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The IMF's Emerging Confusion On Emerging Markets

Tyler Durden's picture


The IMF's woeful forecasting record, chronicled extensively before, has just taken yet another hit, following the latest flip flop on emerging markets. Try to spot the common theme of these assessments by the IMF.

IMF Chief economist Olivier Blanchard, April 11, 2011 (source):

"In emerging market economies, by contrast, the crisis left no lasting wounds. Their initial fiscal and financial positions were typically stronger, and the adverse effects of the crisis were more muted. High underlying growth and low interest rates are making fiscal adjustment much easier. Exports have recovered, and whatever shortfall in external demand they experienced has typically been made up through increases in domestic demand. Capital outflows have turned into capital inflows, due to both better growth prospects and higher interest rates than in the advanced economies. The challenge for most emerging market economies is thus quite different from that of the advanced economies—namely, how to avoid overheating in the face of closing output gaps and higher capital flows."

IMF Chief economist Olivier Blanchard, July 9, 2013 (source):

"If you look country by country it seems to be specific . . . so in China it looks like unproductive investment, in Brazil it looks like low investment and in India it looks like policy and administrative uncertainty. But you wonder whether there is not something behind. I think behind this is a slowdown in underlying growth – not the cyclical component but just the average rate. It’s clear that these countries are not going to grow as fast as they did before the crisis.”

IMF Chief economist Olivier Blanchard, January 23, 2014 (source)

"Finally, we forecast that both emerging market and developing economies will sustain strong growth"

A few days later, EMs around the globe crashed, and central banks virtually everywhere had to step in to bail out their crashing currencies, and hit the tape with even more impressive verbal intervention every several hours.

Finally, today we get IMF economist Alejandro Werner, January 30, 2014 (source)

"Conditions in global financial markets will stay tighter than they were before the U.S. central bank’s “taper talk” in the first half of 2013, translating into higher international borrowing costs, particularly with the recent volatility in emerging markets.... sustained turbulence in emerging markets could tighten global financial conditions further.... Rebuilding fiscal buffers, and using monetary policy and flexible exchange rates to absorb shocks where possible, remains the order of the day."

In other words, going from a forecast of "high underlying growth", to "not going to grow as fast as they did", to "sustain strong growth", to violent EM crash, to "turbulence", "volatility", and urging EMs to "using monetary policy to absorb shocks", what is clear is that nobody knows what is going on, nobody has any handle on the future of Emerging Markets, but let's all just pretend that the MIT central-planners in control, are in control, and all shall be well.

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Thu, 01/30/2014 - 14:22 | 4384585 knukles
knukles's picture

Lawyer training, paid by the word.  With all the integrity of a politician.


Next, the IMF'll be hiring Hookers with Squeegees as they've not been allowed to ply their bodies or intellect (unwantedly squeegeeing auto windows of helpless innocents) on NYC streets for decades under the oppressive dictatorial crime stopping rule of past administrations, so in order to make penance (White Man's Guilt shit, again) they'll all be given senior analytical positions* at the IMF. 
Needle tracks, greasy squeegees and all


*Guaranteed Not to Improve Forecasting Prowess, by does indeed meet Progressive Diversity Standards.

Dumb fucks


We have decidedly arrived to the 7th Circle of Hell, a complete mayhem of murder and debauchery abounding

Thu, 01/30/2014 - 14:22 | 4384611 Say What Again
Say What Again's picture

Is the IMF related to MF Global?  Sometimes I feel like I need a program that describes the cast of characters.

Thu, 01/30/2014 - 14:25 | 4384621 savedeposit
savedeposit's picture

IMF Global

A sort of MF Global product from Apple 

Thu, 01/30/2014 - 14:35 | 4384657 Oldwood
Oldwood's picture

I think they are all MF'rs.

Thu, 01/30/2014 - 15:07 | 4384837 nope-1004
nope-1004's picture

Common thread?  STUPIDITY



Thu, 01/30/2014 - 15:15 | 4384875 Herd Redirectio...
Herd Redirection Committee's picture

Combined with just enough evil so they don't even give a shit.

Thu, 01/30/2014 - 14:39 | 4384667 insanelysane
insanelysane's picture

At least the employees of MF Global were supposed to pay taxes.

