Post by KNOWTHIS on Jan 26, 2009 13:07:50 GMT -5
www.washingtonpost.com/wp-dyn/content/article/2009/01/23/AR2009012304172.html
Downturn Accelerates As It Circles the Globe
Economies Worse Off Than Predicted Just Weeks Ago
It's all so predictable.
news.yahoo.com/s/afp/20090126/wl_uk_afp/financeeconomybritaing20
Brown sees 'new world order' after crisis
Downturn Accelerates As It Circles the Globe
Economies Worse Off Than Predicted Just Weeks Ago
The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain yesterday becoming the latest nation to surprise analysts with the depth of its economic pain.
Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work.
"In just the past few days, we've had a big downward revision, we're seeing that an even bigger deceleration is on the way than we thought," said Simon Johnson, former chief economist at the International Monetary Fund and a senior fellow at the Peterson Institute for International Economics.
The depth of the troubles, analysts say, indicates that nations may need to spend more than the billions of dollars already planned on stimulus packages to jump-start their economies, and that a global recovery could take longer, perhaps pushing into 2010.
Analysts are particularly concerned about the slowdown in China and the recession in Europe. There is mounting concern about the stability of the euro and the British pound, which dropped to a 24-year low against the dollar yesterday. Analysts are fretting about the possibility of a debt default in a euro-zone country that could send fresh shock waves through global financial markets.
The problems in Europe now appear to be as bad if not worse than those in the United States. In the last quarter of 2008, the British economy shrank at an annualized rate of 6 percent. That is worse than economists expected, but also showed the British recession may be even harsher than the one in the United States, where analysts predict data expected next week will show the U.S. economy to have contracted between 5 and 5.5 percent in the last quarter of 2008.
Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work.
"In just the past few days, we've had a big downward revision, we're seeing that an even bigger deceleration is on the way than we thought," said Simon Johnson, former chief economist at the International Monetary Fund and a senior fellow at the Peterson Institute for International Economics.
The depth of the troubles, analysts say, indicates that nations may need to spend more than the billions of dollars already planned on stimulus packages to jump-start their economies, and that a global recovery could take longer, perhaps pushing into 2010.
Analysts are particularly concerned about the slowdown in China and the recession in Europe. There is mounting concern about the stability of the euro and the British pound, which dropped to a 24-year low against the dollar yesterday. Analysts are fretting about the possibility of a debt default in a euro-zone country that could send fresh shock waves through global financial markets.
The problems in Europe now appear to be as bad if not worse than those in the United States. In the last quarter of 2008, the British economy shrank at an annualized rate of 6 percent. That is worse than economists expected, but also showed the British recession may be even harsher than the one in the United States, where analysts predict data expected next week will show the U.S. economy to have contracted between 5 and 5.5 percent in the last quarter of 2008.
It's all so predictable.
news.yahoo.com/s/afp/20090126/wl_uk_afp/financeeconomybritaing20
Brown sees 'new world order' after crisis
LONDON (AFP) – Prime Minister Gordon Brown said Monday the financial crisis must not be an excuse to retreat into protectionism and instead be viewed as the "difficult birth-pangs of a new global order".
In a speech, he will urge countries to avoid "muddling through as pessimists" and "make the necessary adjustment to a better future and setting the new rules for this new global order", according to his office.
Official data confirmed Friday that Britain is in recession. Days earlier, the government unveiled a new package of measures to help the flow of credit in the economy, but Brown has argued global action is needed for a quick recovery.
He will warn Monday that the crisis has given the world a choice: "We could allow this crisis to start a retreat from globalisation.
"As some want, we could close our markets -- for capital, financial services, trade and for labour -- and therefore reduce the risks of globalisation.
"But that would reduce global growth, deny us the benefits of global trade and confine millions to global poverty.
"Or we could view the threats and challenges we face today as the difficult birth-pangs of a new global order -- and our task now as nothing less than making the transition through a new internationalism to the benefits of an expanding global society."...
In a speech, he will urge countries to avoid "muddling through as pessimists" and "make the necessary adjustment to a better future and setting the new rules for this new global order", according to his office.
Official data confirmed Friday that Britain is in recession. Days earlier, the government unveiled a new package of measures to help the flow of credit in the economy, but Brown has argued global action is needed for a quick recovery.
He will warn Monday that the crisis has given the world a choice: "We could allow this crisis to start a retreat from globalisation.
"As some want, we could close our markets -- for capital, financial services, trade and for labour -- and therefore reduce the risks of globalisation.
"But that would reduce global growth, deny us the benefits of global trade and confine millions to global poverty.
"Or we could view the threats and challenges we face today as the difficult birth-pangs of a new global order -- and our task now as nothing less than making the transition through a new internationalism to the benefits of an expanding global society."...
