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No Hockeystick-save Here: IMF To Slash Economic Growth Forecast... Again

Tyler Durden's picture




 

If there is one equivalent to Goldman's FX "strategist" Tom Stolper in the macroeconomic arena when it comes to perpetually inaccurate, flawed and flat out wrong predictions about the future, it is the IMF. Previously we compiled a brief history of their consistently overoptimistic, (downward) revisionistic forecasts based on their semi-annual reports which can only be summarized as "laughable." And, sure enough, we just learned that the IMF is about to trim its unrealistic optimism some more.

From Reuters:

The International Monetary Fund may this week trim its global growth forecast because of the situation in emerging countries, IMF chief Christine Lagarde told a conference on Sunday.  

 

"We had a growth forecast of about 3.3 percent," Lagarde said, referring to the fund's forecast for 2013. "But I fear that considering what we are seeing now in emerging countries in particular - not developing countries and low-income countries but emerging countries - I fear that we might be slightly below that," she told an economists' conference in the southern French city of Aix-en-Provence. The IMF had cut its 2013 forecast for global growth to 3.3 percent in April, down from its January projection of 3.5 percent.

Of course, for the IMF it is always someone's fault, in this case emerging countries being pummeled by the great Chinese deleveraging, that reality intrudes when it is least welcome, and destroys all of its carefully modelled predictions of what an Ivory Towered, Keynesian world should look like.

Visually, it means that what started off as a hockeystick forecast of 4.1% growth in April 2012, will now be cut from 3.3% to 3% of even less.

Here are some of the other IMF "predictions" that we have mocked in the past, and which are all set to be cut now that the IMF has been forced to admit no (hockey)sticksave is coming.

US: expect the US 2014 forecast growth to tumble in the next several revisions - it only took 12 months for the IMF's 2013 US GDP growth forecast to drop from 2.4% to 1.9%. Obviously, the 2013 to 2014 hockeystick is laughable at best.

China: so much for the Great Chinese growth miracle:

Euroarea: over-under on how long until Europe's 2014 growth joins 2012 and 2013 in the negative column?

 

Of course, all of these charts are simply a second derivative of credit creation by the sovereign - either public or private, and as such are largely meaningless. The one chart, however, that should be troubling to all is that of global trade growth, or rather, collapse. This is what we said in April:

However, one chart which deserves particular attention not because it is accurate, but because the rate of deterioration is truly troublesome, is the IMF's view on global trade volume of goods and services. It is here that one can clearly see the disastrous impact of global central bank micro-mismanagement, capital misallocation and central planning. In short: global trade is collapsing - even from the point of view of one of the staunchest macro optimists - at a rate unseen since the Great Financial Crisis, and the Great Depression before it.

 

 

It is, or should be, very concerning to the Central Planning brotherhood , that where global trade one short year ago, as per the IMF's April 2012 forecast, was supposed to grow 5.6%, they only see a token 3.6% growth. And the year is not over yet: expect further downward revisions to this key metric as the quarters go by, with the 2014 data point also revised much lower when all is said and done.

 

Sadly, it is the collapse in global trade that is the most direct testament to the disaster that central planning is: because why trade when one's central bank is there to step in and create the perception of artificial growth, which is not really growth, but merely the dilution of money and the latent onboarding of future runaway inflation. At this pace, quite soon trade growth will halt or even turn negative as countries retrench focused entirely on what their central banks can do for them, instead of engaging in simple economics, comparative advantage and developing their own products and services which should otherwise be competitive on the global arena.

Look for global trade to continue imploding as first currency wars, then trade wars continue to grow stronger and stronger, until in the end, the only variable is who can dilute their currency the most to boost their exports, even as all global trade is ultimately halted thanks to a few not so good Econ PhD's.

 

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Sun, 07/07/2013 - 10:06 | 3728040 fonzannoon
fonzannoon's picture

I don't care whether it's 2013, 2014, 2015 or 2020. What's important to me is to know that growth is just around the corner. 

Sun, 07/07/2013 - 10:36 | 3728069 Bangin7GramRocks
Bangin7GramRocks's picture

I'm absolutely sure this is good for gold, but I will wait for the story with charts to validate my assumption.

Sun, 07/07/2013 - 11:32 | 3728136 augustusgloop
augustusgloop's picture

Actually true for all asset classes. Fortunes turn, look to events to validate. Eg. US equities: 10-30 year yields damn low before QE3 (for instance pimco TENZ flat between fall 2012 & spring 2013) but explanation for rocketing DJIA was quest for yield. And what is the explanation now that we have a taper? rising yield is good for stocks, shows that the economy is growing! 