Thu, 01/30/2014 - 15:37 | 4384984 halfawake
halfawake's picture

check the wb7 chart, i think he updated it this year

Thu, 01/30/2014 - 15:48 | 4385042 halfawake
halfawake's picture

World of Conspiracy 3.0 (https://secure.flickr.com/photos/16315439@N05/9597866606/in/photolist-fC...)



Thu, 01/30/2014 - 14:25 | 4384622 nasdaq99
nasdaq99's picture

these are lobbying words to the Fed, ECB, BOE, BOJ, etc.


they're just a professional lobby institution for more dough to led, more influence to peddle.

Thu, 01/30/2014 - 14:35 | 4384653 piliage
piliage's picture

Man oh man I tell ya, it's getting harder and harder to differentiate between the incompetent French enarc fucks and the incompetant international student exchange Ivy League fucks at the IMF.

Perhaps they are all just useless fucks?

Thu, 01/30/2014 - 15:04 | 4384827 Kirk2NCC1701
Kirk2NCC1701's picture

Lawyer training is the ONLY academic discipline where DEBATING skills are Bread & Butter.

People and their kids need to learn the skills of Debating & Public Speaking at a MUCH younger age (Middle-School and High School), to prevent getting used as dumb-ass sheep. 

Although Christian churches often encourage & promote Public Speaking skills, their particular dogma/worldview limits the Scope & Paradigms of thinking -- which then limits the Debating skills of their people, when faced with more 'creative' or 'predatory' worldviews.

Problem is, TPTB do not want their sheeple to be TOO smart, lest they lose control.  So they restrict it to Law Schools, where they can 'manage' things via the legal bottleneck.

Thu, 01/30/2014 - 14:14 | 4384587 TheRideNeverEnds
TheRideNeverEnds's picture

Whats the problem?  Just print more growth and you'll be 'aight.

Thu, 01/30/2014 - 14:16 | 4384589 Sudden Debt
Sudden Debt's picture

our hart goes out to them....

Thu, 01/30/2014 - 14:17 | 4384592 101 years and c...
101 years and counting's picture

what u say? crashing currencies and soaring rates is not good for growth.  its ben's wettest dream come true....

Thu, 01/30/2014 - 14:16 | 4384595 LawsofPhysics
LawsofPhysics's picture

That which cannot be sustained won't be, period.  The circus can go on for a long time, as to the bread, not so much.

Thu, 01/30/2014 - 15:16 | 4384870 Kirk2NCC1701
Kirk2NCC1701's picture

Agreed.  But the real pain comes when those "parasites with means" ensure that their lifestyle is maintained, even in "bad times".  And then their spawn breed, to keep their species going.

That can only be countered with the same culling as Mother Nature has, via the increase of real natural predators -- not the defanged and declawed shadows of former predators we seem to have. 

Put another way... "Roll the Gui...!" 

Or, in my genre/metaphor: "Get those Klingon bass-turds!"

Thu, 01/30/2014 - 15:28 | 4384932 Panem et Circus
Panem et Circus's picture

I would like to think you're right, but it lasted a long time in Rome. I guess the difference there was theyhad a legal distinction between citizen and slave, not just a financial one. Hey, maybe we should look into that!

Thu, 01/30/2014 - 15:47 | 4385037 LawsofPhysics
LawsofPhysics's picture

Exponential equations are a bitch.  How many people were in Rome?  Probably not half as many that are current in one American city.

Thu, 01/30/2014 - 14:23 | 4384597 hedgeless_horseman
hedgeless_horseman's picture



Although it’s clear that these countries are not going to grow as fast as they did before the crisis...we forecast that both emerging market and developing economies will sustain strong growth.

What is strong growth?  It is like a decent return.

MyRA guarantees a decent return with no risk* of losing what you put in.



* Except inflationary risk, but what are the chances of the USA inflating away it's debt because it is denominated in its own currency that is backed by nothing?

Thu, 01/30/2014 - 14:23 | 4384615 knukles
knukles's picture

Easy there...
A little early for the cynicism and angst...

Let's get Krugman's view on the topic before we run amok trashing The Man with the Scars on His head's Ideas.

Thu, 01/30/2014 - 14:27 | 4384627 maskone909
maskone909's picture

its so obvious!  Ponzi 101 if you will.

