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All the Perl that's Practical to Extract and Report

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  • There's drag and then there's drag.

    We're in the middle of a short-term global credit shock, at the start of a medium-term energy and food shock, and we've still got unquantifiable environmental shocks ahead of us which will reflect at the very least in the insurance and reinsurance markets.

    With food prices for most stables linked to energy prices, the prospect of a simultaneous energy/food shock (two of the most fundamental products) means the entire world is moving in a recessionary direction anyways.

    The question being asked is not "Will the US have an impact" but "Can we keep the US impact on us SMALL ENOUGH to only represent a tolerable slow-down".

    In some areas, especially energy, they would WELCOME a slow-down to give the world some more time to adjust to higher energy prices.

    Australia, at the centre of a once-in-a-century minerals boom, is currently bursting at the seems, with record-low unemployment, major inflationary pressure (of the traditional wage inflation kind) and personal I suspect the treasury would appreciate a break.

    It's getting so tight here that DESPITE the government having zero debt massive surpluses, newspaper economics are pleading the government to NOT give out tax cuts they promised during the election, to try to keep inflation under control.

    So far, I don't see any really obvious examples of major fallout from the US economic collapse (granted, it's early days yet). Growth numbers are certainly tightening around the world. But so far it all looks (at a global scale, relatively containable).

    Assuming this is as bad as it gets of course.

    But those US numbers suggest we're moving into a new more dramatic phase now, and it remains to be seen what impact that will have.

    Complete "decoupling" is probably a myth, but if we get away a bit from the whole "when the US sneezes" problem, we'll probably still see a slowdown mild enough to be tolerable.
    • "But those US numbers suggest we're moving into a new more dramatic phase now, and it remains to be seen what impact that will have."

      That's the dangerous thing about numbers, once people believe them they start to become real. People are behind those numbers, and people always have an agenda or a bias, no matter how subtle.

      It is interesting to follow all of the economic speculation in the news. The one thing that seems to be missing from the equations though is that surprising adaptability that homo sap