Q: The US has reported a negative GDP number. It’s the first of how many quarters of negative GDP according to you?

A: I think this will probably be at least first of at least six in a row, which would be pretty close to unprecedented. I am afraid some of the previous numbers are probably going to be revised as well and certainly the 0.3% negative number today, after a revision in a month’s time, will probably become a much more significant negative number.

When you look at the details of that report, the two things holding GDP up were government expenditure and inventory building and that is naturally a negative sign rather than a positive sign. You don’t want inventories to be building at this point in the cycle. What it is really telling is that people have got more and more unwanted goods on the shelf, so I am afraid there is more negative news to come and more downward revisions probably in these numbers.

Q: Six quarters, is that your best-case scenario right now or worst-case?

A: It is really best-case. The credit contraction that is going on in the global economy is something that we haven’t seen since the 1930s. So usually you would expect a recession to long for about three negative quarters and then [see] a bounce and then another negative one within a couple of quarters after that. Given the unprecedented nature of this negative contraction, six negative quarters is not unlikely.

Q: The problem also is that many of these concerns are hitting home in Asia; some countries in Asia as well are getting to that recessionary stage. How worried are you about growth contracting within the Asian region and how much do you think policymakers will react to that?