Half of the world’s economies in or headed to recession
A new report out today by Goldman Sachs forecasts that half of the world’s economies are in or will be in a recession within one year.
So much for containment. Care to comment Mr. Bernanke? (comment below from Bernanke’s testimony to Congress in May, 2007)
“We believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,” he said in remarks to a Chicago Fed conference.
From Bloomberg:
Goldman Sachs Group Inc. said countries that account for half of the world’s economy face a recession a year after the credit crisis began.
The U.S., Japan, the 15-nation euro area and the U.K. are “either in recession or face significant recession risks in the months ahead,” Goldman’s London-based international economist Binit Patel said in a report to clients today.
A year since the U.S. housing slump sparked about $500 billion in credit market losses for banks globally, the world’s largest economies are all stumbling as rising borrowing costs combine with record commodity prices to sap growth. The U.S. is close to a recession and France, Germany and Japan all contracted in the second quarter.
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