The quarterly poll of global investors, analysts and traders conducted by Bloomberg this week presents an almost unrelentingly gloomy picture.
Europe’s debt crisis, respondents said, is likely to morph into an economic slump that will drag the world into recession. Even the outlook for China, reliably an economic superstar in past surveys, is dire: growth there is expected to slow to less than 5 percent annually by 2016, half the pace of the past three decades.
Perceptions of U.S. President Barack Obama have plummeted since the last poll was conducted four months ago. Three-quarters of global investors now see his policies as a drag on the U.S. business climate, and 57 percent view him unfavorably, a reversal from a poll in May when 55 percent saw him favorably. The standing of the leader at the epicenter of the European crisis, Chancellor Angela Merkel of Germany, also has reversed course: 59 percent of investors say they are pessimistic about her policies. In May, 55 percent said they were optimistic.
The poll of 1,031 Bloomberg subscribers offers a composite reading of the mood of those who are perhaps most intimately involved with the daily mechanics of finance, trade and economic policy. It is worth noting then that the latest results paint the most negative picture since the survey began in July 2009, when the U.S. and the world were still reeling from the aftershocks of the financial crisis.
Almost 8 in 10 respondents say that Fed Chairman Ben S. Bernanke’s plan to replace $400 billion of short-term debt with longer-term Treasuries, known as Operation Twist, will fail to reduce persistently high unemployment. Only about a quarter say the European Central Bank's policies have played a constructive role in addressing the continent's turmoil.
One bright spot: When asked to pick a likely future for the euro area, 12 percent of global investors said it would continue as it is with its current members, 30 percent said it would dissolve -- and a majority, 51 percent, said it would move closer by adopting a common fiscal policy.
As Bloomberg View has advocated repeatedly, the creation of a federal finance ministry with the power to assume the debts of individual euro-area members and the taxation authority to pay them down is the best possible outcome. If only European leaders and recalcitrant parliaments would listen.
(Max Berley is a member of the Bloomberg View editorial board.)