Former (and perhaps future) Treasury Secretary Summers has argued that “You can usually date the end of the crisis to the first moment when a public official makes a forecast that proves too pessimistic.” I don’t think we are there yet. The IMF’s latest forecast still strikes me as rather optimistic. I increasingly suspect that one indicator that the financial crisis has truly turned a corner will come when the Fed’s balance sheet starts to shrink …
This quote is taken from the excellent post Central bank reserve managers still are running away from risk and echoes my post Central banks pushing on a string.
With respect to China, the debate is getting heated up. Projections are all pointing down as in the article How severe a slump in China?
