IBM has offered to keep employees on if they are willing to relocate to India.
A number of seemingly unrelated pieces of news in the last day showed that several high profile people and organizations are at least considering the idea that the global economy could slip into a depression.
It was a bad day for anyone hoping to see stimulus money put to work creating jobs quickly. Those for and against the Administration's plan to right the economy spent the day shooting mortar rounds at one another in the Capitol. (See pictures of TIME's Wall Street covers.)
In the financial sector, rumors that Bank of America (BAC) might be nationalized nearly turned shares in the firm into a penny stock.
In remarks made in New York, GE (GE) CEO Jeff Immelt said that the economy was in as bad a shape as at any time since the 1974 recession. If it should get worse, he remarked, "Once you break through '74-'75, you don't stop 'til you get to 1929." At almost the same hour, Bill Gross, the undisputed king of the fixed income world and chief of investments at Pimco stated "the U.S. may slump into a 'mini depression' unless policy makers spend trillions of dollars to spur growth." He did not make the distinction between a "mini depression" and one of normal size but his comments were, nonetheless, alarming.
The IMF, not wanting to be left out, then posted a harsh warning about the condition of the global credit and financial systems, According to Reuters, "The International Monetary Fund warned of a more severe economic downturn unless governments move aggressively to fix the financial system by removing troubled assets from banks' books." Since many policy makers believe that moving toxic financial assets into "bad banks" is not a solution to the build-up of bad paper on financial firms' balance sheets, the IMF's suggestion may go unheeded.
In just the last day or so, the volume and velocity of the discourse have about whether the economy can recover from its sharp drop or whether the fall will be inexorable and stop when the value of goods and services in relation to income is at a 100-year-low.
The most troubling aspects of these recent comments is that they do not come from the fringe of the world of business and economics. They have become part of the comments and dialog of some of the most powerful people in finance and industry.
This goes to show that nearly everyone has gone from being nervous to terrified.
— Douglas A. McIntyre
See pictures of the global financial crisis.
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