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The True Ugly Side Of Globalization: U.S. Slump Now Is World's Problem.(A)

Investor's Business Daily

| September 06, 2001 | COPYRIGHT 2001 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: Donald H. Gold

It's a classic case of "You can run, but you can't hide." The world is facing its first synchronized recession in 26 years.

Every region is suffering at least a harsh slowdown, and many analysts say that increases the chances that the slump will deteriorate into a recession. Some say it already has.

Often, the world economy will have pockets of strength even if large regions fall into recession. If Northern Europe falters, Asia and Southern Europe can pick up the slack. If Asia falters, maybe Northern Europe will make it up. Or North America.

In this scenario, a geographically diversified company -- one with earnings coming in from all over the world -- can dodge the bullet. While profits will drop in a weak region, the company will avoid catastrophe from strength somewhere else.

But not this time.

Profits Dive

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