The dismal decade (Part 3: The economic race: How US is faring)
Phuah Eng Chye (24 February 2024)
China is considered Pax America’s most formidable challenger ever. A US House of Representative report[1] points out “the CCP’s economic ambitions have taken a severe toll on American workers and companies: In 1978, when the PRC began to open the economy, America produced four times more steel than the PRC. Now, the PRC produces 12 times more steel than we do. In 1978, America produced 36 times more cars than the PRC. Now, the PRC is the world’s largest automaker, producing nearly three times more than America. In 1978, America was the world’s leading economy, with a GDP more than 12 times that of the PRC which ranked 10th in the world. Today, we remain the world’s biggest economy. The PRC is the second-biggest economy, and they’re aiming to be number one. All told, Beijing has developed cutting-edge technologies; built high-end indigenous industrial capabilities; controlled the flow of money, technology, and data across its borders; and secured a leading position over key global value chains, thereby cultivating global dependence on it for critical goods, fulfilling General Secretary Xi’s 2020 direction to tighten international production chains’ dependence on the PRC to form powerful countermeasures and deterrent capabilities. Indeed, the CCP now uses its economic power to suppress its own people, purpose-build a modern military to threaten the United States and its neighbors, and dominate global supply chains, critical industries, and emerging technologies. The PRC now weaponizes that interdependence in its favor and uses it with increasing frequency to coerce the United States and our allies and partners at the expense of our national security, economic vitality, and core values”.
The gap between the US and Chinese economy has narrowed considerably. However, Fareed Zakaria reminds us that “on measure after measure, the United States remains in a commanding position compared with its major competitors and rivals…In 1990, the United States’ per capita income (measured in terms of purchasing power) was 17 percent higher than Japan’s and 24 percent higher than Western Europe’s. Today, it is 54 percent and 32 percent higher, respectively. In 2008, at current prices, the American and eurozone economies were roughly the same size. The U.S. economy How is the is now nearly twice as large as the eurozone…the world’s greatest power is often the one that has the strongest lead in the most important technologies of the time – the Netherlands in the seventeenth century, the United Kingdom in the nineteenth century, and the United States in the twentieth century. America in the twenty-first century might be even stronger than it was in the twentieth…of the ten most valuable companies in the world in 1989, only four were American, and the other six were Japanese. Today, nine of the top ten are American. What is more, the top ten most valuable U.S. technology companies have a total market capitalization greater than the combined value of the stock markets of Canada, France, Germany, and the United Kingdom. And if the United States utterly dominates the technologies of the present – centered on digitization and the Internet – it also seems poised to succeed in the industries of the future, such as artificial intelligence and bioengineering. In 2023, as of this writing, the United States has attracted $26 billion in venture capital for artificial intelligence startups, about six times as much as China, the next highest recipient. In biotech, North America captures 38 percent of global revenues while all of Asia accounts for 24 percent…The United States leads in what has historically been a key attribute of a nation’s strength: energy. Today, it is the world’s largest producer of oil and gas – larger even than Russia or Saudi Arabia. The United States is also massively expanding production of green energy, thanks in part to the incentives in the Inflation Reduction Act of 2022. As for finance…banks designated globally systemically important…the United States has twice as many such banks as the next country, China. The dollar remains the currency used in almost 90 percent of international transactions…Alone among the world’s advanced economies, its demographic profile is reasonably healthy…U.S. fertility rate now stands around 1.7 children per woman, below the replacement level of 2.1. But that compares favorably with 1.5 for Germany, 1.1 for China, and 0.8 for South Korea. Crucially, the United States makes up for its low fertility through immigration and successful assimilation…whereas China, Japan, and Europe are projected to experience population declines in the coming decades, the United States should keep growing”.
As the economic race between the two superpowers intensifies, it matters to the US to maintain its lead to protect its projection of soft power and influence global institutions, rules and norms. For China, it is timely to move on from Deng Xiaoping’s hide your strengths and bid your time[2] and to publicly exert their influence on the global stage. This puts the two economic superpowers on the path to a face-off conflict on many fronts. “The analogy of two whales in a pond captures several critical dynamics. It describes how the global landscape will change now there are two whales rather one. The pond symbolises the information sphere where the space for free movement, without the two large creatures running into each other, is shrinking. Whales are prone to act unilaterally and, because they are large, their movements affect all other creatures in the pond. Whales will not easily cede strategic space to each other and certainly not to smaller fish. Battles among whales are not about right or wrong They are bullies accustomed to throwing their weight around. For this reason, disputes among whales can only be resolved through a contest of strengths”[3].
