注册 登录  
 加关注
   显示下一条  |  关闭
温馨提示!由于新浪微博认证机制调整,您的新浪微博帐号绑定已过期,请重新绑定!立即重新绑定新浪微博》  |  关闭

谢国忠

谢国忠博客:只说出心中真相

 
 
 

日志

 
 
关于我

麻省理工学院经济学博士

个性介绍: 1960年出生于上海,1983年毕业于上海同济大学路桥系,1987年获麻省理工学院土木工程学硕士,1990年获麻省理工学院经济学博士。同年加入世界银行,担任经济分析员。在世行的五年时间,谢国忠所参与的项目涉及拉美、南亚及东亚地区,并负责处理该银行于印尼的工商业发展项目,以及其他亚太地区国家的电讯及电力发展项目。1995年,加入新加坡的Macquarie Bank,担任企业财务部的联席董事。1997年加入摩根士丹利,任亚太区经济学家,2006年9月辞去该职务。

网易考拉推荐

谢国忠:核子寒冬?   

2008-10-12 17:50:12|  分类: 言论 |  标签: |举报 |字号 订阅

  下载LOFTER 我的照片书  |
谢国忠:核子寒冬?

We are witnessing, day by day, a hard landing of the global economybefore our eyes. The chaotic failure of Lehman Brothers triggered thepanic that is forcing deleveraging in markets on a gigantic scale. TheTreasury and the Fed have failed miserably in their handling of thecrisis. Unless they come out with effective and decisive measures soon,the United States could end up like Indonesia a decade ago: financialchaos leads to economic chaos that leads to socio-political chaos-aself-sustaining vicious cycle that would impoverish the country.



Thearticle below was written one week ago and just came out in the currentissue of Caijing Magazine. It makes the case that, regardless ofeffective financial bailouts, an economic crisis is inevitable. TheAnglo-Saxon economies would contract like East Asian economies in 1998by 2-5% in 2009, and would stay weak for years afterwards likeSoutheast Asia after 1998.



Emerging economies have tofigure out how to grow on their own, or they would stay weak alongside.The key is to start a South-South trade and investment boom. Oil-richcountries should invest in China and India, buy consumer and capitalgoods from them, and sell resources to them. This is probably the onlycase for the next bull market. Cheers. Andy





Nuclear winter?



Eventhough the global financial crisis is far from over, a global economiccrisis seems to be unfolding already. The recent economic data suggestthat the global economy is decelerating rapidly, probably contractingsequentially already. Even though the US Congress reluctantly passedthe $700 bn rescue plan for the Wall Street, stock markets are notcelebrating that and are already focusing on the economic downside.Many investors are bearish enough to talk about a 'nuclear winter' forthe global economy. How bad could it be?



Ten years ago,the Asian Financial Crisis began in the spring of 1997, a severeeconomic crisis followed in 1998. Asian stock markets contracted byhalf to two thirds from peak to bottom between 1997-98 and manycurrencies were devalued by one third to half. In US dollar terms,Asian asset prices plunged by 70-90%. Following the severe wealthdestruction, most economies contracted by 5-10% in 1998. Could theglobal economy follow the same pattern this time?



TheAnglo-Saxon economies would follow a similar pattern to what East Asianeconomies experienced one decade ago. Australia, the UK, and The UScould contract by 2-5%, less than East Asian economies then due totheir large service economy and better social welfare. Nevertheless,the contraction of such magnitude for large developed economies has notoccurred since the Second World War. Hence, using 'nuclear winter' todescribe the coming economic downturn may not be an exaggeration.



TheAnglo-Saxon economies account for over one third of the global economyand have been the demand driver through their big current accountdeficits. Their downturn will drag down their trading partners.Euro-zone, for example, is already showing weakness. The strong eurohas already taken its toll. The weak dollar has allowed the US to gainmarket share to stabilize its economy so far. The unfolding USrecession will cut demand for European products in its largest market.The combination means a big recession for the euro-zone. Its largesteconomy, Germany, in particular, will experience a severe recession dueto its export reliance.



Like Germany, Japan's economyis closely intertwined with the US's through the trade linkages. Eventhough China is the largest trading partner for Japan, a big share ofits exports to China is processed for re-exports to the US market.Japan will likely suffer a recession like Germany.



China'sexports would suffer like everyone else's. China's exports, 40% of GDPin nominal value and probably 25% of GDP in value added, may decline in2009 for the first time in three decades. In the previous downturns,China was small and cheap enough to grow its exports through marketshare gains. But, China is now the largest exporter in the world.Market share gain couldn't offset global downturn anymore.



Thebursting of the domestic asset bubbles is adding to the impact of theexport downturn. The stock market bubble has already burst. Its wealtheffect on demand, especially for property and auto, is much larger thenexpected. The property bubble seems bursting too. Its economic impactwould be much bigger than the stock market. The measures to boostproperty market are unlikely to reverse the trend. The globalenvironment is triggering hot money to leave China. The weakeningexports will add to the liquidity drain out of China. The chances arehigh that the property bubble will burst for good this time.



