Morgan Stanley's card-carrying double-dipper, Stephen Roach, gives a frightening outlook in an article at the FT. Even the headline is scary: Global Economy Menaced By Return Of The Living Dead.
The Living Dead refers to the deleveraging American consumer. Previously the Living Dead referred to deleveraging Japanese corporations.
Roach says America's form of deleveraging is worse:
Sadly, America’s zombie consumers could be more problematic for the US than the zombie corporates were for the Japanese economy. At 70 per cent of GDP, US personal consumption is 3.5 times the peak share of Japan’s bubble-distorted business capital spending sector in the early 1990s. A failure to learn the lessons of Japan – especially that of post-bubble zombie congestion – leaves the US and the global economy in a very tough place for years to come. Growth-hungry financial markets could be very disappointed.
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