The rivalry has also been compared to James P. Carse’s infinite game. “The rules of an infinite game must change in the course of play. The rules are changed when the players of an infinite game agree that the play is imperiled by a finite outcome – that is, by the victory of some players and the defeat of others. The rules of an infinite game are changed to prevent anyone from winning the game and to bring as many persons as possible into the play. If the rules of a finite game are the contractual terms by which the players can agree who has won, the rules of an infinite game are the contractual terms by which the players agree to continue playing…Finite players play within boundaries; infinite players play with boundaries”[4]. Infinite games are aptly applied to modern war, where conflicts largely take place in the information realm, where there is a constant contest to establish or change the rules and where there are vested parties interested in bringing in as many countries and firms to play and perpetuating the conflict without contemplating a final victory.
In the economic race, each country runs on their own track dotted with different obstacles. The US focuses on protecting its technology, economic and military lead. Reminiscent of a classic game of snooker, the US defends by setting up blockades to slow China’s advances, to snooker its adversary into blunders while attempting to rebuild it industrial prowess. In contrast, China attacks by breaking through or bypassing blockades and exploiting US vulnerabilities on the technological, industrial, commercial, diplomatic and financial fronts. US relies on provocations to heighten the China threat to frighten allies into cooperating to squeeze China’s global space. China relies on industrious, commercial and operational competitiveness as a battering ram to expand its international presence and use subterfuge to catch rivals off-guard.
Both sides have weaknesses. The US is over-extended on the military and financial fronts and hasn’t seemed to have come to terms with its limitations. China’s main weakness is the formidable array of countries lined up against it, its under-developed financial sector and governance opacity. While China at least attempts to rectify its weaknesses, the US appears immobilised by hubris. In this race, both US and China may end up holding each other back to their mutual detriment. This is creating opportunities for others to rise at their expense.
Tracking the economic race
It will a close race to the 2030s finishing line. In purchasing power parity (PPP) terms, China overtook the US in 2016 and, as at 2023, China’s GDP is estimated at $18.8 trillion; 22% larger than the US at $15.4 trillion[5]. However, the universally accepted metric in the economic race is GDP in nominal terms. As at 2023, China’s nominal GDP of $17.7 trillion is 65.6% of US GDP of $27 trillion. The IMF projects China will close the gap to 72.2% with a nominal GDP of $23.6 trillion versus $32.7 trillion for the US[6] in 2028. This probably assumes China growth will outpace the US by at least 1%-2% faster annually. If China can manage to sustain real GDP at 4%-5%, annually, then China is likely to catch up with the US in 2030.
Rich Miller and Enda Curran notes at the start of 2023, “the U.S. was widely tipped to fall into a recession as the Federal Reserve jacked up interest rates to combat an inflation scourge not seen in decades. China, on the other hand, was expected to experience a rip-roaring recovery as it reopened its economy fully to commerce after strict lockdowns to combat the spread of COVID-19”. Instead the unexpected happened. “The U.S. has pulled further ahead of China in the race for world’s biggest economy, thanks in part to vibrant American consumers. U.S. GDP rose 6.3% in nominal terms – that is, unadjusted for inflation – last year, outpacing China’s 4.6% gain. While some of the outperformance reflected America’s elevated price increases, the 2023 outturn underscores a broader point: The U.S. economy is emerging from the pandemic period in a better place than China’s…The strong performance of the U.S. economy, in tandem with all the short-term and long-term headwinds the Chinese economy is facing, renders it a less obvious proposition that China’s GDP will someday overtake that of the U.S.. The economic outperformance is reflected in the respective countries’ stock markets. U.S. shares have hit all-time highs this week, while Chinese equities are mired in a $6 trillion-plus bear-market rout”. The US has surprised economists “with the resiliency of its economy coming out the pandemic. Some…suspect the country may be on the cusp of a pickup in productivity growth that will allow the economy to grow faster without generating inflation”.
