Global: Productivity Convergence? - S. Roach

Global: Productivity Convergence? - S. Roach
hxxp://www.morganstanley.com/GEFdata/digests/20041015-fri.html#anchor0

These possibilities point to a rather shocking possibility on the US productivity front. Since the mid-1990s, business productivity gains have averaged a little over 3% -- a dramatic improvement from the anemic pace of the preceding 25 years, which averaged closer to 1%. I am not arguing that America will revert to the productivity stagnation of yesteryear. But an increasingly saving-short US economy could well have an exceedingly difficult time funding the investment requirements of ongoing productivity vigor. And the two transitional factors -- capital deepening and slash-and-burn cost-cutting -- may well be about to fade. It is perfectly conceivable, in my view, that US productivity growth could slow to the midpoint between the 3% vigor of the past eight years and the anemic 1% pace of the preceding 25 years. That would find the US on the same 2% productivity growth trend that Eric Chaney believes is now emerging in Europe. In a nutshell, that is the case for what could be a rather remarkable productivity convergence.

If US and European productivity growth were, in fact, to converge over the next few years, this would have very important implications for financial markets. Global investors have become convinced that America is the world?s best productivity story. This, together with outstanding earning performance, has had a profound impact on the perpetual overweight of US equities in global asset allocation portfolios. The US-centric productivity story has also been key to America?s seemingly effortless ability to finance an ever-widening current account deficit. Most believe that there is a ?natural? demand for dollar-denominated assets since they represent a claim on the world?s greatest productivity story. The productivity convergence play could certainly challenge that presumption as well -- undermining dollar support and providing a boost to the euro at just the time when America?s current account deficit is veering out of control.

Productivity growth is where the rubber meets the road for economic and financial market performance. One of the key assumptions embodied in the collective mindset of investors, businesspeople, and policy makers is that the United States has established permanent leadership in the global productivity sweepstakes. A corollary to that belief is that Europe will never get to the Promised Land of productivity revival. In the realm of economics, it?s change at the margin that always matters most. For a congenital euro-skeptic like me, it is very hard to admit it -- the coming productivity convergence could force us to rethink the long-standing contrast between America and Europe.

Ist das Produktivitätswunder vorüber? Wie werden der Meister A. Greenspan und seine Nachfolger damit fortsetzen um ausländische Investoren zu narren und an zu locken, damit sie ihr Kapital in den USA investieren?

Typischerweise wird eine neue Meßmethode, solche wie "Pro-Forma" Statemenents angewendet um die Maskerade fort zu setzen - und verschiedene andere Tricks - unglücklicherweise ist es sehr viel schwieriger die Realität zu verbergen während sich die Volkswirtschaft der USA verschlechtert.

Der S&P 500 verfügt aber aktuell über ein P/E von 19,98, er ist also überbewertet.  

Und nun lasst uns mal sehen was Richard Russell aussagt, der 2000 exakt das Top vorher gesagt hatte. Richard Russell sagt voraus, das der S&P auf ein P/E von 8 fällt, was einen Verlust von ungefähr 60% von seinem aktuellen Wert bedeuten würde. Er sieht einen der schlimmsten Bearmärkte in der Geschichte voraus:

Russell sees is a big, ugly bear. "I'm afraid we are coming into one of the worst bear markets in history," he says. Bear markets typically end with the Dow Jones Industrials and S&P 500 selling for five to 10 times earnings, while yielding 5% to 6%. Russell doesn't expect this beast to be much different. "Let's say this bear market ends at eight times S&P earnings," he says. "Even if earnings hold at the current level -- which is extremely doubtful -- the S&P could lose two-thirds of its value."