Merrill Lynch: globalization peaking?
U.S. Strategy: Thought for the Day: Globalization Peaking Analyst: Richard Bernstein
Another Sad Sign Globalization May Be Peaking
Several weeks ago we suggested that globalization was in the process
of peaking, and that investors should be careful not to extrapolate
the past 10-20 years’ globalization trends into the distant future.
Unfortunately, there was another sad sign this week that suggests we
might be correct.
We have no particular view on the details of the recent global trade
talks, but the breakdown of the talks seems to be yet another bearish
consideration for continued globalization.
Investors today seem to have a poor sense of history, and do not
realize that globalization is like an accordion - it expands and
contracts. The recent era of expanding globalization is not unique.
Similar events have happened many times in history.
What gets globalization to contract? Wars and trade barriers.
Beginning to sound familiar?