The Economist A Bric hits the wall

[Chinese-Dragon]

Nationalism online: Backfired | The Economist

I never even commented on that article, let alone called it anything.

In fact when I read that article before, I remember agreeing with most of it.

 

[Ignited Mind]

China, India, and Brazil are all slowing down simultaneously, plunging the entire world into economic crisis.

America is still recovering from the Great Recession and Europe is melting down, yet from a global perspective, the economy has never been as healthy or prosperous. The world economy enjoyed amazing growth from 2002-08, took a small dip in 2009, and then went back to growing. Sadly the good news seems to be coming to an end in Brazil, China, and India, and that’s horrible news for us.

Mercedes-Benz, Brazil’s No. 2 maker of trucks and buses, announced early Wednesday morning that it would be laying off 1,500 workers in Latin America’s largest market. Volvo AB has also announced a temporary halt to Brazilian truck production. The first half of May saw a staggering 22 percent year-on-year drop in Brazilian heavy vehicle purchases. Overall economic growth slowed last year to a bit under 3 percent, and Brazil’s finance minister recently had to cut the 2012 growth forecast to a number many private forecasters think is still too high. And problems for Brazil aren’t just problems for Brazil, as neighboring Argentina (and other smaller countries like Uruguay and Paraguay) rely on Brazil to buy their exports.

More alarmingly, both China and India are running into trouble. Catch-up growth, in which a poor country improves its public policy, begins importing foreign production techniques, and gets rapidly richer is a time-honored Asian tradition. We saw it in Japan, then South Korea, then Taiwan and other Asian “tiger” economies in the 1980s and ’90s. China and India are so large that their catch-up growth was able to raise the entire worldwide rate of economic growth. That’s why the world economy kept growing through the 2008-09 financial calamity.

The slowdown in India, which remains a much poorer country than China, is very alarming. Even as its economy surged recently, the country did little to raise the productivity of the agricultural sector in which most Indians work. The Indian government had a promising idea on that score: to open the retail sector to foreign firms such as Wal-Mart and Carrefour. Large international chains have experience working with farmers in more productive countries and could be the mechanism for transferring better methods to Indian growers. That could have meant higher agricultural wages and better living standards for India’s urban poor. But faced with pressure from incumbent retailing interests, the government backed down from the plan. That was both a lost opportunity and a blow to the confidence of foreign investors.

And then there’s China. Most of China’s growth takeoff in the aughts was powered, famously, by exports to rich countries—especially the United States. When we stumbled into recession, China needed to change. And change it has. The country’s total trade surplus is now modest enough that it runs deficits in some months.

But rather than rebalancing to a more conventional consumer-focused economy, the Chinese government weathered the recession by engineering an unprecedented boom in domestic real estate and infrastructure investment. Investment is a good thing, but there was simply no way for the country to sustain double-digit growth in investment. Inevitably, the real estate market has started to unravel and even though the official GDP figures still look strong, other data less amenable to manipulation such as electricity demand and railroad shipments show a sharp slowdown.

Which brings us back to Brazil’s trucks. The world’s developing economies are now tightly linked. China’s boom has been excellent news for Brazil’s exports of airplanes and agricultural products, and, as we’ve seen, Brazilian growth has powered Argentine exports. That in turn has produced a market throughout the region for local car and truck production. Commodity exports have also spurred Africa’s best decade on record. The continent is such an economic minnow that its solid growth has gone largely unnoticed, but in terms of human welfare, increased incomes in the poorest part of the world have meant huge gains, including a very rapid decline in child mortality.

The Chinese growth dynamo that rescued the world economy after the financial crisis isn’t going to reappear this time around. That means the stakes as Europe confronts the ongoing meltdown of its banks and America faces the prospect of a new debt ceiling standoff are higher than ever. The bad economic news of 2008-09 came with the major silver lining that growth continued in the places that needed it most. This time around, if the rich countries can’t get our act together, the whole world will spiral into recession.


Global economic crisis: China, India, Brazil are slowing down, plunging world into possible recession. - Slate Magazine

China's 2011 GDP growth slows to 9.2% | Economy | chinadaily.com.cn

Sharp Slowdown in Asia Sounds Ominous Warning


Slowdown in Asia Manufacturing Activity Sounds Warning - WSJ.com

Slowdown worsens as China cools, Europe sinks


Slowdown worsens as China cools, Europe sinks

 

[Chinese-Dragon]

^^^ You spammed those same articles in the previous two pages of THIS thread.

 

[SpArK]

I never even commented on that article, let alone called it anything.

In fact when I read that article before, I remember agreeing with most of it.

It was mere symbolic .. nothing about ur comments..

You are a sweet friend .. i know you wont comment on that one.

 

[Ignited Mind]

Moral of the story? It's happening all around the world.

...and this is probably the 5th(?) thread about India.

Call me a troll or whatever champ, you guys can't resist taking cheap potshots either. So ain't no holier-than-thou, mate.

Obviously it must be the INDIAN TROLL because there are no Pakistani or Chinese troll. No. None. Not one. Not biologically possible.

So just quit it, chump and spare me the homilies and enjoy the party while the entire world's going down.

ATB!

Euro zone unemployment hits record high, seen rising


Euro zone unemployment hits record high, seen rising | Reuters

 

[Developereo]

Also, according to the latest Indian polls (from the other thread)... the "regional parties" in India are getting MUCH stronger, at the expense of the main two parties. To the point where they will be instrumental in forming the next government.