There are some points worth bearing in mind. The US lead in nominal terms but is behind China on PPP terms. This discrepancy can be explained by differences in inflation rates, financialisation and the exchange rate. To a large extent, the 30+% differential in nominal GDP can be easily reversed, or expanded as the case may be, through inflation rate differentials, financialisation or exchange rate appreciation. For instance, the yuan-USD exchange rate is a major swing factor. If the yuan appreciates by more than 30% over six years, then China is likely to succeed and vice-versa. Therefore, one needs to be cautious in taking heart from the US outperformance in 2023. In my view, there would be a more decisive swing in favour of the US if it can sustain real GDP growth at between 2% to 3%.
Lastly, the noise – in particular data scepticism and disaster scenarios – needs to be filtered out. There are grounds to be sceptical about governments and economists on both sides manipulating data to serve their needs. But to be fair, it is difficult to maintain data accuracy as economies are becoming complex and intangible, and to manage the skews on trends from major event such as decoupling, the pandemic, the Ukraine and Gaza conflicts. At the end of the day, official data prevails and we might as well accept it. Disaster scenarios abound for both countries and cannot be ruled out. But disaster scenarios have yet to materialise and if it did, it is unlikely its rival would escape unscathed from contagion. In any case, both countries should be given the benefit of the doubt as they have proven economic resilience and demonstrated their ability to recover from disasters. In the event of a global financial crisis and depression, the economic race will turn into a different sort of contest – to find out which country can withstand the shocks best and which loses the least ground.
Can US sustain its recent performance
As a mature economy with a smaller population, the US is at a disadvantage in that its potential growth is naturally lower. In 2023, the US surprised by outperforming expectations. James Rickards estimates growth “will come in around 2.5%…slightly better than the 2.2% average annual growth from 2009–2019 in the 10-year period between the global financial crisis and the pandemic”. The 2023 outperformance can be easily explained.
- US, as a major energy and commodity producer, benefitted from higher prices as well as from higher global defence spending[7].
- It is the main beneficiary from decoupling as companies relocate to the US to take advantage of its market, government incentives and energy costs. Wolf Richter notes for “2023, spending on factory construction spiked by 71% from 2022, and by 138% from 2021, to $196 billion. This is an eyepopping boom…And yet…The $53 billion CHIPS Act: funds have not yet been disbursed – that’s still coming… Of the $53 billion, $39 billion are manufacturing grants that cover up to 15% of the total cost of the fab… About 80% of the cost of a fab is the equipment; construction costs are only a small part of the total. In terms of the data here, we’re just looking at spending on factory construction, not equipment…Construction spending is the one-time activity to get the building and infrastructure in place. Then there’s the purchase and installation of the equipment. Modern plants are highly automated. And the equipment is more expensive than the building. And then there’s the actual production for many years, with its secondary and tertiary effects on the local and national economy”.
- US economic performance was boosted by record fiscal deficits of $1.7 trillion in FY2023. Total US debt at the end of the year crossed $34 trillion.
- US equity markets have been buoyant with the S&P 500 index surging 24%, the Nasdaq Composite by 43%, the Dow Jones Industrial Average by 13.7% and the Russell 2000 Index by 13.7% in 2023.
Heading into a period of uncertainty
Can the US repeat its strong performance this year? At the moment, 2024 is shaping up to be a more uncertain environment with opinions sharply divided as to whether the US economy is headed for a soft or hard landing. The buoyant stockmarket performance and recent interest rate declines suggest markets believes the Fed is likely to successfully engineer a soft landing; meaning the US will experience a shallow recession followed by a swift recovery. But sceptics remain convinced the US is headed for a hard landing and a financial crisis. James Rickards points out “recession signs are real and growing worse. These include credit contraction, rising bad debts, increasing jobless claims, collapsing commercial real estate markets, contracting world trade, inverted yield curves and many other reliable technical indicators…Short-term interest rates are over 5%. Mortgage rates are over 7%. Student loan repayments have started again. There are no more pandemic handouts. Americans’ savings are depleted, and their credit cards are tapped out…the recession may already be here”.
