For once I know something the gurus at MSNBC and Market Place (NPR) don?t know. I can explain the reason behind the ?great economic disconnect? touted all week in the U.S media. No one can explain why the economy is doing better when the stock market is doing worse.
While the rate of unemployment has unexpectedly fallen in America in May, while all other economic indicators (such as consumer price index) have improved, demonstrating an undeniable economic recovery, the market has turned downward again. For the week closing on Friday evening, the Dow has lost 3% of its value (closing below 9,600), the NASDAQ has lost 5%. No one could say why.
The reason (and I am the first to say it) is the World Cup. The American economy is shrinking because of the World Cup, in spite of the reality that no one in America would give up their first diaper to save the biggest sport event in the world. Even if the Cup is completely ignored under the star-spangled banner, the downturn of the market proves that the American economy is victim of a domino effect that has its origin half way around the world, in Korea and Japan, where the Cup is on.
(George Bush is the only President among all the Presidents of the 32 nations involved who has not showcased some kind of public support for his national team. I predict he won?t have the vote of soccer mom at the next elections. Queen Elizabeth is briefed regularly of the performances of the national side, while Jacques Chirac calls Les Bleus after each game.)
Our economic partners in Western Europe are losing tons of money every day to the World Cup. Twenty per cent, I repeat 20%, of England workforce staid home on Friday to attend the game between Argentina and the team wearing the Union Jack. The game started at 12:30 p.m., London time, lunch time. Today?s papers call it the longest lunchtime in history. No one came back from lunch before 3:00 p.m., many with a laryngitis, and of course little enthusiasm to work. That game, Argentina-England, cost 750 millions pounds (1 billion U.S dollars) to the British economy.
In Haiti, the population stays up all night watching the games, therefore no one goes to work in the morning. On the island, the competition is hailed the Championship san-pwel, an evocation of the folkloric, imaginary werewolves that roam the countryside at night.
The Brazilian economy contracted by 30% during the last World Cup.
Similar attitudes and effects are observed in all countries on all six continents, and their consequences at the register have direct repercussions on Wall Street. That is one side effect of globalization.
It is strange that no analyst has factored soccer in their considerations. MSNBC, the Wall Street Journal, Market Place are lost. The World Cup, stupid.
http://www.jeanlouie.com/
(OdlerRobert Jeanlouie, Saturday, June 08, 2002)
06-08-02, 04:53 AM
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