Skip to main content

Conflicting headlines over IMF reports

Wasn't it just the other day that news headlines warned about "global imbalances" and an increasing risk of global recession? Today's news items regarding the IMF's World Economic Outlook report seem to paint a different picture; while the news about risks and imbalances remain, forecasts for continued growth are highlighted in the most recent headlines.

Earlier in the week, news reports of IMF forecasts focused on the risk of a global crash and imbalances that might rock the global economy. On September 13, The Independent Online carried an article headlined, "IMF: risk of global crash is increasing".

That article was based on findings from the IMF's recently issued Global Financial Stability Report, and implied that the risks to the global economy stemmed largely from the possibility of a "US-led" slowdown, rather than global imbalances cited earlier.

The worry over those imbalances were cited in a newspaper article Monday by IMF chief Rodrigo Rato, whose remarks were convered in a September 11 Reuters article entitled, "Global imbalances could cause world recession - IMF".

But the order of the day is the call for higher growth rates in the world economy by IMF economists. From the Sydney Morning Herald's September 15 article, "A golden era for world economy":

WORLD growth will be stronger than expected next year but the threats to the global economy are intensifying, the International Monetary Fund says.

The fund has raised its global economic growth forecast to 5.1 per cent this year and 4.9 per cent in 2007 - both a quarter of a percentage point higher than its previous forecast in April.

"This would be the strongest four-year period of global expansion since the early 1970s," the fund's six-monthly analysis of the world economy released in Singapore yesterday said.

But it also warned the risks to the world economy were "increasingly tilted to the downside" compared with six months ago.

The fund's economists estimate there is a one-in-six chance of world growth slumping to 3.25 per cent or less next year - a significant slowdown compared to the last four years.
Raghuram Rajan, the IMF's research head, described the global economic outlook as "schizophrenic" because the strong forecast was "surrounded by more uncertainty than usual".


Well, whatever you make of those reports, don't let it throw you too much. After all, this is an organization that believes inflation originates from "tight labour and commodity markets", rather than ever-expanding global money and credit supply.

Incidentally, I would note that while protestors are being banned from the site of IMF and World Bank meetings in Singapore, female escorts are welcomed and recruited!

Popular posts from this blog

Nasdaq credit rating junked.

S&P cut Nasdaq's credit rating to junk status citing debt burdens and its questionable strategy to buy a controlling interest in the London Stock Exchange. Financial Times reported that the exchange's counterparty credit & bank loan rating were lowered fromm BBB- (lowest investment grade rating) to BB+. The change will increase Nasdaq's borrowing costs should it wish to pursue aquisition targets. For an earlier look at the exchange consolidation trend that brought about Nasdaq's push for a stake in the LSE, please see "Exchange fever" .

Jesse Livermore: How to Trade in Stocks (1940 Ed. E-book)

If you've been around markets for any length of time, you've probably heard of 20th century supertrader, Jesse Livermore . Today we're highlighting his rare 1940 work, How to Trade in Stocks (ebook, pdf). But first, a brief overview of Livermore's life and trading career (bio from Jesse Livermore's Wikipedia entry). "During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. He subsequently lost both fortunes. Apart from his success as a securities speculator, Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one's position as it goes in the right direction and cutting losses quickly. Ironically, Livermore sometimes did not follow his rules strictly. He claimed that lack of adherence to his own rules was the main reason for his losses after making his 1907 and...

Finance Trends 2019 Mid-Year Markets Review

Email subscribers of the Finance Trends Newsletter receive the first look at new articles and market updates, such as the following piece, sent out to our email list on Sunday (6/14).   Hello and welcome, everyone! If you received our last email notice over the July 4th holiday, you'll know that this weekend's newsletter will serve as a mid-year market update and a follow-up to issue #29, " How to Reinvest in a Rising Market ".   Ladies and gentlemen, without further ado, let's start the show...  Finance Trends Newsletter: Our Mid-Year Market Review When we last spoke, back in February, the U.S. stock market was rallying off its December-January lows. As the S&P 500 and Nasdaq reclaimed their 200 day moving averages in February and March, it became increasingly apparent that a lot of retail investors (and perhaps some institutional investors) were left under-invested while watching this recovery move from the sidelines.  The U.S. stock ...