the imf has revised their eurozone growth prospects significantly down. they have said that the important advanced economies are suffering low growth. this is destabilizing baking system. the imf is calling this a vicious feedback loop. -- this is destabilizing the banking systems. >> they said that they need to get their act together to avoid repercussions. growth will be less than expected. the imf chief economist not pull any punches. >> the global economy has a new face. the recovery has weakened considerably strong policies. strong policies are needed to improve the outlook and in prove the risks. >> the fund has revived its forecast down from 1.8% to 1.1%. the imf defended the downward revision by pointing to worries about a possible breach defaults and the potential domino effect across the eurozone. -- the imf defended the downward revision by pointing out the worries about a possible greek default. >> italy has had their credit rating downgraded. eu leaders are looking for rome to provide a credible plan. >> this puts italy in the center of the de

the imf thinks that president obama is on the right track. his speech when he presented it yesterday was very much along the lines of the imf and the projected his report. you have the long term measures that raise tax revenues. that gives you short-term support for the economy right now. in the u.s. context, it was quite striking that they're very conscious that it is not as simple as that. president obama cannot push a button. >> all eyes are on greece again. is securing another bailout, is greece still key to stabilizing the economy? >> i got this from my conversations with the chief economist. it has not only been the problems with greece that have been the problem, it was the way that greece's problems were being handled. it sends the message that the grown-ups were not in charge. the euros on was not on top of its problems. -- euro zone was not on top of its problems. it was a signal about how this goes from here. they will be looking at how the negotiations do when they go back next week. it has gone beyond that. how does the european

. >> the imf has warned the global economy is entering a dangerous new face.t says the united states and the eurozone aren't a risk of falling back into recession. this could damage and other economies. the imf says there is a danger that a steep cuts will further weaken the economic outlook. here is our economic editor. >> they have taken a long look at the economy and sounded day a scary place. the report stocks of a dangerous new phase in what may be a week and bumpy recovery with many economy is facing an anemic growth. it is a big change from a few months ago. nor has the outlook change faster than italy. today the the credit rating had been cut for the first time in five years. italy's is paying a price because of athens. students took to the streets to protest government cuts. >> there is a difference between greece and italy. the lack of clarity on increase -- greece is affecting the credibility when it comes to judgment. >> the crisis is one reason why the fund has lowered its growth forecast. expects eurozone to grow by 1.6% this year and the u.s. to

the. -- and imf. an indication of the depth of resentment was police officers and firefighters protesting outside the german embassy. they blame outsiders for insisting on austerity. one banner said we demand respect. we are a proud nation. this is now a moment of truth for greece. for these protesters, and their opposition to austerity -- do they represent the majority, or is there a silent majority that believe the public sector is bloated and needs cutting back? the extent of the resistance will be tested. it is likely that as a result greece will get emergency funding next month. but with no growth and a debt level of 360 billion euros, doubts remain whether sooner or later this country can avoid defaulting. bbc news, athens. >> here to help us way through the many factors weighing down our global economy is a bbc correspondent who spent her day at the imf. the warnings were very clear, but is there any sense that the plan is emerging? >> i think it is probably too soon to say we're seeing in the p

does the imf want? the are calling against sharp budget cuts, but that is part of the problem. what can policymakers actually do? >> if you look at the industrial agencies, there is a problem with huge amounts of debt. the difficulty is there is not just one set of measures that fits all. what they do say is if you try to introduce too much austerity too quickly you will choke on what little growth we are seeing. that is the big problem both here in the united states and also in italy, where we saw that downgrade today, the lack of growth. the united states unemployment is staying high for a long time. the housing market is still obviously in considerable difficulty. at the same time, governments do not have much room to move. there is not room to stimulate the economy. and they have to reduce their debt in the long term. the question is how quickly and how fast. >> the imf is also planning bad leadership. how much of this is becoming a political crisis rather than just an economic one? >> in this instan

