The Global Economic Recession Is Watching Us Too? - Recession France

For everything about the crisis in financial markets ...


U.S. stock markets, European and Asian tumble, the U.S. banking sector suffers heavy losses (Merrill Lynch accuses a loss of $ 7.8 billion in 2007), and consumption in the U.S. plunged. All indicators of a possible recession in the global economy are present. How did we get here? Europe and especially France can they be affected? What are the options for overcoming the crisis? 20minutes.fr an update.

What is a recession? There is talk of recession when the Gross Domestic Product (GDP) decline of a country in two consecutive quarters.

The United States are not yet in this case. According to Natixis, which estimates that 40% risk of recession, growth amounted to 0.3% annualized pace in the first quarter 2008 and 0.9% in the second quarter. There is thus a slight increase, although the risk of going negative is not rejected. "Just a sharp rise in the unemployment rate as in December (0.3% to 5%)," explains Nathalie 20minutes.fr Dezeure, economist at Natixis. "During the previous recession, the unemployment rate was still higher than" relativise she said.

How did we get here? "The bursting of the housing bubble," respond by heart experts. "Everything is on the excess debt of American households," explains Nathalie Dezeure. Many economists criticize the American Federal Reserve (Fed) and his former boss, Alan Greenspan, for not having supervised the growth of mortgage credit risk ( "subprime"). Dean Baker is going to say in "Liberation" dated Thursday that the housing bubble was created to stop the recession caused by the explosion of the previous bubble in 2001 ...

Europe and France can they be affected? It depends on the intensity of the crisis in the United States. But the turmoil of U.S. financial markets have already achieved the European stock exchanges. "If our banks are beginning to be more restrictive conditions on borrowing, it will impact the French economy, for sure," warned Alexander Law, an economist at the institute Xerfi.

The side of the trade with the United States, the "Ireland, the Czech Republic and the UK are much more exposed than France," says Jean-Christophe Caffet of Natixis. "But if they are affected, France will eventually be too," he says, noting that "exposure to U.S. recession is asymmetric across countries in the euro zone." Alexander Law agrees: "If the dollar unscrews, France suffer more from the overvaluation of the euro." Understand: its products more competitive in emerging countries than Germany, more specialized, will be more difficult to export to USA.

Comment sortir de la crise? American Federal Bank in late January is expected to announce a fall in interest rates by 0.5 percentage points from 4.25 to 3.75% (against 4% for the European Central Bank). In order to allow banks to relax some of their borrowing in order to boost consumption and hence growth. "A boost tax should also be given to households," said Nathalie Dezeure. We then avoid the worst. However, according to Yves Marçais, strategist of Global Equities in Paris, the "divergence of views within the Fed and the ECB, one preparing to lower its rates and the other saying that it will perhaps back ", contributes to the confidence of investors. "If you look at history, he adds, it must be remembered that in 1987 this type of disagreement between Bundesbank and Fed at the time, which led to the crash. It is hoped that central bankers will be smart enough to remember. "

Catherine Fournier

Source: Here

Recession - proof Jobs - JOBS TO TEST recession

While no profession or trade is absolutely immune to economic fluctuations, there are some who may face the ups and downs better than others. Rather than go to the unemployment line the next time government officials back to bad economic news, it might be useful to adopt a profession a little more secure in the long term.

Certain factors suggest that a profession can withstand a downturn, especially if they are in high demand jobs that require special skills, charges that continue to provide goods and services despite the difficulties of the economy, jobs and stable companies.

Recent statistics indicate that professions such as construction, retail trade, transport, manufacturing and professional jobs as lawyers and architects are being affected in this economic situation. However, these are to be considered in case of recession

• Sales and Marketing: A person who supplies or money to save a company can be relatively safe in his office.

• Education: Where students will need for the teachers and administrative officials who populate the nation's schools.

• Health and Pharmacy: It is impossible to reverse the passage of time, and still has not discovered the Fountain of Youth. As we grow older, there is growing demand for health care and quality medicines for health. Think of work as a medical assistant. Managed care companies consider positively the work of physician assistants (PAs) because they earn less than doctors, but offer the same attention.

