Different Spins Made On Dr. Stephen Roach's Speach!

Yesterday evening, I posted the following, Asia Countries Are Followers

• KUALA LUMPUR (Dow Jones)--The $827-billion stimulus package making its way through the U.S. Congress may not be large enough to substantially help the U.S. economy this year, Morgan Stanley Asia Chairman Stephen Roach said on the sidelines of a central bankers conference Tuesday.
  
  "This will not have a dramatic impact this year," he said, adding that the Obama administration may need to introduce another package at a later time.
  
  Roach also said Asian economies will likely remain in the doldrums for some time, as most are still export-led economies.
  
  "Asian countries tend to be followers, not leaders, so any recovery will depend on the recovery of the developed nations," he said.
  
  Roach also said the only possibility for an Asia-led recovery would originate in China, if the high savings rate of nearly 50% of gross domestic product translates into more consumer demand.
  
  He said the earliest Asia could see a recovery would be in the second half of 2009.
  
  Despite the fact that the crisis began in the U.S., Roach said the U.S. dollar's role as the international reserve currency "will stay for longer than people expect."
  
  He said that perhaps in 20 to 30 years, other currencies like the euro or the Chinese yuan will gain in importance.
  
  Asian central banks will continue to buy U.S. Treasurys, he said, and there won't be any aggressive selling.
  
  "Given the export-led growth structure in Asia, it's natural for them to continue to recycle a disproportionate share of their reserves into U.S. treasurys."

Here is the screen shot of that dow jones newswire.

Today Business Times carried the same report. However it chooses to focus on 5 words. China may lead Asean recovery.

Morgan Stanley: China may lead Asian recovery

Nice.

Here is the screenshot.

• CHINA may be the first Asian economy to recover from the global financial crisis, due to its high savings which can be recycled into the country’s infrastructure investment, says Morgan Stanley Asia chairman Dr Stephen S. Roach.
  
  He said recovery could begin as early as the second half of this year, supported by China’s large infrastructure spending.
  
  Speaking to the press at the end of the first day of Bank Negara Malaysia’s High Level Conference 2009 in Kuala Lumpur yesterday, Roach said he estimated the Asian economies to grow by not more than 2.5 per cent in 2009.
  
  “Even this is, to me, too optimistic when compared to the rest of the world at minus one and one-and-half per cent, especially it (Asia) being an export dependent region.”
  
  He said most of Asian export markets are in recession now, and unless Asia can come up with new sources of growth immediately, the export-led growth impetus will create a major economic activity shortfall.
  
  There is no quick fix to the current situation, Roach said, but Asian countries should stimulate internal private consumption.
  
  He expects the appetite for US treasuries by the Asian economies, particularly China and Japan, to continue in 2009.
  
  “There is a natural bid for treasuries whether they liked it not.
  
  Until China and the rest of Asia diversify their macro structure away from export towards internal private consumption, they are stuck (with US treasuries),” he said.
  
  Asked if the US dollar will continue its role as the reserves currency, Roach said the greenback will continue to dominate a lot longer than what most expected.
  
  “But I suspect over the next 20 to 30 years other currencies will have increased their role as reserves… maybe euro or renminbi assuming that the currency is convertible.”

And here is Star Business version. Morgan Stanley chief: Asia will be less affected by crisis

• Wednesday February 11, 2009
  Morgan Stanley chief: Asia will be less affected by crisis
  
  KUALA LUMPUR: Asia will have a less acute impact from the global financial and economic crisis but their recovery will also be slower than Western countries, said Morgan Stanley (Asia) chairman Dr Stephen Roach.
  
  He said Asia’s economies, which were largely export-led, would only recover after their main export markets, the US and Europe, recovered.
  
  “Export-led regions are followers, not leaders,” he said. “The only possibility (to recover earlier) is China, as it has large infrastructure spending in place that could provide support for economic growth.”
  
  Roach has predicted that China will recover by the second half of this year.
  
  He said Asia would grow below market projections this year, forecasting Asian growth at less than 2.5% and the rest of the world at between -1% and 1.5%.
  
  Asked if China could turn its high savings into consumption, he said unless China extended its safety net for employment and social security, consumption in China would remain deficient.
  
  Roach also said he doubted that the use of monetary policy to boost the economy could be as effective as before.
  
  “One of the consequences of lowering interest rates is high inflation. But my utmost concern is what the exit strategy for this aggressive easing is? How do you wind down without tipping to deflation,” he said, citing the example of Japan, where the economy had not been stimulated even with near zero interest rates.
  
  Roach said he preferred fiscal policies, especially those which focused more on investments rather than private consumption, as he felt businesses were better credit managers than individuals.
  
  On the US financial crisis, Roach said he blamed it on the reckless consumption, politicians and the central bank.
  
  He said the US was only 20% through its deleveraging cycle and that the adjustments being made would take a number of years to complete.
  
  On the US dollar, Roach said the greenback would continue as the world currency for a lot longer than many people thought, probably for a further 20 to 30 years.

How?

Do you see what I see?

LOL!

*whistle*