| Global downturn just begins! | |
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| Sep 3, 2008 04:23 |   |
 | Yesterday, when Stephen Roach (Morgan Stanley Asia’s chairman) was interviewed by Bloomberg, he said that global downturn just begins. As for the credit crisis, he said that two thirds had gone. But its impact on the US economy and the global economy was just in the early stages. In his opinion, the second quater of US economy growth is better than expected. However, considering of unemployment rate increase and housing prices decrease' impact on consumption, he estimates that the prospect of the US economy in the second half year is not very good and it will have adverse impact on Euporean and Asian's exportation. Hence the global economy will be greatly influenced. What do you think of his words? Does global downturn really just begin? |
| Sep 3, 2008 08:00 | #1 |
| Well, the same stephen roach had advocated for rest of the world taking the hit on american slowdown much before the crash in the markets happened..So he has been telling it long ago. Also, markets discount any future events .. they have already discounted the slowing down of economy .. when it will hit the bottom and how long it will stay there is something, no one can say for sure .. But we are in slowdown .. US is already down and things are cooling in India and China .. |
| Sep 7, 2008 18:21 | #2 |
| The further impact on global economy is from China's upcoming industrial restructuring after the mile stone although this round economic cycle has not seen the bottom. I am saying that because competition in job markets has been becoming more fierce in terms of seeking cheaper labors filling up positions requiring higher and higher skills. West was not, is not and will not be like Japan where promotes life-long employment and social responsibilities by keep labor redundant via reducing working hours, making wages flexible, switching interdepartment positions and retraining (this features is making Japan less and less compatitive). And outsourcing jobs with high techonology intensive to China and India where high skilled tech staff can finish projects faster and more economically. So It's just begun. |
| Sep 7, 2008 23:50 | #3 |
| By definition, there is a global downturn: that is to say many economies are slowing. big deal. Just a year ago we were all concerned about the overheated world economy! China is 'paying through the nose' for iron, coal, oil, farm produce, etc simply because the sudden increase in demand cannot be matched by increased supplies in the short term. So the issue is this a controlled downturn or the beginning of a problem? It has not started for the right reasons, the US sub-prime debacle. Actually, this was resolving itself exactly as market theorists would expect, the bubble began to collapse and the world economies were affected to the extent that they were exposed to it. Overall, China may benefit because the USA's weakness will reduce the total demand for raw materials worldwide. This will help stem inflation and slow the economy to a more sustainable level |
| Sep 16, 2008 14:04 | #4 |
| GUESTWISDOM ... | I guess a way of bail out for the ailing firm and US slow down require just more than simplistic, theoretical measures. Perhaps the Central banks have got to deal prudently with saving banks and institutions that are incremental on the growth of these economies. the is definitely a decoupling effect throughout the rest of the world owing to the invisible forces of globalization and int'l trade. |
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