Establishment's lies exposed

[mrswdk]

IMF ‘admits it was bluffing’ on Brexit: Capital

o did the International Monetary Fund (IMF) and its boss Christine Lagarde (pictured) collude in “project fear?”

The world’s leading monetary authority was “bluffing” over Brexit’s threat to the world economy, a top economic consultancy has claimed.

“Having spent the past few months warning that Brexit would cause “severe regional and global damage”, the International Monetary Fund today all but admitted that it had been bluffing, and acknowledged that economic growth outside Europe would be “little affected”, Capital Economics’ global economist Michael Pearce wrote on Tuesday.

On the face of it he has a point.

The IMF’s latest global economic forecast update still contains plenty of warnings about Brexit. But it pulled its punches when it comes to the actual numbers. The Fund marked down its projections for world GDP growth by just 0.1 percentage point this year and next.

No UK recession predicted

Sure the biggest national downward revision was to the UK. The Fund now expects the economy to grow by 1.3% in 2017. That’s almost a percentage point lower than its previous forecast.

“But even this is not as bad as the recession that many commentators anticipate,” Pearce wrote.

The IMF trimmed next year’s eurozone forecast by 0.2 percentage point. Projections for the US and most of the rest of the world were unchanged. So much, then, for the IMF’s claim that there would be “severe damage”.

Admittedly, the Fund warned of a more disorderly outcome from Brexit. However, IMF Chief Economist Maurice Obstfeld said this would need a trade impact “greater than [the IMF] thinks likely”. Financial conditions would have to deteriorate far more than they have so far.

China, US prospects far outweigh Brexit: IMF

Instead of Brexit, prospects for the world economy are still more likely to be shaped by developments in China and the US. Recent data suggest that growth is holding up fairly well in both. However, Capital still thinks there’s room for unpleasant surprises.

“We expect the American and Chinese economies to expand at a slower rate in the coming years than the IMF anticipates,” Pearce wrote.

“So Mr Obstfeld would be well placed to keep his red pen close to hand.”

Perhaps paradoxically, the problem for Brexiteers is the IMF’s tendency to optimism. Capital reckons its global growth calls were higher than actual outcomes by 0.7 percentage point between 2010 and 2014.

https://news.markets/brexit/imf-admits- ... tal-22241/

[waauw]

What bullshit article. The guy seems to conclude a "bluff" by twisting the context and leaving out important details. Your article seems to be more about making a catchy headline than actually informing people. Here's the article from the Financial Times, rather than that rubbish you're quoting.

The International Monetary Fund has slashed its forecasts for the UK economy next year after Britain’s vote to leave the EU and warned the decision has thrown a “spanner in the works” for global growth.

Even if the UK reaches a quick deal with the remaining 27 EU countries without new trade barriers, the IMF expects Britain’s economy to grow by 1.3 per cent instead of 2.2 per cent in 2017, its biggest downgrade for any advanced economy.

The fund, which repeatedly voiced concerns about a Brexit ahead of the June 23 referendum vote, also cut 0.2 percentage points from its UK growth forecasts for 2016 in its World Economic Outlook update.

The Brexit decision poses broader risks to a world economy struggling with slow post-financial crisis growth and a fragile European banking system, the fund warned, leading it to trim 0.1 percentage points from global forecasts for both 2016 and 2017.

“As of June 22, we were . . . prepared to upgrade our 2016-17 global growth projections slightly. But Brexit has thrown a spanner in the works,” said Maurice Obstfeld, IMF chief economist.

“The direct effects specifically due to Brexit are greatest in Europe, especially the United Kingdom”.

A spokeswoman for the prime minister, Theresa May, said she acknowledged Britain would face economic “uncertainty in the short term” but her government did not intend to let it cloud their “optimism in the long term”.

The IMF’s latest forecasts assume the UK and the EU will reach a trading relationship similar to that of Norway, meaning Britain would stay inside the European single market. The IMF said ahead of the June Brexit vote that this scenario would mean households and companies would soon be “relatively confident about the new long run, and therefore uncertainty dissipates relatively quickly”.