• Federal Jobs: There are few federal layoffs in the area, even during a recession. Generally, only lose jobs federal employees when they leave and are not replaced. Often, the Federal jobs offer good benefits and stability increases, which make them attractive options for people seeking stability.

• Computer: It is worth reviewing the operation of computers and be able to create programs or manage databases. Complex systems that require distinctive skills will never lose its popularity.
• Environmental Industries: The movement "green" is not destined to disappear, according to experts. It is time to join the job of environmental protection for you.

• Accounting: With the changing laws and tax codes, certified public accountants maintain stability in times of recession.

• Financial Planning: The "Baby Boomers" are aging and need advice about how to manage their retirement funds, ensuring the use of financial planners. Besides, everyone wants to "stretch" a little more money these days.

Financial Crisis of 2008 - 2009

The consensus among economists assumed that the financial crisis of 2008 unfolded, directly due to the collapse of the housing bubble in the United States in 2006, which resulted in about October 2007, the so-called crisis of subprime mortgages. The impact of the mortgage crisis began to manifest itself in an extremely serious since the beginning of 2008, getting first to the U.S. financial system, and then to international, resulting in a serious liquidity crisis, and causing, indirectly, other economic phenomena, such as a global food crisis, different stock collapse (like the stock in January 2008 and the global stock market crisis of October 2008) and, overall, an economic crisis at international level.

All analysts agree that the credit crisis started in 2007 is due to subprime mortgages, which is that U.S. banks were high-risk loans to people with poor credit histories.

However, behind the visible and immediate causes that triggered the crisis, the root causes are complex: a banking system without regulation or poorly regulated, especially in the areas of lending and investment, which led to the creation of mortgage virtually vehicles speculative for people without a stable source of income. This, coupled with low interest rates of the monetary authority of the United States for several years offered a space for speculation and over-extension of credit.

Most analysts believe that the primary cause of the financial crisis, chronologically, was the excess global liquidity. Greater liquidity factors are both external and internal. One factor was, at least for the recent period, the very rapid increase of foreign exchange reserves of central banks in emerging countries (especially China) and countries exporting raw materials (especially oil). This increase in reserves was due to significant trade surpluses and high savings rates in these countries, which met high growth rates since 2000. Another factor that also feed the global liquidity was the expansion of credit, because of reduced interest rates by central banks of developed countries, especially the United States. Indeed, the EDF is a monetary policy of low rates, allowing an abundant and cheap credit to alleviate the consequences of the crisis and the dotcom withstand U.S. economic growth Another objective of this policy was to encourage the increase in property prices. Indeed, the increase in property prices has a positive impact on consumption and economic growth, and monetary authorities decided not prevent price increases real estate and eventually the emergence of a housing bubble. The emergence of an excess liquidity was also helped by the development of financial innovations. [6] With this abundantly available liquidity, and set to increase in property prices, banks are giving increasing mortgage loans.

However, there was a breakdown of the financial performance of banks and financial investors. The requirement of excessive profitability and relaxation of conditions for loans, as well as development of financial practices at high risk, have encouraged the financial crisis. Indeed, mortgage loans granted by banks were risky.

After the fall of the stock exchanges in 2000, financial intermediaries (securities firms and commercial banks had to find other investments that offer high performance, because low interest rates, could not have high profit margins for the accounts and deposits. Therefore created mortgage banks with significant benefits (thanks to variable). So the major banks refuse to grant credit to people who did not meet the requirements and equities, encouraged by the monetary policy of the FED. Before 2001, few banks investing in the subprime market, but between 2001 and 2006, the amounts have increased from 94 to 685 million dollars. During this period the quality of the loans are steadily deteriorating and the number of defaults rose, in part because of rising interest rates guideline FED. The fall in housing prices and rising interest rates led to a large number of people unable to pay their mortgages.

