Stephen Roach, former non-executive chairman, Morgan Stanley Asia says he is still unprepared to give the US economy a green light. The biggest sector of the economy - the consumer is still on ice, according to him. Growth rate for consumption over the last four years, 16 quarters has been 0.5%.
Roach says a lot of that damage was done during the build up to the crisis - excess borrowing, insufficient savings, the collateral's under water, consumers scrambling to repair balance sheets and are cutting back spending, while they do the repair. This he says is hobbling demand expectations which drive hiring by American businesses.
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