Financial crisis worst since Great Depression
On the Street: People walk in front of the New York Stock Exchange in New York City. Picture: AFP
Sunday, September 28, 2008
SENIOR bankers delivered a gloomy message on the global economy yesterday, with one calling the current financial crisis the worst since the Great Depression and another saying that the US consumer is "toast".
The comments, made at a meeting of the World Economic Forum in the northern Chinese port city of Tianjin, come as the US Congress continues to wrangle over a US$700 billion package to rescue the US financial system.
"I think it's fair to say we're in the worst financial crisis since the Great Depression," William Rhodes, senior vice-chairman of Citigroup, told the forum.
He said urgent steps were needed to revive confidence in financial markets. "Until you restore that confidence, I think we have some real problems in the overall economy worldwide." "We're now starting to feel the effects of the real economy," he said, adding that US economic growth would probably slow over the next few quarters.
Stephen Roach, Asia chairman of investment bank Morgan Stanley, called for "forceful and effective" action to bring the situation under control and said the world economy was doomed for a period of slow growth that would probably last through 2010.
He said weakness in the US residential housing market was likely to spread to personal consumption, which he said had been sustained in recent years by bubbles in property and credit.
"America has been on the biggest consumption binge of any large economy in recorded history," Roach told the forum.
"The American consumer is toast, done, finished." Reuters
The comments, made at a meeting of the World Economic Forum in the northern Chinese port city of Tianjin, come as the US Congress continues to wrangle over a US$700 billion package to rescue the US financial system.
"I think it's fair to say we're in the worst financial crisis since the Great Depression," William Rhodes, senior vice-chairman of Citigroup, told the forum.
He said urgent steps were needed to revive confidence in financial markets. "Until you restore that confidence, I think we have some real problems in the overall economy worldwide." "We're now starting to feel the effects of the real economy," he said, adding that US economic growth would probably slow over the next few quarters.
Stephen Roach, Asia chairman of investment bank Morgan Stanley, called for "forceful and effective" action to bring the situation under control and said the world economy was doomed for a period of slow growth that would probably last through 2010.
He said weakness in the US residential housing market was likely to spread to personal consumption, which he said had been sustained in recent years by bubbles in property and credit.
"America has been on the biggest consumption binge of any large economy in recorded history," Roach told the forum.
"The American consumer is toast, done, finished." Reuters
Business Besides Oil