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the u.s. and europe risks falling back into recession. well in light of gloomy imf predictions about the future of u.s. and euro-zone countries, one option would be to turn to china. but how well in which china be to lend money to cash-strapped countries like spain, italy, and greece? i am joined on the line from montreal, by the chief global investment strategist in canada. thank you for joining us. how willing are the chinese to invest in the euro-zone economies battered by the debt crisis? >> i think they are probably going to provide some funds to italy and spain. in retrunurn, they will definitely ask for some political favor. if you remember a couple of months ago, the chinese government provided some funds to spain. in return, the chinese government asked the spanish government to support their removal of arms sales ban in china. i am pretty sure that if china provides any kind of funds to italy and spain, and they will ask the same kind of condition. >> apart from lending to these debt-riddle economies, but china's want to invest. do you think that the ameri

he went to the imf. they kicked out the previous -- he knew enough about power to do whatever the imf told him. they kicked out that guy. the new guy with a brain surgeon or something. not a professional politician. he went to the imf and said name one country that did what you say and is now read. they said shut up and do what you are told. he said no. if you don't have an imf treaty the world bank will give you money. you don't get american aid and if you don't get american aid you don't get export credit. it was the economic equivalent of dropping a nuclear bomb. they had the power to do that. people who don't play along. >> if you go back to the fiscal crisis they have to start charging tuition and their referendums in 1847. felix said it is not fiscally important. it was really sort of where the market needs to remake people's sold. there was a bit of soul remaking. >> that is why a jubilee would be helpful. it would do exactly the opposite. it would be real shock value and a way of telling as after

treasury secretary timothy geithner's comments over the weekend. at an imf meeting in washington he said europe's sovereign crisis is the most serious issue facing the global economy but he reiterated the united states' interest in lending europe a hand. >> europe is facing -- and i should say before you talk about europe, you know, it's worth noting that we have a huge direct stake in europe resolving this. not just through the dollar funding the feds providing them and through the imf, but of course we have a huge strategic interest, too, because we don't want to see europe weakened by a protracted financial crisis. not in the interest of the united states to see that happen so we have a strong interest in helping them through this. >> let's take a look at how european stock markets are moving right now this minute. here's where the leading indices stand 93 minutes, roughly, into the monday trading. we are still seeing losses but just scant ones. off by 0.7 for london ftse. dax is gaining 1.5%. zurich smi helped by the gains for ubs, not too much hampered,

. >>> and three years to the day, since lehman brothers imploded, we ask the imf how much has changed in the banking sector. >>> let's get straight to the markets. investors have appeared to have voted with their wallets this morning, following wednesday's reissuances from france and greece that they will stand behind greece on its own problems. france and germany on the issues surrounding greece. the message from the german chancellor, angela merkel, the greek prime minister, papandreou and nick has sarkozy, following a conference call is that greece will not be forced out of the you'rio. that's lifted stock markets around the world. one stock that is taking a pounding that we should mention, listed on the zurich smi. there's a stock in focus today, ubs. this is the swiss investment bank. they reported a loss of around $2 billion. it's blaming that on unauthorized trading. share prices down almost 6% on the back of that very news. traders will have theirize focused on two economic indicators, key ones. mainly the euro zone's con kumar price index, inflation figgs and latest employmen

>> largely through the imf. i mean, they had neoliberal orthodoxy imposed directly. i mean, you know, i, again, turned 20 mad madagascar. madagascar had three accounts of nonviolent revolution in 20 years. the first one, the guy in power thought he was running the place, so he went to the imf, which, you know, they kicked out the previous guy of north korea but new enough about power to do what he was told. they kicked out him. the new guy was a brain surgeon and went to the imf and said, well, name one country that did what you say and is now rich? they said, shut up and do what you are told. he said no. if you don't have a treaty, the world bank doesn't give you money, then there's no american aid, if no american aid, you can't get export credit. basically, it was the economic equivalent of dropping a nuke on the place. people died. they have that power to do that to people who don't play along. >> go back to the new york city fiscal crisis, one said they have to start charging tuition at universities. free under referendums in 1847, and they said i know this is not

