I recently watched The Big Short, a movie sketching the events that led to the 2008 financial crisis, a debacle still afflicting the world economy. I had read Michael Lewis's book, on which the movie was based, so revelations in the film that signs of a pending collapse in the US property market were clear to those who bothered to do a little digging didn't shock me. Investment firms promoting contaminated real estate investments - that, incidentally, were sanitised by the very same agencies currently judging our credit standing - were coining it at the time, and no one wanted to spoil a good pitch by attempting to understand even the most rudimentary facts and figures about the product structures.What's really disheartening is that nine years after indications of troubles in the market first appeared, global leaders are not much closer to extricating their economies from the pain and suffering that ensued.International Monetary Fund head Christine Lagarde, speaking in Washington ahead of a gathering of members at the weekend, cautioned that there was no reason for alarm yet, but warned that nations should recognise that the fundamentals in the global economy were fragile, and government policy makers should be prepared to act promptly to address potential risks.They had relied on their central banks to introduce measures to invigorate growth but it became clear monetary policy alone (tweaking interest rates) was not sufficient and that fiscal policies (lowering taxes and increasing spending on projects like infrastructure) and structural reforms (relaxing labour laws, increasing skills and deregulating industries) should be instituted.Lagarde lamented that in 2008 when governments faced a deep dark hole they found the will to co-operate with each other and discuss a blueprint for a global turnaround. While they acknowledge the need to follow a similar course at present, Lagarde admits that only when policy makers peer over their shoulders into the yawning chasm will they sit around a table and chart a recovery plan.Hardest hit in these uncertain times have been retirees, who customarily are content to store their savings in balanced portfolios that yield returns adequate for them to meet their living expenses while at the same time providing sufficient growth to protect any loss of purchasing power that might result from inflation.With interest rates at close to zero and negative in regions like Japan and Europe, and with the low-growth economic environment slowing company profits, savers have been obliged to take on unprecedented risks to squeeze out a decent return, being forced into high-dividend paying equities, low-grade corporate debt and high-yielding emerging market bonds.The issue is more pronounced in South Africa, where pedestrian growth, runaway inflation, a plunging rand and high marginal tax rates have whittled away savings. While government bonds yield an attractive 9% per year at present, 41% income tax reduces an individual's return to 5.3%, a number that fails, by a long margin, to cover our 7% inflation rate. The stock market hasn't fared much better - up a paltry 10% over the past two years. In international terms the returns on our stock market are even more disconcerting. In dollar terms our market is down 21% over the past 24 months, compared with a 12% increase in the S&P500 (a measure of the US equity market) - a 32% difference.Lagarde has plotted a way out of the world's hardships. Govern-ments, including ours, must act hastily...