IMF statement

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“Ten days ago, the IMF cut its world-growth estimate for this year to 0.5 percent, the weakest pace since World War II. Stimulus packages alone won’t succeed in dragging the global economy out of recession unless confidence is restored in the banking system, Strauss-Kahn said today.”

I do not agree.

An ongoing fiscal adjustment alone can easily do the trick.

The banking system is functioning well enough (clearing checks and making only the loans it feels are attractive on a risk adjusted basis) to support a full blown economic boom should the government get the fiscal right.

>   Warren:
>   Have you seen this analysis by the IMF. Tell me that they are clueless. My
>   analysis is that they may be on the money.

IMF Says Advanced Economies Already in Depression

by Angus Whitley and Shamim Adam

Feb 7 (Bloomberg)