Globalization is a good thing, particularly when it comes to freeing up trade and capital flows. Unfortunately, it looks like the recession has infested all the world's largest economies, leaving some (wrongly) pushing for a little autarky. The euro zone has very likely fallen into a recession for the first time ever under monetary union as real GDP in the 15-country area contracted for the second consecutive quarter. Today we learned Japan is also in the same boat, with output tipping lower during the second and third quarters of this year. The official arbiter of U.S. recessions, the NBER, has yet to make a call as to whether we are in a recession or not, but 2 of the key indicators used in making this assessment, i.e. real personal income less transfer payments and nonfarm payroll employment, suggest things started to sour as early as Dec 2007/Jan 2008. Even China, which had enjoyed double-digit growth rates in recent years, has seen a dramatic slowdown take hold and announced $586 billion in domestic spending to offset the worsening prospects for this export-dependent economy.

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