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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (3385)	9/30/2002 1:26:30 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 57110

(if this doesn't scare the hell out of people, don't know what will <vbg>) story.news.yahoo.com IMF Koehler Sees Widespread Risk Aversion But Urges Calm Mon Sep 30, 8:16 AM ET WASHINGTON -(Dow Jones)- The International Monetary Fund ( news - web sites)'s top executive said Sunday he saw "widespread signs of risk aversion" in world financial markets but he expressed confidence that investors will not panic. Speaking to finance ministers and central bank governors from the IMF's 184 member countries, Horst Koehler, the agency's managing director, urged investors and policymakers to take a sober view of the "risks and uncertainties" facing the global economy. "We should beware of undue pessimism," Koehler said at the annual meeting of the IMF and the World Bank ( news - web sites). "There are good reasons to expect the recovery will continue." The IMF predicts the global economy will expand 2.8% this year, up from 2.2% in 2001. Financial markets are likely to recover from their recent bout of jitters, Koehler said. "While there are widespread signs of risk aversion, I trust that there are entrepreneurs who look for new opportunities and are not content to follow the herd," he said. Worries about the sputtering economic recovery and the prospect of a war with Iraq have caused U.S. stock prices to suffer their biggest decline in 28 years, measured by the broad Wilshire 5000 index. Japanese and European stock prices have also plummeted. Koehler said, however, that global policymakers aren't at a loss for remedies. "I take particular encouragement that...our members know what to do in case of further signs of weakness in economic activity," he said. "Monetary policy should be the first line of defense, as long as inflation prospects remain subdued," Koehler said. "I also expect a boost to confidence as the advanced countries take energetic action to tackle underlying impediments to stronger growth." -By Joseph Rebello, Dow Jones Newswires; 202-862-9279; joseph.rebello@dowjones.com