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IMF: Global economy will suffer worst year since Depression

13 Comments
By PAUL WISEMAN and MARTIN CRUTSINGER

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13 Comments
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Failure to understand investment is the fastest way to stay poor.

Investment is what drives the entire world. Does not matter if it's stocks, real estate, or bubble gum. Someone's got to put capital into something to make a product available to the public on a large scale - the stock market is the fastest and one of the most reliable ways to do that. When you have a good company with good products and good management, the company's worth goes up - regardless of what its stock price is doing - there's no tether holding the two together.

Companies that were profitable, had good products and good management will not suddenly cease to have those qualities because of COVID. The best of the bunch will have ample cash on hand or credit to weather this storm. When the economy begins to pick up again, so will their stock prices. Buy while Joe Shlob is panic-selling because someone on TV told him to. Just make sure you're buying the right things. Warren Buffet's advice is golden, but his approach is extremely long term. Peter Lynch has very similar advice applicable to shorter timescales - 3-10 years more often than not.

1 ( +1 / -0 )

Long term investing is not speculating, and without long term investment we’re all out of work. And the speculators are someone for the long term investors to trade with.

It’s an important economic function, learn to love it.

0 ( +0 / -0 )

Speculators showing off are obscene in this suffering time for the many, while "low" class people worldwide are doing its best to save lives and maintain the minimum needed services.

UGLY!

-1 ( +0 / -1 )

Why IMF to forecast forecast it? For the less profit? This world pandemic measurement is for every people LIFE not for profitable calculations. the Great Depression of the 1930s is another story IMF didn't exist.

1 ( +2 / -1 )

The world should not be in lock down now , China should have been isolated completely in January ! !

2 ( +4 / -2 )

So send China the Bill, Xi and his cronies should be held accountable for this, and then the other so called world leaders who mishandled this form the beginning all need to be held accountable.

World should have isolated China in January instead of crushing everyone else in lockdown.

Some terrible mismanagement carried out by incapable people in charge of some countries.

!

1 ( +3 / -2 )

The Great Depression was because of bad bank loans. But now we live in different times. The risks of today's intense globalization are toxic, if not fatal. One day, another a globalization spin-off may well destroy us all.

Instead of a World War, I fear a Climate Change crisis may be what we are going to get. An apocalyptic reassignment of world powers.

The eruption of Theran volcano caused the collapse of Minoan civilization. The backward Mycenaean civilization quickly takes over and dominates the entire Agean seas. We may see things like that in this century. I don't think China can become a superpower because they already have underlying environmental disasters and socio-political catastrophe (extreme regional inequality, gender disparity, population decline). The US now faces a Japanese economic issue (Lost Decades type) but it can use the FED printing press and intellectual strength to get back on the feet. However, the ages of Pax Americana may be over in the next few decades after China and Japan fade away on the global stages. The US returns to isolationism once again.

-1 ( +1 / -2 )

Economic Depression may be temporary but the socio-political depression may be permanent until national collapse. We have seen the same thing with the Western Roman Empire. Gradual collapse of the empire lies in the distrust of people towards the imperial government and the senate.

The public trust in the ruling institutions and government is the real casualty of this pandemic and economic depression.

0 ( +1 / -1 )

this is one in a lifetime opportunity to enter the stock market as an investor.

Maybe not once in the lifetime opportunity, but definitely once in a decade, I'd say.

I'm doing exactly what I was doing before - monthly index-based investment in foreign assets - except I increased my monthly investment amount, and probably will continue to do so until the S&P hits new all-time highs again, which it will eventually.

But I'm very skeptical that we've already seen the bottom of this, even though the money printing authorities responses have been quite spectacular. Governments are spraying money around everywhere too, but is it actually getting to the small businesses and employers that need it to be tided over? What is there is a second wave of coronavirus infections that sweep the place once again?

Rather than try to pick a bottom, I'm happy with a steady monthly-investment approach that should get see my buying stocks at reasonable prices when average out at the ultimate end of this, whenever that may be...

(And I got me some gold and commodities too...)

2 ( +4 / -2 )

Instead of a butterfly in Beijing, we got a bat in Wuhan.

3 ( +5 / -2 )

And despite the economic havoc currently happening around us, a quick check of just about any stock index will quickly show you that compared to the great depression, we're not doing that bad.

Agree with GS, the time to buy is times like these. Just do your research diligently, don't throw money around thinking it will magically grow..!

-2 ( +2 / -4 )

If Warren Buffett taught the world anything it is that this is one in a lifetime opportunity to enter the stock market as an investor.

If the world doesn't end, around 2025 the investment from now will turn into huge profits. If the world ends you won't have to care about the lost money anyway.

Since March 23 I have moved over 60% of my patrimony from savings account to shares.

1 ( +6 / -5 )

We live in a connected global economy. That means when some people in Wuhan, an industrial centre that supplies the world, want to eat pangolins or bats, the rest of the world suffers a catastrophe as a direct result. That's scary stuff.

The Great Depression was because of bad bank loans. But now we live in different times. The risks of today's intense globalization are toxic, if not fatal. One day, another a globalization spin-off may well destroy us all.

-1 ( +4 / -5 )

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