World Bank Forecasts Slower But Smoother Growth - Ny Times

[interestrateripoff]

http://www.nytimes.com/2013/06/13/business/global/world-bank-forecasts-slower-but-smoother-growth.html?ref=business&_r=0

The world economy will face slower but less volatile growth in the coming months and years, the World Bank forecast on Wednesday, as dire risks from the financial crisis in Europe fade and emerging economies confront new challenges adapting to softer commodity prices and the prospect of rising interest rates.

“There’s a growing recognition that this is not the aftereffect of the crisis,” Andrew Burns, the lead author of the report, said in an interview. “It is a new normal.”

All in all, the bank’s economists forecast that the global economy will grow about 2.2 percent this year and 3 percent in 2014 in the latest periodic update to its Global Economic Prospects report. That is slightly weaker growth than the World Bank forecast in January.

A bit of mid year cheerleading?

Less volatile growth = no growth?

[interestrateripoff]

http://www.telegraph.co.uk/finance/economics/10119553/World-Bank-warns-on-Fed-tightening-shock-for-emerging-markets.html

“There is the risk that the transition to higher rates occurs in an abrupt and disruptive fashion. In such a scenario, markets react pre-emptively, potentially trapping some participants in vulnerable positions that appeared manageable under low interest rates.”

The bank warned that banks “may be at particular risk” in countries that have let rip with the biggest asset bubbles. The institution cut its growth forecast for the global economy to 2.2pc this year, a world recession under the bank’s traditional definition, chiefly due to faltering momentum in China and the rest of Asia.

The World Bank said real interest rates were likely to jump by up to 270 points in the more heavily indebted BRICS states and other emerging markets as the West unwinds quantitative easing, and the tightening cycle starts in earnest.

The Chinese bank Everbright defaulted on an interbank loan last week, one of several instances of lending stress in China over recent days and a sign that bad debts are emerging from the shadows of the banking system.

The World Bank said private credit in China was now the highest of all emerging markets at 160pc of GDP.

Like the Fed is going to unwind QE and start tightening. It appears that inflation will be the pain free escape plan...

Are the biggest asset bubbles still in the West?

[21stcenturycentralbankers]

http://www.telegraph.co.uk/finance/economics/10119553/World-Bank-warns-on-Fed-tightening-shock-for-emerging-markets.html

Like the Fed is going to unwind QE and start tightening. It appears that inflation will be the pain free escape plan...

Are the biggest asset bubbles still in the West?

Quick introduction as I'm a new member. Forty six years old, happily married (25 years now) two great kids, run my own small joinery business and ever since the crash have pretty much on a daily basis been searching for why it happened. Seen and read plenty of information, quite an eye opener as many of you will have no doubt felt as well?, I have many days when I feel like I had not opened the box, kept living my life as I used to (as most do) with no idea whatsoever how the World actually works. Well, from literally thousands of hours of research, I keep coming back to one thing? Economic growth requires a few ingredients, two of the biggest are an exponentially growing money/debt supply, and top of the list, energy to fuel the growth. It seems both are in short supply in the cake mix today, and ever since the crash, both are either shrinking or not growing as they used too. From what I have seen, neither are likely to be cured in at least the next decade (possibly longer), and its about time our leaders realised this and altered our economies to fit a zero growth World or negative growth World. I see little evidence sub prime was the cause, sub prime seems to be a symptom of the real problem, not the problem itself, the lack of energy to fund growth is simply not available today.

I have no economic background, I learned everything I know for myself, I have cringed every-time the IMF and co have made forecasts for various Countries growth patterns , and to date (five years plus) have out performed pretty much all of them by some margin? I'm a Jo nobody in this World, and yet I seem to have a much better grasp of what's happening and what will happen as we go on than the experts????? I'm in no way blowing my own trumpet here though, I'm just pointing out the fact these people seem to have no idea what they are doing or saying?

[The Masked Tulip]

Slow is smooth, smooth is fast.

[The Masked Tulip]

Quick introduction as I'm a new member. Forty six years old, happily married (25 years now) two great kids, run my own small joinery business and ever since the crash have pretty much on a daily basis been searching for why it happened. Seen and read plenty of information, quite an eye opener as many of you will have no doubt felt as well?, I have many days when I feel like I had not opened the box, kept living my life as I used to (as most do) with no idea whatsoever how the World actually works. Well, from literally thousands of hours of research, I keep coming back to one thing? Economic growth requires a few ingredients, two of the biggest are an exponentially growing money/debt supply, and top of the list, energy to fuel the growth. It seems both are in short supply in the cake mix today, and ever since the crash, both are either shrinking or not growing as they used too. From what I have seen, neither are likely to be cured in at least the next decade (possibly longer), and its about time our leaders realised this and altered our economies to fit a zero growth World or negative growth World. I see little evidence sub prime was the cause, sub prime seems to be a symptom of the real problem, not the problem itself, the lack of energy to fund growth is simply not available today.