At the same time, these mortgages and other loans (bonds or shares) were placed through a process known as securitization, in portfolios called Collateralised Debt Obligations (CDO)

Sold to investors worldwide to diversify risks. These bonds were rated excellent by the specialized agencies in the rating of risk. The same time, banks are finally left the junk bond mutual funds by creating special entities called Conduits subsidiaries. These funds Special bought the junk bonds, which disappeared from the balance sheets of banks. The mortgage loans of banks were sold to hedge funds that seek significant risk because they have higher profitability. These investment funds deregulados borrow using these CDO collateral.

Global Financial Crisis - Effects On USD

In a context where there is a pace of growth slowed, it becomes evident that the continued weakness of the dollar against major currencies. Know what the implications will stage worldwide in emerging countries and in Argentina
The global financial crisis further weaken the dollar

The impact of the housing bubble on the financial system was so significant that although the Federal Reserve of the United States (EDF) to continue injecting liquidity and lowering rates, it is unlikely that the current credit restrictions dissipate quickly.



Indeed, for many, the sensation of heat is that the U.S. economy continued to deteriorate. In that sense, M & S Consultants, says in its latest report that the market can not remove the head of the confluence of negative elements that started the year (hikes in fuel prices and food, real estate deflation, complications of credit, financial turmoil, low employment and inflation on alert).

Millions in losses
According to the latest report published by the consulting Ecolatina, losses announced by banks in the second half of 2007 reached U.S. $ 52,000 s for the Americans yu M $ 35,000 M s for European banks. (See: Citigroup suffered the biggest loss in its history: nearly U.S. $ s10.000 M)

While it is still premature to determine the exact figure, analysts speculate that the total losses could be located between 200,000 and 300,000 million dollars. It is not unreasonable to anticipate that in this context, the mood of investors will remain very volatile in the coming months and that the uncertainty surrounding the financial market will remain very high.

Lower growth
If this pressure is compounded by the negative wealth effect arising from the collapse of housing prices in the U.S., the result will be a very low GDP growth in the world's largest economy during 2008, which many analysts see below 2%.

But the focus of the problem is concentrated in the first part of the year, as there is consensus that during the first half the pace of expansion will be located around 1% as a result of credit restrictions, the continued decline in the home prices, high commodity prices for energy and a very limited rise in domestic consumption (there is consensus that the slowdown would have been heightened between December 2007 and early 2008).

Therefore, threatened by recession, the financial market already discounted the Fed in the U.S. (EDF) announced a drop of at least 50 pb at the next meeting on January 31. Although in recent days a growing consensus on a low and might even reach the 75 pb

Moreover, many banks and analysts and evaluated the possibility that after this reduction, the reference rates in the U.S. are located below those set by the European Central Bank (ECB). In other words, the interest rate that applies to the dollar could fall below that which governs the European currency.

But fears of a recession, there is an additional factor: the year 2008 is in the U.S. presidential election, so there will be greater official concern to reduce the costs of the crisis in terms of jobs.

Recession stalking andalusia
"The U.S. economy is already in recession or close to it, "he dared to say Alan Greenspan, former head of the EDF, in an interview with the Wall Street Journal. His words were the trigger to destroy all world markets.

In the same vein, a report on global risks, submitted days ago in London by the World Economic Forum in Davos (Global Risks 2008), also about the possibility of a recession in the U.S. economy for the next twelve months, with the prognosis matching Merryl Lynch and Goldman Sachs in its latest published reports.

"Investors are increasingly convinced that consumption will decrease, leading to a recession, since it represents two thirds of U.S. economic activity," he explained to AFP analyst Al Goldman.

Low rates and weak dollar
Different analysts consulted by infobaeprofesional.com agree that a scenario of low rates and low growth rate also means that:

* The continued weakness of the dollar relative to major currencies.
* The euro may reach a maximum of $ 1.55 s mid-year, slightly above the current level (u $ s 1.45 / 1.49).
* The prices of major commodities would be upward pressure, given the weakness in the benchmark for excellence, which is the dollar.

China ensures much of the growth of emerging
In recent years, China has become one of the main proponents of the global economy and is particularly important in the commodities market.

* In just ten years, imports of primary products, including fuel, rose eight times.
* This phenomenal rise prompted a hike in the international price of these goods from more than 135%.

These values are more than eloquent to say that the future of the economies of exporting raw materials is tied to what happens with China.

