Market Talk: IMF warnings fall on deaf ears
- IMF and World Bank jet off to Bangkok with a suitcase full of grim economic warnings.
- Energy costs are soaring, debt is at record highs, and bond markets are having a nervous breakdown.
- Wall Street suits are betting the house that the gloom is already priced in, effectively tuning out the bureaucrats.
Brief Summary
The suits at the IMF and World Bank are gearing up for their annual pilgrimage to Bangkok, armed with dire warnings about the global economy. Between the energy crisis and a mountain of sovereign debt that would make any sane accountant weep, they have plenty to be worried about. The problem? Nobody on the trading floor seems to care.
Why This Matters
When the people who move the money stop listening to the people who write the policy, you are looking at a recipe for a massive market correction. If you have a 401(k) or any exposure to the markets, this disconnect between the institutional fear-mongers and the reckless optimism of traders means you should prepare for a bumpy ride. When reality finally forces its way onto the trading desk, your portfolio is the one that will have to absorb the shock.