Davos Man’s Real Problems Are In Tokyo

Davos Man's Real Problems Are In Tokyo

U.S. President Donald Trump delivers a speech during the World Economic Forum (WEF) annual meeting on Jan. 26, 2018 in Davos, Switzerland. (Photo: Fabrice Coffrini/AFP/Getty Images) As the masters of our economic universe funnel into Davos, Switzerland, their attention should be 6,000 miles away — in Japan. That’s because the most consequential bull market this year will be in the number of nations courting a lost decade. And no place understands this most-fearful of predicaments than Prime Minister Shinzo Abe’s Japan, which is still struggling to get its own $4.9 trillion economy found again. Which nations are most vulnerable to falling into a chronic, debt-ridden malaise from which policymakers can’t extricate themselves? Here are five. China. News it just grew at the slowest pace since the 2008-2009 global crisis is as sobering as it is telling. Thing is, 6.4% output in the fourth quarter isn’t the disaster hedge-fund managers might think. With gross domestic product rising to $13.6 trillion from $12.2 trillion in 2017, Xi Jinping’s government still added an economy the size of Australia. The problem is the abrupt U-turn in Beijing priorities. The buzz in Davos is about how much stimulus President Xi’s men will throw at cooling demand. The worry, though, should be how a much-needed reform push is being shelved. The biggest misstate Tokyo made after its 1980s bubble economy imploded –- and one Beijing is making now — was treating the symptoms of financial imbalances, not the underlying causes. Donald Trump’s trade war, and […]

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