The uncertainty is heightened because the US is in the midst of managing a difficult policy transition – from QT[8] to QE, from high to low interest rates and from a strong to a weak dollar. In addition, the US economy face strong headwinds as the post-pandemic stimulus is starting to wear off and as high interest rates, balance sheet mismatches and QT start to bite into economic activities. Questions arise as to:
- Can US sustain annual fiscal deficits of above $2 trillion? With the size of public debt crossing $34 trillion and at current interest rates, interest servicing costs could soon reach $1 trillion per annum. Alternatively, Congress could rein in fiscal deficits but the negative impact on US GDP growth could be substantial.
- After more than a year, some economists estimate excess liquidity would have been drained by the Fed by 1Q 2024. This would then increase market vulnerability to an adverse liquidity event which could cause interest rates to spike. Hence, expectations are the Fed would ease monetary policy from 2Q 2024 onwards. The impact on the US economy and USD would then depend on the size of QE and target interest rates.
- Inflationary pressures seem to have ebbed but are still present. Would lowering interest rates reignite inflationary pressures; particularly if the USD depreciated?
- After a strong 2023, are US equity markets in a position to repeat their bullish performance in 2024 or will there be mean reversion into a market decline or, worse, a crash? Would this have spillover effects on real GDP growth?
- How much of a dampening effect would external influences – such as the slowing global economy, economic and technology fragmentation, de-dollarisation and expanding military conflict – have on US economic growth.
Nonetheless, Fareed Zakaria points out “of course, the United States has many problems. What country doesn’t? But it has the resources to solve these problems far more easily than most other countries…The United States’ vulnerabilities, by contrast, often have ready solutions. The country has a high debt load and rising deficits. But its total tax burden is low compared with those of other rich countries. The U.S. government could raise enough revenues to stabilize its finances and maintain relatively low tax rates. One easy step would be to adopt a value-added tax. A version of the VAT exists in every other major economy across the globe, often with rates around 20 percent. The Congressional Budget Office has estimated that a five percent VAT would raise $3 trillion over a decade, and a higher rate would obviously raise even more. This is not a picture of irremediable structural dysfunction that will lead inexorably to collapse”.
Strategic imperatives the US need to achieve to win the race
Fiscal and monetary policies can only take the US so far. The US has committed significant resources and prestige in three strategic areas and on a longer-term basis, the US ability to sustain its economic lead over China will depend on whether it achieves the following strategic imperatives.
Reindustrialisation. Japan, South Korea, Germany, Taiwan and China had deliberate policies to hold onto their manufacturing and export base. In contrast, the US allowed its manufacturing sector to be hollowed out as it made a structural shift towards services. Wolf Richter notes “manufacturing’s share of GDP had been on a long downward trend in the US”. In 2006, “manufacturing accounted for over 13% of GDP. By early 2020, manufacturing was down to 10.5% of GDP”. The pandemic and Ukraine war highlighted the critical role of domestic manufacturing capacity for the world’s superpower and the risks of its dependence on adversaries for essential supplies. Hence, reindustrialisation to rebuild its manufacturing prowess and to wrest as much of the global supply chain away from China is the centerpiece of US initiatives to invigorate its global economic leadership.
The reindustrialisation initiatives centers around domiciling high-value advanced technology production to capture the substantial secondary and tertiary benefits. Wolf Richter notes “automation and industrial robots cost roughly the same in the US as in China. US labor costs are far higher, but other costs are reduced by bringing manufacturing onshore: Transportation costs are lower, lead times are shorter, there is less geopolitical uncertainty, less risk of losing or having to surrender the IP via technology transfer, etc”.
However, it is an uphill task to loosen China’s grip on the global supply chains. David P. Goldman notes “despite the Trump tariffs and the Biden Administration’s commitment to re-shoring, China’s dominance of global supply chains in manufacturing has grown, not shrunk, during the past several years…China’s growing dominance of global supply chains is the result of chronic US underinvestment in manufacturing. In constant dollars, US manufacturers’ orders of nondefense capital goods (excluding transportation) are where they were twenty years ago. Meanwhile imports of capital goods (also in constant dollars) have grown more than fourfold in the past twenty years…America’s capital stock of manufacturing equipment has barely changed since the recession of 2000…Until the United States invests in manufacturing technology, infrastructure and education, its dependency on Chinese supply chains will only grow. It should be no surprise that re-shoring turns out to be a charade, a soporific offered by politicians in place of a real solution”. “That’s because capital investment in US manufacturing continues to shrink….US imports from China are being replaced with imports from large developing countries…Countries replacing China tend to be deeply integrated into China’s supply chains and are experiencing faster import growth from China, especially in strategic industries. Put differently, to displace China on the export side, countries must embrace China’s supply chains”.
