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Soros and Roubini cheer me up
* Robert Peston
* 28 Jan 09, 04:57 PM
According to the IMF's latest forecast, there will be just 0.5% growth
in the global economy this year.
Which is so close to zero that we can see it as total stagnation - a
phenomenon we haven't experienced since the World War II.
According to the IMF, the prize for worst performer among the big
economies goes to you-know-which: our proud land, the UK.
It forecasts the UK will contract by 2.8% in 2009, a steeper decline
than the US (predicted to contract by 1.6%), the euro area (minus 2%)
and Japan (minus 2.6%).
Our combination of massive debts, an over-valued housing market and
excessive economic dependence on financial services (the City) has
been toxic.
Here's some mildly encouraging news however. I interviewed George
Soros, the hedge-fund legend, this afternoon - and he thinks most of
the bad stuff about the UK is in the price.
Or, as he put it, he thinks that sterling may have fallen enough, for
now (which is something of a contrast with that mega-bear of the UK,
Jim Rogers, who used to work with Soros).
That said, Soros had no qualms about using the "D" word: he says a
full scale depression remains a very real risk.
As does Nouriel Roubini, who I also interviewed. Roubini is the
economist who probably shouted loudest and earliest about the looming
financial disaster.
And what he said cheered me up a bit (and I needed it) - in that he
believes governments at last acknowledge the scale of the problem,
even if (in his view) they haven't yet sufficiently co-ordinated their
policies to create money, use taxes and public spending to stimulate
demand, and fix banking systems.
Wednesday, 28 January 2009
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