Blog Post 10

Stabilizing a Stabilizer

http://www.economist.com/world/international/displaystory.cfm?story_id=12725914

After the surging price of oil last year, the debate has recently turned to the huge decrease in the price of oil.  Now below $50 a barrel, oil producers are trying to cut down production 1.5 million barrels a day.  This cut is not happening fast enough however, because economies around the world are demanding so much less.  America, for example, is using 5% less oil than last year.  This is causing huge decreases in income for OPEC.  The oil producing countries are aiming for $75 a barrel, which many assume is reasonable, but the struggle comes from every country do there share, and in doing so losing there share.  

 

To bail or not to bail?

http://www.economist.com/world/europe/displaystory.cfm?story_id=13062174

The once admired euro is becoming more and more less attractive with its countries barely making it through the economic crisis.  Almost a year ago, Britain (who is not on the euro) was struggling the most and was criticized for not adopting the euro.  Now Britain is looking better than most of the Euro countries.   With Greece, Ireland, Portugal, Spain, and Italy all having massive debts, the future is looking very unstable.  Almost $2 trillion dollars of public debt has to be raised this year.  People who made a 10-year note investment in the government, are now ready to cash the investment but in doing so, may very well bankrupt their countries.  If the consumer realizes that the government may not be able to pay them back, then there would be a massive bail-out, and everyone would start to demand their money back.  People would lose confidence and trust in the government.

 

 

Raise is Expected for IMF

http://www.forbes.com/2009/04/21/imf-europe-banks-markets-equity-recession.html

The number crunchers at the IMF are expecting $4.1 trillion dollars in loss of assets by the world’s banks and stating that in order to fix it billions of dollars will have to be given back for the banks to be able and confident to make additional loans. The IMF is expecting to give US banks over $250 billion dollars to get the economy back to pre-crises levels, not to mention the $375 billion it is planning to give the European banks. They are also considering giving specific countries, such as England, an additional $100 billion to jump start individual nations. All in all, the IMF is planning on contributing over $600 billion dollars to Europe. That is a lot of money.

9th Blog Post

Bosnia to get IMF rescue loan if it starts saving

http://www.cnbc.com/id/30595497/for/cnbc/

Officials say Bosnia will have to cut spending to get a euro1.2 billion loan from the International Monetary Fund. The three-year standby arrangement should help the country overcome the impact of the global crisis. Bosnia's Prime Minister Nikola Spiric told media Wednesday that the talks with the IMF have been concluded and that the country can count on the financial injection if it decreases budget spending by June and revises its various budgets by August.  If the saving measures are implemented, the IMF executive board will approve the loan and the first euro200 million would reach Bosnia's Central Bank in July.

 

IMF: Latam recovery quicker than advanced economies

http://www.cnbc.com/id/30598619/site/14081545/for/cnbc/

The Latin American and Caribbean region will recover more quickly from the global crisis than advanced economies because they are less exposed to systematic banking problems and have more flexibility regarding policies to spur growth, the IMF said on Wednesday. In a report on the hemisphere's outlook, the International Monetary Fund said it expected Latin American and Caribbean growth to rebound around 1.5 percent by 2010 while prices of the region's commodity exports should recover 3 percent next year.

 

World Bank Sees Bleak Prospects For Asia

http://www.forbes.com/2009/04/07/asia-world-bank-markets-economy-forecast.html

Excluding China, Asia’s financial crisis has not bottomed out yet and is expected to get worst in the rest of 2009.  This is very interesting to America because we are perceived as a country that has already bottomed out of its recession and is expected to start growing again.  This Asia problem, will only hurt the US economy in the long run and there will be an balancing act that will have to take place over the next couple of years.  America will also hurt by the lack of imports and exports that occur on an unprecedented level between the two countries.