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To: ild who wrote (136421)	11/30/2001 11:03:01 AM
From: ild	Respond to of 436258

morganstanley.com Global: Recession Verdict Stephen Roach ....................... 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 bubble-free outcomes of the past. The arbiters of the US business cycle have rendered an important verdict: The seeds of this recession were sown as Nasdaq raced toward 5000. To the extent that the excesses of that bubble have not been purged, I believe that the timing and vigor of the coming recovery will prove to be a major disappointment -- especially for financial markets that are once again banking on the glorious "V." 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 for the US economy -- either on Wall Street or in Washington. The message from the NBER is a real wake-up call.