sorry ist ja die china karte hier über: Global: Recession Verdict

verfasst von leibovitz, 04.12.2001, 19:47

Global: Recession Verdict
Stephen Roach (New York)
The verdict, itself, was hardly a surprise. By the time the
Business Cycle Dating Committee of the National Bureau
of Economic Research (NBER) convened its formal deliberations
in late November, few would doubt that
America was already in recession. But the verdict came
with an important twist. The academics also determined
that this contraction began a full six months before the
terrorist attacks of 11 September. There’s great significance
to this finding. It underscores the unique character
of this recession, as well the unusual dynamics that will
shape its eventual recovery.
By designating March 2001 as a business cycle peak, the
NBER seems to be validating the diagnosis that I have
long been sympathetic to — namely, that this recession
stems importantly from the post-bubble aftershocks now
afflicting the US economy. Sure, there were other forces
at work in setting the stage for this downturn — especially
the impacts of sharply rising energy prices during late
1999 and 2000. But most of the other proximate causes of
this recession — the lagged effects of Fed tightening from
mid-1999 to mid-2000, a wrenching contraction in corporate
profits, a collapse in IT-led capital spending, and rising
layoffs — are all traceable to the bubble-induced excesses
of the US economy.
The impact of the asset bubble on the real side of the US

economy is not that difficult to discern. In the midst of an
unprecedented five years of 25% annualized appreciation
in the S&P 500 over the 1995-99 interval, both consumers
and businesses went to excess. Consumers mistakenly
believed that the stock market had become a new and
permanent source of saving. As a result, they were perfectly
content to implement a critical change in saving
tactics — shifting the mix of saving away from the paycheck
and into the “automatic” returns of the mutual fund.
At the same time, businesses became convinced that the
capital markets would generously reward those who spent
the most on new technologies. And so the IT-spending
binge took on a life of its own, aided and abetted at the
end by the ultimate mania of New-Economy hype —
Nasdaq 5000 and the e-commerce frenzy of B2B and
B2C. Meanwhile, a saving short US economy had little
choice but to turn to foreign capital in order to fund this
investment splurge. The result was a massive and unprecedented
current-account deficit that not only left the
United States overly dependent on foreign financing but
also in the position to export its bubble-induced excesses
to the rest of the world. America was living beyond its
means, and the world wanted a piece of the action.
America has only begun the long march of purging the
excesses that built up during the asset bubble. This recession
initiated the process but is unlikely to complete it.
Asset bubbles always pop. Alas, this one was no different.
And once it popped, it was only a matter of time before
the cards in the real economy came tumbling down.
That’s what this recession is really all about. All it took
was a bit of a Fed-engineered slowdown from the hypergrowth
of the late 1990s. Rapid spending on IT and
white-collar headcount suddenly morphed into bloated
cost structures, unleashing an extraordinary squeeze on
corporate profit margins. Cost-cutting was the only way
out — first capital and eventually labor. With the benefit
of hindsight, it was this strain of post-bubble cost cutting
that sowed the seeds of this recession. It’s a time-honored
process that is as old as the business cycle itself.
And it’s far from over. The metrics I use to gauge America’s
bubble-induced excesses are hardly flashing the allclear
sign. The capacity overhang has hardly been eliminated.
The capital spending share of nominal GDP was
still 11.9% in 3Q01 — down from the cycle high of a little
over 13% but well above trough readings of about 10% hit
in earlier downturns. The personal saving rate has moved
up from close to “zero,” but at 2.4% in 4Q01, our estimates
leave little doubt of the shortfall from pre-bubble
norms of close to 8%. And while the current account
deficit has narrowed from a record 4.5% of GDP, at an
estimated 3.8% in 4Q01, it remains excessive by any standards
of the past. Nor can America’s external imbalance
be expected to narrow in a synchronous global recession;
weakness in the rest of the world means any pullback in
imports will be matched by a comparable reduction in
exports.
In short, America has only begun the long march of purging
the excesses that built up during the asset bubble.
This recession initiated the process but is unlikely to complete
it. To the extent a post-recession US economy is
still dealing with the legacy of a devastating asset bubble,
there will be significant offsets to the classic forces of
cyclical recovery. Aggressive policy stimulus notwithstanding,
these powerful headwinds won’t die down easily.
That’s not to say economic recovery won’t occur —
it’s just that it seems unlikely to conform to the bubblefree
outcomes of the past. It’s been more than a year and
a half since the Nasdaq bubble popped. I continue to be
amazed at what little attention this event gets in shaping
expectations of the US economy — either on Wall Street
or in Washington. The message from the NBER is a real
wake-up call.


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gesamter Thread:

• Barton Biggs von Morgan Stanley meint, wir seien VERRÜCKT: - Der letzte Grund, 04.12.2001, 17:45
  • Re: Barton Biggs von Morgan Stanley meint, wir seien VERRÜCKT: - Sascha, 04.12.2001, 17:57
  • Re: Barton Biggs von Morgan Stanley meint, wir seien VERRÜCKT: - XERXES, 04.12.2001, 18:56
    • Re: Barton Biggs von Morgan Stanley meint, wir seien VERRÜCKT: - leibovitz, 04.12.2001, 19:42
      • sorry ist ja die china karte hier über: Global: Recession Verdict - leibovitz, 04.12.2001, 19:47
  • Re: Barton Biggs von Morgan Stanley meint, wir seien VERRÜCKT: - leibovitz, 04.12.2001, 19:40