the imf has downgraded the estimate from 9% to 7% in 2011.orld bank says the growth is mainly driven by donor funds, unlocking the private sector's potential is essential to creating sustained growth right now. again, that would require lifting israeli restrictions on transport, water and raw materials. kevin flowers spoke to the palestinian prime minister and ask him if the current palestinian infrastructure was enough to support a sovereign state. >> in terms of basic infrastructure of the physical infrastructure, capacity to deliver services, government's infrastructure, i think we're mature enough for statehood. >> given your assessment of the status of the palestinian economy right now? >> still growing. on the strength of rebound in gaza, this may come as a surprise to some, economy in the west bank has been into a slowdown phase since the first quarter of last year. the model was that the government was going to gradually phase out the stimulus, that it actually injected into the economy going back to late 2007, consistent with that we

what is director of the imf? >> what you need to watch for with her is her urge to really sort of push european leaders to get out in front of the sovereign debt problem is going to come to fruition. she needs to get out in fronted on this. >> and j.p. morgan ceo jamie > dimond has served him and the shareholders well during the financial crisis. how due keep that going while still growing in the age of uncertainty? >> that's a big challenge for him. and really what we notice about him right now is the sort of pinnacle of power at the moment he's in a position where he's at a conference in june down in atlanta at a banker conference. and ben bernanke is speaking. and q and a people are asking light question of bernanke. and he comes out and says vu study or considered what happens when the regulations you're developing come into force? he has the guts to do that. and he's the only person positioned to do that. see if he can hang on to that position. >> and you identified ray dalio. we heads up the $110 billion hed

that is the role of the imf. what is the role of the imf in all of this? it is a critical role. it is a critical role, because, one, we can help countries appropriate national, regional, and global surveillance but i have been a minister of finance. i have been a minister of trade. there things you do not see for yourself because you are right in the middle of it. you do not necessarily have the distance to analyze exactly the strength and weaknesses of your economy. that is the work of surveying how things worked, how the interconnect, what is the spillover effect of decisions made in one country and how will they affect another? with a degree of impartiality and academic skills and tolerance that is required, and that i was very likely to find. two, we have the ability to provide the level of technical assistance that will actually help countries. i'm thinking, for instance, of the countries in the middle east and north africa, to build their public finance sectors, to build a proper fiscal system, to develop a tax system, to organize the collection of taxes, to build a moneta

is there you see them, dominique strauss-kahn is obviously the imf chief accused of sexual assaulting a hotel maid in new york. those charges were dropped this week after the prosecutor said he could not prove beyond a reasonable doubt that a crime occurred. we're now expecting that

>> largely to the imf. there was unorthodoxy simply imposed. correctly. mean, can i turn to madagascar. madagascar aside to why some accounts are a violent revolutions in the last 20 years. the first one that i put in power thought he was actually running the place so you into the imf, which they kick out the previous north korea, but knew enough about he kicked out that guy. the new guy was like a brain surgeon or some thing. went to the imf inside, well, you know, name one country that did what you say and is now rich. and i said shut up and do what you're told. he said no. he signed the inf treaty. if you don't have an imf treaty the world will give you money. if you don't get american economy can't get extra credit. so basically it is the economic equivalent of dropping a nuclear bomb in the place. people died. they had the power to do that. >> we go back to good new york city fiscal crisis. they have to start charging tuitions to the university, free of their referendums in 1847 making that day. felix as i know this is not fiscally important, but it'

the imf also says the world economy has entered period of great economic difficulty. song ji-sun reports. the international monetary fund has warned that the global economy is entering a new dangerous phase. the imf said both europe's debt woes and a painfully slow us recovery could undermine global expansion, and it warned that without action those economies could tip back into recession. it cut its 2011 and 2012 global growth forecast to 4 percent, shaving projections for almost every region of the world and saying downside risks remain. just three months ago the imf had projected an expansion of 4- point-3 percent for 2011 and 4-point-5 percent for 2012. the top economist at the global lender singled out europe as "a major source of worry." english "policy makers are one step behind the action market and i think we are very explicit in our messages both in the eu and elsewhere in saying europe must get its acts together." the fund cut its growth forecast for the 17-nation euro zone by nearly half a percentage point to 1- point-6 percent in 2011 and said growth woul

