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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (25624)	11/21/2002 11:45:06 AM
From: Jim Willie CB	Respond to of 74559

nice stuff, Jay, I hit on definition of terms you hit on next level / jim

To: TobagoJack who wrote (25624)	11/21/2002 10:00:17 PM
From: elmatador	Respond to of 74559

World economy 'slow and fragile' FT - PARIS (Reuters) - 21 Nov 2002 10:03 Stock market haemorrhages and poor business confidence could delay the long-predicted recovery in the global economy until well into next year, according to the Organisation for Economic Co-operation and Development. Leading central banks should keep interest rates low in the near future, and push them lower in the 12-nation euro zone, to shore up growth because the economic upturn spotted last spring faltered as 2002 wore on, the OECD said on Thursday.. "The global recovery is slow and irregular," the Paris-based think-tank, whose 30 member countries account for the bulk of the world's wealth, said in its twice-yearly economic report. It nevertheless forecast improvement, predicting growth of 1.5 percent this year, 2.2 percent in 2003 and 3.0 percent in 2004. For the critical U.S. economy, it forecast growth of 2.3 percent in 2002, 2.6 in 2003 and 3.6 in 2004. In the euro zone, it forecast growth of 0.8, 1.8 and 2.7 percent respectively. For Japan, in the doldrums for a decade, the OECD forecasts shrinkage of 0.7 percent this year, followed by modest expansions of 0.8 and 0.9 percent in 2003 and 2004. The OECD said it only expected the world economy to start firing on all cylinders in 2004. "Forward looking indicators show that a solid recovery may be rather slow to materialise," it said. Specific reports based on corporate purchasing managers intentions had highlighted the threat of cuts in U.S. car manufacturing and even recession in the manufacturing sector in the 12-nation euro currency zone. There had been signs of recovery earlier this year in the United States and relatively solid European growth, but those economies then ran into "substantial headwinds", it said. Referring to tumbles that have knocked stock markets to lows unseen since the mid-1990s in the United States and Europe, and since the early 1980s in Japan, the OECD said corporate scandals like the accounting scam that toppled U.S. energy giant Enron had seriously rattled investor and business confidence. OECD chief economist Jean-Philippe Cotis said in the report that profit prospects were now better but professional investors and households were likely to take time to get over the fallout. "This is why the present Outlook (OECD report) incorporates a period of sluggish spending in most of the OECD until mid-2003," he said. The global recovery was "slow and fragile and heavily dependent on developments in the United States. "The general slide in equity prices is also restraining consumption in accordance with the traditional wealth effect," the report said. U.S. citizens owned more shares relatively and were more prone to this, but others felt a knock-on impact. Further stock price falls could not be ruled out even though share prices were now considered to have worked off the fat that was added during a period of excess, it said. "The bottom may not have been reached yet."

To: TobagoJack who wrote (25624)	11/21/2002 11:53:18 PM
From: elmatador	Respond to of 74559

The whole post war economic system was devised with of locks akin to the Panama Canal. A lock in between several groups of countries and the control of the locks in the hands of governments and multilateral institutions. The locks' system is breaking down. Globalization and all that. Of course water is being, hurriedly, pumped up to the boats floating in the locks up stream to avoid them floating down to the level of the boats floating at a lower level. That is what's called inflation. Deflation means all those boats, floating up those locks, will be flushed down to the level of the boats down below at a single go. The deflation -locks opening up and flushing down those boats floating at the higher level- would not affect countries that have never been inflated. Case in point: Eastern European countries. If you are there already and your boat is floating at that level you will be OK. You won't perceive the mayhem, only those boats arriving at your side. Now countries that have made a living out of being inflated are in for serious trouble: Germany, UK, Sweden, France, well, most, EU countries minus Greece. By the way, the whole plot about EU enlargement is to get those former communist countries to inflate. It is like pumping water into those locks to bring them up so that the upper locks don't fall too far down.

To: TobagoJack who wrote (25624)	11/22/2002 12:00:59 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

Japan pumps water -as usual- into its lock to keep its boat up there. It hasn't worked before. It is not going to work now, nor will work in the future. Japanese boat has to come down and float at a lower level lock. No other way out! House mortgages in the US and the UK to pump up collateral to allow people to borrow money to keep economy going via consumption? Looks like pumping water into UK and US locks? Yes, it certainly does. Japan Cabinet OKs Extra Spending By YURI KAGEYAMA 11/21/2002 22:24:28 EST TOKYO (AP) - Japan's Cabinet approved a 3 trillion yen ($24 billion) extra spending package Friday for public projects and other measures that analysts quickly criticized as far too small to revive the feeble economy. After days of wrangling between Prime Minister Junichiro Koizumi, who is determined to rein in public works projects, and politicians dependent on construction lobbies for votes, the ruling coalition agreed on the supplementary budget late Thursday. The budget earmarks 1.5 trillion yen ($12 billion) for public works and another 1.5 trillion yen for "safety net" measures to help small businesses and to create jobs. Japan's economy has been in a slowdown for more than 10 years, but has shown signs of deterioration recently. The Tokyo stock market has plunged to 19-year lows, and the share prices of Japan's leading banks are crashing as investors fear that Koizumi's promise to tackle bad debts at the nation's banks will lead to corporate bankruptcies - and possibly the nationalization of a major bank. "The move toward recovery has slowed, and the situation surrounding prospects for the economy is growing more uncertain," Koizumi told his ministers Friday. Copies of his comments were released to the media. The spending plan needs parliamentary approval, but the ruling coalition controls the majority in parliament. Analysts called the extra spending inadequate for a rebound. Japan is suffering from deflation - continually falling prices that increase debt values, depress corporate profits and shrivel paychecks. "Even if the number had an extra zero at the end and was 10 times the amount, getting out of deflation isn't possible," said Koji Shimamoto, chief economist at BNP Paribas in Tokyo. "Recovery simply isn't possible with just public works." But Shimamoto said Koizumi should be commended for at least sticking with his agenda of reforms. Koizumi has been trying to rein in excessive government spending because he is worried about Japan's ballooning public debt. Tokyo share prices rose in morning trading, partly cheered by a rally on Wall Street, but also underlining hopes for Japan's commitment to reform. The benchmark Nikkei Stock Average ended the morning session up 1.32 percent. As part of his reform efforts, Koizumi has appointed a government panel to tackle the bad debts at the banks and revive money-losing companies. A package of policies, including a tighter monitoring of the banks' books, is expected next week.