The old ponzi schemes(refered to in the article as "advanced economies") have run out of participants.  For any ponzi to thrive you must have greater numbers of players to enter the game.  Welp, thats not happening.  so whats a banker to do?  well what other than create new ponzi schemes!  we will call these new schemes, "BRICS".  we will suck people into it in hopes of growth and profit!  unfortunately the old ponzi called USA et al is hurting the ability of the new ponzi's to thrive.  the bottom line is that it is game over.

Thu, 01/30/2014 - 14:50 | 4384744 Rip van Wrinkle
Rip van Wrinkle's picture

"the bottom line is that it is game over."


Oh, how I wish.




Thu, 01/30/2014 - 15:35 | 4384972 Panem et Circus
Panem et Circus's picture

What we should do is allow the government to take over all industry, agriculture, businesses, etc. Then everyone gets a payment every month, you know something like a "livable wage." It would be the same exact amount for everyone of course, except for Party members. The government would guarantee us all a job, food, housing, etc. They can outlaw lending, because that obviously hurts the poor and only benefits the rich. They can outlaw saving too, because you don't need to save if the government is giving you exactly what you need every month. What could go wrong?


Thu, 01/30/2014 - 16:22 | 4385221 Hayabusa
Hayabusa's picture

Ok maskone909, I gave u an up arrow... it is a ponzi... but in addition it's a confidence game. 

In order to keep things afloat they need to inspire confidence of us underlings via a constant barrage of media propaganda from self-annointed experts who say they have a macroeconomic crystal ball, but obviously their hocus pocus and high powered education/expert credentials cannot "override" concrete reality and control every aspect of the world economy - it just goes boom unexpectedly sometimes.  They are clueless... following their "leadership advice" is akin to following the other lemmings off the cliff. 

Thu, 01/30/2014 - 14:43 | 4384680 Oldwood
Oldwood's picture

Their concept of growth is todays new normal. Simply surviving one more day, even from a terminal disease is "growth" now. Upward, Onward, and of course Forward...towards the abyss. Words mean shit.

Thu, 01/30/2014 - 14:20 | 4384601 Kirk2NCC1701
Kirk2NCC1701's picture

Per my comment yesterday...  01/29/2014 - 14:41 | 4381028

The BRICs + EMs (Emerging Markets) need to dump the Dollar... NOW!

Or they'll get what's coming to them:  A real whoopin'.

So you can't say I didn't warn you or provide SMART* solutions, you must...

Back your national currencies with

   (a) PMs (mix of Platinum, Gold, Palladium and Silver), and

   (b) Exportable Energies (Carbon-fuels or Electricity).

If you have a healthy mix of these, short of starting WW3, there is NO way the Fed-led CBs can mess with you.  In fact, if you did these things, THEY would be the ones with bank runs, starting the same day. 

The BRICs can lead the way, and the EMs would follow in short order (starting with S. Africa, Argentina, Chile, Turkey).

I think you got the brains.  But do you have the balls?

* Specific, Measurable, Actionable, Relevant, Timely

Kirk out.

Thu, 01/30/2014 - 14:25 | 4384616 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

No, but Gold Man Sack has Dong.

Thu, 01/30/2014 - 15:52 | 4385049 Kirk2NCC1701
Kirk2NCC1701's picture

And balls.  A yen for Mochi balls.

Thu, 01/30/2014 - 14:34 | 4384652 maskone909
maskone909's picture

kirk i agree but...

folks are scared to do anything.  libya, iraq, and even venezuela ect served as a clear indicator of what happens when you go behinde the dollar.  sanctions, coup's, and assasinations are the alternative

Thu, 01/30/2014 - 15:42 | 4385014 StychoKiller
StychoKiller's picture

Good luck pulling that crap on one of the BRICS!

Thu, 01/30/2014 - 14:37 | 4384661 Kaiser Sousa
Kaiser Sousa's picture


A gold store in Taiyuan, the capital of north China's Shanxi province, unveils lucky gold money on Sunday, January 26, 2014, which they have made for parents to give their children on the lunar new year, which falls on January 31 this year. The lucky gold money, which has its weight marked on its surface, offers parents an alternative greeting option to paper money. [Photo/Chinanews.com]

Thu, 01/30/2014 - 18:15 | 4385709 Rafferty
Rafferty's picture

I think you're 100% right but in my case I got a severn figure pension fund (IRA equivalent).  If I cash it in I pay tax at the full rate.  Will come out with less than €400k.  Just not feasible in my case, godammit but I don't know what else to do......

