Citi List 5 Reasons US Investors Shouldn't Fear The Japanese Disaster

Citi’s Steven Wieting has built one of the most clear cut cases we’ve seen thus far that the markets are overreacting to the situation in Japan.

From Steven Wieting:

1) Three Mile Island, 2) Chernobyl, 3) Kobe earthquake, 4) Indian Ocean Tsunami, 5) Hurricane Katrina. These are five tragic events with one thing in common: They didn’t precede U.S. or global recessions.

For a little more detail, Wieting adds that it would take a significant spillover from abroad to derail the current U.S. rebound.

We should remember, however, that the earthquake and nuclear disaster are not events preceded by a new lending boom, or bank capital crisis (see Figure 7). Supported by expansionary macro policies this year, and a long period of adjustment, private activity in the U.S. has been and will remain on a recovery track, barring the most acute spillovers from the global economy, in our view.

For a visual of just how calm markets are right now, check out 3-month LIBOR, etc. al.

Don’t miss: Shocking photos from the Japanese disaster >


Photo: Citi

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