You can’t argue that the world ecomony hasn’t rebounded. It has. Yet you can still argue whether or not the rebound has been strong enough to justify current stock prices, or if it is sustainable through 2010.
The latest world trade data makes this clear. Trade volume has surely improved over the last few months, yet one needs to put it in perspective with 2008. It still has a long way to go before regaining the level of trade activity we used to know.
WSJ: Global Trade Information Services, a private Geneva outfit, estimates the value of global trade in the second quarter was $2.58 trillion, up from the first quarter trough of $2.41 trillion but far from the year-ago second quarter’s $3.85 trillion. The International Monetary Fund predicts that the volume of world trade this year will be 11.9% below year ago levels, a collapse of the sort unseen since the Great Depression. It sees a modest 2.5% increase in 2010.
Export data for the U.S., China, and Germany: Up from their lows, yet still far from recent highs. At the current rate of improvement, it would take about another three years of rebound just to get back to 2008. Thus this rebound better be sustainable.
This WSJ chart tells the story.
The Organisation for Economic Cooperation and Development’s (OECD) latest leading economic indicators tell a similar story.
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