The Great Debate UK
from The Great Debate:
Japan: The mother of all miserable recoveries
(James Saft is a Reuters columnist. The opinions expressed are his own)
Investors met the news that Japan's economy has emerged from a bone-breaking recession calmly and rationally: they sold shares quickly and in large amounts and made bets that consumer prices are going to be falling for years to come.
That's because Japan's recovery, coming as it does after a global bubble in the production of what I call, for lack of a more technical term, "stuff," is really not sustainable.
The fact that the consumer portion of the recovery is only a reflection of income transfers from government to individuals isn't very encouraging either.
More importantly, given that hopes for Japan were low anyway, the vulnerability of its recovery point to some important challenges the nascent rebounds in the U.S. and Europe now face.
from The Great Debate:
Stress test the consumer
-- Christopher Swann is a Reuters columnist. The views expressed are his own --
People can be divided into three classes, it has been said: the haves, the have-nots and the have-not-paid-for-what-they-haves. The prevalence of the third category may be the biggest single source of vulnerability for the U.S. recovery.
A stress test of the consumer could reveal more distressing results than the one conducted on the banking system.
from The Great Debate:
The recovery will feel familiar: lousy
-- James Saft is a Reuters columnist. The opinions expressed are his own --
The good news that the United States cannot keep contracting the way it has been is not to be confused with a return to robust expansion, a point financial markets eventually will grasp.
Consumers, the mainspring of the U.S. economy, will see the cash from government stimulus slip through their fingers but will still face very ugly personal balance sheets and a brutal job market. Their party is not going to get started again for some time.