If completed as expected cooling of the U.S. economy during the first half of the year, it is estimated that the impact on China's economy will only be marginal, since fall of 10.5% to 9.5%.

* In terms of impact on the price of commodities, is expected to demand China to continue with the current rates of expansion.
* Moreover, considering the dynamics of domestic consumption, the Chinese government implemented an increase in withholding taxes on wheat, corn, rice and its derivatives earlier this year which will add additional pressure to prices.

With this perspective, it is easy to conclude that China's strong growth in emerging countries will cushion the impact of a sharp U.S. slowdown.

The impact on Argentina
Arise in this context important implications for emerging markets in general and Argentina in particular.

* The slowdown in the U.S. economy and the lower dynamism of the economies that make up the Eurozone scheduled for 2008 are not promising for our economy.
* By contrast the world, especially China, India and Russia remain very seekers Argentine products. Supports this theory that the growth in prices of major commodities exported by Argentina does not answer but only for transient structural changes in global demand.
* It is expected that the elements that drive the consumption of these products will be maintained in the medium term and even increase, generating further increases in contributions.
* In this context, the reduced demand from the U.S. Argentine products would be affected, but mainly in trade in manufactured home industry, as foreign sales of fuels and energy depend essentially internal (energy shortage) and Strong global demand for primary products and manufacturing of agricultural origin guaranteed placement.
* Another important factor for the Argentine economy is the sustained weakness of the dollar. In 2008, the U.S. currency continued ceding ground with respect to other currencies but at a slower pace.
* While awaiting a sharp appreciation of the real exchange rate in relation to the U.S. (around 11%), loss of competitiveness will be reduced (7%) as the strengthening of the Euro and the Real-as in 2007 - will moderate the loss of competitiveness.
* Finally, from a financial point of view, although the EDF is expected to make a significant reduction in fees, yet weigh important sources of uncertainty that foster greater risk aversion on the part of international investors (magnitude of losses financial system, depth of the crisis, the risks of recession, etc.).

Since the beginning of the decade the internal conditions of the emerging countries were strengthened, and this acts as a defense against any external shocks. This is reflected in its current account surplus in the accumulation of international reserves and reduced requirements for funding as a result of the policies of debt cancellation and increased tax savings.

Its the decline in interest rates in the U.S. bring relief to the financial commitments from emerging economies, this does not necessarily imply a favorable scenario for placing new debt.

For this scenario to be attractive again, it will be necessary to normalize the situation and reduce the U.S. financial uncertainty is the extent of it. To which the response should join the EDF to the crisis. Only met these conditions, it is foreseeable that regenerate a good scenario for capital flows back to favor emerging assets.

The economic recession caused biggest increase in unemployment in history

Services account for one in two of the 192,658 registered in the last month with the same level of unemployed in 1996. Zapatero, says that there are signs of improvement

Registered unemployment in the public employment services has risen for the seventh consecutive month in October, a month traditionally bad for the labor market but rather, has increased by about 192,658 people in September, which has placed the total number of unemployed at 2,818,026, a 7.34% increase a month earlier and the largest number of unemployed since April 1996. In fact, the strong rebound in October of nearly 200,000 people is the largest hike intermonthly throughout the series "because he had never experienced an economic well," said Secretary of State for Employment, Maravillas Rojo. Faced with the deterioration, President Zapatero has launched a message of confidence to citizens and businesses to ensure that "can maintain its margin of tranquility" and has argued that the Government is carrying out the "appropriate policy" to the crisis.

The economic downturn is being fattened in the labor market data showing "bad, we can not say otherwise," he admitted his part, Economy Minister Pedro Solbes, who added that the fight against unemployment is the Priority Executive. If just two weeks ago was the Labor Force Survey that ignited the alarm signals after retracting the unemployment rate to 2004 levels today are the INE data which show that employment is going through its worst time in recent decades. In this sense, the 2.8 million registered unemployed at the end of October represent a 12.28% of the workforce, almost one point above the rate of 11.33% reflecting the INE survey and only three tenths below the Government's forecast for the next 2009 (12.5%).

