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To: russwinter who wrote (27652)	3/2/2005 7:56:28 PM
From: CalculatedRisk	Respond to of 110194

Will an Adjustment in the Current Account Deficit Lead to a Recession? calculatedrisk.blogspot.com The paper I reference reviews historical periods of CAD adjustment. The authors conclude: "a significant subset of the adjustment episodes we studied were associated with substantial declines in GDP growth ... Thus, the fear that current account adjustment might be associated with recession is not entirely without basis." BUT ... "[O]ur second main finding is that the shortfall in growth experienced in the contraction episodes appears to reflect the playing out of standard cyclical developments rather than a response to current account adjustment." MY COMMENT: My interpretation of their conclusion is that a CAD adjustment doesn't necessarily cause a recession, but a recession cures a CAD problem. Is that good news or bad?

To: russwinter who wrote (27652)	3/2/2005 8:35:41 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 110194

Congested ports warning for US importers By Andrew Ward in Los Angeles Published: March 2 2005 20:15 \| Last updated: March 2 2005 20:15 US importers can expect another year of supply bottlenecks and rising supply-chain costs because of congestion in west coast ports, transport industry executives and analysts have warned. Surging trade with China is increasing the strain on Los Angeles and Long Beach, which together receive nearly 80 per cent of traffic to the western US. The Pacific Maritime Association, which represents west coast ports, predicts import volumes will increase by a further 14 per cent on average this year the same rate as last year. Container ships bound for California last year had to wait offshore for several days before a berth became free, delaying deliveries to retailers and pushing up costs for carriers and shippers. The ports, with their powerful labour unions, limited working hours and outdated technology, must increase investment and productivity if further disruption is to be averted, said the executives and analysts. “The congestion we faced [in the US] last year is likely to be repeated this year,” David Lim, chief executive of Neptune Orient Lines, a Singapore-based ocean freight carrier, told a conference on trans-Pacific shipping this week. “There is a need for closer co-ordination between industry, government and other interested parties to make sure much-needed investment [in US ports] is not further delayed.” If congestion persists, routing Asian-made goods through the Suez Canal and across the Atlantic might become a viable alternative, said John Isbell, director of logistics for Nike, the sports clothing brand. Ports across Europe have also struggled to increase capacity, and analysts expect any delays on the west coast to have knock-on effects for shipping schedules and tonnage rates around the world. Shippers have sought to bypass west coast congestion by redirecting cargo through the Panama Canal to east coast ports, such as Savannah and New York. But this is pushing the canal towards full capacity and forcing sharp increases in rates. Mexican ports and more northerly west coast terminals, such as Seattle and Vancouver, have also absorbed some overspill but analysts said they were not big enough to resolve the crisis. Tom Ward, marine specialist at JWD, an architecture and engineering group, said west coast ports had room to expand but needed to hire more workers, work longer hours, introduce more advanced technology and maximise use of dockside space. Several speakers at this week's conference also called for improvement in the congested roads and railways that serve the ports, particularly around Los Angeles and Long Beach. The biggest container ships carry enough cargo to fill 27 miles of rail wagons and 60 miles of trucks. Executives from Union Pacific and BNSF, two of the main rail operators serving the west coast, said they were building new cargo-handling facilities. Jim McKenna, chief executive of the Pacific Maritime Association, said west coast ports were pushing to introduce more advanced technology this year and hiring thousands more. news.ft.com