Wednesday, March 11, 2009

The Coming Great Recession

The forecast from the International Monetary Fund is out - world growth will be below zero this year. It would probably be the worst performance in most of our life times, according to IMF managing director Dominique Strauss Kahn. He has given a new term to the global financial crisis- the Great Recession.

Just two months ago, the IMF had forecasted the global economy would expand 0.5% this year. But the uncertainties seemed to have move very fast, at the speed of a tsunami, because every nation has now changed their forecast. Poliiticians are no longer saying all is fine and that a recession can be avoided.

The reality is that international economy would shrink for the first time since World World II and trade will decline by most in 80 years. I think Malaysians should brace themselves a long haul. The grim statistics are there and we should start to adjust to the coming scenario. There are fears that some countries would slipped into depression - any country with contraction of more than 10% from peak to trough is said to have fall into this category. Latvia is the first to enter that category. See my comment The Coming Great Recession.

5 comments:

bennyloh said...

NOTHING FRIGHTENS THIS GROUP ANYMORE

Anonymous said...

If Malaysia is not careful, we may fall into this category. This 60B mini budget is not generating any good feeling about it. It looks like
save a crony budget.

May god save our soul!

Anonymous said...

Datuk Wong please explain or put up in your blog...how this recession will affect the common man in malaysia.Thank you.

Michael Gaw said...

Dear Wong,

We hear of govt. announcing stimulus package, mini budget, midi budget,maxi budget mounting to 7, 10, and 60, BILLIONS of ringgits.

All these amounts sound mind boggling with 9 ZEROS behind the figures.

These are all mere figures with many zeros to the common man.

My question is this:

What is the impact of ths huge amounts to the common man, the salary man, middle class, taxi drivers, salesman, remisiers, etc.????

Are the funds only benefitng companies, contractors, developers, car companies, etc.????

Would the common man benefit from this huge infusion of funds??

So far, the 7 billion used by Value Cap has not achieved its purpose. The market is heading south, and foreign funds are gleefully selling to Value Cap. Inspite of all this , the market is going south.

I fail to see what value investing the govt. is taliking about.

Catching a falling knife??

The common man as I described above is wondering when, if ever, will they get the benefit of this 60 billion mini budget.

Put the actual cash into the pockets of the needy, the common man, etc. That would be a more effective 'infusion of funds'.

ChengHo said...

IMF very quite this day not like 1997 wonder why? when they have so many idea and push their concept around the globe those year
In China factory closed almost every day , 16 million peoples already out of job lucky China still an authoritarian nation otherwise the former USSR effect will happen