President Obama said today that he can see “glimmers of hope” on the horizon regarding the global financial crisis. In light of Obama’s Pollyannaesque comments on the GFC, Crikey has pulled together a collection of glass half full and half empty types on the state of the global economy. Here’s a look at what some of the more positive and negative economic commentators around the world have been saying.
Glass half full:
Optimistic Obama sees glimmers of hope: “There is no doubt that times are still tough,” Obama said. “But from where we stand, for the very first time, we are beginning to see glimmers of hope. And beyond that, way off in the distance, we can see a vision of an America’s future that is far different than our troubled economic past.” — US President Obama quoted in The Washington Post
Bernanke sees U.S. contraction slowing: “I am fundamentally optimistic about our economy,” Bernanke said today in a speech in Atlanta. “Today’s economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence.” — Head of U.S Reserve Bank Ben Bernanke quoted in Bloomberg.com
U.S. economy ‘more balanced’: “The freefall we’ve been seeing is not going to be something we’re going to be living with indefinitely.” — Lawrence Summers, director of the White House National Economic Council as quoted in Bloomberg.com
Asia’s own economic solutions: The richest and fastest growing countries in Asia seem to have looked at the turmoil afflicting the rest of the world and decided that it’s not for them. Instead, they perhaps see this as an opportunity to shift the axis of the world, or rather confirm the centre of the global map to where China has always believed it to be. — Rupert Walker at FinanceAsia.com
Business thinks worst of downturn is over: “The idea that this downturn won’t be much worse than 2001 for Australia can be seen in the way the NAB business data is bouncing back,” UBS interest rate strategist Matthew Johnson quoted by David Uren, at The Australian
Britain’s economy is not dying. It’s just poorly: We should be relatively unconcerned about the economy’s immediate future. We know it will survive. What matters is its long-term quality of life. Crippling a patient who would otherwise die may be worth it. But crippling an immortal patient who would otherwise have to endure a brief period of intense pain is not. — Jamie Whyte at The Times UK.
Glass half empty:
A dawn of false hope So far, the credit losses have mostly been confined to banks and other financiers, but they are spreading. Bondholders have been protected by government bailouts, but that source of succour is becoming exhausted. …Fiscal stimulus and money printing has produced a sharp jolt that has papered over the economic cracks and produced some not-so-bad statistics lately, as well as a bear market rally/new bull market. — Alan Kohler, Business Spectator
Always look on the bright side … unless you’re an economist. Equity markets have risen by more than 20 per cent. Anticipating economic recovery? Or just a bear market rally? The hard heads almost all say it is the bears having fun with us, the world’s investors, correction punters. The Economist notes that markets often stage rallies while the trend is down. — Henry Thornton, The Australian
US optimism is all the rage but hidden risk remains. The passionate desire for a swift recovery risks obscuring the necessary national – and international – debate about what shape that recovery ought to take. Compared with today’s rising unemployment and shrinking GDP, the robust economic activity of recent years looks very appealing. But we now know that much of that growth was illusory, based on unsustainable over-consumption by American households and over-leverage by American financial institutions. — Chrystia Freeland, Financial Times
Great speech, Obama! But still wrong about the problem We’re glad we voted for you Mr. President, and we’d do it again. But we wish you’d spend a few minutes listening to Paul Krugman, Joe Stiglitz, or any of the dozens of other folks who think your financial team still doesn’t understand the problem. — Henry Blodget, The Business Insider