This year has been a tough one economically. We’ve had the foreclosure crisis, and now the credit crunch. People are bracing for the worst. Now leading academics are saying that the credit crunch may not be over yet.
The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares.
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Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely.
“The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come,” Prof Rogoff said at a conference in Singapore.
In an ominous warning, he added: “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks,” he said.
Personally I’m not going to start panicking about anything quite yet – I think the markets are still in a correction, while things may get worse, the sky isn’t falling and we aren’t going to be bartering chickens for corn anytime soon. The markets are not going to collapse!
What do you think about all of the problems our economy has been having this year, and what are you doing because of it?