QE Was good for gold, now QE bad for gold. Analysts might as well be reading sheep intestines. The MSM is just a chorus amplyfying the words of the seers. 

Sun, 07/07/2013 - 12:16 | 3728175 knukles
knukles's picture

Stop picking on the IMF and Stumbler at Goldman or whatever his name is.  These are hard working dedicated servants of the people and institutions committed to the inter-mediation of savings to capital, raising money for businesses in free and open markets.
This constant complaining and criticism is akin to rumor mongering and character defamation, the sole cause of today's economic and social malaise which if continued will lead to the Decline of Western Civilization.
You peole need to help push the bus instead of miring it down ion the mud.
You need to take on attitude of strong Russian peasant woman and put on green sticky gum mud boots and babushka, heave ho and pull both tractor and cow out of mud puddle for good of country.

 

Hah ha ha haha ha ha ha
Lead benefactor of NWO cutting world economic growth projections. 
Fuck else is new?
Just wake up?!?!?!?
Surprise!
About as effective as CNBS tinkering with prime time schedule due to declining viewership.
Fuck's wrong with these pictures?

Oh and PSS....  So where's everybody talking about this "Taper" shit?
On CNBS, etc.
Go figure

Sun, 07/07/2013 - 12:17 | 3728179 fonzannoon
fonzannoon's picture

haha I read that. Replacing Kudlow With Carl Chinchilla. That's definitely the answer.

Sun, 07/07/2013 - 12:23 | 3728186 knukles
knukles's picture

On year for my birthday or Christmas (when I was still drinking, can't remember which) I'd asked for a Chinchilla peter heater banana hammock.
But alas, I was told go pull tractor out of mud puddle and don't come back...

Didn't improve my prime time experience, lemme tell you...
I'll just tinker with MrFunnything for a while and see what...
OMG!

Sun, 07/07/2013 - 12:27 | 3728192 fonzannoon
fonzannoon's picture

You need to know this knukles.

On at least three occasions my wife has walked into my office and looked at me squinting, a half inch away from my monitor, attempting to read your midget lettering at the end of your posts. I then giggle after reading it. Then I look over and she is standing there and says "you really are seriously weird" and walks away.

Sun, 07/07/2013 - 12:36 | 3728204 Hulk
Hulk's picture

I would imagine that is what most of our wives think of us !!!

Sun, 07/07/2013 - 13:05 | 3728237 derek_vineyard
derek_vineyard's picture

after the current drop in gold she wants ZH blocked from my hard drive

Sun, 07/07/2013 - 12:28 | 3728193 GMadScientist
GMadScientist's picture

Is that a live Chinchilla garment?

PETA will not be pleased (the Chinchilla is a toss-up).

Sun, 07/07/2013 - 12:26 | 3728190 GMadScientist
GMadScientist's picture

All very motivating, but we can't help notice you're still sittin' in the bus. ;)

Sun, 07/07/2013 - 12:30 | 3728094 Smegley Wanxalot
Smegley Wanxalot's picture

Little Orphan Lagardie, The Musical

 

The growth'll come out ...

tomorrow,

Bet your borrowed dollar that tomorrowwww ...

there'll be growth.

 

Just lying about ...

tomorrow,

Gives the world more reasons to go borrowwww ...

till there's growwwwwth!

 

Tomorrow!  Tomorrow!

Shut up and ... go borrow,

Growth's only a day awayyyyyyy!

Sun, 07/07/2013 - 12:35 | 3728203 WmMcK
WmMcK's picture

Arf, bitchez.

Sun, 07/07/2013 - 11:12 | 3728110 disabledvet
disabledvet's picture

"after the recession we just had in 2012." can we at least get the past right?

Sun, 07/07/2013 - 11:32 | 3728135 NoDebt
NoDebt's picture

The only thing more frightening than the innacuracy is that they believe their own projections. 

Sun, 07/07/2013 - 11:33 | 3728137 Bearhug Bernanke
Bearhug Bernanke's picture

and terrorists, don't forget terrorists.

Sun, 07/07/2013 - 12:16 | 3728176 Stoploss
Stoploss's picture

Apparently global finance is slightly, slightly, more complicated than synchronized swimming..

Sun, 07/07/2013 - 10:11 | 3728044 DEVILDOG
DEVILDOG's picture

lagarde should just stick to showing off her fashionable scarfs and stop pretending she knows anything about global economics except for channeling all the globe's wealth to herself and the other .01% parasites.

