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IMF Reduces US Growth Forecast
The IMF's latest growth forecast, which will be continuously revised until it finally gets it right and sees a decline in world growth (sorry, boys, and Jim O'Neill, decoupling does. not. work) has the US growing at 2.6% and 2.7% in 2010 and 2011, revised down by -0.7% and -0.6% respectively, from the prior overly bullish estimates, which we ridiculed at the time as well. Hereby, we ridicule these estimates as well: US GDP in 2011 will be flat to down. Period. And instead of wrong speculation, here are some wrong, hard facts: " More than 210 million people across the globe may be unemployed, an
increase of more than 30 million since 2007. Three-fourths of the
increase has occurred in advanced economies, the IMF said." And now we understand why the I in BRIC stands for IMF: "The world economic recovery is proceeding,” IMF Chief Economist Olivier
Blanchard told a press conference. “But it is an unbalanced recovery,
sluggish in advanced countries, much stronger in emerging and developing
countries." In other words, same old strawman song and dance.
The IMF's recommendation:
To spur a stronger recovery and more employment growth, government policies need to become more proactive and coordinated to achieve the internal and external rebalancing required for robust real GDP and employment growth. “Historical evidence suggests that countries hit by financial crises typically suffer permanent output losses relative to precrisis trends,” the report says. “However, outcomes after individual crises have varied widely, depending on the policy responses.”
Households and companies have already scaled back expectations for growth over the next one or two years. Policymakers must avoid paralysis and put in place policies to strengthen medium-term prospects. “The challenge ahead if for policymakers to put in place, in a coordinated manner, policies that support the fundamental adjustments needed for a return to healthy medium-term growth,” the report states.
But this is the bottom line: even the IMF is now endorsing global and unending QE:
Monetary policy should stay highly accommodative to support activity and help bring down unemployment, but fiscal consolidation needs to start in 2011 in the advanced economies. If global growth threatens to slow appreciably more than expected, countries with budgetary room could postpone some of the planned consolidation.
One of the most urgent challenges for advanced economies is to adopt plans that help achieve sustainable fiscal positions before the end of the decade. This task is now more pressing than it was six months ago to rebuild room for fiscal policy maneuver in the face of still volatile sovereign debt markets. Such room could be needed because monetary policy alone might not be able to provide sufficient support to counter a threat for a markedly more pronounced-than-expected weakening of activity.
Emerging economies that relied heavily on demand from advanced economies will have to rebalance growth further toward domestic sources to achieve growth rates similar to those before the crisis. In economies with excessive external surpluses, removing distortions that drive high household or corporate saving rates and deter investment in nontradable sectors would facilitate the rebalancing of growth to domestic sources. Such rebalancing will also require further deregulation and reform of financial sectors and corporate governance, as well as stronger social safety nets in key Asian economies.
Lunatics - meet asylum corner office.
And here a pretty table with a catchy colorscheme and lots of meaningless data:
For many more meaningless tables and pretty but useless charts, here is the entire paperweight, er, report.
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Propaganda and reality slowly converge at some point in the future. Unless reality is so distorted by the propaganda, mass media manipulation and martial law that there's no viable comparisons to be made any longer.
In which case, happy days are (forever) here again.
Someone please remind me why the IMF is the source for this analysis. Is there a word for conflict of interest in new speak? Maybe it is accenture?
Enjoy running the hen house, Mr. Fox.
Personally I think people are being conditioned to accept the IMF as a viable source of "truth" and information. I wonder why?
You are right CD, total conditioning with all these UN, Imf, BIS, reports. This is the New World Order stepping out of the shadows.
"wonder"? That's not in the newspeak dictionary. Plus plus bad.
My bad. Or my good in newspeak, where bad is banished to the good place we never want to visit.
1175 today?
Out of gas.
Definitely a great table filled with many numbers, letters, and symbols.
Futures positive! This is outrageously bullish for common equities!
Peak oil ..it happened in July of 2008. There will be no recovery. QE will only make matters worse at oil will soar in dollars..crippling the US economy even more.
How anybody can be the least bit optimistic with given policy and fundamentals is beyond me.
Could it be because most people are stump-jumping ignorant morons? Just a theory, of course.
The warning comes after Brian Lenihan, the Irish finance minister, said that subordinated bondholders of two state-controlled Irish lenders – Irish Nationwide Building Society, or INBS, and Anglo Irish Bank – should make a “significant contribution toward meeting the costs” of a planned government bailout.
Mr Abramovich’s asset management company, Millhouse LLC, would be among the first in line to shoulder INBS’s burden if Mr Lenihan gets his way.
In August 2009, Millhouse bought an unspecified amount of the £126m in subordinated bonds issued by INBS. The government guarantee on those bonds ran out October 1.
In a statement emailed to The Daily Telegraph, a spokesman for Mr Abramovich, the billionaire owner of Chelsea football club, said in Moscow that Millhouse was “extremely concerned” by the recent collapse in the value of these bonds, adding that Mr Lenihan’s statement “did not help the situation”.
“We bought [the bonds] because the Irish Government …promised to guarantee these bonds and promised to have a strategy for the bank. A year later, there is no guarantee and no strategy. We now believe that we have been misled and deceived,” the statement said.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8042534/...
Didn't PIMPco show his advanced insider knowledge of FED data and said Fed will revise to 2.5 next week or so?
But this is the bottom line: even the IMF is now endorsing global and unending QE
Of course it is. When your aim is to bring down every central bank and currency in the world in order to step into the shoes of the world's central bank and have one world currency, you would endorse destructive policy too.
USD/JPY seems definatively below 83 now sitting around 82.91. Wonder when the BOJ will step in again?
Gotta love lines like this:
“Historical evidence suggests that countries hit by financial crises typically suffer permanent output losses relative to precrisis trends,” the report says.
So, excuse me for being dense, but doesn't that suggest that the US is not going "back" to old levels of GDP, as in impaired, condensed, downsized, deflating economy?
The doublespeak is beginning to become annoying.
Gotta slip a "Safe harbor clause" in there somewhere...
I love this morning's CNNMoney headline:
IMF says double-dip recession unlikelyThe oily conquistadors are rubbing their dirty hands with glee.
Apparently some economies are more advanced that others...