Wake Up!# Stock
c*r
1 楼
There are many important differences between Japan's experience and the U.S.
today. But both instances, along with the Great Depression, are classic
examples of credit booms turned bust. These are fundamentally different from
garden-variety recessions and expansions triggered by inventory or demand
shocks.
They are supercycles in terms of both time frame and scope. They are marked
by asset-price bubbles that, upon reversal, trigger financial crises as the
banking system struggles to stay afloat. And importantly, these financial
crises tend to occur at the start—not end—of the debt-shedding process
that can take years or even decades fully to play out.
Somewhere in the early innings of this debt-shedding process, then, is where
the U.S. stands today. And it is why investors and policy makers shouldn't
overreact to bouts of bright economic news, like the retail-sales strength
in September. The economy is hardly on the verge of a break-out performance.
Any flurries of strength, in fact, only risk ushering in periods of renewed
weakness.
today. But both instances, along with the Great Depression, are classic
examples of credit booms turned bust. These are fundamentally different from
garden-variety recessions and expansions triggered by inventory or demand
shocks.
They are supercycles in terms of both time frame and scope. They are marked
by asset-price bubbles that, upon reversal, trigger financial crises as the
banking system struggles to stay afloat. And importantly, these financial
crises tend to occur at the start—not end—of the debt-shedding process
that can take years or even decades fully to play out.
Somewhere in the early innings of this debt-shedding process, then, is where
the U.S. stands today. And it is why investors and policy makers shouldn't
overreact to bouts of bright economic news, like the retail-sales strength
in September. The economy is hardly on the verge of a break-out performance.
Any flurries of strength, in fact, only risk ushering in periods of renewed
weakness.
