* U.S. stocks slide, job losses mount
* Economists, Fed see recession well into 2009
* Switzerland slashes interest rates
* IMF helps Iceland, Turkey
* Oil falls below $50 on reduced demand (For more stories on the financial crisis click [ID:nCRISIS]) (Updates with stock prices, deflation fears, quotes)
By Jackie Frank
WASHINGTON, Nov 20 (Reuters) - Fears of a deep, long global recession intensified on Thursday as stock markets hit new lows on reports of more U.S. job losses and oil prices below $50 a barrel, as prospects dimmed for a bailout of U.S. automakers.
World economic woes prompted Switzerland's central bank to make a surprise one percentage-point interest rate cut and analysts said the poor U.S. jobs picture almost guaranteed a Federal Reserve rate cut at its next meeting on Dec. 16.
CNBC reported Saudi Prince Alwaleed bin Talal planned to
boost his stake in Citigroup
Global equity markets sold off again, with U.S. stocks tanking for the second day to mark new multi-year lows.
"How many times is one going to take a beating before realizing the market isn't going to bounce?" said Andrew Kanaly, chairman of Kanaly Trust Company in Houston, Texas. "The decline in the oil prices is a barometer of more economic sliding globally."
Amid fears that a bankruptcy in the U.S. auto industry could send tremors through the entire U.S. economy, prospects for a quick bailout of its automakers faded, although Congress continued to discuss it and hoped for a deal soon. Observers said one might not come until January.
In a bad sign for the bailout, an important industry friend in Congress, Michigan Democratic Rep. John Dingell, was unseated as House Energy and Commerce Committee chairman.
General Motors
All three major U.S. stock indices made broad swings, with the Dow Jones industrial average <.DJI> at its lowest since March 2003 and the Standard & Poor's 500 <.SPX> down more than 2.5 percent, it lowest since October 2002.
World stocks <.MIWD00000PUS> tumbled to 5-1/2-year lows with volatile emerging market equities <.MSCIEF> down 4.71 percent. European shares <.FTEU3> closed down 3.7 and Japanese stocks <.N225> plunged nearly 7 percent. [MKTS/GLOB]
In what would normally be a good sign for consumers and
markets but now signals weaker global growth, U.S. crude
futures
JOB LOSSES, LONG DOWNTURN
On the jobs front, a government report showed the number of workers filing new claims for jobless benefits last week surged to the highest in 16 years. President George W. Bush backed an extension of jobless benefits and U.S. Senate Democratic Leader Harry Reid said it may be considered this week.
Over four million Americans were receiving jobless benefits in the week ended Nov. 8.
Planned layoffs since September at non-financial companies worldwide total at least 172,000. To that can be added 89,500 in financial sector losses. For more see [ID:nLK348100].
Leading economies will likely be in recession for around a year, a Reuters poll of around 250 economists showed. The survey across the Group of Seven nations showed economies faced recession for as much as five quarters. [ID:nLK530846]
"All developed economies will contract in 2009. It's the worst we have had in a century. But to say it's going to look like 1929 again for all these economies is a bit excessive, it's too pessimistic," said Marco Annunziata, chief economist at UniCredit in London.
The Federal Reserve said on Wednesday the U.S. economy would contract through the first half of 2009. [ID:nN19340273]
"No end in sight," ING economists said in a note on Thursday, a sentiment widely shared by investors.
Analysts said now the fear may be for a deadly economic problem: deflation, marked by steadily falling prices and economic stagnation.
"Once you get into a period of deflation, it's important to get the economy turned around as soon as possible," said Lyle Gramley, a former Fed governor now an analyst with the Stanford Group in Washington.
The Philadelphia Federal Reserve said a key measure of U.S. inflation, the prices paid index, fell to its lowest level since the survey started in 1968.
Japan's exports to Asia fell in October for the first time since 2002, suggesting the fallout from the credit crisis has spread to neighbors such as China. [ID:nT254579]
IMF TO THE RESCUE?
With investors looking increasingly to governments and other authorities to stop the rot, the IMF moved to prop up both Iceland and Turkey. It approved a $2.1 billion loan for Iceland, battered by a severe banking crisis, as part of a $10.2 billion package. [ID:nLK644669]
The IMF said Iceland's economy would likely shrink 9.6 percent next year and unemployment quadruple to 5.7 percent.
Sources in Turkey told Reuters the IMF was ready to agree a precautionary standby agreement of $20 billion to $40 billion. [ID:nIST002723]
Russia's Prime Minister Vladimir Putin said his country would not allow the global financial crisis to capsize its economy and announced a $20 billion stimulus package and help for people who lose out in the downturn. [ID:nLK574680]
European Central Bank Executive Board member Lorenzo Bini Smaghi told a Portuguese newspaper more interest rate cuts by the European Central Bank were possible. (Additional reporting by Richard Cowan, Tabassum Zakaria and Reuters bureaux worldwide; Editing by Chizu Nomiyama)