Tuesday, February 19, 2002

'The Chastening': When the I.M.F. Took a Shelling [Book Review] "The global economy was always much shakier than most people imagined. One of the most severe economic crises since World War II occurred in 1998, a crisis of confidence that swept through the developing world and even threatened to spread to the United States. ... The most optimistic interpretation that can be placed on the crisis was that it proved that ''crony capitalism'' is incompatible with open capital markets ... " " ... the guardians of the world's financial stability were often making it up as they went along. They failed to see the storm coming ... The I.M.F ... its basic philosophy -- belief in free markets tempered by a safety net ... "  " ... we could well see a repeat of the crisis of 1998. ... this time the outlook appears much darker. ... the Federal Reserve has few weapons left in its armory. Islamist terrorism is not the only horror that America has to worry about." ... [more] 4:18:42 PM    comment  []

Japan's Debt Under Study for New Cut in Rating " ... country is not ... deal[ing] with deflation and debt ... Moody's ... was reviewing Japan's yen-denominated debt for a possible downgrade in the next three months." "The warning ... increases the pressure ... before President Bush arrives on Sunday to overhaul the stagnant economy and keep prices from falling." " ... there could be credit risk contagion between domestic and foreign financial markets ... and Japan's woes could begin taking a toll in the United States. ... draw up a strategy to combat deflation, which Moody's said was making "a serious government debt problem worse." "The government expects to owe 693 trillion yen ($5.2 trillion) in long-term debt by March 2003, equivalent to 140 percent of the country's gross domestic product or more than $45,000 for each citizen. Financial commitments to state- sponsored companies add further to the burden." ... [more] 3:55:54 PM    comment  []