So the main complaint at the moment regarding India's economy, policy paralysis, it looks set to continue even AFTER the 2014 elections.

Since neither Congress or BJP can come in with a majority. They will need to rely on the now much stronger regional parties to form a coalition government. The ultimate policy paralysis.

Personally, I don't see why the regional parties should be blamed. They are representing the interests of their constituents, which is exactly what they are paid and elected to do.

Anyway, that's the whole drama with democracy in any country -- the whole tussle between local v/s national interests.

 

[Shinigami]

^^^ You spammed those same articles in the previous two pages of THIS thread.

Guys...

CD is accusing someone else of repeated posting.

 

[Ignited Mind]

Global markets slump as fear bubble expands

World markets slump as fear bubble expands - Jun. 1, 2012

 

[Chinese-Dragon]

Guys...

CD is accusing someone of repeated posting.

I am well aware of the irony.

However even the worst spammers will post in different threads. Posting the same few articles in the SAME thread, over and over again... that clearly means a big nerve has been hit.

The Economist is trolling India on our behalf.

 

[Ignited Mind]

Guys...

CD is accusing someone of repeated posting.

That's Okay, That's alright. They can do it all they want to. It's their forum, their rules.

Like I care.

Amid the eurozone panic, a greater threat is lurking


If you followed the old stock market adage this year, and sold in May and went away, you probably feel rather relieved.

May was an awful month for stock markets, and most other ‘risk-on’ assets. Crude oil saw its worst monthly drop since 2008. The FTSE 100 fell by nearly 8%.

The main reason for the big drop this month is pretty clear – the eurozone crisis has managed to snowball yet again.

The bad news is that this time round, any sort of temporary eurozone resolution will be overshadowed by another looming nasty – China’s slowing economy…

China is going to disappoint the bulls
Growth in China’s manufacturing sector is slowing rapidly, according to official data. In May, the purchasing managers’ index hit a five-month low, worse than analysts had expected. A separate survey sponsored by HSBC – which pays more attention to smaller companies than the official measure - suggests it is already shrinking.

The response from the China bulls is that China will launch another stimulus of some sort to save its economy. The idea is that China’s leaders have so much power at their fingertips, that they can effectively make the economy do whatever they want it to.

Here’s a quote from Zhang Liqun, an economist with a Chinese government think tank. “Pre-emptive, targeted fine-tuning of macroeconomic policy has already started, especially with a series of measures to stabilise investment. As that impact is felt, the economy will stabilise,” he tells the FT.

As we’ve noted before, this is just the same sort of reassuring waffle that we heard before the subprime crash. It’s not a million miles away from the sort of statements about Greece that we got used to seeing from eurozone officials in recent years either.

Why are intelligent investors willing to believe that China’s officials can succeed where others have failed?

Investment stories die hard
As with most things, it’s all about the money. Fund managers have stories to sell. ‘You should buy stocks. You should buy my fund.’ It’s hard to make a pitch for stocks if there isn’t a cheerful story around to back up your bullish argument. So you’ve got to find one.

“Yes, Europe is self-destructing. Yes, US growth is fragile, and stocks aren’t massively cheap. But don’t worry, because we’ve got China and Asia and all the other emerging markets. Their consumers will pick up the slack from the rest of the world. Western companies will have vast new markets to profit from. So all will be well.”

It’s a compelling story. But it’s just not that simple. As Matthew O’Brien points out in The Atlantic, government officials have admitted that banks might miss their lending target for 2012. How can this be? After all, “China still has a state capitalist model. The government sets targets for loans, and the banks have – until now – hit them.”

The problem is “a simple lack of demand.” This in turn, is a side-effect of falling house prices. As O’Brien puts it, “popping a housing bubble – which is what China is trying to do – is usually an economic death sentence.” The problem is that when prices fall, borrowers end up ‘underwater’ (in other words, the collateral is no longer worth as much as the loan secured against it).

“Underwater borrowers don’t want to borrow more until their balance sheets are right-side up, even at zero rates. That’s what happened to Japan in the 1990s. It’s what happened to [the US] in 2008.”

Amid the eurozone panic, a greater threat is lurking - MoneyWeek

 

[Shinigami]

Posting the same few articles in the SAME thread, over and over again... that clearly means a big nerve has been hit.

couldnt agree more...

 

[Chinese-Dragon]

So, not even ONE Indian can argue against the points made in the Economist?

Because that would be, I know it's shocking, but it would actually be on-topic.

 

[Ignited Mind]

'Beware a rerun of the Great Panic of 2008': Head of World Bank warns Europe is heading for 'danger zone' as world markets suffer bleakest day of the year so far

Read more: http://www.dailymail.co.uk/news/art...st-day-global-economy-year.html#ixzz1wct7fB28

Will the eurozone collapse?


Will the eurozone collapse? - Inside Story - Al Jazeera English

 

[Chinese-Dragon]

^^^ Are you still spamming articles that are off-topic?

The Economist article in the OP was about India. Not about the Eurozone.

 

[manofwar]

^^^ Are you still spamming articles that are off-topic?

The Economist article in the OP was about India. Not about the Eurozone.

Dude, you have proved your ignorance today...........
If you would have read more than the tittle of all those articles about slowing Indian growth, you would have known that the Eurozone crisis is the chief reason for slowdown...........
Next time read the whole Article , not just the title.......