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IMF Chief Pours Cold Water On Optimistic Yellen, Says Growth "Will Be Disappointing"
Over the past six or so months, the OECD, the WTO, and the ADB have all come out with rather grim assessments of global growth and trade.
Back in September for instance, the WTO warned that the rate of growth in global trade is set to trail the expansion of the worldwide economy for the third year running. As WSJ noted at the time, “before the recent slump, the last time trade growth underperformed the rate of an economic expansion was 1985.”
“We have seen this burst of globalization, and now we’re at a point of consolidation, maybe retrenchment,” WTO chief economist Robert Koopman said. “It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.”
“Global growth prospects have weakened slightly and the outlook is clouded by important uncertainties,” the OECD said later in September. “Emerging economies have vulnerabilities that could be exposed by rising US interest rates and/or a sharper-than-expected slowdown in China, giving rise to financial and economic turbulence that could also exert a significant drag on advanced economies,” the organization continued.
Finally, the ADB weighed in, noting that “softer growth prospects for the People’s Republic of China (PRC) and India, and a slow recovery in the major industrial economies, will combine to push growth in developing Asia for 2015 and 2016 below previous projections.”
Those assessments came just as the Fed adopted the “clean relent” in September and make no mistake, the outlook hasn’t changed since then. Just ask IMF chief Christine Lagarde.
In a guest article for Handelsblatt, Lagarde lays bare the risks facing global trade on the way to painting a rather depressing picture for 2016.
“Global economic growth will be disappointing next year and the outlook for the medium-term has also deteriorated,” Reuters says, recounting Lagarde’s comments. “The prospect of rising interest rates in the United States and an economic slowdown in China [are] contributing to uncertainty and a higher risk of economic vulnerability worldwide.”
Lagarde warns of the “spillover effects” from the Fed hike, including the possibility that fragile emerging markets may be shaken further at a time when myriad risk factors are already weighing on the space.
China’s transition from a smokestack, investment-led economy to a consumption and services led model as well as Fed policy normalization are “necessary” but should be executed carefully with a mind towards mitigating shocks, she continues.
Specifically, Lagarde is concerned about the nightmare scenario that occurs when EM corporates borrow heavily in dollars only to see their currencies depreciate rapidly, the so called "original sin" that's been largely avoided at the sovereign level, but not by corporates. For an example of what can happen in such instances, see Empresas ICA SAB.
As a reminder, EMEs have over $3 trillion in USD-denominated debt:
"Most highly developed economies except the USA and possibly Britain will continue to need loose monetary policy but all countries in this category should comprehensively factor spillover effects into their decision-making," she goes on to say, underscoring the fact that there are risks both to hiking and to remaining suspended in the Keynesian Twilight Zone.
Ultimately, the takeaway is the the head of the IMF, who supposedly knows about such things, has just delivered a decisively negative outlook for global growth and trade in 2016 and that assessment seems to be at odds with the FOMC. That is, Lagarde is warning on economic growth and the dangerous "spillover effects" of a Fed rate hike cycle just as Janet Yellen is using stronger economic growth as an excuse and a justification for liftoff.
Of course such "truthiness" is tantamount to heresy in today's world, so perhaps this is why Lagarde's criminal case was reopened.
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how do two cunts control monetary aspects congress?
Lagarde’s face and her famous purse are made from the same pig skin. ;-)
Looney
sheesh, could have done w/o the mental imagery of Lagarde pouring water on Yellen
Quick LeGarde better call Obama with the State of the Union coming up he doesn't want to again lie to the American people,.... Oh wait, it's Obama, he doesn't give a shit.
On Wall Street 'hold' means sell and 'sell' means short the fools still in the stock. So in the .gov world 'disappointing' means .govs should buy another 250 million rounds of ammo and then work their way up the 'tryanny' list pronto.
Ah...the old "good cop/bad cop" strategy...
So she is saying that the IMF is not going to get paid back on many of the loans they have made....and they are going to have to make more...print away boys....print away...and gold and silver down
Y'all goyim need not concern yourselves with IMF growth predictions. Go see Star Wars instead or buy a hoverboard. And eat hamburgers. Shalom bitchez.
The western financial empire looks like it is going to finally implode. Bailouts were a scam and the nation is already broke with nothing left to bail-in to another bankster scam. A crash and a war seems to be the preferred reset button by the elite parasitic losers who didn't get their way. I am betting the parasitic plutocrat won't survive this crash and if they haven't run away by the time it gets ugly they will be hanging from the old oak tree. Long on gold and silver.
Sounds good. But if it doesn't happen in early in 2016 that old oak tree is going to outlive us all without any use.
Nothing to bail-in ?
Keep a close eye on you savings, your ownings, your salary (if you have or need one), your organs and children.