I have no economic background, I learned everything I know for myself, I have cringed every-time the IMF and co have made forecasts for various Countries growth patterns , and to date (five years plus) have out performed pretty much all of them by some margin? I'm a Jo nobody in this World, and yet I seem to have a much better grasp of what's happening and what will happen as we go on than the experts????? I'm in no way blowing my own trumpet here though, I'm just pointing out the fact these people seem to have no idea what they are doing or saying?

Greece and Spain are fecked as long as they stay in the Euro as far as I can see. The fat cats at the top in both countries will do very well but the tens of millions of ordinary Greeks and Spanish will be, and are, fecked.

We're in a slightly less state of fecked.

[21stcenturycentralbankers]

Greece and Spain are fecked as long as they stay in the Euro as far as I can see. The fat cats at the top in both countries will do very well but the tens of millions of ordinary Greeks and Spanish will be, and are, fecked.

We're in a slightly less state of fecked.

They'll keep both and others in the game as long as there's money to be made. Our rating agencies are grading various levels of S&*%, some S$&% is better than others though, nothing more. The UK? we are only in a slightly less state of fecked as we have and are continuing to hide/put off the problem for someone else (making it worse) probably our children if things get that far into the future (I doubt it)

[okaycuckoo]

Agreed with everything up to this point:

I have no economic background, I learned everything I know for myself, I have cringed every-time the IMF and co have made forecasts for various Countries growth patterns , and to date (five years plus) have out performed pretty much all of them by some margin? I'm a Jo nobody in this World, and yet I seem to have a much better grasp of what's happening and what will happen as we go on than the experts????? I'm in no way blowing my own trumpet here though, I'm just pointing out the fact these people seem to have no idea what they are doing or saying?

You nor I can understand what will happen. And you and I should recognise the same inability in others.

I try to stick to what I know. Not much. I hope that simplifies life.

[21stcenturycentralbankers]

Agreed with everything up to this point:

You nor I can understand what will happen. And you and I should recognise the same inability in others.

I try to stick to what I know. Not much. I hope that simplifies life.

Your right of course, although I can predict things seemingly much more accurately than the so called experts? From what nuggets I have gleamed over the years so far, real economic growth ended in the nineties, it will not return in anything like we have seen before as there is near nothing to fund it. Any signs of growth will be quickly followed by recession year after year, growth needs cheap energy, energy the world no longer has.

[Eddie_George]

Slow is smooth, smooth is fast.

Like sh1t off a shovel.

[interestrateripoff]

Your right of course, although I can predict things seemingly much more accurately than the so called experts? From what nuggets I have gleamed over the years so far, real economic growth ended in the nineties, it will not return in anything like we have seen before as there is near nothing to fund it. Any signs of growth will be quickly followed by recession year after year, growth needs cheap energy, energy the world no longer has.

No one has a future prediction machine too much data and the interactions unpredictable as Talebs black swan shows.

I think in some respects this crisis started in the early 80s although you can make the argument it was long before then.

From the historical perspective we are due a correction. At what time point is anyones guess.

[21stcenturycentralbankers]

No one has a future prediction machine too much data and the interactions unpredictable as Talebs black swan shows.

I think in some respects this crisis started in the early 80s although you can make the argument it was long before then.

From the historical perspective we are due a correction. At what time point is anyones guess.

I'm just going on what I have seen, and I'll make this prediction as it has been working since 2009 at least. Most of us will continue to see our standards of living reduce over the coming years. Many (the blind) will see this happen pretty much overnight, and will have no idea why its happening and how, many of them will sink under its weight as they have not yet felt the real recession the Governments and Central Banks have been hiding behind the Xerox. UK growth (unless Labour get in and attempt the inevitable spend/borrow growth plan) will be near zero or negative for at least the next decade (unless some miraculous God like invention/resource is found) and the same will go for many Countries around the globe. I hear our politicians on a daily basis striving for growth, plans for growth, growth just around the corner????? from what??? how is that growth going to be funded when the funding does not exist to create it?

As I've said previously, I'm not an economist, I'm not an expert, I have just opened the box and looked in, what I have seen and understood seems to work in the World around me, and I seem to have a better idea of what's happening and what may happen than the people who should know. (A tad worrying to say the least)

[19 year mortgage 8itch]

Slow is smooth, smooth is fast.