there have been warnings coming from the imf that the world economy might cool down.recession fears directed down the markets sharply. car makers, also shares of -- the facts went down by 5%. -- the dax went down by 5%. there is fear that there is more trouble ahead. >> things were flat lining in frankfurt. those fears are having an effect. as you heard, the dax fell almost 5% but still managed to stay above the 5000 mark. the dow ended about 3.5% down. the euro is trading at $1.34. one good thing for you, oil is getting cheaper. crude has been trading over 5% down. the price drop came in response to the disappointing economic forecast. slow economic growth reduces demand for oil. >> i will be back after a short break with more on the pope's visit to germany. don't go away. >> we continue our broadcast of coverage of the pope's return to his native germany. there was a warm reception the german president. benedict later held private talks with chancellor angela merkel where they discussed the financial crisis and globalization. then he went over to deliver the first e

about power to do whatever the imf told them. hey kicked out that day. the new guy was like a brain surgeon or something. was a professional politician. went to the imf and said well, you know, name one country that did what you said and his rich. they said shut up and do what you are told. he said no. he didn't sign the imf treaty. you don't have an inf treaty the world bank will not give you money. you don't get american a. if you don't get american aid you can't get export credits. so basically i was the economic equivalent of dropping a nuclear bomb on the place. people die. they have that power to do that to people who don't play alone. >> that, of course, go back to the nuke city fiscal crisis. they had to start charging tuition to state universities. it's important for the shop guys pick so it's really also were as margaret thatcher said we need to remake people's souls. there's a bit of soul by making going on spent and that's what i think a jubilee would be helpful because it would do exactly the opposite. i mean, it woul

they need the ecb, the imf to sign off. this will be based on the assessment of how well greece is implementing reforms. prime minister george papandreou traveled to germany to underline greece's commitment. more than 90% of the people think that the austerity measures are unfair. >> fast german cars. they have been this man's business. he has done well and importing luxury used cars and selling them to greece. now even the wealthy are feeling the pinch. his show room is full of unsold vehicles. today, big gas-guzzlers' of the last thing people need. >> we probably have five or six months left selling cars, that is it. whatever is left will go to germany. i would have to trade small cars but that is not worth it, so i guess we will close down. >> every day, people crowd the cafe is to scour the morning newspapers with their litany of gloomy headlines such as 250,000 civil servants to get the attacks. the one newspaper describes merkel's demands as the german news around greece's net. >> they want a europe of equal partners o

our business correspondent is that the imf and joins us now. what was the main point to come on of the debate? >> the mood in this building has been pretty somber. a lot of people are talking about the global economy entering a dangerous phase. that has been repeated by the head of the world bank and the head of the international monetary fund, christine lagarde. she says given the problems that keep mounting and the fears spreading across the financial markets, it is time for policy meters -- leaders to stop wasting time and get their act together. >> there is a sense of urgency within the group of political leaders, whether it is head of states hr the ministers of finance. the real architecture in of the euro zone has so much at stake that it -- rearchitectureiing of the euro zone has so much at stake that it is time to take action. >> she was supportive of european leaders. she said they are taking steps that are needed. you have to allow the parliamentary systems in the different countries to play out. that will take time. the problem is tha

we have seen this take place at the imf. we have seen that the succession process at the imf run its course. your term comes out next summer and i wonder if i can get your view on the global perspective. >> for my personal and professional perspective, i tried to do the best that i can to advance emerging market officials and to senior roles in the bank. he was obviously such a star player that they brought her back from nigeria as a draft choice. they have applied a role in the indonesian context. i think that is one of the best things i can do as an executive and it makes us a better institution as well since we're focusing on the gender topic this week, the fact that we now have half of our officers or above who are women which is also something i think that sends a good signal to all institutions. i think the responsible thing to do would to determine early next year what i want to do. as for these institutions in general that you mentioned, i guess that depends on your definition. it is a good it is a good thing. they ar

