IMF says US crisis is 'largest financial shock since Great Depression' - Guardian

[Eugene]

Source: The Guardian

4.15pm BST update

IMF says US crisis is 'largest financial shock since Great Depression'

Heather Stewart in Washington
guardian.co.uk, Wednesday April 9 2008

America's mortgage crisis has spiralled into "the largest
financial shock since the Great Depression" and there is
now a one-in-four chance of a full-blown global recession
over the next 12 months, the International Monetary
Fund warned today.

The US is already sliding into what the IMF predicts will
be a "mild recession" but there is mounting pessimism
about the ability of the rest of the world to escape
unscathed, the IMF said in its twice-yearly World
Economic Outlook. Britain is particularly vulnerable,
it warned, as it slashed its growth targets for both the
US and the UK.

The report made it clear that there will be no early
resolution to the global financial crisis.

"The financial shock that erupted in August 2007, as the
US sub-prime mortgage market was derailed by the reversal
of the housing boom, has spread quickly and unpredictably
to inflict extensive damage on markets and institutions
at the heart of the financial system," it said.

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Read more: http://www.guardian.co.uk/business/2008/apr/09/useconomy.subprimecrisis