Global trade collapsing
Commentary: U.S. exports falling at 49% pace as customers fade away
By MarketWatch
Last update: 12:37 p.m. EDT March 13, 2009Comments: 21
WASHINGTON (MarketWatch) -- For a while, some analysts held out hope that the rest of the world would be spared the devastation of the collapse of the great American credit bubble. The global economy had de-coupled, they said. America's problems were her own.
No one is saying that any more.
In fact, the latest evidence shows that global trade flows are plunging at an alarming rate.
The Commerce Department reported that the volume of U.S. imports from abroad fell 4.6% in January while exports declined 8.6%, the most since the monthly trade figures were first collected in 1992. See full story.More
Over the past five months since the credit crunch intensified, real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace.
The pace of the decline is unprecedented in modern times, economists say. "We doubt even during the Great Depression that trade collapsed with such ferocity," said David Greenlaw, an economist for Morgan Stanley.
The Great Recession, as the IMF calls it, has severed a crucial link in the global economy. U.S. consumer spending has been the main engine of growth for the whole world, but that spending was based largely on phantom gains in asset prices that were inflated by that cheap money from abroad that has now been disrupted.
The profits that foreign producers made from selling to America, in turn, created millions of jobs in places such as China, Southeast Asia and the Persian Gulf. That was then: China reported its exports plunged 25% in February compared with a year earlier.
Those jobs are disappearing, sparking a great reverse migration back to rural China, the Philippines and South Asia. In China, an estimated 20 million workers have lost their jobs. It's not just the American economy that needs to adjust to the new reality. The rest of the world will have to re-examine just where growth comes from.
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The word "collapse" is about as extreme as a word can get, for instance a person who collapses on the way to the shop doesn't complete the journey. You repeatedly put the word in capitals here. Commendably you give readers a lot of actual figures showing sharp decreases, but the collapse word would be better reserved for decreases of tenfold or greater. Cut out the hype or you will lose credibility. RPC
ReplyDeleteTrue, we ought to be discerning about the kinds of strong words we use but that particular word choice was by Market Watch - just follow the link.
ReplyDeleteI agree with the above poster. You can only say the sky is falling so many times for so many months until you lose credibility. Enough with the hyperbole.
ReplyDeleteUntil you get that smoking gun quit using imminent and collapsing.
The word used was COLLAPSING not collapse. The chart clearly shows trade is fallig off a cliff. The situation is bad but many are in denial as reality is to much for the simple minded masses to handle.
ReplyDeleteThe average person is at a total disadvantage as to knowing the truth of what is really the situation with the US Government, and our true condition. The blog owner always uses a link to the reported blog posts, so those should also be reviewed along with reading the blog. Information on this blog is merely searched out news that is found and reported for the reader's use. Sadly, 99.9% of what Americans know is taken from the news, and thereby used to form our opinions. Why? Because unless your good friend or relative works in the middle of all this, and has privy to the truth, then the news is all you have to go on. You see, we drown in information, but which is right and which is wrong? Opinions and Speculation just don't really count.
ReplyDeleteI think 'calling it what it is' is called truth. Maybe this blog owner realizes the people are in such denial, he/she has to emphasis the word to get the information to sink in and to alert coming danger.
ReplyDeleteWe are literately hanging by a thread, the bankers could pull the string any time now.
If you people cannot handle a word such as "collapse", then maybe you should go read Mary Poppins.
Maybe this is a little more light weight.
"BABYLON IS FALLING, IS FALLING!"
Never used the word collapse today. Please read the information along with the WORDS carefully. Shall I start changing the words in articles to make you all feel better? Like temporary, perhaps,likely, somewhat. There you go #1. Feel better?
ReplyDeleteEconomic Analyst, do NOT change your methods of posting information. Do not sugar coat. We are all responsible for reading and figuring out what we read. You are doing a fine job, and we need the posts just as you are doing them. Keep up the good work. As I said in my previous post, "We are drowning in information, but which is correct and which is not? We do not expect you to know. A blog is presentation of "found" news, ripe for comments. None of us are D.C. insiders. If we were, we would not be reading or posting on this blog. Keep up the good work!!!!
ReplyDeletePlease..Don't patronize me. I know full well what is going on. All I am saying is in September 2008 there was a "collapse". It was pseudo-stabilized by the feds and we are in a derivative purgatory. If you want to get into a sematics argument over the the term collapse or collapsing you can argue with yourself. You speak of the average person. It depends on what the average person is defined as. 45-65 male/female's are for the most part hopeless and stuck in there ways and generated this crisis in the first place. It's going to take the 25-44 generation to get us out of this mess and trust me we know full well what the hell is going on.
ReplyDeleteIf it's going to take the tattooed, multi-pierced, hat on backwards, pants drooping 25+ year olds to get us out of this mess, then there isn't much hope....... is there???
ReplyDeleteI agree with the post dated March 15 8:15am
ReplyDeleteLook at Noah, he warned and warned, then the flood. The owner of this blog is right. We need this. So much greed for so long. I love this blog, we need it told, as it is. We are not 4 year olds.
