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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: THE ANT who wrote (78946)	9/3/2011 3:54:05 AM
From: elmatador	1 Recommendation Respond to of 217830

You take action only after a fact happened. But the action will only take effect after a certain time. (Hysteresis) It is what they've done now: If they are fighting inflation now and see in the future recession coming, BEFORE recession hits they took preventive action. It works the other way around too. If economy is growing normally but they see potential overheating they take action BEFORE the actual signs of overheating are clear and present. Call it preventive action against recession. To avoid going to 7.5% GDP grpowth, followed by 3.1%, Mantega is trying to keep an even 4% GDP growth for the coming years.

To: THE ANT who wrote (78946)	9/3/2011 4:03:35 AM
From: elmatador	1 Recommendation Read Replies (1) \| Respond to of 217830

Macroeconomists are always trying to see the results of their actions or how the market is moving. That enable them to prepare their arsenal of countermeasures. They may see the wrong signs and misinterprete them. Take Greenspan irrational exuberance. He saw it. But was persuaded that Y2K would cause damage to the economy and opened the tap. And Bernanke. He saw some signs in the US economy and interpreted them as the growth coming. Called them greenshoots. They weren't. Greenspan saw the economy tanking. Called 'going through a soft patch'. But it was not a soft patch. It was on the way to no growth a la Japan. In the case o Mantega and Tombini, it can be that they are very confident they have enough weapons in their arsenal to act as they are doing. In the case of foreign analyists it can be that they have not seen a country with Brazil's profile (growing from a lower base but inside the demographic window and already totally urbanized) in their life time (not knowing Portuguese is also a problem for them) and have no way to grasp what is really going on there. But those guys and girls here in the thread have the luck to have Elmat enlightening them :-)

To: THE ANT who wrote (78946)	9/3/2011 4:12:53 AM
From: elmatador	1 Recommendation Respond to of 217830

An alternative indicator points to a slowing world economy. I am trying to see what they saw. Are there signs that only they saw? Or are there lazy people who are not doing their home work or do not know how to make the right correlations? "The average increase in the total weight of cargo passing through the canal was 5.7% in the three months to July, down from 9.5% in December. Making a simple forecast based on the past few months' data suggests that world GDP will fall from 3.8% in the first quarter to 3.3% in the second quarter." An alternative indicator points to a slowing world economy economist.com