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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Rolla Coasta who wrote (27747)	1/13/2008 12:23:10 AM
From: elmatador	Respond to of 217738

Economy faces greatest risks for decades By Edmund Conway, Economics Editor Last Updated: 1:27am GMT 10/01/2008 The world (ELMAT: by world they mean US, Europe and Japan) is facing the most potent cocktail of economic and political risks for a decade in the wake of the credit crisis, an authoritative report has warned. A potential recession in the US and the knock-on effects of a collapse in asset prices, such as housing and shares, could throw the world economy (ELMAT: by world they mean US, Europe and Japan) into chaos, says a study from the World Economic Forum. Britain is more vulnerable to the threat of financial meltdown than almost any other country, since its economy is more reliant on this sector, warned the Global Risks 2008 report. (ELMAT: which other countries depend, heavily, on financial sector? Spot those and you'll spot the ones who will be severily affected( The alert is particularly significant since last year's report flagged up the possibility of a re-pricing of risk in financial markets - the event which sparked the turmoil last summer. The report - produced together with a collection of insurers and finance experts - also mentioned the possibility of the dollar falling yet further. David Nadler, vice-chairman at insurers Marsh & McLennan, said: "Systemic financial risk is the most immediate and, from the point of view of economic cost, most severe risk facing the global economy. "With so many potential consequences of the 2007 liquidity crunch unresolved, the outlook at the beginning of 2008 is more uncertain than it was a year ago. The US Federal Reserve has projected direct losses related to sub-prime of $150bn (£75bn); non-sub-prime financial losses may be considerably greater." The warning comes a fortnight before the start of the forum's annual conference in Davos, where many of the world's leading politicians, businessmen and academics will meet to discuss the outlook in the years ahead. Prime Minister Gordon Brown and Chancellor Alistair Darling are among the UK politicians due to visit, as well as Tony Blair, who attended when he was in power. The report put the chances of a dollar collapse at about 10pc, while the risk of a contraction in major Western economies was about 15pc. (ELMAT: Now he give names to the cows! Major western economies:-) However, while financial turmoil remained the major threat, it said the world also faces a number of other less widely anticipated problems - among them a potential food crisis and possibly explosive problems with companies' supply chains. Christian Mumenthaler, chief risk officer at Swiss Re, said that with food prices on the rise and the amount of meat and fish available for the rapidly growing world population falling, it was not inconceivable that there could be widespread food riots in the developing world. (ELMAT: this isn't a problem! This is an opportunity to make money selling food! that means if you have the farmland, the technologies' package and the peple who want to wokr and you are not dependent on illegals to work your farms The report said that while companies have been boosted by the development of sophisticated and efficient supply chains to transfer goods from one part of a company to another, these links could be more vulnerable to unexpected disruptions than many executives assume. Among the other risks mentioned were a global pandemic and a further surge in oil prices to levels which start to harm the economy dramatically. Mr Nadler said: "The global economy has demonstrated remarkable resilience to increases in energy prices since 2004. But the limits of resilience may be close to being reached. Over the next two decades the supply of primary fossil fuel will become tighter with the world economy becoming much more vulnerable to price shocks as a result. "The report urges better dialogue at all levels - between emerging and developed countries and between the corporate sector and government and regulators. A move towards a forward-looking regulatory framework is needed in order to ensure long-term economic viability. This framework should seek to unlock investment and innovation in cleaner energy and, ultimately, deliver an economic price for carbon."