overcapacity
Lehman Brothers | Global Weekly Economic Monitor
22 February 2008 1
REGULARS
Forecast Summary ........................ 2
The Week Ahead........................... 3
Economic Themes............................4
The Week At A Glance......... 16-17
Energy Outlook..................... 91-92
Metals Outlook...................... 93-94
Equity Outlook...................... 95-96
The World At A Glance........ 98-99
Contacts ....................................100
DATA VIEW
United States ......................... 21-30
Canada .................................. 31-33
Euro Area.............................. 34-45
United Kingdom.................... 46-52
Scandinavia & Switzerland... 53-55
Japan ..................................... 58-64
Asia Ex-Japan ....................... 65-77
Latin America ....................... 78-82
EMEA................................... 83-88
GLOBAL
Global Letter
Debt deflation: Lessons from Japan 5
As risks mount, the lessons from Japan for US policymakers become more potent.
Commodities Overview
IMF gold sales 89-90
We doubt that any IMF sales will have a substantial impact on the gold market.
UNITED STATES
Overview
Great expectations 6-7
Many forecasters have overhedged: benign baselines but high risk of recession.
Focus
Sensing recession 18-20
A comparison of previous downturns suggests a rising likelihood of recession.
EUROPE
Overview
2001: A policy odyssey 8-9
The ECB’s policy is often criticised but it may not be justified.
JAPAN
Overview
Feeling the squeeze 9-10
The rapid deterioration in the terms of trade makes real GDP look better than it is.
Focus
MOF’s FX intervention function 56-57
It seems to have changed since the heavy intervention period of 2003-04.
ASIA EX-JAPAN
Overview
Monitoring China’s overcapacity 11-12
The severity of China’s overcapacity problem should be exposed in H2 2008.
EMERGING MARKETS
Overview
Spanish banks in Latam: Agents of contagion? 13-14
They face challenges at home but the impact on LatAm lending will likely be small.
NOTE TO READERS
From this week we are including in our Forecast Summary on the next page the
gold price forecast from our Fixed Income Commodities Research group.