The whole world is following the example of the usa and going down the drain. I don't quite see how it spreads like that. If other countries bought our toxic securities, then they would lose money but not go under. Iceland declared it's close to insolvency. The panic is spreading.

http://ap.google.com/article/ALeqM5gKRj ... AD93MDG7G0

IMF: World economy to slow sharply, led by US

By JEANNINE AVERSA – 4 hours ago

WASHINGTON (AP) — The world economy will slow sharply this year and next, with the United States likely sliding into recession reflecting mounting damage from the most dangerous financial jolt in more than a half-century.

The International Monetary Fund, in a World Economic Outlook released Wednesday, slashed growth projections for the global economy and predicted the United States — the epicenter of the financial meltdown — will continue to lose traction.

"The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the IMF said in its report.

The IMF now projects that the global economy, which grew by a hardy 5 percent last year, will lose considerable speed, slowing to 3.9 percent this year. It is forecast to weaken even more — to just 3 percent — next year, marking the worst showing since 2002. In the past, the IMF has called global growth of 3 percent or less the equivalent to a global recession.

Well, when you build a financial house out of straw, this is what you get. Its bigger than toxic securities, imo.

This does show how individual economies have evolved into one global financial system since the internets went online.

lw

btw, the stock market bubble has been growing for years with large gains on paper and little product advancement or infrastructure development to back the upward movement. Imo, this phenomena can be attributed to confidence and optimism in future market performance. Or some might say overconfidence and unwarranted optimism that has suddenly come to a crashing halt once the numbers start heading south.

lw

Iceland is asking for a few hundred million to avert disaster. That is like spare change among nations. Most self respecting third world countries won't ask for less than a few billion. It's like seeing the fine old gentleman down the block who is reduced to begging on the street corner.

Markets around the world are still tumbling. The rate cut by the fed was like a tiny balloon in a hurricane. It was hardly noticed and did little good as did the so called bailout. The next great depression has started and we are witnessing it. Hunker down because it's going to get a lot worse before it gets better. Sell off any stock you may own, down worry about taking a loss. Just get what you can.

Iceland's economy in midst of meltdown

From Chicago Tribune news services
October 9, 2008

Iceland plunged further into financial turmoil on Wednesday as the country's third-largest bank went into receivership and the government abandoned attempts to put a floor under its free-falling currency.

Prime Minister Geir Haarde acknowledged that it will take the nation of 320,000 people several years to recover from the crisis, which has been wrought by the exposure of the country's banking sector to the global credit squeeze.

The brief stock surge of Oct 13 was followed by more drops which wiped out the advances. The Dow which was up to 14,000 last year, is in the range of 8,000 now. The world is in a recession and depression is looming. When the media and the politicians admit we are in a recession, it will be depression time. Don't keep more than $100,000 in one account and sell all stock you own. The housing market is still headed down but the bottom may be seen by 2010 perhaps.

World stocks tumble as Tokyo markets plunge 11 pct

By JEREMIAH MARQUEZ – 9 hours ago

HONG KONG (AP) — World stocks tumbled Thursday, with Tokyo's market plunging more than 11 percent, after another dive on Wall Street as worse-than-expected data about the U.S. economy heightened fears of a global recession.

Japanese Prime Minister Taro Aso blamed the renewed drop in markets, which had rebounded earlier this week, on investor concerns that the U.S. government's $700 billion bank bailout was insufficient.

"Since it was insufficient, the market is again falling sharply," Aso told lawmakers. He did not elaborate.

Tokyo's Nikkei 225 stock average slid 1,089.02 points, or 11.41 percent, to 8,458.45, its biggest drop since the 1987 stock market crash.

In South Korea, the main index dropped 9.25 percent after Standard & Poor's said it may downgrade the credit ratings of some of the country's leading banks. The ratings agency warned the credit crisis could make it difficult for the companies to refinance maturing debt.

Hong Kong's key index trimmed losses, closing down 4.8 percent after falling more than 8 percent earlier.

Benchmarks in Britain, Germany and France opened about 3 percent lower. Russia's RTS also fell back.

Investors were unnerved by U.S. data showing the country's retail sales fell 1.2 percent in September, almost double the 0.7 percent decline analysts expected — clear evidence that consumer spending, which accounts for more than two-thirds of U.S. economic activity, was weakening.

That was followed by more bearish data from the U.S. Federal Reserve that showed the economy continued to slow in the early fall as financial and credit market problems took a turn for the worse.

All told, the readings provided some of the most ominous signs to date that the world's largest economy — a critical export market for Asia — was sliding into recession, if not already in one.