Thu, 01/30/2014 - 14:19 | 4384606 maskone909
maskone909's picture

Tyler sums it up perfectly

what is clear is that nobody knows what is going on, nobody has any handle on the future of Emerging Markets, but let's all just pretend that the MIT central-planners in control, are in control, and all shall be well.

good job getting the timeline of shifting opinion and perceptions.  you guys must read alot of mind-numbing stuff to be able to provide us with this incredibly contradictorial IMF propaganda.  thanks for taking one for the team!

Thu, 01/30/2014 - 14:46 | 4384709 SDShack
SDShack's picture

A sociopath never changes. They never learn from their mistakes because it's not built into their DNA. The bankers are the poster child for Einstein's definition of insanity. To them they only have a hammer, so every problem looks like a nail. This shit has been ongoing for decades, and will continue for decades more until the masses are literally starving in the streets. Only then will real change happen.

Thu, 01/30/2014 - 15:46 | 4385034 Kirk2NCC1701
Kirk2NCC1701's picture

Hmm... I'd argue that it's not so much "nobody knows what is going on", but that they are shouted down by the MIT-class central-planners and their media friends.  It becomes a signal-to-noise issue.

"Manage the SNR (signal/noise ratio), and manage the message."

Thu, 01/30/2014 - 17:10 | 4385455 falak pema
falak pema's picture

the EM turmoil is more linked to China's shadow banking turmoil rather than to FED tapering as pointed out erlier based on this :

George Mangus Warns of Broad Impact of Emerging Markets Turbulence | naked capitalism

Thu, 01/30/2014 - 14:22 | 4384608 B2u
B2u's picture

Actually the "high underlying growth" is "not going to grow as fast as they did" but will maintain and "sustain strong growth"....until it doesn't...

Thu, 01/30/2014 - 14:26 | 4384625 Iam Yue2
Iam Yue2's picture

Crystal balls.

Thu, 01/30/2014 - 14:29 | 4384635 foxenburg
foxenburg's picture

I thik we can safely say that Oliver is an incompetent twat.

Thu, 01/30/2014 - 14:37 | 4384658 piliage
piliage's picture

Kinda hard to differentiate when the baseline is useless twats.

Thu, 01/30/2014 - 14:44 | 4384696 OC Sure
OC Sure's picture

There is no confusion here as long as when questions only their powers of prognostication instead of their power to be.

Does anyone know anyone who knows someone that would voluntary donate to this:


The IMF is another link in a long chain connected to the shackle around your neck.

Don Corleone never had a racket so sweet.

Thu, 01/30/2014 - 14:50 | 4384745 the not so migh...
the not so mighty maximiza's picture

Corleone would never involve women and children

Thu, 01/30/2014 - 14:51 | 4384746 Sizzurp
Sizzurp's picture

Blanchard actually gets paid to spew out that dribble.  Nothing but completely worthless nonsense.  The central banks and the IMF should be disbanded. If the Universities had any real honesty and integrity they would fire their entire economics faculty for teaching corrupt psuedoscience.

Thu, 01/30/2014 - 15:08 | 4384834 ghostzapper
ghostzapper's picture

if you like your IMF forecasting, you can keep your IMF forecasting.  


In the meantime, sign your ass up for this MyRA and while you're at it call Goldman and see if they'll write you a CDS on your own MyRA so you can cash in when the bonds it holds default.  

Thu, 01/30/2014 - 15:56 | 4385092 Pseudo Anonym
Pseudo Anonym's picture

it defies all statistical probabilities that imf would err so consistently in their forecast - unless it's by design and willfully purposeful

Thu, 01/30/2014 - 16:52 | 4385374 falak pema
falak pema's picture

Enuf already said on this issue on the Don Corleone thread...The IMF has only ONE brief since donkey's years : protect the greenback of Pax Americana.

Thu, 01/30/2014 - 17:25 | 4385520 Herdee
Herdee's picture

You can see and hear the BS in the media about how emerging markets are high risk and your safe haven is always U.S. Treasuries.No doubt at all,the Fed will gradually collapse a lot of countries in order to suck money back into the buck.

Thu, 01/30/2014 - 20:56 | 4386115 MagicMoney
MagicMoney's picture

 I really don't take IMF predictions seriously most of the time.

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