Can Restructuring Revive the Asian Locomotive?
By Keith W. Rabin After the onset of the Asian financial crisis in 1997, there was considerable discussion about the need to revive the Asian and European “locomotive” to allow the U.S. economy to slow down. The U.S. economy began to weaken significantly last year. While this can be seen as a necessary consequence of the speculative dot.com era, the events of September 11th accentuated negative pressures, which are now further exacerbated by the fallout from the Enron debacle. As a result, Asia and the rest of the world sit nervously. They await the resurgence of U.S. demand, which they believe supports the health of their own economies. However, they are likely to be disappointed. While many analysts predict a U.S. upturn in the near future the Fed has less leverage to reduce interest rates, consumer debt is at exceedingly high levels, and corporations are under extreme pressure to maintain a conservative accounting posture. Their optimism therefore seems misguided, as there is little