From Moncloa, the chairman of the Government Jose Luis Rodriguez Zapatero, has defended the measures announced so far in pursuit of the economy to regain its potential and create jobs again. "Our policy is right," he emphasized. In addition, the State has ensured that "dump all their investment capacity, which is a strong capacity at the low debt to address this deterioration. The socialist leader has committed in this regard the support of the Executive to the families and communities affected by the crisis to the economic problems facing enterprises in the strategic sectors. "Citizens and businesses can maintain a degree of calm," he added.

37% more in one year

In the last twelve months, the number of unemployed has increased by 769,449, a 37.56%, which increases the pace of advancement of the previous crisis in 1993 (15% with 95,983 unemployed). In addition, differences that mark the rise in unemployment then was due primarily to the destruction of jobs, now the lists of feeds largely on new population, although the Spanish economy and destroying jobs takes two months for the first time in fifteen years, as shown by data from Social Security.

Despite the obvious deterioration and "no intention of circumventing the negative," Red has been justified, it should reflect positive "signs of hope and change." Among them, the secretary of state stressed the recruitment of October (180,229), which exceeds the number of contracts for the same months before the October 2006 reform. Against this background, Red reiterated yesterday that the chairman of the Government, José Luis Rodríguez Zapatero, announced immediate and urgent measures to support families and jobs. It has also announced that "there will be the last."

Turning to the data of the past month, more than half the 192,658 registered unemployed in October, six times more than the same month last year, corresponding to the service sector, which has added 113,720 new unemployed, a 7.49% increase . Meanwhile, in the construction, unemployment has moved in 36,275 people (8.18%) in the industry, 20,144 (6.12%) in the group had never been employed in 13,480 (5.41%), and in agriculture, 9,039 (10.56%).

Unemployment rises by 86% among foreigners in a year

Unemployment has increased among men, with a 9.61% to 1,335,865 over 117,133 unemployed people, and among women, an increase of 5.37% to 75,525 more unemployed to a total of 1,482,161 stops. It has also increased among children under 25 years on 39,112 people, 12.24 percent, and among foreigners, a 12.92% to place the total unemployed at 337,493, a 85.62% higher than a year ago by the special effect of the cessation of construction in this group.

Membership also has shown a negative trend in October. According to data made public today by the department that runs Celestino Corbacho, the average number of registered social security has declined in October at 101,886 people, to stand at 18,918,473 workers, representing the first decline in a month of October since 2001, which began this indicator.

Of the total membership means belonging to 14,435,444 in October Regime of Social Security, 119,377 fewer than in the previous month, while the Special Autonomous System (RETA) totaled 3,355,586 members, 16,105 less than a month before . The total number of registered October 31 stood at 18,706,423, 130,879 fewer than at the end of last month.

Economy Recession in Mexico -1.2% decline in 2009: UN

* The crisis is deeper and more prolonged what was thought Rob Vos
* In the best of scenarios advanced 0.7%
* Risk of forced landing of the U.S. dollar

In the best case scenario, the progress of our economy for 2009 would be 0.7 percent, but the risk of a deep global recession, especially the U.S., and because of our proximity to that country, the outlook is pessimistic that a record decline of 1.2 percent.

According to the report World Economic Situation and Prospects 2009, prepared by specialists from the United Nations (UN), the risks facing the economy of the world show that the crisis is deeper and more extensive, so we thought.

This, because of the prolonged credit restriction in the major economies, the strong capital investment in emerging countries and the possibility that this was a forced landing of the U.S. dollar.

Rob Vos, director of the Division of Policy Development and Review Department of Economic and Social Affairs of the UN, said that the pessimistic scenario, "Mexico, which is very close to the United States is very concerned and in 2009 will decline by 1.2 cent.

The greatest damage

Thus, Mexico will be in developing countries with significant decreases in its Gross Domestic Product (GDP), which contrasts with the outlook for other nations.

For example, in the baseline scenario, Brazil will advance 2.9 percent, and at worst, 0.5; China may register a maximum of 8.4 and a minimum of 7 percent, India, from 7 to 4.7, and Russia, between 4.8 and 2.5.

