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IMF: Global recession can be averted

2009 bottom seen for U.S. housing

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The International Monetary Fund projects a global recession can still be averted if financial markets stabilize and U.S. housing markets bottom out in 2009. The financial crisis that began in U.S. housing markets has the world teetering on "the cusp of a global recession," according to a top IMF official. But IMF Managing Director Dominique Strauss-Kahn said today that if countries act together, a slow economic recovery should begin in the second half of 2009. Strauss-Kahn said the need for recapitalization was "well understood on both sides of the Atlantic" but cooperation was less evident. He urged European countries to work together to draw up national plans that provide liquidity from central banks, contain guarantees to depositors and assurances to creditors, and that recapitalize financial institutions. In their latest World Economic Outlook, IMF economists this week called prospects for the global economy "exceptionally uncertain," with a...