Time to rebalance

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  • America’s economy will undergo one of its biggest transformations in decades.
  • - GDP shrank 3,8% - worst drop after second world war Gross Domestic Product

Transcript

  • 1. Greg Ip “TIME TO REBALANCE” The Economist, March 31st Sigrid Sibul
  • 2. The presentation
    • 8 minutes
    • Recession in USA
    • Cheap oil, easy loans and credit, high salary are not about to return
    • Transformation of economics
      • Away from consumption and dept
      • Towards exports and saving
  • 3. Old model
    • Recession -> end of the old economic model
    • Customers less willing to spend
    • Banks less willing to lend
    • Customers in dept
      • Average from 80% to 129%
      • GDP: 70%, 76%, 73%
  • 4. The Economist, March 31st 2010
  • 5. Examples
    • Deflated assets
    • Tighter credit
    • Fewer new homes
    • Shranked average home size
  • 6. Recessions
    • Comparison
      • 1973-1975
      • 1981-1982
    • GDP shrank 3,8%
    • Economy might grow 6-8%
    • Unemployment falling steadily
  • 7. Unemployment
    • Surplus buildings, equipment and dept
    • Recovery is slow and weak
    • High unemployment throughout the country
    The Economist, March 31st 2010
  • 8. Economic recovery
    • Higher energy prizes
    • Renewable energy
    • Imports of the stuff decreasing
    • Changed economic geography
    • Spending on equipment
  • 9. Economic recovery
    • Exports – classic route to recovery
    • Intel & Brian Krzanich
      • Sales down, 3% of employees laid off
      • 3 billion $ for retooling
      • Readiness to produce new cheaper, smaller and efficient chips
  • 10. Easy days gone for ever
    • “ Worst crisis since the 30s with no end in sight.” – September 18th 2008
    • Mr Hamilton
    • Antidote for all happiness and slappy
  • 11. THANK YOU! Questions!?