By John Canally, Economist and Investment Strategist for LPL Financial
Gauging Global Growth in 2014 & 2015: An Update
Developed Markets Grow, While Emerging Markets Slow
The outlook for global growth is important to investors, since it defines the ultimate pace of activity that creates value for countries, companies, and consumers. This week, as investors begin to digest the S&P 500 earnings reports for the second quarter of 2014, we provide an update on how estimates for
Editor's note: Originally published on 26 June, 2014
When I first arrived in Japan in 1974, international investors widely expected the country to collapse, a casualty of the overnight quadrupling of oil prices from $3 per barrel to $1, and the global recession that followed. Japanese borrowers were only able to tap foreign debt markets by paying a 200 basis point premium to the market, a condition that came to be known as "Japan Rates."
Hedge fund manager, Kyle Bass, says that the despised Japan rates are about to return. There is nothing less than one quadrillion yen of public debt in Japan today.
A perennial trade surplus powered high corporate and personal savings rates during the eighties and nineties, allowing these agencies to sell their debt entirely to domestic, mostly captive investors.
Those days are coming to a close. The problem is that the working age population peaked in