Exportsand property have contributed to most of China's growth in this cycle.I do expect a major push to accelerate infrastructure construction in2009. But, it won't reverse the downward trend. The fiscal pump-primingwon't surpass 3% of GDP. Exports and property have contributed to GDPgrowth by 5-6 percentage points per annum in this cycle. If theycontract, say, by 2-3 percentage points of GDP, the effect on GDPgrowth rate is 7-9 percentage points. Fiscal stimulus simply can'toffset their impact. China's growth rate in 2009 will likely reach aten-year low.



The developed economies account for twothirds of the global economy, and emerging economies one third innominal terms. If the developed economies contract by 1.5-2%collectively in 2009 and emerging economies grow by 2-5%, the globaleconomy as a whole could contract for the first time in half a century.If any downturn fits the description of 'nuclear winter', this onewould.



In addition to depth, duration of the downturncould also be much longer than the ones before. In 1999, East Asianeconomies staged a V-shaped recovery on an export boom due to a robustUS economy and currency devaluation. With all major economies down, noone could stage a quick recovery on exports. Devaluation wouldn't workthis time. Repairing balance sheet can only come from demand reductionrather than income growth. Restoring the economic health will be timeconsuming.



What about the $700 billion bailout package?The market was expecting its passage to stabilize financial markets andstave off a recession. The package may stabilize the financial system,i.e., preventing bankruptcies of large financial institutions. But, itcouldn't restart lending, as hoped, to keep the real economy afloat. InAnglo-Saxon economies (Australia, UK, and US) lending to consumers hadsustained their consumption boom. The lending was made possible byrising property price, which made property an effective collateral andincreased household's debt appetite for boosting consumption due to thewealth effect. Now property prices are falling. It is hard to imaginethat the households want to borrow more for consumption when theirwealth is vanishing. Even if they do, banks wouldn't lend to them asthey lack good collaterals. Hence, if the $700 bn cash is swapped fortoxic assets on the balance sheets of the banks, the money will remainthere instead of lent into the real economy. Some sort of liquiditytrap seems likely.



Central banks around the world maycut interest rates soon, despite high inflation. The explanation isthat rate cuts are needed to boost demand and the economic downturnwill bring down inflation. Neither is true. Rate cuts stimulate demandby encouraging borrowing by businesses or households to boost demand.When household balance sheet is so damaged, low interest rate doesn'twork its magic. We saw this drama in Japan ten years ago. Credit demandwill only come back when the household sector has repaired its balancesheet through cutting leverage. That is a long process.



Weakdemand, however, wouldn't erase inflation like in Japan ten years ago.Japan had a large trade surplus. Its demand weakness caused its tradesurplus to remain high and the yen strong, which kept inflation down.Energy and food prices were low due to demand crash in the formerSoviet block. The prices of manufacturing products were falling due toChina's emergence in global trade. And IT was boosting productivity,especially in the service sector.



Today's environmenthas totally changed. First, despite the recent sharp fall, energy andfood prices remain elevated due to supply and demand issues. The demandin the ex-Soviet block is rising rather than falling. The demand amongoil exporting countries is especially strong. One source of deflationduring Japan's crisis is gone for good.



Second, theprices of manufacturing products wouldn't fall like before. The demandweakness may cause temporary price decline. But, it is not a trend. Tenyears ago, as multinationals moved factories from Europe, Japan, andthe US to China, there was a trend for prices to converge towardsChina's production costs. That process is over. And China's costs arerising. Together with demand weakness, China's export sector issuffering an unprecedented crisis. It will lead to shrinking of China'sproduction capacity, which would cause prices to rise.



Third,IT is fully integrated into the production side. Its upside forproductivity is quite limited. On the other hand, IT has become themost important tool for entertainment. IT toys have become serious timekillers at work. I think IT is now a drag on productivity.



Hence,on the supply side, the main deflationary forces are gone and the newinflationary ones are around. Energy supply bottlenecks are certainlyinflationary. On the demand side, the economic downturn is certainlydeflationary. Ceteris paribus, inflation may cool off a bit. Butinflation rates won't fall quick enough to remove negative real rates.Australia just cut interest rate by one percentage point to 6%. Otherswill follow suit. Interest rates will probably fall faster thaninflation rates. Hence, negative real rates would remain for a longtime, which would rekindle the prices of energy and gold and boostinflation.



Interest rate reductions are definitely thenext big story. Stock markets may stage a significant rebound soon onthis story. But it would be mis-interpreted just like the bailoutstory. Rate cuts can ease the burden for debtors but won't be able torekindle the economy by increasing credit demand. Credit demand canonly come back when both household and business balance sheets aresound again.