But the consequences of even this modest impact of the vote are serious. The IMF still estimates Britain’s public borrowing would rise by 0.7 per cent of national income in 2017. That implies that rather than saving £350m a week, as Leave campaigners had promised, Brexit would cost UK taxpayers £270m a week. In the longer term, the public finance implications would be negative, the IMF thinks.

A UK Treasury spokesperson made no comment about the trading relationship the UK government will seek with the EU and said: “The decision to leave the European Union marks a new phase for the British economy, but . . . we are the same outward-looking, globally minded, big-thinking country we have always been.”

Other parts of the global economy are little affected by the UK’s vote to leave so long as the impact remains limited, the IMF said. However, Brexit would remain a risk for the whole world economy, especially if the relationship between Britain and the EU soured.

Under a severe Brexit scenario, the IMF believes growth in advanced economies could almost halve in 2017 — from 1.8 per cent to 1 per cent — but it thinks the risks of the most severe outcomes have been reduced because financial markets have remained resilient in the weeks following the UK’s referendum.

The IMF’s update recommends Britain and the EU27 rapidly show they will maintain good trading relationships in future. “Of primary importance is a smooth and predictable transition to a new set of post-exit trading and financial relationships that as much as possible preserves gains from trade between the United Kingdom and the European Union,” it says.

With the UK at the centre of global attention, Philip Hammond, the new chancellor, will face stiff questioning when he attends the G20 meeting of finance ministers this weekend. The IMF also notes that many other global risks are worrying.

Geopolitical risks and refugees are creating strains across the world, Mr Obstfeld said. This is complicating the still unfinished business of recovering from the global financial crisis.

Politicians need to recognise that all risks are more dangerous in the slow global growth environment and “policymakers should not accept current growth rates as a ‘new normal’, dictated by factors out of the reach of policy,” Mr Obstfeld said.

Instead of blaming global forces, he added, political leaders need to offer “a sense among voters that the benefits of economic growth can be more fairly shared”.

http://www.ft.com/cms/s/0/34eaff02-4cfa-11e6-88c5-db83e98a590a.html#axzz4Eww78eKI

[Dukasaur]

It's still a tempest in a teapot.

If the economy grows by 1.3 percent instead of 2.2 percent, it basically means the rich assholes at the investment houses will only be able to give each other $130 mil bonuses instead of $220 mil bonuses. (Should that be bonii?) Won't make a lick of difference to the working stiff. He'll go to work, same as before, and come home tired, same as before, and face an overwhelming pile of bills in his mailbox, same as before.

[mrswdk]

If the economy grows by 1.3 percent instead of 2.2 percent, it basically means the rich assholes at the investment houses will only be able to give each other $130 mil bonuses instead of $220 mil bonuses.

The world according to YouTube comments sections.

[waauw]

It's still a tempest in a teapot.

If the economy grows by 1.3 percent instead of 2.2 percent, it basically means the rich assholes at the investment houses will only be able to give each other $130 mil bonuses instead of $220 mil bonuses. (Should that be bonii?) Won't make a lick of difference to the working stiff. He'll go to work, same as before, and come home tired, same as before, and face an overwhelming pile of bills in his mailbox, same as before.

Actually, that's only the optimistic scenario. IF a swift deal is found and IF the deal is lenient. And this optimistic deal even assumes it would be a Norway-like agreement.

Norway-EU:

• Norway has no political influence over the EU
• Norway accepts the laws in Brussels and applies them themselves
• Norway pays almost 900 million euro's each year for access to the EEA and to be able to partake in european projects(according to EEA EFTA, this number corresponds to the GDP-size of the economy, which means that according to current EU regulation this amount will be much higher for the UK)
• EEA demands free movement of persons, which goes directly against the BREXIT's anti-immigration propegation. EEA also demands that companies will be subject to EU court systems.

So as you can see, even this optimistic deal is nowhere near what the BREXIT camp promised.