Why Japan’s mess doesn’t mean recession

Mar 16, 2011


This quick quiz just in from Citigroup's Steve Wieting. What do these disasters have in common?

  1. Three Mile Island
  2. Chernobyl
  3. Kobe earthquake
  4. Indian Ocean tsunami
  5. Hurricane Katrina

Stumped?

"These are five tragic events with one thing in common: They didn’t precede U.S. or global recessions."

True enough. So while a big stock market selloff is not exactly an all-clear sign, Wieting contends the issue is uncertainty, rather than sure economic doom, and investors should proceed accordingly. Predicting a recession off this tragedy, he said, is not only difficult but "speculative."

Something to chew on, anyway.

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