IMF: The cost of a second bailout may be democracy

Wall Street CEO's are deaf to Main Street while awarding themselves record bonuses from taxpayer bailout money. Democrats in Congress, in the White House, and regulators in the Federal Reserve who propose a permanent TARP bailout program are also deaf to Main Street.

But even the IMF has heard the increasingly angry rumble of Main Street, and they are warning the plutocrats that their insatiable greed will only be tolerated for so long.

The public will not bail out the financial services sector for a second time if another global crisis blows up in four or five years time, the managing-director of the International Monetary Fund warned this morning.

IMF validates Roubini on Dollar used for carry trade

Bloomberg reports IMF Says Overvalued Dollar Used for ‘Carry Trades’ :

The International Monetary Fund said traders are probably using the dollar to fund “carry trades” across the world and the currency may still be overvalued even after its slide this year.

“There are indications that the U.S. dollar is now serving as the funding currency for carry trades,” the IMF said in a report published today. “These trades may be contributing to upward pressure on the euro and some emerging economy currencies.” While the dollar “has moved closer to medium-run equilibrium,” it is still “on the strong side.”

The IMF is also warning on the Chinese currency being significantly undervalued. We've covered China's currency manipulation many times and noted almost all of the U.S. trade deficit with China can be attributed to Chinese currency manipulation.

India central bank buys 200 tonnes of IMF gold

When the IMF announced the coming sale of 403 tonnes of its gold, after nearly a decade of threatening to do it, some expected China to purchase a little off-market. Almost no one expected India to make a major move.

The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6,7 billion, quietly executing half of a long-planned bullion sale that has threatened to slow gold’s ascent.
The deal, which surprised traders who expected China to be the most likely buyer, will relieve the gold market of some uncertainty over how and when the IMF would sell 403,3 tonnes of gold, about one-eighth of its total stock. The deal will increase India’s gold holdings to the tenth largest among central banks.

IMF: The U.S. Consumer cannot save the global economy, crisis not over

The IMF Director gave an interview on the state of the financial crisis and global economy. Guess what? The crisis is not over.

The global economic crisis will continue and countries must do more to adopt financial market regulations, International Monetary Fund Managing Director Dominique Strauss-Kahn told a German magazine on Saturday.

"The global economic crisis will continue, even if Germany and France had some good figures in the second quarter," Strauss-Kahn was quoted as saying in an advance copy of an article to be published in Der Spiegel on Sunday.

Strauss-Kahn said he wanted to see more action from nations to curb bankers' pay and tighten capital requirements in the banking sector.

Maybe he's reading EP for we're saying that, most recently by this post.

IMF: The U.S. sees a "Diminishing Rate of Deterioration"

The IMF has updated it's global economic projections and now claims the world will grow about 2.5% in 2010, with the caveat of > 10% unemployment into 2010 for the United States. (Folks, how can you call that a recovery if working people cannot find a job?)

This is in line with the World Banks recent estimates of 2% by removing China and India from their calculations.

Stabilization uneven, challenges remain

IMF Projects $4.1 Trillion in Losses from the Financial Crisis

The IMF projects financial losses will hit $4.1 trillion with most losses originated from the U.S.:

Worldwide losses tied to distressed loans and securitized assets may reach $4.1 trillion by the end of 2010 as the recession and credit crisis exact a higher toll on financial institutions, the International Monetary Fund said.

Banks will shoulder about 61 percent of the writedowns, with insurers, pension funds and other nonbanks assuming the rest, the Washington-based lender said in a report released today on the state of the global financial system. The fund forecast $2.7 trillion in losses from U.S.-originated loans and assets, compared to its estimates of $2.2 trillion in January and $1.4 trillion in October.

There have already been $510 billion in writedowns but the IMF is projecting $550 billion more by 2010.