The media is creating a lot of confusion about the pressing economic situation. There is much talk, and hype, regarding whether or not we are in recession, mostly pointing to the realities of a recession that “may” already be underway. Scanning the mainstream media is an exercise in gloomy prognostications and flimsy evidence. Reading Rich Karlgaard’s blog at Forbes.com I came across the following excerpt of the 2008 Global Forecast by David Malpass:
“After the ongoing two-quarter slowdown, we expect a U.S. rebound in the second quarter extending through the second half. The softness in foreign growth in recent months should pass as U.S. orders start flowing again and the impact of lower U.S. interest rates spreads globally. We think the wave of downgrades in other outlooks–the Fed’s on February 20, the IMF’s in January, the falling Blue Chip forecast–is a delayed reaction to the severity of the August financial market turbulence. We’re more focused on the forward-looking response to the Fed’s interest rate cuts (3% and likely to fall), which we view as a significant positive event in the growth outlook.”
I appreciate that Karlgaard goes out of his way to present alternative viewpoints to those that seem to make better headlines. Malpass, as Karlgaard points out, has a pretty stellar record and is credited by Karlgaard as being one of the most accurate economic and market forecasters to navigate the intensity of the last eight years. Malpass feeling bullish about the U.S. economy is a very, very good thing. We need more good things right now.
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