Re: (Fwd) Soren on the IMF’s demise
On Apr 16, 2007, at 4:50 PM, Patrick Bond wrote:
After the two South American countries, who happened to be the IMF=92s largest borrowers, set the example, others followed. Serbia, =
Indonesia, Uruguay, and the Philippines made similar announcements. With the addition of Indonesia to the list, three of the four largest =
debtors to the IMF had liberated themselves. The fourth, Turkey, is reportedly considering taking the same step before the end of 2007. With all =
these early repayments, and the gathering certainty that virtually no =93middle-income countries=94 would be giving the IMF more business, it =
soon appeared that the IMF might face a crisis of solvency. Indeed, the institution is expected to post its first loss in decades=96about $100 million=96this year.
Either that, or we’ve gone too long without a financial crisis. I say =
that not out of love for the IMF, of which I have none, but because =
the financial markets have gotten so complacent about risk that no =
one thinks twice about pouring money into what, in more normal times, =
would be regarded as a potentially treacherous place. Junk bonds, =
“emerging markets,” and, until just a little while ago, subprime =
mortgages - all have had no trouble pulling in the cash. We haven’t =
had a major bust-up since the dot.com debacle almost seven years ago =
(though the subprime thing is starting to look that way). And no =
international crisis since, what?, Russia nine or ten years ago.
Doug