Wax on, wax off?

[drunkincharge]

I'm just going on what I have seen, and I'll make this prediction as it has been working since 2009 at least. Most of us will continue to see our standards of living reduce over the coming years. Many (the blind) will see this happen pretty much overnight, and will have no idea why its happening and how, many of them will sink under its weight as they have not yet felt the real recession the Governments and Central Banks have been hiding behind the Xerox. UK growth (unless Labour get in and attempt the inevitable spend/borrow growth plan) will be near zero or negative for at least the next decade (unless some miraculous God like invention/resource is found) and the same will go for many Countries around the globe. I hear our politicians on a daily basis striving for growth, plans for growth, growth just around the corner????? from what??? how is that growth going to be funded when the funding does not exist to create it?

As I've said previously, I'm not an economist, I'm not an expert, I have just opened the box and looked in, what I have seen and understood seems to work in the World around me, and I seem to have a better idea of what's happening and what may happen than the people who should know. (A tad worrying to say the least)

Listen mate, I don't know if you re having some sort of awakening or something but just to let you know we have all read and seen the same stuff you have and we couldn't predict sh1t about the direction of house prices as they turned out.And by the way we all felt the same feeling of knowing things that the 'ordinary' person did not know.Unfortunately this exalted state did not give us the power to buy a three bed semi at 3.5 times oue wage.

Edited June 14, 2013 by drunkincharge

[wonderpup]

Quick introduction as I'm a new member. Forty six years old, happily married (25 years now) two great kids, run my own small joinery business and ever since the crash have pretty much on a daily basis been searching for why it happened. Seen and read plenty of information, quite an eye opener as many of you will have no doubt felt as well?, I have many days when I feel like I had not opened the box, kept living my life as I used to (as most do) with no idea whatsoever how the World actually works. Well, from literally thousands of hours of research, I keep coming back to one thing? Economic growth requires a few ingredients, two of the biggest are an exponentially growing money/debt supply, and top of the list, energy to fuel the growth. It seems both are in short supply in the cake mix today, and ever since the crash, both are either shrinking or not growing as they used too. From what I have seen, neither are likely to be cured in at least the next decade (possibly longer), and its about time our leaders realised this and altered our economies to fit a zero growth World or negative growth World. I see little evidence sub prime was the cause, sub prime seems to be a symptom of the real problem, not the problem itself, the lack of energy to fund growth is simply not available today.

I have no economic background, I learned everything I know for myself, I have cringed every-time the IMF and co have made forecasts for various Countries growth patterns , and to date (five years plus) have out performed pretty much all of them by some margin? I'm a Jo nobody in this World, and yet I seem to have a much better grasp of what's happening and what will happen as we go on than the experts????? I'm in no way blowing my own trumpet here though, I'm just pointing out the fact these people seem to have no idea what they are doing or saying?

Good summary- but I would disagree that the banking sector was not a major force in what happened.

My own history with this is similar- before the crash I had zero interest in economics but when it hit I set about educating myself- or trying to- as to what the hell just happened.

I still remember being deeply shocked when I discovered that the banks were packaging up other people's debts and selling them to investors- this struck me as really strange thing to do. - that's how little I knew about modern finance and how byzantine it had become.

I think your feeling that you have a better grasp of the realities than many of the 'experts' is not a case of delusions of grandeur but is an accurate reflection of reality- the reason being that those 'experts' are horribly handicapped by their own eduction.

What few people realise is that the theoretical superstructure of modern economic thinking is riddled with so many bizzare and archaic assumptions so as to render those who apply them incapable of dealing with the reality in which they find themselves.

For example current theories of economics do not recognise the role of banks and credit/debt in the way the economy works- the theory is that banks are simple mediators between depositors and borrowers- and that credit creation is at all times controlled by the reserve limitations imposed by the central banks.

In reality what happens is that banks create credit out of thin air and the Central Banks are obliged to provide the reserves to back that credit up to avoid a meltdown. So the Central Banks are not leading the Elephant of credit creation from the front, they are running along behind it clearing up the shite before it hits the fan.

The extraordinary reality is that the people in charge are wedded to an incoherent model of how the economy works with the result that their attempts to fix are doomed to failure.

If you have not yet discovered his work I recommend looking up Steve Keen's website- and if possible read his book on debunking economics- you may not agree with everything he says but his attack on the current economic orthodoxy is very persuasive and even if you don't grasp it's mathematical foundations do not worry- most of those he critiques seem to suffer from the same problem.

Edited June 14, 2013 by wonderpup