"Mexico and Central American countries are those that have the greatest impact in the global economic downturn.

This subregion will be directly hit by the recession in the U.S. market, which sent its manufactured exports and providing employment to its migrants, "says the study.

For Vos, in the pessimistic scenario, there is a risk that the assessment was that the U.S. dollar sunk to come, because once they are completed and support programs reinvestment again come to light the U.S. deficit, which cause a fall in the greenback.

Given the current situation, he added, the U.S. president-elect, Barack Obama, only the option of printing more dollars to fund its programs, and this will cause the currency is cheaper, and if the fall is sharp can cause panic in financial markets.

Moderate ambient

In a moderate, said the U.S. recession in 2009 will mean that the economy will decline 1 percent, Japan 0.3 and the 15 European Union countries 0.7, while the new EU members will advance 3.1 percent.

This situation affects all developing countries, but especially the middle-income and exporters of primary products, because there will be a reduction in international trade, an estimated 4.4 percent increase in 2008 down to 2.1 2009, and in the worst scenario will fall further, something that has not been seen since 2001.

A Vos is concerned about the rising cost of financing for developing countries and that private capital flows are reversed. Moreover, the crisis has not bottomed out and we must avoid a forced landing generating financial panic.

At a press conference, the director of Mexico for the seat of the Economic Commission for Latin America and the Caribbean (ECLAC), Jorge Mattar said the Latin American region, including our country, facing declines in exports, remittances in income from tourism and foreign direct investment.

Economic Recession - Spain Economic Recession

We are in recession and slowdown. The economic crisis rages. For the usual negative effects on workers with workers destroyed some 800,000 jobs, now joins the novel and unique fact that the crisis is to prey upon the middle classes, social and traditionally wealthy and productive.

In Spain, traders, self-employed and small businesses in general, have endured a serious situation that results in loss of business. Every day, at least, close a trade in Spain. Similarly, the poverty is over 16% share in that it includes children (one in four is poor) to survive on poor and peak around six euros a month, an amount that is legally recognized as an indicator of poverty .

Thousands of autonomous activity had ceased, and provinces, Alicante leads the further destruction of commercial establishments and the highest rate of casualties from the Social Security workers. Only in this province have closed their businesses given the low SS about 6000 people in what we have in years, resulting in an approximate ratio of 500 casualties per month, with a minimum of 300 and a maximum of 600.

Therefore, requests for assistance to Caritas has increased by 45% over the previous year. Indeed, those who were once partners are now using its services such as clothes and food, mainly. Gentes economy until recently half and never had been impoverished come to this organization to receive help from food and clothes because they need to meet these basic needs.

On top of all evil, the Spanish economy will not grow more than 2% and even at around 1 or 1.5%, and even some experts predict that in 2009 growth could reach 0, which would entail a massive loss there would be jobs and job creation. Ie total stalemate, a very crude picture.

And to alleviate this situation and minimize the effects of the crisis must be fought resolutely arrimando shoulder all: state autonomy, county, municipalities, employers, workers and families .... Since the public sector through the private economy to reach the last link in the chain that is the family (home or home economics) all we have to implement measures against the crisis and recession.

Economist Luis Albentosa (Member of the Board of Directors of the National Energy Commission) calls for the low labor flexibility and reduce the price for ending the crisis. This expert believes (correctly by the way) that can go three ways. In the first case would be quickly and would grow the economy. In the second, would maintain low rates of growth. And third, even worse, would collapse and would not have a lift, as in Italy. Thus, the forecasts were made based on the behavior of economic agents, emerging from the crisis more or less quickly depending on such behavior. This not only depend on the central government but also the private sector, powerful and decisive.

Add this prestigious economist nearly two main ways out of the crisis by adjusting the prices and quantities, lowering wages and housing prices. This applies to the problem of housing a million empty houses so no one can recover the construction sector. Albentosa rightly says that these homes can only be absorbed (sale) if they lower their prices considerably, something that has already begun to practice but is soon to check their effectiveness and recovery.

