Un extracto de un largo post de uno de los economistas mas famosos de la actualidad, Nouriel Roubini, quien con justicia puede atribuirse haber predicho la crisis en la que estamos (aunque por cierto no fue el único).
En esta parte explica las razones del contagio del frenazo gringo. Como él mismo dice en otro lado, la primera reacción es NEGAR, la segunda, ENOJARSE, luego viene NEGOCIAR, despues de ello DEPRIMIRSE y recién con la ACEPTACION comienza la etapa de reconstrucción y reorientación.
Cuanto antes lleguemos a la etapa 5, de aceptación, mejor sera para todos. Mientras sigamos enojados o negadores, perdemos tiempo precioso.
Ya es momento de ocuparse de dos cosas:
1) Medidas para aliviar el dolor y las consecuencias que TRAERA la crisis
2) Trabajar en la ventana de oportunidad que se abre para CHILE durante y poco tiempo después de la crisis.
Va el texto. aquí pego el link, pero no se si va a funcionar debido a que expira el trial de contenido premium que tenía. Está en ingles, ojalá se entienda.
But a more important part of the “contagion” is due to the fact that bad economic news in the US – such as signals of recession – that trigger a fall of the US stock market also lead to expectations of lower growth in other economies that triggers in turn a weakening of their stock markets. Thus, the recent sharp fall of global equity markets is a signal that investors are now realizing that the rest of the world cannot decouple from a US hard landing.
Direct trade links. Real economic contagion occurs importantly via direct trade links. If output and demand in the US falls – a recession - the resulting fall in private consumption, capital spending by firms and production leads to a reduction of US imports of consumer goods, capital goods, intermediate goods and raw materials. But US imports are other countries’ exports and important components of their overall demand. Thus a contraction of other countries exports reduces their economic growth rate.
Since the U.S. is running a current account deficit that is still close to $700 billion this year, the effect of a U.S. slowdown on its imports is likely to be larger than its share of the global economy. Also, note that a number of countries are heavily dependent on exports to the U.S. (both as a share of their total exports and as a share of GDP). These economies include obviously Canada and Mexico but also China, Japan, Korea and a significant part of the rest of Asia (Singapore, Hong Kong, Malaysia, Philippines, and Thailand). China is particularly at risk in the case of a US slowdown as so much of its recent growth has relied on the growth of exports, and of exports to the US of consumer goods that are now at threat as the US recession will be driven by a fall in private consumption.
Indirect Trade Links. If US imports fall and thus Chinese exports to the US fall, the Chinese demand for intermediate inputs from the rest of Asia falls and thus – indirectly - the growth of demand and exports of these Asian economies falls. Some have incorrectly argued that the large growth of inter-Asian trade in the last decade makes this region’s growth less dependent on US growth. But studies have suggested that this argument is faulty as the cyclical and structural dependence of Asia on US growth is now larger than a decade ago. The reasons is as follow: its used to be the case that Asian countries such as Korea, Taiwan and others produced final goods that were exported directly to the US. But with the rise of Chinese competitiveness in such goods the pattern of trade in Asia has now changed: increasingly these Asian countries produce intermediate inputs – such as computer chips - that they export to China and then China assembles them - into final goods (say consumer electronic goods) - and then exports them to US. So greater inter-Asian trade does not mean less dependence – rather greater dependence – on US growth.
Effects on commodity prices. Since the US and China have been the two major drivers of global growth in the last few years – the former as the consumer of first and last resort and the latter as the producer of first and last resort – the slowdown of these two locomotives of global growth – following a US hard landing - will seriously affect the rest of the world; in particular, there will be a sharp drop in the demand for commodities – oil, energy, food, minerals – and in the price of such commodities that had surged in the last few years following the high growth of China and, in part, India and other economies.. The ensuing fall in commodity prices will hurt the exports and growth rate of commodity exporters in Asia, Latin America and Africa. For example Chile’s exports of copper and its price will fall as both the direct demand from the US and the indirect demand from China will fall in the context of a US recession and of a global economic slowdown.
Global Deflationary Effects of a Weaker US Dollar. The US economic slowdown and the ensuing reduction in US policy interest rates has led to a sharp weakening of the value of the US dollar relative to many floating currencies. While this weaker dollar may stimulate US export competitiveness it is bad news for other countries that export to the US as the strengthening of their currencies relative to the US dollar increase the price of their goods in US markets and makes their export competitiveness lower. So a weak dollar is bad news for the exports and economic growth of many countries that depends on the fast growth of exports to the US as an important engine of their growth.
