The Downturnaround is anything but an isolationist. When it comes to the global economy, we are practically a Buddhist. We believe that the fortunes of all nations are interconnected, and each are dependent on the others. Nobody, except maybe a few hedge funds, profits from sovereign failures. Nations are not pitted against each other — we are all potential trading partners, and the stronger our partners, the stronger we are. Why else do you think the entire world’s stock markets have surged since Geithner’s plan was announced? It’s not necessarily a sign that the plan will work, but it most definitely indicates people everywhere are desperate for dramatic and powerful leadership. Say what you will about the world dreaming of the humbling of the United States. The markets say something different. And while it’s true that some bad things are still happening overseas, in our travels across the world wide web we’ve also seen a lot of evidence of the global economy finding its footing.
• Mexico may be beset by drug wars, and the tourist business isn’t looking super-swell these days, either. But if we’re willing to believe that the disgraced ratings agencies, particularly the one that’s owned by Warren Buffett, have upped their game, then our southern neighbor is holding its own. [Bloomberg]
• Chile, too, saved for a rainy day, and is looking as strong as any emerging market, despite the commodities crash. [Bloomberg]
• At a moment when “futurists” like Ad Age’s Bob Garfield see nothing but fire and brimstone for the media as we know it, it is useful to be reminded of forecasters who once worried “How Will Google Ever Make Any Money?” [Business Insider]
• Homeowners in the Hamptons can’t be thrilled that in an online auction, some houses went for as little as half their asking price. But here’s the thing: It shows buyers will step up if the prices are realistic. And if the whole “summering” thing doesn’t work out they can always plant potatoes. Since… [NYP]
• Not all real-estate prices are cratering. Farmland is doing great! [Economist]
• And there’s been a bounce in factory orders! [NYT]
• Compulsively reading the great hordes of digital doomsayers as we know he does, Paul Kedrosky is moved to wonder, “Has the Econoblogosphere Decoupled?” From reality, he means. [Infectious Greed]
• There’s increasing noise out of China these days that the world’s next superpower is dissatisfied with the dollar and wants alternatives to it as a reserve currency. This, we are led to believe by the catastrophist club, would be, well, catastrophic. The Downturnaround agrees, but differs in the sense that we see the catastrophe as largely befalling China, not the United States. Which is precisely why, despite all the bluster, the Chinese are likely to do their best to keep the dollar strong. As the eminent Paul Volcker put it, “They hold all these dollars because they chose to buy the dollars, and they didn’t want to sell the dollars because they didn’t want to depreciate their currency. It was a very simple calculation on their part, so they shouldn’t come around blaming it all on us.” [Calculated Risk]
