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[Via Communist Internet... http://www.egroups.com/group/Communist-Internet ] [Subscribe: [EMAIL PROTECTED] ] . . ----- Original Message ----- From: secr <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Tuesday, November 27, 2001 3:34 PM Subject: [mobilize-globally] The World's Economies Slide Together Into Recession > ------ Forwarded Message > From: [EMAIL PROTECTED] > Reply-To: [EMAIL PROTECTED] > Date: Tue, 27 Nov 2001 08:34:42 -0500 (EST) > To: [EMAIL PROTECTED] > Subject: [anti-bush-league] NYTimes.com Article: The World's Economies Slide > Together Into Recession > > > This article from NYTimes.com > has been sent to you by [EMAIL PROTECTED] > > > /-------------------- advertisement -----------------------\ > > > <!--OAS SETUP="@Right2"--><!--OAS AD="Right2"--> > > \----------------------------------------------------------/ > > > The World's Economies Slide Together Into Recession > > November 25, 2001 > > By JOSEPH KAHN > > > > > WASHINGTON, Nov. 22 - With American economic malaise > spreading as seamlessly as the technology- driven surge > that preceded it, many economists now agree that the world > is suffering its first recession in two decades and that > recovery may come more slowly than once expected. > > The common slump may be revealing a dark side to the > increasing economic integration of the last decade. The > gyrations in cross-border trade and investment - even in > business and consumer confidence - show that nations are > responding in like fashion in times of trouble, just as > they responded in the same way to the boom years of the > late 1990's. > > By almost all estimates, the world has entered a recession, > meaning that growth this year will fall below the 2.5 > percent annual rate that the International Monetary Fund > defines as the breaking point between economic progress and > slippage. > > While the vast majority of economic activity still takes > place within national borders, the world has become a more > cohesive place in recent years. European reinsurance > companies, which provide insurance to insurers, suffered > heavily from the Sept. 11 attacks in New York, for example. > The German conglomerate DaimlerChrysler is at least as > sensitive to swings in auto sales in the American market as > those at home. Taiwanese semiconductor makers shed jobs the > moment computer sales decline in the United States. > > The United States economy has shown tentative signs of > stabilizing, as the number of people filing for > unemployment insurance declined for the fourth straight > week and consumer confidence inched ahead. But weakness > among America's major trading partners could help delay a > full recovery until the middle of next year, some > economists say. > > East Asian economies are shrinking in the second half of > this year, led by Japan's deepening economic crisis. Mexico > and Canada followed the United States into recession, and > their woes have spread to Argentina and Brazil. Some > economists say Germany's worsening performance - its > economy slipped into reverse in the third quarter, the > latest statistics show - could drag most of Europe into > negative territory. > > "One by one, every major country is tipping into a rare and > possibly lethal recession," said Stephen Roach, chief > global economist at Morgan Stanley in New York, who has > been predicting a worldwide slump since early in the year. > "It is far-reaching and deep, and much of that has to do > with the fact that we've become much more interconnected." > > If the trend holds, the United States, Japan and Europe - > considered the three main engines of growth - are likely to > see their first collective contraction since the oil price > shock of the mid-1970's. Many forecasters now say they see > problems continuing until the second half of 2002, then a > relatively modest rebound. > > Global trade increased rapidly throughout the 1990's, as > multinational companies shipped products through a global > supply chain that minimized costs and maximized efficiency > with little regard for national borders. Trade accounted > for about 17 percent of economic activity 20 years ago > compared with about 26 percent today, according to the > Organization for Economic Cooperation and Development, the > Paris- based organization of the world's most developed > countries. > > But while cross-border commerce grew by nearly 13 percent > in 2000, a record increase, it has declined so far this > year, the first such drop since the deep recession of the > early 1980's. Trade has gone from fueling global prosperity > to detracting from growth everywhere. > > "It's clear that the global trade has become an extremely > powerful transmission channel" for economic trends, said > Val Koromzay, director of country studies for the O.E.C.D. > "We are only beginning to understand the degree to which > economies have become synchronized." > > The behavior of multinational companies may offer some > answers. Large corporations tend to coordinate their > operations, however far- flung, based on the company's > overall financial health. > > Executives say that companies often react to a change in > fortunes in a leading market - say, the United States - by > cutting investment and employment in Germany and Hong Kong, > often ignoring differences in economic performance in the > three places. > > The statistics back up the idea that companies are quick to > react globally. Led by a steep decline in capital flows to > emerging markets, businesses appear to be cutting > investments abroad faster than at home. > > They have also become far less eager to buy one another. > Mergers and acquisitions around the world are off 55 > percent so far this year compared with 2000, according to > Morgan Stanley. That is a sharp contrast to the milder > recession of the early 1990's, when Japanese companies were > still expanding rapidly in the United States, Europe and > Southeast Asia. > > Partly because no major economy has managed to stay > vibrant, the Organization for Economic Cooperation and > Development reported this week that its 30 member nations > would probably experience reduced output in the second half > of this year. It also reduced its growth forecast for next > year by two-thirds, to 1 percent from almost 3 percent . > > The worldwide downturn gives some ammunition to critics of > global integration, many of whom have argued that the trend > toward corporate expansion and unfettered flow of goods and > money will not foster sustained prosperity. > > Nations that enthusiastically courted foreign multinational > investment and followed American advice to keep their > markets open and their currencies freely convertible have > suffered most. Singapore, Taiwan, Mexico and Argentina are > among the nations that were considered economic models in > the late 1990's that are now experiencing deep recessions. > > China, Russia and India have tended to move more slowly > toward integrating themselves into the global economy, and > they have suffered much less in recent months. > > On the other hand, the fact that a decline in trade and > investment appears to have had a pronounced drag on global > growth suggests that the above-average expansion of the > late 1990's had more to do with rapid integration than > critics acknowledged at the time. > > "There is an underlying trend toward more synchronization" > that accounts, at least in part, for today's broad > downturn, said Kenneth Rogoff, chief economist of the > International Monetary Fund. But he said that the same > forces would raise average growth rates over the long haul. > > > "There's no question that we would be worse off without > it," Mr. Rogoff said. > > While most economists agree that that nations should > integrate more, many say the risks are also becoming > clearer. Investors who bought surging Internet stocks a few > years ago thought they had the potential to earn > extraordinary returns, but they suffered unusually steep > losses. Nations can also follow the herd. > > The clearest sign of that is the technology boom, which > gripped Finland, Israel, Hong Kong and Chile with the same > fervor it excited in the United States. The collapse of the > Nasdaq became a common shock - not unlike the oil shock of > the 1970's - that punished risk-takers everywhere. > > Porous borders and open competition have also proven to be > a double- edged sword. Prices of the most highly traded > goods have been in general decline for several years. That > has generally been good news for consumers. But it has left > businesses struggling to earn reliable profits on both > commodities and manufactured goods. > > With the notable exception of oil, which does not respond > freely to market forces, prices of commodities like coffee > and copper, as well as simple manufactured goods like > clothing and shoes, and some highly traded industrial goods > like steel, have been slipping steadily. This deflation has > already overtaken Japan and other Asian nations. It is > lapping the shores of the United States and Europe. > > While few expect lasting deflation in this country, the > United States has begun to see at least a temporary fall in > prices. The American producer price index declined at a 1.6 > percent rate last month, its steepest drop in many years. > Consumer prices also slipped in October. > > Falling prices tend to discourage economic activity because > businesses see less likelihood of earning high returns if > they have to cut prices. Consumers defer purchases if they > think they may be able to buy the same item for less in the > future. > > Ultimately, economics can be a self-fulfilling prophecy. > The world is unlikely to fall into a deflationary spiral > unless people believe that will happen. But even psychology > can be borderless. > > While the Bush administration is worried about how > Americans and Arabs are getting divergent information about > the war in Afghanistan, economists are more focused on the > fact that the vast majority of people around the world get > roughly the same take on events. French, Spanish, Thai and > Korean people have reacted in much the same way to the > attacks of Sept. 11. Air travel and tourism are down > everywhere. > > Mr. Rogoff said he saw a high correlation between business > and consumer sentiment across the world that might sway > economic performance even more than other common links, > like trade and finance. > > "One reason we have become more synchronized," he said, "is > because we're all watching CNN." > > http://www.nytimes.com/2001/11/25/international/25RECE.html?ex=1007868082&ei=1 > &en=7aa1d9d938479843 > > > /-----------------------------------------------------------------\ > > > <!--OAS SETUP="@Right2"--><!--OAS AD="Right2"--> > > \-----------------------------------------------------------------/ > > > HOW TO ADVERTISE > --------------------------------- > For information on advertising in e-mail newsletters > or other creative advertising opportunities with The > New York Times on the Web, please contact Alyson > Racer at [EMAIL PROTECTED] or visit our online media > kit at http://www.nytimes.com/adinfo > > For general information about NYTimes.com, write to > [EMAIL PROTECTED] > > Copyright 2001 The New York Times Company > > Yahoo! Groups Sponsor > ADVERTISEMENT > > To unsubscribe send an email to: > [EMAIL PROTECTED] > > |==*==|==*==|==*==|==*==|==*==|==*==|==*==|==*==| > > "A man who was elevated to the presidency despite losing the > popular vote is now leading the American people into a war of > unknown dimensions and duration, and claiming that this war, > allegedly for "freedom and democracy", requires the suppression > of basic democratic rights at home." Patrick Martin > _Bush's war at home: government censorship, secrecy, & lies_ > > Citizens For Legitimate Government: http://www.legitgov.org/ > The American Civil Liberties Union: http://www.aclu.org/ > Electronic Frontier Foundation: http://www.eff.org/ > an alternative to mainstream news: http://www.alternet.org/ > > > > Your use of Yahoo! Groups is subject to the Yahoo! 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