(Source: U.S. Dept. of the Treasury)
It is a pleasure to be back in China and to join you here today at this great university.
I first came to China, and to Peking University, in the summer of 1981 as a college student studying Mandarin. I was here with a small group of graduate and undergraduate students from across the United States. I returned the next summer to Beijing Normal University.
We studied reasonably hard, and had the privilege of working with many talented professors, some of whom are here today. As we explored this city and traveled through Eastern China, we had the chance not just to understand more about your history and your aspirations, but also to begin to see the United States through your eyes.
The world economy has avoided “utter catastrophe” and industrialized countries could register growth this year, Nobel Prize-winning economist Paul Krugman said on Monday.
“I will not be surprised to see world trade stabilize, world industrial production stabilize and start to grow two months from now,” Krugman told a seminar.
“I would not be surprised to see flat to positive GDP growth in the United States, and maybe even in Europe, in the second half of the year.”
The Princeton professor and New York Times columnist has said he fears a decade-long slump like that experienced by Japan in the 1990s.
From the Asahi Shimbun:
MR. FUNABASHI: I see. Is there any danger or risk for us to see the second wave of, you know, the collapse of banking, you know, the institutions if we would mishandle this stress test, you know, putting the public money into the companies?
SEC. GEITHNER: No, I don’t think so because we’re being very clear that we want to make sure there is continuity of funding, the banks are able to meet their commitments as we go through this process of adjustment, and that the government is prepared to put capital in where it’s necessary.
So in some ways what we’re saying is we’re going to backstop the amount of capital-raising that’s necessary.
And, again, a lot of that will come from the market, ultimately. But where it doesn’t we’ll make sure we provide it.
The Times of London reports on Tuesday that the Internation Monetary Fund will revise its estimates of how much the world’s bankers and brokers are on the hook for with regard to toxic assets. Excerpt below, entire article here.
Toxic debts racked up by banks and insurers could spiral to $4 trillion (£2.7 trillion), new forecasts from the International Monetary Fund (IMF) are set to suggest.
The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.
Banks and insurers, which so far have owned up to $1.29 trillion in toxic assets, are facing increasing losses as the deepening recession takes a toll, adding to the debts racked up from sub-prime mortgages. The IMF’s new forecast, which could be revised again before the end of the month, will come as a blow to governments that have already pumped billions into the banking system.
(Source: White House Press Office)
In this new century, we live in a world that has grown smaller and more interconnected than at any time in history. Threats to our nation’s security and economy can no longer be kept at bay by oceans or by borders drawn on maps. The terrorists who struck our country on 9/11 plotted in Hamburg, trained in Kandahar and Karachi, and threaten countries across the globe. Cars in Boston and Beijing are melting ice caps in the Arctic that disrupt weather patterns everywhere. The theft of nuclear material from the former Soviet Union could lead to the extermination of any city on earth. And reckless speculation by bankers in New York and London has fueled a global recession that is inflicting pain on workers and families around the world and across America.
Foreign and Commonwealth Building
London, United Kingdom
10:15 A.M. (Local)
PRIME MINISTER BROWN: The whole of the United Kingdom welcomes President Obama and the First Lady on your first official visit to our country. President Obama, you have given renewed hope not only to the citizens of the United States of America, but to all citizens in all part of the world. And I want to thank you for your leadership, your vision and your courage, which you’ve already shown in your presidency, and congratulate you on the dynamism, the energy and, indeed, the achievements that you have been responsible for.