The Business Climate:Confidence An Absolute Factor

Lakshman Achuthan,Research Director of the Economic Cycle Research Institute,thinks the global industrial growth rate is slowing.The question is,does the slowdown turn into an outright recession?Every time you have a slowdown,the risk of recession does go up.
Confidence absolutely factors into Mr.Achuthan's work.It is a large driver of the business cycle,both from the consumer and the corporate side.You have a giant era of pessimism following a crisis.That's exactly what you're seeing now,Mr.Achuthan believes.
Byron Wien,a Vice-President at The Blackstone Group,L.P.,notes that people aren't buying stocks because they're worried there's a structural impairment.We're deleveraging,and on that basis growth is gonna be slow.This is a fear trade.
Since 2000,there's been zero return on equities.One percent return on Treasuries is better than zero.Eighty percent of the time,the market does go up over the course of a decade,but the days of a 15% return over a 20 year period are not coming back,Mr.Wien cautioned.
Treasury yields have been pushed to record lows as investors distrustful of the recovery seek the traditional safe havens.
The Blackstone Group,L.P.(BX)

Special Access:With the General

Thursday is the seventh anniversary of the 9-11 attacks on the United States.Those attacks set off the recession of 2001.National security has a definite economic impact,so I am observing this anniversary with a military update on the Global War on Terror.Major General Jeffrey Schloesser,U.S. Army,is Commander,Combined Joint Task Force 101 in Afghanistan.In a teleconference with reporters at the Pentagon,General Schloesser,wearing his camouflage uniform,noted that there are several Islamic militant groups fighting in Afghanistan.Even the LET,a Kashmiri terrorist group from India,is among them.Al Qaida is serving as ideological ringleader and helping with funding the groups.These militants join together in their quest for a radical Islamic regime in Afghanistan,from where the 9-11 attacks were planned,prepared and directed.There are 7,000-11,000 of them in Eastern Afghanistan.Some of them are expected to remain in the country over the winter,so that they can resume their attacks more quickly when spring arrives.We are not losing the war,General Schloesser feels,though we need to proceed in a more timely manner.The enemy cannot win-even with what we have now.