Sun, 07/07/2013 - 11:16 | 3728119 disabledvet
disabledvet's picture

she could show off some personal stick saves she's had if she's feeling lacking in attention. coverage for "estimates" isn't bad of course but there is no such as a "growth estimate."

Sun, 07/07/2013 - 11:33 | 3728138 lakecity55
lakecity55's picture

US Taxpayers pay her salary AND she pays NO income tax as IMF Head.

But, who would want head from her?

Sun, 07/07/2013 - 12:25 | 3728188 knukles
knukles's picture

Joe Biden

Sun, 07/07/2013 - 10:13 | 3728045 RaceToTheBottom
RaceToTheBottom's picture

IMF produces the thighmaster of estimates. Never do what they should

Sun, 07/07/2013 - 10:18 | 3728051 Handful of Dust
Handful of Dust's picture

"3.3%"?

 

In her [wet] Dreams.

Sun, 07/07/2013 - 10:31 | 3728059 Non Passaran
Non Passaran's picture

A bunch of useless morons.
Why countries don't quit the WB and the cocksucking International Moron Fest?

Sun, 07/07/2013 - 10:39 | 3728068 Haole
Haole's picture

 

IMF = holographically-induced destruction of whatever they touch, just add debt zeros.

Sun, 07/07/2013 - 10:37 | 3728072 Temporalist
Temporalist's picture

But...but...Latvia just joined the EZ.  Doesn't that solve everything?

Sun, 07/07/2013 - 20:02 | 3729249 Bazza McKenzie
Bazza McKenzie's picture

Don't know about solving "everything", but it no doubt solved a personal wealth matter for a number of Latvian politicians, bureaucrats and bankers.

Sun, 07/07/2013 - 10:44 | 3728078 CrashisOptimistic
CrashisOptimistic's picture

US GDP growth has not seen a 3.5% quarter in 6 years amid the most spectacular stimulus the world has ever seen.

How are stocks behaving as they have? 

Answer is two reasons: 

1) HFT and

2) The Share portion of Earnings/Share is shrinking with 0% interest loans used to buy back shares.  It creates EPS growth that is used to compute P/E.  When the loans mature, they are rolled over, still at 0%.

Truth is, Earnings are only slightly up over 6 yrs.  Divided by 6, very little.  It is EPS that is up more, and it will collapse when interest on debt rolled over starts to cost CFOs money, which has to come from earnings and will preclude any more buybacks.

Sun, 07/07/2013 - 11:46 | 3728145 Everybodys All ...
Everybodys All American's picture

The manipulation of share price by company buybacks and borrowing at historical extremes is coming to an end. Companies will find it very hard to hide their business and margins collapse.

Sun, 07/07/2013 - 12:28 | 3728194 knukles
knukles's picture

Another reason is the "banks" buying stocks at the behest of those nefarious fuckers somewhere behind the scenes not to be mentioned above a whisper in private.

Like, uh, POMO, SOMO, OMO, HOMO or whateverthey'recallinghteshit today

Sun, 07/07/2013 - 10:48 | 3728081 Smegley Wanxalot
Smegley Wanxalot's picture

Lagarde: "I'll gladly pay you Tuesday for some fake tanning cream today."

 

Even worse, the IMF is using China's overblown statistics in their equation.

Sun, 07/07/2013 - 10:46 | 3728082 smacker
smacker's picture

 

The IMF's economic forecasting is on a par with the BBC's weather forecasting: they're both very good at telling you what's happening today but no good at telling you what's going to happen tomorrow. ;-)

Sun, 07/07/2013 - 10:48 | 3728086 BooMushroom
BooMushroom's picture

I swear, any minute now, something good is going to happen! Would I lie to you?

Sun, 07/07/2013 - 11:00 | 3728099 eddiebe
eddiebe's picture

And we can believe what the IMF tells us, right?

Sun, 07/07/2013 - 11:01 | 3728100 surf0766
surf0766's picture

If you think it is true , it will be

Sun, 07/07/2013 - 11:03 | 3728101 q99x2
q99x2's picture

They are psychopathic sociopaths that must be jailed before they destroy the world. Arrest them.

Sun, 07/07/2013 - 11:09 | 3728106 ISEEIT
ISEEIT's picture

WTF exactly is the purpose of the IMF? All these 'international' organizations almost seem to be little more than parasitic 'news' generators. What constructive role do they play..

Just kidding. I'm stupid, but not that stupid.

