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Anorak | Goodbye, Cruel World – The IMF’s Suicide Note

Goodbye, Cruel World – The IMF’s Suicide Note

by | 8th, October 2008

“THE world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930s,” notes the IMF.

Yes, we’d noticed; can you tell us something new?

The situation is exceptionally uncertain and subject to considerable downside risks.

Yes, we’d noticed that too, but we were hoping for something a little more substantive from the IMF, which, after all, has has shaped policy for decades.

In hindsight, however, lax macroeconomic and regulatory policies may have allowed the global
economy to exceed its “speed limit” and may have contributed to a buildup in imbalances
across financial, housing, and commodity markets.At the same time, market flaws, together
with policy shortcomings, have prevented equilibrating mechanisms from operating effectively
and allowed market stresses to build.

I don’t need hindsight to point out that the ‘lax’ regulatory policies were at the instigation of the IMF, which has assured anyone willing to listen that markets are good, governments are bad, regulation really bad, and free markets solve everything. It has apparently come as news to the IMF that:

The financial turmoil has revealed that national stability frameworks have failed to keep with financial market innovation and globalization, at the price of deleterious cross-border spillovers.

Which seems a little odd since anyone with any experience in the financial markets knows that the IMF has consistently opposed any attempt to regulate the globalised markets.

Nor do I need anything special in the way of analytical powers to

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Posted: 8th, October 2008 | In: News Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink