This column originally appeared on Real Money Pro at 8:11 a.m. EDT on June 25.NEW YORK ( Real Money) -- Worldwide growth forecasts are being revised lower. Indeed, our markets/economy and politicians seem to be operating on different timelines. I had been hopeful that our leaders and policymakers would finally recognize the reduced effectiveness of more cowbell (easing of monetary policy) and that they would at least have started a dialogue on the implementation of pro-growth fiscal policy aimed toward whittling down the fiscal cliff and/or postponing its impact -- all sooner than later in order to prevent a possible adverse and negative feedback loop. Over there, the worsening sovereign debt crisis, and structurally flawed eurozone continues to weigh on the global economic recovery. Eurozone leaders and central bankers, seeking to seal one sovereign fissure at a time, remain behind the curve but, hopefully, are preparing to catch up and abandon Germany's gradualism as attention is focused on the June 28/June 29 Brussels Summit and the ECB's July 5 meetings.
Consensus Profit Forecasts Are in JeopardyWith political cohesion absent domestically, U.S. business and consumer confidence has been victimized. In turn, profit disappointments are multiplying and will accelerate further unless our leaders abandon their divisive, divided and dysfunctional behavior. Witness the already weaker-than-expected industrial earnings at United Technologies ( UTX), Nucor ( NUE), Pall ( PLL), FedEx ( FDX), Jabil Circuit ( JBL), Adobe Systems ( ADBE), Autodesk ( ADSK), Texas Instruments ( TXN) and Cardinal Health ( CAH) and the poor results at consumer-based Bed Bath & Beyond ( BBBY), Procter & Gamble ( PG) and Darden Restaurants ( DRI). Meanwhile, as mentioned previously, the domestic economic downturn is broadening geographically and the notion of a self-sustaining developed world economic recovery is starting to fade:
- The U.S. economy still seems capable of muddling through 2012-2013, and real GDP growth seems likely to grow annually at 2.0%.
- Real GDP growth forecasts for the Chinese economy are estimated at approximately 7% annually over the next two years, but projections have started to waver.
- Estimates for the eurozone's growth are still -0.5% in 2012 and zero growth to +0.5% next year, but these forecasts are obviously in jeopardy.
- In total, developing economies are expected to grow by slightly more than 1% in 2012, with some modest acceleration toward 1.5% in 2013, less than half the growth experienced in the last cyclical recovery.
- In the aggregate, the world's emerging markets are projected to grow by about 4.5% in 2012 and accelerate to 5.0% growth in 2013.