As was the case back in 2007, what folks call “decoupling” is really just “lags”.
There is no global decoupling in a world whose economies, supply chains and
financial markets are so interwoven as is the case today. Every U.S. recession in
the past followed a financial or economic shock — and there is little doubt that
we endured one during the late summer. Whether it is rooted domestically or
inherited from abroad is irrelevant. There was an 11 month lag in 2007. There
was a 12 month lag in 2000. There was a 12 month lag in 1990, a 7 month lag
in 1982 and a 3 month lag in 1980. Historically, it takes an average of 9 months
before a violent spasm in the financial economy begins to impinge on the real
economy. So considering that the latest spasm occurred during the summer, it
may not be until we are into Q1 that we will start to see the real economy begin
to show more serious signs of strain.
As was the case back in 2007,
what folks call “decoupling” is
really just “lags”. There is no
global decoupling in a world
whose economies, supply
chains and financial markets
are so interwoven as is the
case today
---This and the last DR excerpts from yesterday
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