This expert says that if there is no flexibility to lower wages will happen much more unemployment. In addition they must also emphasizes reduced prices. Albentosa states that Spain is now poorer, a fact, and says that we must accept it, otherwise the greatest difficulties arise.

Economist calls for flexible working to prevent further losing jobs and places as an example that other Western economies more down its Gross Domestic Product destroyed fewer jobs than Spain.

However, one thing I disagree with the economist Luis Albentosa it offers the path to reducing wages to end the crisis. If salaries are dramatically lower (wages of workers and employees employed persons, the most disadvantaged) thousands or millions of Spaniards may not survive. Lowering the cost of dismissal (against the advice of this expert) would produce an exorbitant increase in unemployment and new poor. A choice between cutting costs Albentosa style 'meat or fish', ie wages or prices or to choose, I prefer to order the State to implement the price reduction. If revenue is lost is that fair prices fall, especially anything that is vital, and basic necessities. And speaking of those cuts ... charge more, as politicians, wealthy businessmen and senior officials should set an example by reducing their salaries because it is not enough to 'freeze'.

And at least those that have not cut their salaries. And to lower gasoline, food, clothing, light and gas, among other needs. Apretémonos belt but do not just pay for sinners, not be sacrificed or suffer the same as always, those who have less: weak, underprivileged, needy, humble and poor. That powerful and ostentatious millionaires, "pay" the crisis. Everything is soon to leave the best possible recession.

Recession in the U.S. - US Recession Impact On world

Recession in the U.S. - US Recession Impact On world, could drag the rest of the world

Multilateral institution that provides our country will grow 7% in 2008 and 6% in 2009

The economy of Latin America would be affected by the economic slowdown that crosses the United States, although the impact would be smaller than on previous occasions, due to decreasing dependence on the region with respect to the first performance, he designed the International Monetary Fund (IMF ), in its report "World Economic Outlook." According to the document, the U.S. economy grow 0.5% this year and 0.6% in 2009, which, according to the IMF, including a mild recession in comparison with the 2.2% expansion in 2007.

As a result, Latin America would grow 4.4% in 2008 and 3.6% in 2009 to slow growth when compared with the figure of 2007, which was 5.6%. Emerging economies will grow 6.7% this year compared to 7.9% last year, which is still considered a "robust growth" by the IMF.

The Eurozone will also feel the impact of the financial crisis and will grow only 1.4%. The vast majority of forecasts are low, and even correct estimates in January this year. The IMF predicts that the world will grow 3.7%. In January an estimated growth of 4.1%.

The increasing reliance of the Latin American countries with respect to the growth of Asian economies, particularly China and India - continue to grow above 9% - as well as better macroeconomic conditions and policies of fiscal responsibility limit the impact of the U.S. recession in Latin America, the IMF stressed.

IMF economist Augusto de la Torre said that while the possibility of a recession in the U.S. is a source of concern, while China continues to grow, the impact on the region will be limited by increased trade links with that country and the largest Chinese investment in mining and agriculture. "

Commends the PERÚ
The IMF report highlighted the case of Peru as far as fiscal reforms and growth rates are concerned. He estimated that Peru will grow 7% this year and 6% in 2009.

The manager of Economic Studies of BBVA, Hugo Perea, commented that it is worth underlining the fact that the IMF considers that Peru is the country of the region recorded the highest growth rates, next to Argentina.

De la Torre recommended that countries with emerging economies that "the first line of defense should be monetary policy, ie price stability. The report predicts a global slowdown, but noted that, while the prices of food and energy continue to rise driven by demand from Asian countries.

IN POINTS
Stagnation with inflation
4Algunos economists do not rule out that it can occur in the U.S. stagflation, a phenomenon that describes an economic decline, while a rise in prices, as happened in this country in the late 70's. The term was coined by the British Minister for Finance, Ian McLeod, in 1965.

Economic recession in 2008 - Causes

The following letter attempts to analyze the causes of the economic downturn done in the second half of 2008, a sketch of crisis to be completed drawing in the next five years.

1 .- Stagnating oil prices (easily surpassing the $ 100 a barrel), driven by geopolitical uncertainties, the collapse of stock markets and subsequent diversion of speculative investment market and the expected oil production cuts by the OPEC.