the imf would extend the credit to the troubled e.u. economies, italy and spain particularly, but would insist on closely monitoring economic reforms and granting funds as restructuring occurs. the credit line would more than cover the costs of italy and spain for two years. the imf terms would ensure the two nations remain under pressure to reform and set them up for growth. now, the chinese would have to devote at least half the funds. what's in it for them? a new global role. this could be the spur to giving china a much larger say at the imf. in fact, it might be necessary to make clear that christine lagarde would be the last non-chinese head of the imf. in a world awash in debt, power shifts to creditors. it's happened before. after world war i, european nations were battered by debt. germany was battered by reparation payments. the only country that could provide credit was the united states of america. for america, providing desperately needed cash to europe was its entry into the councils of power, a process that ultimately bro

the imf's stand ready to help. there is the ability to set aside political ambitions to allow supports to be sent to where they should be. i would like to end a cat that there is always hope. -- indicate that there's always hope. they brought together the finance ministers of the g eight countries plus they had of international institutions and countries like jordan and morocco. we can reach out to the population and governments that have the courage to put it in their hands. there is a time for building a strategy. there's time for implementing a strategy. we will work together. it is a matter of development. it is a matter of organizing exchanges and demonstrating that market access can help the developments. it can develop economic appear turning to the roots of the problem, i suppose to deal with global challenges and solutions. i see three distinct groups of problems. the balance sheet pressures that sap growth. the instability of in core of the economic system and social tensions. they are little bit below the

that is the role of the imf. what is the role of the imf? it is a critical role. we can help countries with appropriate national, regional, and global surveillance. i am have been a minister of finance and trade. there are things you do not see for yourself with the issue are in the delegates. you are trying to row this boat, but you do not understand the weaknesses of your economy. that is how it times work. decisions made in one country will affect the others. with a degree of impartiality and academic skills that are required and i would be likely to find. we have the ability to provide the level of technical its efficiency that will help countries. does the thinking of the middle east and north africa. they can build their public finance sectors. they can organize the collection of taxes to build a monetary institution. we can do that. in many of -- many corners of the world, we do. finally, the third arm of the fund is our lending capacity. there are situations where there is nobody else but the fund that can come to support by way of lending. not by subsidie

. >> what is the imf's plan to save the world? the bank of england could inject more cash into the economy. in europe, the central bank may need to act. the key is for european politician to solve the problems with the euro and shore up their banks. in america, the imf says president obama was right to spend money now to create jobs. >> it will provide a jolt to an economy that has stalled and give companies confidence that if they invest and hire, there will be customers for their products and services. you should pass this jobs plan right away. $450 billionent's stimulus plan seemed to go down well last night. but the markets fell again today on fears that the republicans would not pass it. the value of the euro also fell sharply on the news that a key figure in the european central bank had resigned. there was plenty to talk about in france denied. the last time anyone was worried about the global economic, policy makers pulled out all of the stops to save it. they now have much less room to maneuver. >> still to come on tonigh

the imf downgraded its outlook for the u.s. economy to 1.5% as a result of continuing weakness in the housing market which it says is a key to economic recovery. >>> as for the euro zone economy, the fund revised ilts outlook to 1.6%, down by 0.4 points. for merging economies such as india and brazil have also been lowered. the record upgraded its growth outlook by 0.2oints to minus 0.5%, say prague ducks has been rapidly recovering from the impact of the march disaster. >>> housing starts in the united states for august fell 5% from the previous month. this shows continued weakness in the housing sector, one of the keys to achieving a full-fledged u.s. economic recovery. the commerce department says august housing starts stood at an annualized 571,000 units. that's below the market consensus of around 590,000 units. by region, new construction of homes declined 29.1% in the northeast. and 3.3% in the south. meanwhile, the figure rose 2.6% in the midwest and 2.2% in the west. building permits, an indicator of future constructio

the estimate was made in the imf's annual report wednesday ahead of the opening of its joint annual meeting with the world bank in washington. the report says the deepening fiscal crisis in greece and other european countries and the falling values of government bonds are to blame for the growing losses. it warrants that financial institutions in some countries are struggling to raise funds from the market. the imf says it's vital that europe's financial institutions boost equity ratios and improve their balance sheets. it also warns that risks in emerging markets have increased. it says that a sudden stop in capital flows could combine with a rise in funding costs and a fall in global growth to strain capitalization in emerging market banks. >>> japan's trade balance in august fell into the red for the first time in three months. the finance ministry on wednesday reported the trade deficit stood at 775 billion yen, or $10.2 billion, marking a record high for the month of august. exports rose 2.8% from a year ago in yen terms. that's about $70.4 billion. this marks the first increase since

