Mohamed El-Erian, a prolific and dependable analyst of global economic affairs, wanted a “Sputnik moment” in Shanghai on the weekend. Just as watching the Russians take the lead in the space race prompted the Americans to get serious, El-Erian wished that the terrible start to 2016 would spur the finance ministers and central bank leaders of the G20 to do something to enliven the headlines on his Bloomberg terminal.
The G20 let down El-Erian, as I suspect he knew it would. The failure wasn’t denial. Finance chiefs identified everything that either is wrong with the global economy, or that could go wrong: volatile capital flows, a “large” drop in commodity prices, geopolitical tensions, the United Kingdom's possible exit from the European Union, and the surge of refugees in Europe. But this unusually long list of vulnerabilities wasn’t enough to inspire a collective response. Instead, the G20 told the world’s traders of financial assets that they should stop staring at their screens and take a walk in the real economy.
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