Finimize - 💋 The IMF’s kiss of debt

Hi Reader, here's what you need to know for September 27th in 3:03 minutes.

🇺🇸 It’s true, folks: the US has already entered a technical recession. So join abrdn’s Abigail Watt for What’s Next For The US Economy? on Thursday, and find out what that means for you, your bank balance, and the country as a whole. Grab your free ticket

Today's big stories

IMF bailouts have hit record highs as the global economy suffers
Could one little blockchain be the next big thing? – Read Now
The pound plunged to an all-time low against the dollar

Life-Or-Debt IMF Loans Hit An All-Time High

What’s Going On Here?

Data out this weekend showed that the International Monetary Fund (IMF) is lending more money to hard-up countries than ever before.

What Does This Mean?

The IMF is kind of like a bank for countries, but it’s a bank that few nations get excited about dealing with. As “the world’s lender of last resort”, it’s a worst-case-scenario safety net that countries can rely on when their economies are – well – going to hell in a handcart. Calling in the IMF, then, is a kind of SOS flare that can spook investors and hit a country’s reputation – but the combined forces of the pandemic, the war in Ukraine, and the sharp rise in global interest rates have pushed at least five countries into default and forced dozens more into the IMF’s arms. No wonder, then, that the organization had a record-breaking $140 billion out in loans at the end of last month.

Why Should I Care?

Zooming in: Downhill from here.
This could just be the beginning. Experts think that greater interest rate hikes could push even more countries into dire economic straits, and with 55 of the world’s poorest countries already due to repay almost half a trillion dollars of debt by 2028, the IMF could find its resources stretched pretty thin over the next few years. That might be why some economists are keen to remind us that the IMF’s pockets are only so deep and the day could come when it can no longer dole out emergency checks.

The bigger picture: The outlook’s pretty cheerless.
The OECD isn’t optimistic about the global economy: the organization said on Monday that it expects just 2.2% growth next year, down from a 2.8% forecast in June. That means 2023’s global output is now projected to be a cool $2.8 trillion lower than had been forecasted before war broke out – a sum equal to the entire economy of France (tweet this). (Zut alors!)

You might also like: What’s next for the global economy: three scenarios.

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Analyst Take

Could Polkadot And Its Gang Of Parachains Be Ethereum’s Killer?

By Jonathan Hobbs, Analyst

There’s always speculation about which blockchain might someday be the “Ethereum killer”, capable of knocking the No. 2 blockchain off its perch.

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With its parachain technology, Polkadot is designed to do all the things Ethereum can do, only better.

That’s today’s Insight: is this the blockchain that takes out Ethereum?

Read or listen to the Insight here

The Dow’s dipping

The Dow is one of the most keenly-watched US stock indexes, and it carries some serious heft.

So it doesn’t bode well that this year’s less-than-idyllic conditions have sent it tumbling down a steady downward slope.

You’ll probably have three big questions right about now: what’s going to happen next, how to protect your income and savings, and how you can use the crash to actually make money.

As luck would have it, you can get all three answers today by watching this quick video by Weiss Ratings.

Get your head around the crash with Weiss.

Find Out More