Anonymous March 15, 2009 9:54 AM
ReplyDeleteOh really..and those sellout hippie generation...free love...peace...pot smoking...turned corporate whores and social security/medicare leaches who are the root of the problem economic mess will surely return to their altruistic, psychedelic, "fight the man" glory...oh wait...they ARE the man..I said 25-44 not 14-25...Your generation had your chance and you blew it. Just accept that and attempt to right the wrongs or step aside and let your children clean up your mess.
It's going to take the 25-44 generation to get us out of this mess and trust me we know full well what the hell is going on.
ReplyDeleteMarch 15, 2009 9:01 AM
What does age have to do with anything? Its preception that counts.
I want my mommy.
ReplyDeleteGet yerself lots of Silver and Gold cause baby regardless of generation your going to need it to navigate through this morass.You think the politicians give a damm.Please smoke some more theres lots to go around.
ReplyDeleteNOthing will get us out of this mess.
ReplyDeleteI don't think sugarcoating things will
make this situation better.If you want sugary ,flowery stuff then you better not come here. Maybe you ought to watch NBC or CNBC
or some crap like that.Oh yeah I forgot to mention NBC's parent company General Electrics
Collapsing stock ! Collapse is not a strong word. I can give you much stronger. Like
criminal and fraud. Corrupt federal government
led by a bunch of 4 year olds. Nancy Pelosi
-Speaker of the house continuing to use the 500
million monthly job loss numbers not realizing
that there are only 300 million American citizens. Complete inane stupidity. This is
our elected leadership at a critical time! Ha.
Congress has no backbone, brains or credentials. You know who all that infrastructure stimulus is going to -illegal
frickin aliens. They are the ones who do construction in this country anymore. Don't
believe me ? Go and visit a construction site.
The time will come when the only solution to
this corrupt gov't of America will be pitchforks, torches and a very angry citizenry.
Some of these post have been entirely ineffective; mainly the ones that blame others, seemingly generationwise about this downturn. I happen to fall perfectly between these two stated generations, and I don't think it is a gererational issue at all. If you do you have been watching too much media, the type of media that wants to divide and conquor you so that your minds cannot contribute to a good solution.
ReplyDeleteGood solutions are multigenerational, they involve communication from all generations, so that we may understand the perceptions of all. Good solutions do not ever involve one generation shutting out another generation alltogether, because then you lose all of the valueable information that a generation has to give.
In the current scenerio, we should be looking to the older generations that knew how to grow things, animal husbandry, and how to can, because you can deny all you want, but it is looking like that is where we are heading. Or you can spend your time blaming the preceeding generation for our current woes, but you will find that for the most part, they are not to blame. Yes, they were fed media about a bigger and better America, much like the media you are fed today, but with a slightly different direction. But, blaming your parents for buying the media bullshit and will not get you anywhere. You need to acknowledge together as a family that you bought the media bullshit, what you bought varied from generation to generation. I feel very stongly that the blaming needs to end, it is not a path towards a solution, and as long as one keeps blaming they are not ready to find solutions.
The blame should continue. The Blame should
ReplyDeleteintensify and ramp up. The frauds and criminals
needto be flushed out and punished severely.
Its the lack of leadership and aversion to
punish the evil doers that drags this thing
out longer and longer. At least Maddoff is
going to prison but, there are many others that
should follow. The US Congress doesn't even
resemble the elected body that the citizens
entrusted them with their votes. What , when
as recent as last week, Nancy Pelosi ( Speaker
of the House of Representatives) Put off all
most of her and other congressmen's buisness
for the better part of the day so that they could fawn over Movie star Brad Pitt's visit to
Capital Hill. I'm sure that will give comfort
to all those poor souls living in the tent cities that are springing up all over the country. Disgusting! And all that hundreds of thousands and millions that have lost their jobs.And Fed Chairman Ben Bernake announcing
on a weekly basis that the recesssion will
end in 09. OK. What a lot of people are overlooking here is the retiremant of the babyboomers. 72 million will be moving into
old age. My mother was in a nursing home for
three years @ 11,000.00 per month. You do the math. Medicare took over after her estate was
liquidated. I was lucky enough to have inherited some money.The baby boomers Will not
be spending the amount of money they used to.
They will be conserving what wealth they have
left ( after the deterioraton of their stock
portfolios and 401 K's). The Huge amount of
so called wealth that vaporized with this
event ( depression)will not be coming back
quickly. We have rode all bubbles that could
be had. No more bubbles. People will have to
work harder and economize and save. You know
just like back in the 1950's before the whole
something for nothing culture took over this
country.
Summing up the bottom line of this thread: THE LESSON COMES HOME LOUD AND CLEAR:
ReplyDeleteWe have learned (all age groups)
Making 12.00 an hour income will NOT
support the purchase of a McMansion.
It simply will not.
Your calculator or mine.
It won't work out.
You can't do it.
Mathematics does not alter to fit a person's desires.
NADA.
Not much useful in the comments here. The comments at MarketWatch are more instructive but even they miss the mark. Given this, it really will take a complete unwinding of the consumerist economy to get back to reality that real wealth is having a safe and secure food supply, decent shelter and clothing, good health, and real friends.
ReplyDeleteWow 20 million Chinese suddenly unemployed? Out of how many? A billion+? 1 billion is 1,000 million BTW. So... that's an unemployment rate of um... 2%? Take a Valium people.
ReplyDelete