Comstock Partners, Inc.October 19, 2000
Global Economy Reeling
Not only is the domestic economy deteriorating rapidly, as we outlined yesterday, but the global economy is in trouble as well. Germany reported that its Ifo index of business confidence showed its sharpest one-month decline in 28 years as it neared an 8-year low. Japan's finance minister, Masajuro Shiokawa, finally conceded that the Japanese economy was declining, a conclusion reached by private economists some time ago. If anything, Japan's economy and overall financial condition is worse than he admits, and may be reaching alarming proportions. Argentina recently proposed altering its agreement with debtors, a proposal that is tantamount to an outright default. Andrew Crockett, general manager of the Bank For International Settlemants, stated that, "It's clear that there will be significant further slowing of ewconomic activity in more or less all regions of the world." We could go over each region's economy on a country by country basis, but we think you can get the picture. It seems clear that the world is facing the greatest slowdown since 1973-1974, and, perhaps, worse.