5. Most comments have been yankee-centric – perhaps mirroring readers interests and geography. I can warm to risk appetites returning when Global ZIRP arrives and begins to push the mountains of cash investors hold, further out on the risk curve. And global fiscal packages diminish the nominal falls and begin – not necessarily to get traction – but just stabilize things. NOT intermediaries, or leveraged punters, but owners of capital whose initial forays will resemble a tug-o-war with the ongoing deleveragistas, happy to finally catch a bid in something. Don’s comment was a good one. It highlights the historical assumption that the developed world would eventually close in on us, by rising to our level – not by dragging us down. But globalization is at least partially about convergence, and the leverage in the west papered over fundamental unsustainabilities about such rosy western convergence notions that must be confronted in the absence of cold-nuclear fusion, flux capacitors and unlimited resources.
Global rules make for greater concern. If trade does not pick up in 2009, how does Japan deal with the trade imbalances occurring now? What will be the engine for them?