At the moment, US reindustrialisation seems to be progressing smoothly but this is because US firms are currently harvesting the low hanging fruit. But the US will find it hard going further ahead due to the difficulty of reversing the structural bias in its economy favouring services. For reindustrialisation[9] to be successful, there needs to be full commitment to increasing the level of investments not only into building factories but also into strengthening the ancillary infrastructure (energy, water and transport). Ensuring adequate supply of skilled labour is a major challenge because of the low US unemployment rates. Factories may find it difficult to employ workers willing to accept low wages, long hours and mediocre benefits that comes along with being globally competitive. Reindustrialisation must come in hand in hand with the intention to assist America to regain its international competitiveness. Without competitive manufacturing costs and quality, the output can’t be exported. The end-result is that reindustrialisation will result in inefficient producers that require protection and subsidies. In this context, the US tariffs and sanctions have cascading cost effects that undermine its international competitiveness. The alternative is a cheap currency policy but that has other drawbacks.
Given the intense geopolitical competition, firms and governments alike need to be prepared to absorb losses as reindustrialisation and self-sufficiency is likely to result in global duplication of capacity and a massive increase in inefficiencies. In China, the government and private sector are willing to tolerate losses. But the US operates a capitalist system; where there is less patience and capacity to absorb losses. The US government and firms also needs to be mindful that as reindustrialisation comes onstream, China will leverage off its dominance of global supply chains to attack US downstream and upstream dependencies[10]. This will create uncertainties for US-based rivals in relation to supply and costs of essential raw materials and access to export markets in the Global South.
Technology leadership. Economic leadership is synonymous with technology leadership. However, the US lead in technology is becoming more tenuous because of China’s rapid advances. Jamie Gaida, Jennifer Wong-Leung, Stephan Robin and Danielle Cave’s “research reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains. China’s global lead extends to 37 out of 44 technologies…covering a range of crucial technology fields spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas…The US comes second in the majority of the 44 technologies…currently leads in areas such as high performance computing, quantum computing and vaccines…there’s a large gap between China and the US, as the leading two countries, and everyone else”.
The US has attempted to block China’s advance in critical areas such as chip-making technology. What has been impressive has been the way the US has been able to marshal support from its allies. Nonetheless, evidence suggests China is already breaking through some chip-making strangleholds[11]. In my view, blockades can at most buy time by delaying China’s progress. In fact, the likely outcome will be technology bifurcation as China is likely to chart its own path.
While blockades can serve a purpose, the US needs to reinforce its technology leadership to win the economic race. In this context, China’s government is committed to supporting and deploying new technologies. In addition, competition in China is very intense; e.g. there are roughly 100 companies battling it out in China’s EV market. We don’t see this level of intense competition in US, Europe, Japan, South Korea and India. In fact, Western firms seem to find themselves under assault by up-and-coming Chinese firms with their disruptive business models.
However, US and Western firms seem badly positioned to transform their legacy operations to compete with China on industry disruption. Western firms face pressure from their need to maximise shareholder value maximisation and technology roll-outs meet with resistance from interest groups on issues relating to climate change, trade unions and privacy. Western governments need to foster a wave of private sector-led innovation and competitiveness that will disrupt their own legacy industries and practices if they are to retain technology leadership. Without technology leadership, reindustrialisation becomes a limited exercise in import substitution and would expose the West to the risks and costs of stranded assets[12].
