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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: Jdaasoc who wrote (18849)	6/26/2001 2:12:44 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 30051

GLOBAL EXPANSION COLLAPSING Mount Kisco, NY, June 26, 2000-This is no mere global slowdown, according to the Levy Institute Forecasting Center. A world-wide recession is developing, with numerous economies, including the two largest, already contracting. The decline will be unusually severe and will bring the worst financial problems since the end of World War II. The latest issue of The Levy Institute Forecast reveals: · The United States, the world’s economic locomotive, "performed an especially mighty feat by pulling the global economy up a steep hill from 1998 through 2000." But "it shifted into reverse in 2001. Now it is starting to push the train back down the hill." · "Rest-of-the-world profits during the past two years have been bolstered to an extraordinary degree by the massively swelling U.S. trade deficit, a trend that has now reversed." Also critical to foreign profits growth was an inventory cycle that "had overshot by late 2000" and capital spending encouraged by the inflating financial bubble and "speculative frenzy" in technology investment. Both inventory and capital investment are now weakening. · "Because exports to the United States are only 3% of Eurozone GDP, many believed that Europe would not be much affected" but "the U.S. recession affects European profits through a number of channels...shrinking global trade, a tough financial environment, and widespread [global] overcapacity." · "Japan started the 1990s with a private debt problem. The government began running large deficits not to offset the pain of private sector retrenchment but to avoid it. Now, after a decade of red ink, Japan has a public debt problem as well as a private debt problem.... If Mr. Koizumi delivers on his promises, he could hardly do so at a worse time, the start of what threatens to be the worst global recession and international financial crisis in half a century." · Economic and financial conditions in emerging markets around the world have also been deteriorating dramatically. · "With the global recession developing and oil prices likely to fall, Russia will again be vulnerable to external debt problems." · "Brazil...is a sitting duck for financial trauma and currency crisis as the world economy moves toward a severe recession." David A. Levy, director of the Levy Institute Forecasting Center, explains, "The excesses in debt, business capacity, and asset pricing were so great that once credit conditions tightened and the economy stopped booming profits, serious cash flow problems and a bursting of the bubble were inevitable-both in the United States and worldwide."