IMF Warns Of Risks From 'Excessive' Financial Market Bets

[Purveyor]

Source: REUTERS

WASHINGTON Wed Sep 17, 2014 4:03pm EDT

(Reuters) - The global economy faces a growing risk from big financial market bets that could quickly unravel if investors get spooked by geopolitical tensions or a shift in U.S. interest rate policy, the International Monetary Fund said on Wednesday.

The IMF, an institution based in Washington that is the world's premier watchdog for financial and economic stability, said in a report it still expects economic growth will pick up in the second half of 2014 after a rough start to the year.

But it also warned that financial market indicators suggested investor bets funded with borrowed money looked "excessive" and that markets could quickly deflate if there were surprises in U.S. monetary policy or the conflicts in Ukraine and the Middle East.

As the IMF put it in its technical language, "New downside risks associated with geopolitical tensions and increasing risk taking are arising."



Read more: http://www.reuters.com/article/2014/09/17/us-imf-economy-idUSKBN0HC28320140917

[Kelvin Mace]

1. They don't care

If it blows up, the various governments, especially the U.S., will make sure the poor pay off all the corporate losses.

That's how it worked last time.

[drm604]

2. This is what comes from treating the financial markets like a casino.

Too much is being made speculating on financial instruments rather than producing something of value.

[jwirr]

3. They have not reformed anything. When if crashes again they are going to want us to bail them out

again. I hope we have learned to say no.