The article that I've clipped from today's BBC News looks like it was written by Nouriel Roubini last summer. To have some idea of where this mess is probably headed, read recent Roubini. But, if instead of just sniffing at it, you prefer to take it intravenously, read this from Prudent Bear.
What notes of good cheer do I have to add to the opinions of these well qualified purveyors of doom? I would only point out discreetly that although since WWII there have been recessions, slow-downs and scares, nothing this bad has ever loomed large under the leadership of someone the entire world considers a hopeless idiot-fool and whose measure is daily taken by every tinpot dictator and autocrat in the world.
What Bush has done and is daily doing in Iraq, combined with the lack of an effective response by America's institutions... Reelecting him, for example... The images of Katrina etc, etc, have caused many to entertain grave doubts about America's health and power: social, military... everything except the economy.
Most of the world's conservatives, horrified by Bush's deflation of America's mojo, invoke the US economy the way someone with a wasting disease might invoke Saint Jude Thaddeus. If the economy tanks too, the feeling of existing in a vacuum for those all over the world who owe their safety and prosperity to holding the American coat may be extreme, and that in turn might set off chains of events, all of them disagreeable and difficult to predict. DS
World stocks tumble on US fears – BBC News
European stocks have joined a global sell-off after concerns about the US economy and mortgage industry hurt markets in Asia and dented Wall Street. The UK's FTSE tumbled 110.4 points, or 1.8%, to 6,050.8. Earlier, Japan's Nikkei index closed 2.9% lower, and New York's Dow Jones index ended down 2%. Indexes in Hong Kong, Malaysia, India and Australia fell more than 2%. The sell-off comes as stocks were starting to recover from a sharp slump that rocked markets late last month. Analysts said that market volatility was likely to continue, and any recovery would be short-lived. Although analysts said Asia's leading economies remained fundamentally strong, markets across the region are particularly sensitive to signs of a possible economic slowdown in the US. The US economy, by far the world's biggest, is a key export market for Asian companies. This latest round of selling has been sparked by concerns over the US sub-prime mortgage market. Sub-prime lenders target consumers with poor credit histories and they have been hit by an increase in defaults and bad loans. Figures have shown that late mortgage payments and home repossessions in the US had hit their highest level since records began. New Century, the second-biggest sub-prime mortgage lender in the US, is seen by many observers to be close to bankruptcy and the fear among investors is that this will ripple out into more stable parts of the economy. "If the US sub-prime mortgage problems get worse, it could begin to hurt US consumers, and that would be very hurtful for exporters," said Kim Yung-min, a fund manager at SH Asset Management in Seoul. "This month could be very bad," he added. Wall Street's slide on Tuesday also gained momentum from a US Commerce Department report that showed retail sales rose at a lower-than-expected rate of 0.1% in February, suggesting consumer spending could be slowing down.