Dollar is coming into center stage again.It has strengthened sharply: Australian dollar ('A$') is down 15%against it, euro down by as much, and pound sterling down by half asmuch. The dollar's bounce is due to unwinding of carry trades. Therapid appreciation of yen against A$, for example, is the bestindicator. The high interest rates in Australia attracted even retailinvestors who borrowed yen at 0.5% interest rate and bought Australiandollar at 7% interest rate. This source of demand kept the value of A$elevated. When Australia poised to cut interest rate, the carry tradeswere unwound quickly, and A$ tumbled. Euro has been another favoritecurrency for carry trades. It has tumbled too.



Dollar'sstrength has had a big impact on the prices of commodities. Manyspeculators have invested heavily in the 'long commodities and shortdollar' trade. As dollar has strengthened, they have unwound theirpositions in commodities too, causing their prices to tumble. As theprices fall, users are cutting their inventories too, reinforcing theprice decline. Some analysts are already arguing for deflation due tothe tumbling commodity prices. While there are many commodities, theones that really matter are energy and agriculture products. I thinkthe prices for both will remain high for years to come. As I arguedabove, the constraints on the supply side and demand in emergingeconomies will favor high prices for both.



The dollarstrength will continue for three to six months. As the US economycrashes, so would its imports. Its trade deficit may fall quick enoughto strengthen the dollar further. But, the monetary loosening measureswill come back to bite afterwards. The Fed cares more about the economythan inflation. Its policy is biased towards loosening. The dollar willdecline again in 2009. Indeed, when market shifts its attention to theballooning debts of the Federal government, the dollar could have abigger crisis than the last one.



As the technicalfactors run their course, speculators will come back into energy andgold, noticing declining interest rates. Real interest rates arealready negative. Rate cuts could increase negative real rates. Papercurrency is depreciating in real value. It is rational for investors tobuy value-preserving commodities like energy and gold. The bullishstory for energy and gold may last for a decade. Of course, they willfluctuate, as the current correction demonstrates. They will remaingood assets in the era of inflation.



In addition tobailouts and rate cuts, more radical measures are coming. When acentral bank expands its balance sheet, it loosens monetary policy.This can be accomplished by cutting interest rate, when there is demandfor money, or buying government papers ('quantitative easing') whenthere is a liquidity trap. When it decreases the asset quality on itsbalance sheet, it loosens the monetary condition also. Japan did bothduring its long stagnation.



The Fed is already talkingabout buying commercial papers that businesses issue. The market forcommercial papers is pretty much dead now. The risk premium as pricedin the credit default swap ('CDS') market is ridiculously high forbusinesses to function normally. If the Fed purchases the papersdirectly, it essentially substitutes the market as lender tobusinesses. The high risk premium essentially means that investorsdon't trust businesses, because they can't understand their balancesheets. The Fed could step in to take on this risk.



Centralbanks can buy government bonds to monetize national debts. The fiscalbalances will be amazingly bad next year. The US's budget deficit couldbe 4% of GDP in 2008 and 6% of GDP in 2009, not counting the bailoutcosts. It may have to issue $3 trillion of new papers into the treasurymarket, or 30% of the stock. The market may not be able to absorb. Ifthe Fed steps in to buy, it is equivalent to printing money to fundfiscal spending.



When it comes to the 'inflation ordeflation' debate, we should consider who Ben Bernanke is. He has spenthis lifetime researching ways to stop deflation, i.e., finding new waysto printing money. He is not known as 'Helicopter Ben' for nothing.When push comes to shove, he will really drop money out of a helicopterto stop deflation. With Bernanke at the helm of the Fed, we shouldworry about inflation, not deflation.



The creativemonetary measures that will come can stabilize the business sector byimproving their balance sheet, but won't prevent the recession. Theproblem is that the household sector needs to decrease leverage. Thedemand for credit is just not there when wealth is evaporating likenow. The total paper wealth in the world may have declined by $15trillion in stocks and properties. A similar amount could be lost inthe next 12 months. It is not possible to get consumers to spend withwealth destruction of such magnitude.



After therecession, I don't see how the global economy could resume robustgrowth quickly. The debt-driven Anglo-Saxon consumption has powered theglobal economy for years. Investors won't lend to Anglo-Saxon consumersfor many years. Memory doesn't go away so quickly.



Using'nuclear winter' to describe the coming downturn is probablyappropriate. The depth and duration of this downturn are certainly themost severe since the nuclear age dawned. The biggest downturn in thenuclear age should be described as 'nuclear winter'.


  评论这张
 
阅读(1858)| 评论(7)
推荐 转载

历史上的今天

评论

<#--最新日志,群博日志--> <#--推荐日志--> <#--引用记录--> <#--博主推荐--> <#--随机阅读--> <#--首页推荐--> <#--历史上的今天--> <#--被推荐日志--> <#--上一篇,下一篇--> <#-- 热度 --> <#-- 网易新闻广告 --> <#--右边模块结构--> <#--评论模块结构--> <#--引用模块结构--> <#--博主发起的投票-->
 
 
 
 
 
 
 
 
 
 
 
 
 
 

页脚

网易公司版权所有 ©1997-2017