meanwhile, the imf gave out a second warning wednesday,... saying that the global financial system is at its most vulnerable state since the 2008 financial crisis. highlighting that the risk to banks and financial markets has grown in recent months,... the imf urged european banks in particular, to bolster their capital levels. over in libya, ... the national transitional council or ntc forces are holding back advance... after having taken al-jufra ,... one of the last remaining moammar gadhafi's strongholds.. according to the afp on thursday,... the ntc forces gained control of all three towns in the al-jufra oasis,... but are holding back for the time being... to mount offensives on sirte and bani waldi, where pro -gadhafi forces still remain. ntc authorities said... the attacks on pro- gadhafi strong holds will commence again... following close coordination of its troops to carry out effective assaults. at least 15 people are reported dead or missing in japan,... after typhoon roke... hit parts of the nation on wednesday. the storm has halted public transportation operations... and

. >> papandreou's commitment will be put to the test on wednesday, when the troika of the year, imf, and central bank experts returned. >> talk of a possible great default, speculation greece might leave the eurozone. >> you are getting much the same feeling in brussels as in germany tonight about this. it all stems back to a week or two ago when the european central bank officials, the imf, and members of the commission were meeting routinely to help greece sort out their paper work and get austerity measures in place, measures promised in return for a bailout. they walked off the job because they found nothing was being done. revenue collection was falling. the greek ministers said they could not do much. decision was not good. there was deep frustration in brussels. it is being spoken about in berlin by president barroso. i think some of this public concern being expressed is designed to put a rocket into the greek government, to make it realize the economics of this problem are more important than domestic politics they may be contending with. >> what is brussels doing? >> not a l

officials from the european commission, the european central bank and imf are due to hold a conference call with top finance officials in greece hoping for reassurances that greece will meet the criteria for another trail of bailout cash. if not they face a grim set of options fraught with risk. we have more on this as the finance ministers meeting happens. they're going to meet and do something. we'll be much wiser in 24 hours and then what happens? tell me what happened ask. >> it's looking all too familiar. it was supposed to be an informal meeting as we also had the other countries in the european union meeting, 27 finance ministers saying again they didn't manage to come to an agreement becoming powerless for greece. greece only has enough money to last through mid-october so it's only got one month left and economists generally agreed without any extra bailouts they won't be able to last past the month of october. they delayed a decision on releasing the next tranche of money. it amounts $11 billion and it will now be made in october. very disappointing for other countries that a

the imf looked at 15 countries from 1980 through 2009. they identified a total of 173 years in which governments reduced budget deficits through spending cuts, tax increases, or a combination of the two. the research finds, on average, a deficit-reduction a 1% of gdp raises the unemployment rate by 0.4% after to debut years. -- two years. workers without jobs for 26 weeks or more. making matters worse, these average effects of deficit reduction are likely to understate the effects of today's u.s. economy. in a typical episode studied by the imf, the country's central bank response to a fiscal tightening by reducing short- term interest rates dampened the rise in unemployment. currently, the federal reserve can of reduced rates because they are already near their lower bound of zero. in this situation, this suggests the cost of production are twice their normal size. to better and standees findings, let's consider one hypothetical fiscal policy. the deficit reduction of 3% of gdp. i picked this number because the cbo forecasts deficits of a

that has been the message from the imf. u have to convince the markets he will not allow greece to go down and with it the rest of the eurozone. host: stella dawson is the economics editor with reuters. we're looking at the european debt crisis impact on the u.s. economy. we have numbers for you to call. let's go to new york city where michael joins us on the independent line. caller: you look really lovely today. i happen to be a super expert in bank accounting from the graduate school of business. greece has made the $200 billion. that is not your problem. the situation you have in northern europe with germany, sweden, switzerland, and the u.k. is that they are traitors. their losses are about $20 trillion. why they are not showing the losses is because they are bucking the accounting has cost accounting, what you pay for the contract. worldwide, your book at market value. the loss will be over $10 trillion. the reason the banks are not alone in -- loaning to the banks is because of the trading losses. the stuff done in eu

