The global economy is faced with total write-downs on toxic asset which could top $2.2 billion. Most of this paper is based on mortgage-backed securities. Some guy who defaulted on his home loan in late 2006 started the avalanche.
The IMF says that only half of these write-down have gone through financial company earnings, so another $1 billion has to be burned off before the pot is right.
According to Bloomberg, "The global economy will slow close to a halt this year as more than $2 trillion of bad assets in the U.S. help sink economies from Russia to the U.K., the International Monetary Fund said. " The agency says that global economic growth in 2009 will be the slowest since WWII.
Douglas A. McIntyre
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