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Strategies & Market Trends : Currents of Currency -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (26)	4/4/2003 10:53:04 AM
From: Ahda	Read Replies (1) \| Respond to of 594

Morgan Stanley Forecasts World Recession Subscribe to The Post Reuters Friday, April 4, 2003; 7:34 AM LONDON (Reuters) - U.S. bank Morgan Stanley said on Friday it was cutting its forecast for the global economy to recession, citing war, geopolitical uncertainties and most recently, the impact of the SARS virus on Asian growth. Morgan Stanley said it was the first Wall Street bank to forecast world recession. The usual definition for recession in a single country is two consecutive quarters of contraction. However, as the entire world is unlikely to contract simultaneously, economists say low levels of global growth is the equivalent of world recession. Morgan Stanley's measure of global recession is growth below 2.5 percent. "The major economies of the developed world appear to have contracted in February and March...additionally SARS-related impacts have hit once resilient Asia extremely hard," said Morgan Stanley chief economist Stephen Roach in a research note. "We are cutting our baseline estimate of 2003 world GDP growth from 2.5 percent to 2.4 percent. We and others have long viewed 2.5 percent world GDP growth as the official recession threshold for the global economy." >>I happen to agree with Roach. The underlying question has been how will the war impact the economy? It is not difficult to deduce it is loss of lives as well as dollars. The rebuilding of the area that is destroyed will have little impact on J6packs economic woes other than their hope that the cost of oil will eventually reduced. Under growth circumstances with almost two hundred thousand reservists called up to duty the employment figures should show a decrease. Employment figures continue to increase. The world has a problem right and that is how to keep up growth. There is a little bit more to it in our case as we have exceptionally high living standards but as business reduces heads to decrease cost these heads attempt to find other positions problem is for many the pay is far less than the job they lost. I truly believe there is a high possibility the underground economy will grow, If you trade services it is my belief that you also reduce the taxation base by decreasing the free markets valuation of the service. The greatest growth has been in housing it is a business that i still believe is only solid when the growth rate of the economy and housing have some sort of sane ratio. There is no sane ratio at present. Refinancing due to low interest creates surplus cash at some point this will end and market evaluation will change.