Sun, 07/07/2013 - 11:10 | 3728107 surf0766
surf0766's picture

They are a wealth transfer organization headed by NWO, marist, socialist tards

Sun, 07/07/2013 - 12:29 | 3728196 knukles
knukles's picture

Dat Be Da Troof!

Sun, 07/07/2013 - 11:11 | 3728108 Jayda1850
Jayda1850's picture

This is exactly why I have such a hard time believing in global warming. I am supposed to believe that the same people who think they can project gdp growth over the next 5 years, having been proven wrong time and again, think they can also predict the weather over the next 100yrs and then pass regulations that affect us all on their false assumptions.

Sun, 07/07/2013 - 11:13 | 3728115 Tinky
Tinky's picture

You're conflating economists with scientists.

Sun, 07/07/2013 - 11:53 | 3728149 ISEEIT
ISEEIT's picture

No, he's confronting cognitive dissonance.

That's when the bullshit meters go off..

It's good thing.

http://www.forbes.com/sites/larrybell/2013/02/05/in-their-own-words-clim...

http://finemrespice.com/search/node/climate

Sun, 07/07/2013 - 11:58 | 3728160 Tinky
Tinky's picture

Presumably you imagine that Forbes is a great place to go to get the most sophisticated and balanced views on climate science. Good luck with that!

More to the point, climate science is not black and white, but it is science.

Sun, 07/07/2013 - 12:31 | 3728199 knukles
knukles's picture

In the old days, science used to be called Natural Philosophy
Which is probably a better descriptor of the noble effort

 

Noble, get it, noble, pun... Hah ha ha ha ha

Sun, 07/07/2013 - 18:09 | 3729023 moondog
Sun, 07/07/2013 - 13:01 | 3728234 SunRise
SunRise's picture

Greyyyyy Science???  Is that a synonym for sorcery?

Sun, 07/07/2013 - 19:58 | 3729242 Bazza McKenzie
Bazza McKenzie's picture

Anyone who regurgitates government BS is not a scientist.  Anyone who collaborates with the UN, the most corrupt organisation on the planet, is just another crook.

Sun, 07/07/2013 - 11:13 | 3728113 pachanguero
pachanguero's picture

Here in Thailand where I live it's slowing down big time in real estate.
Big bust coming I think.

Hot chicks!

Sun, 07/07/2013 - 11:30 | 3728134 smacker
smacker's picture

 

Please let me know when I can buy a nice place in Patong at a good price :-)

Sun, 07/07/2013 - 12:39 | 3728207 Hulk
Hulk's picture

I would like a plave to rest my head in Badonkadonk

Sun, 07/07/2013 - 12:32 | 3728200 knukles
knukles's picture

One of my acquaintances who loves Thailand gets real defensive when we ask him how he tells the hot chicks from the hot not so chicks....
Just relating a conversation....

Sun, 07/07/2013 - 15:08 | 3728560 Dubaibanker
Dubaibanker's picture

Two different articles and interestingly both published this week. Both articles use the word 'bubble' in their headlines. Bangkok Post saying that banks are not giving loans to many developers which is also stated by the second article from Oxford Business Group. Bank of Thailand has made higher loan to value - LTV - requirements and more detailed project assessments more stringent. There are fears of oversupply in certain areas within each city. Bank of Thailand is expecting a property bubble. While the Thai currency is certainly showing a selling pressure with its decline, just like most other emerging market currencies and the decline in GDP growth was a surprise even for Bank of Thailand and the Govt. Developers have hiked payment plans which also is interesting to note that it helps reduce speculation but at the same time shows that they are slightly more worried than last year. Banks are refusing mortgages to buyers which is not a good sign. Advertising galore on the streets of Bangkok, so I hear! 

http://www.bangkokpost.com/business/news/357684/banks-cautious-on-bubble...

http://www.oxfordbusinessgroup.com/economic_updates/thailand-monitoring-...

Sun, 07/07/2013 - 11:20 | 3728126 Jake88
Jake88's picture

wow big deal. not!

Sun, 07/07/2013 - 11:25 | 3728127 involuntarilybirthed
involuntarilybirthed's picture

The US has fed off the world consuming it's products in exchange for "interest" on mountains of issued debt.  Seems only Africa (minus the stuff ripped out of it ground) is the only one left to keep the game rolling.  Now that the world is wiser others will want more that full faith and credit as collateral for their investments.  China know this so will use gold to supplement their credibility.  All the US can offer is more debt.