They will find something to "bail-in"!
"I think part of being a parent is trying to kill your kids". - CHRISTINE, by Stephen King.
"No! Try not. Do! Or do not. There is no try." - Yoda - Star Wars
Isn't she in jail yet.
j/k
The Strauss-Kahning of Christine is not complete. Please hold for further developments.
No. They can't find any volunteers to play the part of the guy she rapes.
Oh ZHers you are dooming again for naught (yes that's a pun). She said "next year" and "medium term" which means everything will be awesomerist just after that.
Droogs,
A friend just forwarded this link to me.
I love his honesty.
https://www.linkedin.com/pulse/truly-big-shorts-john-m-cunningham?trk=pr...
Great read. Is Mr Cunningham a ZHer?
Dunno.
He should be though...
don't forget what merkel says.
Everyone in our industry is patiently awaiting our Blessed Savior to arrive after New Years. Historically that’s when budgets get refilled and peace on Earth resumes, except this time it’s different. There’s nothing waiting to get bought. The projects have all been completed and there’s no more jobs left on the horizon. The Fed’s Easy Money just drove demand up by a decade or more. America will have to face the terrible repercussions of failed economic policies which have only brought more misery and suffering for the working classes who without them our entire corrupt financial system would fall apart immediately.
leave your troubles behind.
Chipolte new year's Blowout party
Humans ingesting E.coli causes the increased production of methane greenhouse gases. Chipotle needs moar gubermit regulations.
We need a methanious food commitee..stat!
After eating Chipotle, they will leave their troubles behind them, in the form of diarrhea.
Umm I thought that's whathe meant ,haha...
Global growth? That's pretty rich.
Look at the BDI, oil, copper, gold, silver and interest rates. Yeah, everything is just fuckan booming Mr Yellin.
I would favor "pouring cold water on Yellen" in the manner of waterboarding if it would help convince her of the destructive damage she is causing our economy.
I thought Chrissy was in jail. Was it only a dream?
Witch fight!
Witch fight!
Oompa loompas vs gnomes. Shit's about to get real.
More like Snow White versus Agent Orange.
Lagarde and Kerry look like the long lost inbred twins.
Wait, no hockystick graph ?
I am rather dissapointed in the IMF.
O wait.....
The song remains the same, it's the dance that's changed.
This is just payback from Lagard to Yellen.
Lagard usually wears the strapon, but last night Yellen had to do the work.
Tyler Durden... preferably one of the more experienced ones, not the cheerleader who has been writing ZH stories over the holidays:
Please make this cheerleader person stop. Every day, he/she finds yet another long discredited political hack to quote and parade around as though they were an expert on something.
Lagarde thinks she can borrow indefinitely and some future generation will happily work 10 jobs to pay the cost of her incompetence. Tell her to come up with a plan to pay back her existing debts, or just shut up. Deadbeats.
Neither Yellen nor Lagarde know anything about markets or economies. They are both inbred government bureaucrats who have never held a private sector job in their lives. Neither is qualified to say what will or will not fix the economy.
Your site's portrayal of these people as "experts" is getting really offensive.
Lagarde is in deep shit with IMF fund allocation. I call this a cat fight between Federal Reserve and IMF. Can't make this shit up.
IMF head Christine Lagarde ordered to face trial ...- The Telegraph
David Rockefeller said: "Christine gave me one of the best blow jobs I have ever had". Whats that she is licking off of her fingers in the picture?
now i get it. these are the abundant "jobs" of which b hussein homobama speaks
Simple, we've reached peak overconsumption and incomes don't grow anymore to support growth in overconsumption.
In short, it's the greed of the managementn of large companies that has put a cork in growth and now they'll suffer from their greed.
And the pampered population who is used at overconsumption believes that it are hard times because they can't buy everything they want.
Hard times are hunger for a week.
How does she get all that fake tan on just one face?
In the spirit of our new world of normalizing, estimating & overall forgetting how things really are - is it possible that growth has more than 1 meaning? Thank you common core ;)
Can anyone tell me the name and nationality of the private banks that run the Fed and why a Jew is always the Fed chairperson?,,,ALWAYS!
Because Jews are better with money than the rest of us? Did I win?
You win for being correct. You lose for being a jew lover. Thats the law of Jake Wade of ZH.
What she means is IMF employees can still order expensive Champagne when in Brussels.....
All is OK.
Unless....................
Unless you ppl grab moar countries
especially Russia & China
Break them up like Humpty Dumpty
They are fools , so attack
& loot them , Then the west will
become all ok, prosperous, with good growth
We Europeons(& Americans & west) must always invade, loot & pirate
as usual
or vanish
-----------
I hope the above idea will enlighten some cabal wolf of washington
(They probably are already on it)