IMF = Buzzkill

Few would be surprised to hear bleak assessments of this or that markets or currency, but hearing them all at once is somehow jarring. The IMF's recent assessments of world economic growth shows that they see harder times to come and note they even this view may be too rosy.

The IMF lowered its projection for the global expansion next year to 4.8 percent in its semiannual World Economic Outlook, from an estimate of 5.2 percent in July. A weaker outlook for the U.S. was mostly to blame, as the fund reduced its forecast to 1.9 percent, from 2.8 percent.

Far from bringing a sense of containment to the perplexing fallout from the sub-prime issue, the IMF, like so many others, seems to have thrown up its hands as if to say 'buckle-up kids, this could be a rough ride'.

``Risks to the outlook lie firmly on the downside, centering around concern that financial-market strains could continue and trigger a more pronounced global slowdown,'' the Washington-based fund said. ``The immediate task for policy makers is to restore more normal financial-market conditions.''

The IMF built into their analysis a further 50bp reduction in the Fed Funds rate, which I've head/read as a reasonable estimate from many, but with inflation still kicking, who knows what's next?

Aside from predictions of steady, rapid growth in India (8.4%) and China and reasonable growth in Brazil (4%), the IMF report offers little to assuage the nervous. Perhaps the topic that's generating the most worry lately, the value of the dollar, will be them most remembered prediction from the IMF. The headlines will read, "IMF Says Dollar Going to Hell, Fast!"

In foreign-exchange markets, the dollar ``remains overvalued relative to medium term-fundamentals,'' the IMF said, echoing remarks by Managing Director Rodrigo de Rato two days ago. So far, the U.S. currency's depreciation has been ``orderly,'' Johnson said today.

Well, lets hope it's orderly. Looking at a Canadian dollar on par and a Euro closing in on $1.43 could just as easily cause more panic. Dismal science baby - dismal science!

Bribes to Saddam via UN's Oil For Food Program

Sometimes the satisfaction of seeing justice done is immediately overpowered by disillusionment and the realization of just how often good intentions are poisoned by bad deeds. The United Nations Oil for Food Program (OFF), designed to deliver humanitarian aid to war-ravaged Iraq has been revealed as an unholy perversion of attempted-aid. Even when carried out by experienced bureaucracies ostensibly governed by a large and diverse board of overseers, aid efforts that involve lots of money are irrestible lures for the corrupt and easily corruptible. Cynically, I must admit that the math seems all too simple for someone who studies such efforts. The disbursement of billions of dollars by hundreds of bureaucrats to thousands of organizations in a virtually intstitution-free environment that just happens to pump industrial oxygen is bound to be corrupted.

Mr. Wyatt was charged in 2005 with conspiracy, wire fraud and trading with a country that supports terrorism. The indictment alleged he arranged for at least $3.9 million in secret payments to the Iraqi government from 2000 through 2002 funneled through companies he set up and Swiss intermediaries. He could have received more than 70 years in prison if convicted on all counts.

Mr. Wyatt started what became Coastal Corp., which grew into one of the largest importers of Iraqi crude oil to the U.S. The World War II veteran was friends with nearly every president since John F. Kennedy. However, he clashed with both the current President Bush and his father over their handling of Iraq.
At trial, federal prosecutors painted Mr. Wyatt as a friend of the late Saddam Hussein and said the executive cozied up to high-ranking Iraqi officials to win oil contracts.

Texas Tycoon Oscal Wyatt, father of oil giant Coastal Corp. is just one of many who sought to pilfer funds from a program designed to bring food to the hungry, in exchange for oil for the masses. Oh yeah, Wyatt sought to do so by kicking-back funds to Saddam's regime while the UN's weapon's inspectors were rather busy in Iraq. Regrettagbly, he is joined by misdoers in the UN, in Iraq and literally around the world, all of whom saw OFF as a pirate's treasure just waiting to be looted. Making aid work is extraordinarily important for living standards in many parts of the world, but corruption makes is deadly difficult at times. Makes you wonder how best to improve living standards if even the organizations we design to do so often fail miserably. And you thought all those Clooney movies were fiction.

http://online.wsj.com/article/SB119124878895844810.html?mod=hpp_us_whats_news