Decoupling theory: another down the drain

josephpalazzo

It used to be thought that with the emerging economy from China and India, the rest of the world would decouple from the American economy. To wit: five straight years of growth of around 5 percent. But with the recent subprime saga, it is now believe that if the US goes down, so will the rest of the world.

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>>Funds and banks around the world have taken hits because they purchased bonds, or risk related to bonds, backed by bad home loans, often bundled into financial instruments called collateralized debt obligations, or C.D.O.’s.

The losses have often surprised the investors, and in some cases the funds and the executives of the banks, who were unaware of the extent of their risks.

The crisis extended as far as the $2.2 trillion money market that finances the day-to-day operations of businesses, as investors wondered whether the underlying assets were sound. “It’s amazing how much ignorance and fear are out there,” said Kevin Davis, a professor of finance at the University of Melbourne. <<

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So are we at the cusp of a world recession? What says you...

josephpalazzo · Posted: Fri Aug 31, 2007 9:35 am Post subject:

*bumps*

CET · Posted: Fri Aug 31, 2007 11:49 am Post subject:

Balderdash!

Our economies are becoming interdependant, but not necessarily codependant. There's tons of ignorance and fear involved with international trade, and I have not heard any arguments against international trade that are actually grounded in economics.
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josephpalazzo · Posted: Fri Aug 31, 2007 12:10 pm Post subject:

So are we decoupled or not?

CET · Posted: Fri Aug 31, 2007 12:42 pm Post subject:

josephpalazzo · Posted: Fri Aug 31, 2007 2:03 pm Post subject:

Make trade, not war...

CET · Posted: Fri Aug 31, 2007 3:23 pm Post subject:

Jason_Harvestdancer · Posted: Fri Aug 31, 2007 3:47 pm Post subject:

Certainly worked in 1914.
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Visit my wife's art gallery

Moloth · Posted: Fri Aug 31, 2007 4:11 pm Post subject:

CET · Posted: Tue Sep 04, 2007 11:26 am Post subject:

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