Relevant:
- "Eurozone Slides Back Into Recession" Says Markit PMI News Release; Sharp Decline in German Export Business; Misguided Decoupling Theories
- Fed governor sees US contagion, not 'decoupling'
- Decoupling to world: "I'm still not dead yet!"
- Fed's Lockhart on "Decoupling"
- Wall Street may see $460b more in credit losses
2007-12-07 — bloomberg.com
"It turns out the U.S. economy matters after all. The credit collapse and dollar decline that followed a surge in U.S. home foreclosures jeopardize expansions in the U.K., Canada and Germany, economists said. They also debunk ``decoupling,'' an argument advanced by analysts at Goldman Sachs Group Inc. and Morgan Stanley that the world wouldn't suffer as it did during U.S. slowdowns in previous decades. "
What this article is missing is that decoupling won't be between the US and other "anglosphere" countries, but rather between the Asian tigers and other export surplus countries and the US (and to some extent, Canada and the US).
Look at it this way: if you are a shopkeeper and you continue to sell to a bad customer on credit, its a bum deal for you. When you finally cut that credit and stop selling to them, your losses will go down, even if you have lower sales. So you are better off. That is why cutting off the US "credit junkie" will be better for exporting countries, not worse.
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