TET-S&P: global economy is navigating historic times

Oct 9 - The outlook for the global economy is, in a word, precarious, said
an article published by Standard & Poor's, titled "Navigating Historic
Times...With No Room For Error." Global growth has slowed and the eurozone is
back in recession.

"As a baseline forecast, we expect the global economy to continue to expand
modestly," said Standard & Poor's Chief Global Economist Paul Sheard. "We
expect that the U.S. will avoid the fiscal cliff and eke out about 2% growth,
policymakers will keep a lid on the eurozone crisis and the recession there
will remain relatively shallow, China will experience a "soft landing" in its
growth deceleration, and Japan will grow modestly while remaining stuck in
deflation." But the risks are stacked to the downside--and they are
significant.

Just four years have elapsed since the global economy experienced the worst
financial crisis and recession since the Great Depression of the 1930s, a
twice-in-a-century kind of event. Historic analogies need to be invoked with
caution, but we see some eerie parallels between the depressed 1930s, which
followed the go-go 1920s, and the current period. If the Great Wall Street
Crash of 1929 and the near collapse of the U.S. financial system in 2008 are
treated as the respective trigger events, superimposing the current period's
timeline on that period's means that the world is now in "1933."

In other words, the stakes are high--and for policymakers and politicians,
there's no room for error.

The report is available to subscribers of RatingsDirect on the Global Credit
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subscriber, you may purchase a copy of the report by calling (1) 212-438-7280
or sending an e-mail to research_request@standardandpoors.com. Ratings
information can also be found on Standard & Poor's public Web site by using
the Ratings search box located in the left column at www.standardandpoors.com.