Common Shocks such as high oil and energy prices. A high correlation of growth rates of the US with that of other countries can also be due to common shocks such as high oil and energy prices that slow down growth among all oil importers. Such negative shocks hurt not just the growth of the US; they also hurt the growth of other oil importing regions such as Europe, China, India, emerging Asia and parts of Africa.
Bursting of Global Housing Bubbles. A cycle of housing boom and bubble followed by a bust has occurred in the US. But similar booms and bubbles did occur in many other parts of the world as easy money, low long-term interest rates and financial innovation occurred in many countries. We have seen such housing booms in Spain, UK, Ireland and, in smaller measure in Italy, Portugal, Greece, France; in Central and South Europe (the Baltic nations, Hungary, Turkey); in Australia, New Zealand and parts of Asia (China, Singapore and parts of India). With a lag we are now observing the beginning of the bursting of such bubbles outside of the US, especially in the UK, Spain and Ireland. Such bust will lead to a domestic economic slowdown in these countries and outright recession in some.
Effects on Consumer, Firms and Investors’ Confidence. Bad news from the US and falling confidence of US consumers, firms and investors can be transmitted to a fall of confidence of similar economic actors in other countries: confidence is contagious. Global investors become more risk averse and dump risky assets (equities, credit instruments, etc.) not just in the US but across the globe; large international multinationals may decide to cut back new capital spending on factories and machines not just in the US but also in other countries as losses on their US operations lead to more caution and less internal funds available for global capital expansion (a “corporate boardroom investment strike”). Consumer confidence outside the US – especially in Europe and Japan – was weak to begin with; it can only become weaker as an onslaught of lousy economic and financial news in the US affects the “animal spirits” of consumers worldwide.
Constraints on Monetary and Fiscal Policy in Counteracting a Global Economic Slowdown. Finally, today the ability of policy authorities around the world to use monetary and fiscal policy to stimulate their economies and dampen the effect of a US and global demand slowdown are more limited than in 2001 recession. Then, the Fed slashed rates from 6.5% to 1%, the ECB from 4% to 2% and the Bank of Japan cut its policy rate down to 0%. Today the Fed is easing again but it cannot ease as aggressively as in 2001 as it has to worry about inflation and about the risk of a disorderly fall of the dollar that may lead foreign investors to reduce their financing of a still huge US current account deficit. While in Europe and Japan monetary policy had been recently tightened or, at best, kept on hold and the ECB is in denial of the serious downside growth risks in the Eurozone. Similarly, in 2001 there was a massive fiscal stimulus in the US (as we went from large budget surpluses to large budget deficits), in Europe where the 3% deficit limits were breached in the major eurozone economies and in Japan where the deficit went as high as 10%. Today instead, the existence of large structural budget deficits – and high public debt - in the US, Europe and Japan limits the fiscal stimulus that policy authorities can afford. Finally a weaker dollar is a zero-sum game: it may benefit the US but it hurts the competitiveness and growth of the US trading partners.
In conclusion, all these channels implies that a US recession will have painful effects on economic growth and financial markets across the globe: in a “flat world” of globalization trade and financial links boost growth across countries in good times; but they also lead to negative transmission of shocks from large countries like the US in bad times. Thus, while the rest of the world will not experience an outright recession (while at the same times some specific countries may actually follow the US into a recession path) the global economic slowdown and financial losses – in equity markets and in other risk assets’ markets - that will follow the US recession will be much larger than what it is usually expected. One can expect a high correlation of a variety of financial markets across the world: seriously bearish stock markets in the US and across the globe; a wide increase in credit spreads and junk bond yields across the globe; a sharp fall in a variety of commodities (oil, gas, energy, food, metals and other minerals and raw materials); a deflation of housing bubbles and fall in home prices in many different countries; growing losses in structured finance products related to housing and commercial real estate around the world; a global credit crunch and liquidity crunch; and an increase in volatility and risk aversion in a variety of markets and among most investors.
2008 will be the year of re-coupling rather than de-coupling both in financial markets and the real economies; and the effects will be painful for the US and global economy. So, as Bette Davis warned in All About Eve: “Fasten your seatbelts as it’s gonna be a bumpy ride!” Not just bumpy; rather very ugly and scary as the risks of a systemic financial meltdown – that would seriously worsen the economic downturn and around the world - are seriously rising. As argued in detail in the past in this column this is the first crisis of financial globalization and securitization, an episode of a severe and worsening liquidity and credit crunch, a most severe case of systemic risk that will have dire consequences for the growth rate of the US and the global economy.
