ECRI’s Lakshman Achuthan says the economy is slowing:
[gigya src=”http://i.cdn.turner.com/money/.element/apps/cvp/4.0/swf/cnn_money_384x216_embed.swf” type=”application/x-shockwave-flash” bgcolor=”#000000″ allowfullscreen=”true” width=”384″ wmode=”transparent” height=”356″ flashVars=”context=embed&videoId=/video/news/2012/02/29/n_ecri_lak_recession_jobs.cnnmoney”]
It is not only the U.S. economy that is in peril right now. …Europe is struggling to prevent the sovereign debt problems of its peripheral Euro-zone economies from spiraling into a full-fledged banking crisis… Meanwhile, China and other large emerging economies… are beginning to experience slowdowns…Nor is renewed recession the only threat we now face. Even if a return to negative growth rates is somehow avoided, there will remain a real and present danger that Europe and the United States alike fall into an indefinitely lengthy period of negligible growth, high unemployment and deflation, much as Japan has experienced over the past 20 years following its own stock-and-real estate bubble and burst of the early 1990s.
via Roubini: Moving From the Post-Bubble, Post-Bust Economy to Growth | Credit Writedowns.
Many ask whether high-income countries are at risk of a “double dip” recession. My answer is: no, because the first one did not end. The question is, rather, how much deeper and longer this recession or “contraction” might become.
…… the dire consequences of soaring risk aversion, against the background of such economic fragility. In the long journey to becoming ever more like Japan, the yields on 10-year US and German government bonds are now down to where Japan’s had fallen in October 1997, at close to 2 per cent. Does deflation lie ahead in these countries, too? One big recession could surely bring about just that. That seems to me to be a more plausible danger than the hyperinflation that those fixated on fiscal deficits and central bank balance sheet find so terrifying.
via Martin Wolf|Struggling with a great contraction – FT.com.
