Tuesday, January 15, 2008

Decoupling is Real

In the few moments we have before investors become consumed with news re Citigroup, inflation reports, etc., here’s a little data point that you might find interesting.

In a report published yesterday by Credit Suisse, evidence of decoupling can be seen in two charts.

The above first chart* shows quite clearly that the US economy means far less to China than it had in the past. As for the second chart*, Chinese domestic growth is not just strong but is actually accelerating.

Investment Strategy Implications

As the charts above show, there is ample evidence that decoupling is real. Therefore, while the US economy may suffer a recession, the global growth story appears to be intact. Maybe the end of the world is not just around the credit derivatives corner.

* click image to enlarge

1 comment:

notswimmingnaked said...

Slowing export growth doesn't look like decoupling...... also the acceleration in retail sales from the beginning of 2007 can all be explained by the pickup in inflation.