2.-Continued escalation of prices of staple foods (around 15%), due to the effect called "second round" (translation by companies from increased costs of crude oil and raw materials along with wage increases the prices of manufactured products; abusive margins of companies and brokers and a totally inefficient administration and lack of mechanisms to control the ceaseless desboque with consequent rises in inflation and subsequent contraction of consumption.

3.-runaway inflation rates close to 6% and unbridled growth of foreign debt (d 2.5 billion U.S. dollars) and current account deficit (15% of GDP) for 2008 as a result of the above two points, with a consequent drop in state revenues Autonomies and loss of purchasing power of workers in a near future due to salary increases below the inflation rate or the freezing or reducing them.

4 .- Rise in interest rates by the European Central Bank to reach 4.5% in the last quarter of 2008 with the aim of trying to curb rampant inflation in the euro zone (close to 5%) the immediate impact on mortgages and bank loans due to increases chilling Euribor (up almost 6%); economic strangulation consequent extensive social and dramatic increase in delinquencies and embargoes banking collapse of securities (around the IBEX 10,000 points at the end of the year) and diversion of investment to fixed income and real estate.

5 .- An increase in the rate of unemployment up to 12.5% at the end of 2008, due to the outbreak of the housing bubble and subsequent domino effect in the sectors linked to the construction of a united euro artificially appreciated that the cause of the bottleneck exports and the stagnation of the tourism sector (into recession in the second half of 2008 and ending the year with a meager increase of 1.5% of GDP), with the proverbial drop in state revenues and the consequent contraction of investments basic infrastructure and social services.

Spain Economic Recession - La Caixa believes that the recession will last until end 2009

Employment is expected to reduce half the 3% and the average unemployment rate reached 15.2% and 16% attrition in the last quarter, to 3,700,000 unemployed

La Caixa an estimated decline of the Spanish economy of 1.3 percent in 2009 and ensures that the economic downturn will last until the last quarter of this year or the first of 2010.

That explained the chief economist of La Caixa, Jordi Gual, during the presentation of the monthly economic report prepared by the organization department of studies and ensuring that the current economic crisis will have a "less harsh" while a "longer period" that Spanish economic recession of 1993.

The study forecasts that employment is reduced by an average of 3% and the average unemployment rate reached 15.2% this year and 16% attrition in the last quarter, to 3,700,000 unemployed, a figure that would rise in the first months of 2010.

However, as explained Gual, the Research Department "does not see this year's four million unemployed and that there are" factors to be optimistic, "such as low inflation is achieved and the expected decline in interest rates . Thus, the report forecasts that the CPI will fall below 2% in the coming months and the average inflation in 2009 reached 1.4%, while an estimated drop in interest rates to 1.5% in the second half of the year.

Gual said that the fall of the Spanish GDP is higher in the first and second quarter of 2009 and growth will not occur until the fourth or the first quarter of 2010.

In this regard, said the economic downturn could last five consecutive quarters (taking into account the negative data from the third quarter of 2008 and the decline forecast for the fourth quarter).

This decrease is due to falling domestic demand of 2.7% and investment in about 8%, mainly for the construction, which would fall 10.3% in 2009. Household consumption returned 1.8% while the government would grow by 3.8%.

According to Gual the "real adjustment" is to be "harder and longer" than in the recession of 1993 and Spanish as "burdens" the high level of debt and excessive dependence on external financing. However, they also considered that "there is an excess of pessimism" and estimated that the economy is natural adjustment mechanisms that prevent the sinking in misery. "

He stressed that Spain has room for the drive to increase the fiscal and debt, and calculated the public deficit in 2009 at an average rate of 5.5%. He also praised the benefits that the Spanish economy will bring down the price of raw materials and oil, and estimated the value of net imports of energy this year, down 1% of GDP. Also, according to the Economic Report of La Caixa, the European Central Bank might again lower interest rates 0.5 points in their next two revisions, which would "reduce the cost of access to housing." On the international economic situation, the chief economist of La Caixa, said he was optimistic that the banking crisis "is in the process of stabilizing go."