- ASIA as a problem, ain't... according to Greenpants;
Bill, the article you linked in your earlier post was apparently based on Mr. Greenjeans testimony last week to the Ag committee. While the article focused on his support for the IMF, your take on his view of the Asian flu is different than mine. From the article:
"Clearly those economies are not out of the woods, as recent events attest." -Alan Greenspan
In prepared testimony ..., the central bank chairman said the effect of Asia's turmoil on the U.S. economy was "only now just being felt"...
Where you apparently see "ain't a problem", I noted the quote "only now just being felt". Greenspan's point, as the quote indicates, is that we are being significantly effected - it just hasn't hit the corporate bottom line yet. He was testifying to the Ag committee, so he noted that US agriculture is feeling the effects now as exports are dropping significantly and called on the Ag committee to support IMF funding for the sake of US agriculture. The export demand and import competition problems certainly effect many other industries beside agriculture.
The continued rise of the Dollar won't help in the trade picture either and the second half of the year is not likely to make up for the weak first half earnings as analysts have been assuming.
I wonder if the Treasury and the Fed are happy to let the Dollar rise, slowing the economy without a rate hike. Everyone avoids blame for a slowdown in the US; Asian leaders can't pin their failures on US rate hikes; we continue to import disinflation so the public doesn't feel squeezed by higher prices and higher rates. The result may just be a no-growth, sideways movement or a mild recession.
The only problem is that the US stock market has priced in double digit earnings growth from now to when the last baby boomer retires, but that's nothing a good 20-30% bear market won't cure.
Bob |