one of the reasons behind that is an imf. the dax now down by twice as much in percentage terms as to what it was just half an hour ago. >>> here in asia, nina, stock markets ending mainly higher for the day. a somewhat different picture than europe. the nikkei rising slightly this session despite a disappointing result in japan. there are the closing numbers for you. you see the hang seng pulling back somewhat. you had some of the bigger chinese listings doing rather well today. more focus again on china and whether or not it can weather the economic storm raging all over the world. >>> now, of course, all eyes are on the u.s. federal reserve as it tries to breathe new life into the ailing american economy. as a two-day meeting ends this wednesday, a new strategy is expected. it is called "operation twist." as felicia taylor explains, it's not completely new. >> reporter: the fed's first "operation twist" was launched back in 1961 during the kennedy administration. the fed originally called the program "operation nudge," but

is there you see them, dominique strauss-kahn is obviously the imf chief accused of sexual assaulting a hotel maid in new york. those charges were dropped this week after the prosecutor said he could not prove beyond a reasonable doubt that a crime occurred. we're now expecting that dominique strauss-kahn will be heading back to his home country of france, we are monitoring this story very closely and bring you more details as they come into our newsroom. we want to head to the gulf coast where tropical storm lee is threatening louisiana and mississippi. ed lavender are is in bay st. louis, mississippi. we're hearing about some breaks in the storm but the mayor of new orleans just held a news briefing warning people not to be fooled by this. what kind of rain are you expecting there? bar you hearing? what are you seeing? >> this is, i think the mayor described it as unpredictable and it is acting rather bizarre. a lot of the storm is still offshore, a lot of the heavy rains, there are severe weather warnings and tornado warnings in place for much of louisiana and mississippi until 10:

the imf model does not allow for that. it does not take into account the productivity changes and the beneficial effects of expected lower tax rates. those are important conditions. let me close by saying two things. if we look at the history of the post-war period, we find that there were three fiscal changes they're really did enormous good. one was that kennedy-johnson tax cut. the chairman of the council of economic advisers said the most effective part was the business tax cuts they got the biggest bang for the buck. the sec that big fiscal change they worked well -- the second big fiscal giselle were well was the reagan tax cuts. and the third policy they gave people confidence or the tax increases under clinton, which assured people that their future tax rates were not going to go up. they had seen what they were going to have to pay and there would not be any more. that is important -- and give people confidence. that is what people desperately need at the moment, confidence that the policy that the government puts

her comments are seen as a preview of the speech she will give at next week's general meeting of the imf korean banks greatly increased their r short-term foreign borrowing last month,... amid growing uncertainties in the global economy. the financial supervisory service says... 16 local banks refinanced 157-point-4 percent of their maturing short-term foreign debt in august,... up 90-point-1 percentage points from the previous month. this means the banks borrowed more foreign currency than the amount that matures in less than a year. the august figure is the highest rate since january 2008, when the fss began recording related data,... and suggests that the local banks' funding conditions remain relatively stable. the watchdog explains that... local lenders are securing foreign currency to prepare for a possible credit crunch... amid the ongoing external uncertainties. the leaders of france and britain were cheered in libya for their support for the uprising that overthrew moammar gaddafi. meanwhile, the forces of the new government closed in on gadhafi's hometown of sirte in an effort

but the imf says the cost of recovery for those economies is more than $160 billion.espite the promises, much of the money has yet to be delivered. i spoke to egypt's finance minister and asked him how important it was to see the funding this year. >> of course any funding is welcome always. but i don't think we expect to see some concrete proposal as to amount of money to be located. but the idea is to show that the g8 and the other countries are supporting the countries in the middle east or are undergoing this major change. both politically and economically. >> one would argue if you look at the crisis that you have on your hands right now that nobody's moving fast enough to meet the needs of egypt because of the size of the economy. >> yes. because of this situation of the global economy, our problems came at a time where everyone else has its own problem. available finance is not easy in the context, however, one should also mention in this very difficult financial situation, there is a kind of firm commitment from many countries to help boost egypt and tunisia.