My money is on the World Bank. By contrast, the lending institution appears to be shorting the "green shoots" that optimists see sprouting around the globe. The World Bank on June 22 said recessions will be deeper than it estimated in March. It now expects the world economy to contract 2.9% this year, compared with a previous forecast of a 1.7 percent decline.
Things may get worse than the numbers suggest. That's because the developing world, the one part that's still growing at the moment, is experiencing a capital flight that will swell the ranks of the poor and the unemployed.
The least-appreciated side effect of this crisis is how living standards of poorer nations will be set back.
Huge economies such as the US, Europe and Japan were hit hard and fast by the credit crisis that began on Wall Street. The effects on less affluent nations haven't been given enough attention. For the developing world, this crisis is unfolding in slow motion.
Money is moving in the wrong direction, a dynamic that risks holding back the parts of the world on which investors and executives are depending for growth. Even if a global recovery begins this year, poorer economies will lag behind rich nations.
Developing economies that need rapid growth may experience weak growth for years to come. The World Bank warns of "increasingly grave economic prospects" for developing nations amid reduced capital inflows from exports, remittances and foreign direct investment. After peaking at $1.2 trillion in 2007, inflows this year may fall to $363 billion.
The upshot is that investors abandoning developing economies may be sowing the seeds of a renewed slump. And governments in Asia, by neglecting the importance of domestic growth, are paving the way for a rough several years ahead.
Asia's 1997 crisis was a fast, furious and deep one. Yet the region was able to recover rapidly because the US was booming at the time. Then-Federal Reserve chairman Alan Greenspan referred to the US as an "oasis of prosperity," and it was the engine that powered Asia's impressive snapback.
No such oasis exists today. China isn't there yet in terms of size or influence, and neither is India or Brazil. Developing nations are on their own to produce growth at home as opposed to exporting their way to recovery. It will require some serious policy changes from Seoul to Hanoi.
The good news is that many Asian governments have latitude to boost public spending, while central banks have scope to cut interest rates. The bad news is that the absence of large domestic consumer markets will make those efforts less potent. Nothing would restore Asia to health faster than an export recovery. One is unlikely to happen anytime soon.
A "crowding-out" dynamic of historic proportions won't help. The crisis is devastating public finances and the US, Japan and Europe are issuing mountains of debt.
"Even on optimistic assumptions, in a number of industrial economies, debt burdens stand to rise by anything from a third to almost 100% over the next five years," Russell Jones, London-based head of fixed-income and currency research at RBC Capital Markets, wrote in a June 22 report. "On less optimistic assumptions, the prospective debt dynamics are truly explosive."
If you are a Group of Seven economy, selling debt shouldn't be much of a problem. If you are Indonesia or the Philippines, the boom in global issuance will complicate efforts to attract bids at bond auctions.
Soros, in his June 20 interview, called the crisis the most serious in his 78 years. "This is the end of an era," he said. "The question is what's going to come out of it in the future."
The answer may be found in the details of recent World Bank reports. One new element will be reduced aid from advanced economies because the crisis is weighing on their finances. Another is the need for international coordination to revive domestic demand through stimulus spending.
The G-7 is a pretty useless entity these days. That's why meetings of the Group of 20 nations now get more attention.
Even as stock markets calm down a bit, the effects of the credit crisis continue to flow into the economy. As nations experience more of the fallout, their challenges are likely to boomerang back into markets.
As this vicious cycle plays out, better insights may be coming from Washington lenders than investors in the trenches.
William Pesek is a Bloomberg News columnist. The opinions expressed are his own.