OK, so that's the bad news, but how bad does it get really?

Christine Lagarde has been waffling on in Washington on the back of the World Economic Outlook report produced by the IMF which she heads.

What is interesting about the report is how it was reported, The press picked up and heavily repeated the first sentence of the report,

The global economy is in a dangerous new phase.

Terrifyingly portentious as it is. The great cuts to expected growth figures were thrown about and the markets had a series of jitters.

In the group's latest predictions, economic growth was lowered by 1 percentage point for the U.S. to a 1.6 percent rate of growth in 2011 and by nearly as much for 2012 to 1.9 percent. The Euro-zone was lowered 0.4 percentage points for 2011 to 1.5 percent and by 0.6 percentage points in 2012 to a 1.1 percent rate of growth

But if the hacks had bothered to look a bit further down the page, if they had strayed into the second paragraph indeed they would have seen something far far worse.

Put it this way the headlines are bad enough, but what about this?

World Economic Outlook (WEO) projections indicate that global growth will moderate to about 4 percent through 2012, from over 5 percent in 2010. Real GDP in the advanced economies is projected to expand at an anemic pace of about 1½ percent in 2011 and 2 percent in 2012, helped by a gradual unwinding of the temporary forces that have held back activity during much of the second quarter of 2011. However, this assumes that European policymakers contain the crisis in the euro area periphery

that is my italics.

Now given that there isn't a cat in hell's chance of European Policy makers containing the crisis in the Euro area periphery, what are the real figures, how bad are the real projections if we do nott make that sanguine assumption.

My blood runs cold.