Sun, 07/07/2013 - 11:28 | 3728132 eddiebe
eddiebe's picture

I also think the smashdown in gold is a harbinger of a smash in stocks and bonds both. TPTB wanted to do a pre-emptive strike there to keep that door obscured so more people will still run to the dollar. Obviously keeping fiat systems intact is the #1 priority for them for as long as they can keep the scam going. ( Til they announce the next one, to save us from total disaster of course.)

 

Sun, 07/07/2013 - 11:42 | 3728142 unununium
unununium's picture

The door may be obscured but has opened wider. Or to switch metaphors, the tide has gone out. Time to collect seashells and other shiny things before the tsunami.

Sun, 07/07/2013 - 11:31 | 3728133 lakecity55
lakecity55's picture

I am going to hedge and buy some Yuan.

One poster yesterday put up the link to a site you can buy and get delivered to your house.

So, in addition to holding cash in the safe, some of the cash will be Yuans.

Right now, looking at the dollar index, it seems the time to buy them, imo.

Sun, 07/07/2013 - 12:13 | 3728174 Non Passaran
Non Passaran's picture

No sane person should refuse silver and gold coin.

Sun, 07/07/2013 - 12:43 | 3728212 WmMcK
WmMcK's picture

Yes, but it may soon/temporarily also be that no sane person will offer it for fiat.

Sun, 07/07/2013 - 12:29 | 3728197 GMadScientist
GMadScientist's picture

There *will* be growth!

In foreclosures, bank spindowns, dissolved investment funds and REITS, and government deficits.

Sun, 07/07/2013 - 12:38 | 3728206 Bunga Bunga
Bunga Bunga's picture

These charts look all like: " but but but next year!"

Sun, 07/07/2013 - 12:42 | 3728211 Curt W
Curt W's picture

Can I get a job at the IMF ?

I have beeen practising drawing straight lines.

I am getting really good at it.

Just give me a guesstimate and I will draw your line

Sun, 07/07/2013 - 13:31 | 3728286 Freedumb
Freedumb's picture

All of these charts are accurate, once you rotate them all between about 60-90 degrees clockwise

Sun, 07/07/2013 - 13:37 | 3728303 eaglerock
eaglerock's picture

Perpetual exponential growth is a bitch. 

Sun, 07/07/2013 - 15:28 | 3728609 Benjamin Glutton
Benjamin Glutton's picture
IMF's Lagarde says U.S. budget cuts 'inappropriate'

 

AIX-EN-PROVENCE, France (Reuters) - The U.S. federal budget cuts are an inappropriate measure that will weigh on potential growth, IMF chief Christine Lagarde said on Sunday, urging Washington to present "credible" fiscal plans.

Washington enacted across-the-board federal government spending cuts, known as sequestration, in March because Congress could not agree on an alternative.

It has meant everything from furloughs for air traffic controllers to fewer planes for the U.S. Navy to smaller subsidies for farmers.

"The budgetary procedure that is in place in the United States, which leads to a budgetary adjustment, seems to us absolutely inappropriate ... because it blindly affects certain expenditures that are essential to support medium and long term growth," Lagarde told an economists' conference in Aix-en-Provence, southern France.

Her comments echoed those last month from the IMF itself, which said: "The deficit reduction in 2013 has been excessively rapid and ill-designed."

In its annual check of the health of the U.S. economy, the IMF forecast economic growth would be a sluggish 1.9 percent this year. The IMF reckons growth would be as much as 1.75 percentage points higher if not for the rush to cut the government's budget deficit.

While the budget cuts that took hold on March 1 do not appear to be hitting government payrolls directly so far, some economists said they were weighing on private employers and helped explained a sharp slowdown in hiring in the health care and social assistance sector.

Lagarde urged Washington - as well as Tokyo - to come up with fresh plans to cut their debt.

Japan has pledged to halve the primary deficit - the budget excluding new bond sales and debt servicing - by March 2016 and bring it to surplus by March 2021 to contain its ballooning public debt. It will detail how it wants to accomplish that in a medium-term fiscal plan expected in August.

"It is indispensable that these countries indicate for the long and medium term predictable, credible fiscal policies, anchored in legislation that will not be challenged, which will bring the deficit down in a way that will reverse the debt trajectory to a downward trend," she said.

(Reporting by Ingrid Melander and Michel Rose; Writing by Elena Berton; Editing by Alison Williams)

Sun, 07/07/2013 - 16:59 | 3728857 Abi Normal
Abi Normal's picture

LOL, wrong again IMF, you people are good for one thing - a laugh!

http://www.bloomberg.com/quote/BDIY:IND/chart

This one chart tells a lot about growth or lack of it!!!

Do NOT follow this link or you will be banned from the site!