US & Global Economy: Review and forecast 2012
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US & Global Economy: Review and forecast 2012

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e-forecasting.com's overview of the US and global economic climate, with short and long term projections

e-forecasting.com's overview of the US and global economic climate, with short and long term projections

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  • 1. Economic Review and Forecast: You Might Need These e-forecasting.com’s outlook for US and global economic conditions Friday, February 10 th , 2012
  • 2. Presentation Agenda
    • New stylized facts in global trends
    • Snapshot of current economic climate: from stagnation to stagflation
    • Future outlook
    • Q&A
  • 3. State Capitalism & Global Competition
    • state-backed companies account for 80% of the value of China’s stock market and 62% of Russia’s
    • Not a road to liberal capitalism
    • A sustainable model
    • New view: redesign capitalism to make it work better
  • 4. The Rich is the Problem
    • 99% vs. 1%
    • Take their money
    • Global anarchy
    • Instability
    • Uncertainty
    • Lack of investment
    • No job creation
    • Erosion of wealth
    • Decline in incomes
  • 5. Jobs: Cooking The Numbers
  • 6. FED, ECB, BoE, BoJ…. & IMF
    • Experiments with monetary policy
    • Took over fiscal policy from inept political leaderships
    • New asset bubbles?
    • Do they rule?
    • Are they doctors or patients
  • 7. Fifty Years of the European Socialist Experiment
    • Spend other peoples money
    • Hire the unemployed
    • Does government create wealth?
    • The end of the social state?
  • 8. Current Risks
    • Ineffectiveness of low interest rates
    • Capping inflation at 2%
    • Negative saving rates
    • Deficits, Debts and Fear – The European experience
    • Free Fall of dollar, panic, policy reversal, high interest rates, a “real” depression
    • Geopolitical factors, Iran conflict & oil prices
  • 9. Fed in a printing mode again
  • 10. Employment: Where is the New Peak
  • 11. Real-Time Look @ Economy NOW
    • What is happening RIGHT now with the economy
      • US monthly GDP, current macro components, policies, etc
  • 12. Real Time Monthly GDP
    • e-forecasting estimates US monthly GDP increased 2.8% in January to $13,487.6B, after jumping 3.4% in December
    • Current annual growth rate in first quarter is estimated to be 2.9% (Nov, Dec, Jan average)
    • Six-month growth rate, which signals confirmation of turning points, went up 2.4% in January, after going up 2.2% in December
  • 13. Growth in Monthly GDP
    • Looking @ growth rate, can see depth of previous recession, upswing, and now slow recovery in economy
    • When negative, recession; when positive, expansion
  • 14. Historical View
    • Taking the current recession in context over a long history, we can see how deep the recession was as well as the length (solid fill) and current recovery
  • 15. Q4 was fastest quarter last year
    • Looking @ table, we see growth rates incrementally increasing over the last 12 months
    Year Month Quarterly GDP Monthly GDP Chained $2005 annual % change Chained $2005 annual % change annual % change MA3 SAAR*, Billions from quarter ago SAAR*, Billions from month ago from 3 months ago** 2011 January     $13,225.0 ▼ -1.4% 1.9% 2011 February     $13,224.5 ▬ 0.0% 1.2% 2011 March $13,227.9 0.4% $13,234.1 ▲ 0.9% 0.4% 2011 April     $13,259.8 ▲ 2.4% 0.4% 2011 May     $13,266.9 ▲ 0.6% 0.7% 2011 June $13,273.3 1.4% $13,293.1 ▲ 2.4% 1.4% 2011 July     $13,308.9 ▲ 1.4% 1.5% 2011 August     $13,326.8 ▲ 1.6% 1.7% 2011 September $13,331.6 1.8% $13,359.1 ▲ 3.0% 1.8% 2011 October     $13,391.0 ▲ 2.9% 2.1% 2011 November     $13,419.3 ▲ 2.6% 2.4% 2011 December $13,422.4 2.8% $13,456.9 ▲ 3.4% 2.8% 2012 January     $13,487.6 ▲ 2.8% 2.9% *SAAR: Seasonally Adjusted Annual Rate. **MA3: 3-month moving average monthly GDP. End-month of quarter growth rate is the same as the annual quarterly growth rate.
  • 16. Short-Term Outlook: US Lead
    • Using leading indicator helps with short-term forecast and turning point identification
    • US leading indicator has been slowly picking up steam the last few months
  • 17. Short-Term Outlook: US Lead
    • Six month growth rate at highest level since May 2010
    • Currently at 5.9%
    • Has increased last 3 months in a row
  • 18. eLEI shows recession probability next 3-4 months at nearly zero
  • 19. Short-Term Outlook: US
    • Looking at growth in the US economy, we see slow recovery with growth to hit 3% by 2014
  • 20. US Manufacturing
    • Manufacturing recovery will continue and near peak of 06 by 2014
  • 21. US Consumer Prices
    • Look for sharp increase in inflation due to QE
  • 22. US Durable Goods
    • Consumer expenditures on durable goods will continue to recover nearing $1,500 trillion at 2005 constant prices
  • 23. Exports Outlook
    • Exports will remain on a very low growth path
  • 24. Imports Outlook
    • Real imports will sharply increase and reach new peak near $1,700 billion
  • 25. Trade Balance Outlook
    • Trade balance of manufactures as percent of GDP will sharply increase through forecast horizon
  • 26. Monetary Policy on the Horizon
    • Look for the Fed Funds rate to remain near zero through forecast horizon
    • Bernanke’s ‘pledge’ to hold rates thru 2014
  • 27. Global Future Outlook
    • Looking @ major economic blocs and their leading indicators helps give an idea of turning points, which areas suffered more than others and which are recovering…
  • 28. World vs. US
    • The US moves with the world economy, usually the timing of recessions and peaks are the same
    • While US growth is slowly picking up, world continues to decline
  • 29. BRIC: Showing Resilience
    • BRIC HAD been continually outperforming the world and USED TO move out of recession much faster
    • BRIC recently faced a slowdown but is now turning the corner again
  • 30. Latin America’s Bumpy Ride
    • Latin America’s economy fluctuates much greater than rest of world
    • Economy is turning out of a slowdown in growth before the world resumes growth
  • 31. Euro Area
    • Euro area usually mirrors global economy
    • This changed last year and was in a free falls, looks to be bottoming out barring any more debt crises
  • 32. Non-Euro Area
    • Non-Euro area continues to fare much better than Euro area
    • Slowdown has stalled
  • 33. Africa & Middle East
    • Africa and Middle East moving along with world economy
    • Economies turning slightly quicker than world
  • 34. Asia Pacific
    • Asia Pacific showed a lot of strength coming out of recession
    • However, now growth has cooled off and at pre-precession levels
  • 35. Emerging Asia once again will carry global economy
  • 36. Market Size Measured by GDP in $PPP Billion: 2009 vs 2010
    • Pieces of pie remain similar, with following changes:
      • Emerging Asia (+2%)
      • North America (-1%)
      • Non-Euro (-1%)
  • 37. Short term global forecast
  • 38. Long term global forecast
  • 39. Global Opportunities
  • 40. Q&A
  • 41. Wrap Up
    • Find us on the web:
      • http://www.e-forecasting.com
    • Fan us on Facebook:
      • http://www.facebook.com/eforecasting
    • Follow CEO Maria on twitter: http://www.twitter.com/mesimos
    • Information taken from our forecast and reports, for subscription queries, please contact:
    • Maria [email_address]
    • Thank you!