In 1997 some observers feared an impending global recession as result of the headwinds stemming from the Asian Financial Crisis. However, within two years, those fears had dissipated and were replaced with new concerns of irrational exuberance. ... Read full article
To be sure, the U.S. economy is in the midst of a painful structural adjustment process. And, not surprisingly, the consumer is at the epicenter of the crisis. After years of excess consumption, overextended consumers will have to significantly reduce consumption and increase savings to restore their financial health. Moreover, since consumer spending constitutes 70% of GDP, many economists fear that this “deleveraging” process may plunge the U.S. economy into a deep and protracted recession. ... Read full article