EconomicCrisis.US

The European debt crisis threatens to spill over to the U.S. and emerging markets, requiring a bigger financial firewall, more bank recapitalization and limits on bank deleveraging, the International Monetary Fund said.

While European policy makers have taken steps to contain the crisis, it still poses risks to U.S. stability and may spread to emerging markets beyond central and Eastern Europe, the IMF said. The U.S. in particular is at risk, including the direct exposure of banks, according to the IMF.
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Industrial production in the U.S. advanced more than forecast in October, adding to evidence the world’s largest economy is weathering disruptions in financial markets caused by the crisis in Europe.

Output at factories, mines and utilities climbed 0.7 percent after a revised 0.1 percent drop in September, figures from the Federal Reserve showed today. Other reports showed the cost of living unexpectedly fell and builder sentiment improved.

Combined with rising retail sales and record exports, the data signal manufacturing will help the economic recovery strengthen heading into 2012, overcoming concern surrounding a default in Europe that has caused stocks to plunge. Less inflation also opens the door for Fed policy makers to take additional action should the expansion falter.
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The nation’s economy gained some much-needed strength in the third quarter, as the pace of growth nearly doubled compared to the previous three months.

The nation’s gross domestic product, the broadest measure of its economic health, grew at a 2.5 percent annual rate in the quarter after adjusting for inflation. That’s up from the disappointing 1.3 percent growth in the second quarter and the anemic 0.4 percent pace in the first three months of the year.
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Three Nobel economists share their thoughts on America’s future, what went wrong, and what can be done to fix things.

Coming home from my Italian vacation this year was an abrupt transition. From the calm waters of southern Sardinia, I was plunged into the global economy’s stormy seas. Financial markets were plummeting, driven by pessimistic growth forecasts in Europe and America. Investors were fleeing for safety pretty much everywhere. Systemic risk—the statistical likelihood of outright economic collapse—was rising. Yields on Italian and Spanish sovereign debt were climbing into the danger zone, threatening to fly out of control. America was on the verge of a technical default on its sovereign debt.
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