by: Cam Hui posted on: October 10, 2008 | about stocks: There is little doubt that the US is entering a recession. The IMF's latest report also forecast that the world is entering a major downturn. The bigger questions are: Most importantly, will the US slowdown drag down the rest of the world? As for the depth question, we have a good idea. Econobrowser pointed to a study that indicate the presence of financial stress is indicative of deeper recessions. How long it lasts and the its effects on the world depends on the policy response. What’s the policy response? In Charlie Rose’s interview with Warren Buffett, Buffett stated that the depth of the slowdown is dependent on the policy response: Unemployment is going to go up under any circumstances. The 6.1 is going to go higher. But whether it goes and quits at seven or...
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