WSJ: Morgan Stanley Turns Mega-Bear on Australia

WSJ: Morgan Stanley Turns Mega-Bear on Australia. The WSJ Reports On Wednesday, the bank poured a cold warning on any optimism, saying the country may be on track for its first recession in more than two decades-unless the government takes action. Morgan Stanley analysts say the economic transition in Australia from the resources boom to east coast recovery has stalled and revised lower the forecast for economic growth this year to 3.2% from 3.4%. In 2015, it now expects growth of only 1.9%, down from an earlier forecast of 2.5%. That compares with the current central bank forecast of around 3%. The bank urges more rate cuts, from the current record low of 2.5%, and an end to belt-tightening by a government that's worried about growing public debt. Morgan Stanley says there's a 50% chance the central bank will need to further cut rates, despite Gov. Glenn Steven's public statements that monetary policy has done all it can do. (VIEW LINK)