntyre believes that Strauss-Kahn could be right as banks may be in for more trouble than believed, and high oil prices that could lead to higher inflation, deleveraging of the credit markets and unemployment. The excellent analysis of the current economic situation is a must-read for those who think this recession is done.
If there is a double dip in the current recession, it could be far worse recession if the uber-bulls continue to ignore signs that more pain may be on the way.
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Reader Comments (Page 1 of 1)
6-15-2009 @ 3:50PM
Iridium said...
I'm just a little guy with an education from Carnegie Mellon, without the access to numbers the IMF has, but I can put it together and see what is coming. It really isn't hard.
The difference between me and the people actively engaged in the stock market is that I don't need the stock market to ensure my livelihood.
Those that have a vested interest in hyping stock, analyzing stock, and selling stock can not live unless there are millions of people willing to part with their money to play the game.
They don't want to tell you the real story or give you a glimpse of the real picture. If they do they will lose their ability to make a living. That is why we had a BS rally for three months based on conjecture of a recovery that was never going to happen. By saying so they could get thousands of people to jump in the market so they wouldn’t get left behind. The charade could go on and CNBC can keep on producing their shows.
The business of talking about stocks is almost as big as actually trading stocks. That is where we have a big problem. The conflict of interest is gigantic.