much of recent economic decline would have occurred regardless of events of last year
One year on, disengaging the economic consequences of 11 September 2001 from events that would have occurred anyway is difficult, according to Goldman Sachs.
The asset manager believes it is possible to draw out a number of concrete changes to the global economic picture, but adds that much of the economic deterioration in global economics post-11 September 2001 would have happened anyway.
Setting aside the continued likelihood of a war in the Gulf as one of the more concrete consequences of the 11 September attacks, Goldman Sachs dismisses pessimistic claims that globalisation has now peaked, but added the pace of free-trade developments has slowed.
Also, importantly, it can be argued market risk premia has risen, although again it may be that 11 September brought about a change in perceptions rather than actually having fundamentally changed the economic outlook drastically.
The perception that productivity gains, which had driven world markets had stalled, may be one of the most subtle consequences of the terrorist strikes, the group argues.
The problems of a weak consumer in the Eurobloc is merely a continuation of a trend in place pre-11September, while the fiscal and monetary straitjacket created by convergence criteria for those which adopted the euro meant policymakers have been unable to provide the economy with the same kind of lift as in the US and UK.
Similarly Japan's problems and those of non-Japan Asia, were obvious in the lead up to last year's terrorist strikes.
In the US and Latin America, Goldman Sachs said the impact has been clearer. In Latin America the outlook for markets and economies worsened considerably following 11 September, however the region was already entering recession. The region suffered not just due to worsening global growth figures, but from reduced overseas investment. By contrast Russia has emerged as a stronger ally of the West and consequently is receiving a greater and greater share in overseas investment.
Looking forwards, investment analysts from investment bank UBS Warburg, said the approach of war in the Gulf remains one of the most tangible consequences of last year's terrorist strikes in New York and Washington.
Analysts Meyrick Chapman and George Bory at the group believe there are four likely outcomes to a war: either rapid victory or a prolonged confrontation, pursued by either a multilateral or unilateral force.
In each of these cases likely investment effects can be identified. Under the unilateral quick victory scenario the build up would put equity markets under pressure and see increased volatility drive up oil prices, weaken the US dollar and push short rates down. The yield curve would also steepen and 10 year rates would approach 4%.
Corporate yields in the run up would fail to track Treasury yields lower.
A successful outcome would drive a rally in US dollar assets including the US equity markets, while the oil price would drop rapidly. Short rates would rise and the yield curve would flatten with 10-year yields rising to around 4.3%.
A prolonged confrontation would spark a resumption of selling in the market, oil prices would rise rapidly leading commodity prices up, UBS Warburg predicts.
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