Geopolitical alliances. Despite its lead, China’s size and organisational skills makes it difficult for US to take China on its own. The US’s greatest success has been its ability to tap into the strength of its allies – both traditional and new – to confront China. Victor Cha notes the Biden administration’s remarkable success in weaving a “networking of the traditional bilateral alliance system into plurilateral, functionally based coalitions to deal with different aspects of the China challenge. From groupings of United States, Japan, South Korea Taiwan, and the Netherlands on semiconductors and the United States, United Kingdom, and Australia on nuclear submarines, to the United States, Japan, India, and Australia joining together in the Quad, the United States has impressed skeptics with the ability to get these Asian partners to move away from a traditional hedging position between Washington and Beijing. Within the past year, hard cases like South Korea and Philippines have entered into unprecedented bilateral military arrangements and spoken out against unilateral belligerence by China in the Taiwan Strait”.
The whole-hearted support from allies comes as a surprise because it involved considerable economic sacrifices on their part. The Russian sanctions, technology blockade, investment restrictions and various control measures are hurting their firms and economies. It is too early to assess the outcomes from cutting China interdependencies and increasing bilateral frictions. Some legacy operators will benefit from the protection of their own markets and industries from prying Chinese entrepreneurs. But it is unlike Cold War 1.0 where allies benefitted from the US economic umbrella. Today, there are signs that Western economies are already suffering losses from reduced access to China’s market and supply chains. As these losses start to filter to the masses, it is unclear if they will still support the current governments. Towards this end, the loyalties of allies may start to waver if they continue to have to sustain the sacrifices. Perhaps among the allies, India’s vibrant economic growth may provide the offset to the losses from ostracizing China.
Conclusions
The race is too tight to call and momentum is constantly switching between the two economic superpowers. There are too many unknown variables. For example, it is difficult to envisage either US or China making it to 2030 without stumbling into a disaster. Today, it is China struggling under the weight of a property and stockmarket downturn, bad financial risks, export and investment slowdown. Tomorrow, it could just as easily be the US if it cannot find buyers for US debt, if it is forced to cut fiscal spending, or risks related to property[13] or small US banks blow up. Both US and China are equally vulnerable to risks from slower global economic growth and disruptions from military confrontations.
As neither side can force the other to make concessions, the economic race is moving into an escalatory phase whereby hard actions will begin to define the boundaries for economic fragmentation. The stakes are higher for the US as it focuses on maintaining its global economic leadership. The US is counting on reindustrialisation to deliver, on technology blockade to contain and on its allies to hold the line against China. If these strategic goals are achieved, then US is likely to widen its lead over China in 2030. Otherwise, the US would need to count on China to make policy errors and stumble.
References
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Victor Cha (6 December 2023) “Beyond Taiwan and de-risking: Allied strategies for addressing the China challenge”. Center for Strategic & International Studies (CSIS). https://www.csis.org/analysis/beyond-taiwan-and-de-risking-allied-strategies-addressing-china-challenge
Wolf Richter (3 February 2024) “Eyepopping factory construction boom in the US: Chip makers on forefront, but CHIPS Act funds not even released yet”. Wolf Street. https://wolfstreet.com/2024/02/03/eyepopping-factory-construction-boom-in-the-us-chip-makers-on-forefront-but-chips-act-funds-havent-even-been-disbursed-yet/
Wolf Richter (22 February 2024) “The Fed wants to drive QT as far as possible without blowing stuff up, and it’s working on a plan: FOMC minutes”. Wolf Street. https://wolfstreet.com/2024/02/22/the-fed-wants-to-drive-qt-as-far-as-possible-without-blowing-stuff-up-and-its-working-on-a-plan-fomc-minutes/
[1] Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (12 December 2023) “Reset, prevent, build: A strategy to win America’s economic competition with the Chinese Communist Party”.
[2] https://www.wikidata.org/wiki/Q24900613
[3] “Global reset – Two whales in a pond”.
[4] “Theories on war and diplomacy (Part 3: Conflict in the information realm)”
[5] https://www.imf.org/external/datamapper/PPPSH@WEO/CHN/USA?year=2023
[6] https://www.imf.org/external/datamapper/NGDPD@WEO/CHN/USA
[7] According to the Stockholm International Peace Research Institute, total global military spending increased 3.7% in real terms in 2022 to a new record high of $2.24 trillion. MSCI’s global defense benchmark is up 14% on the year and breaking out to new highs. See Tyler Durden.
[8] See Wolf Richter “The Fed wants to drive QT as far as possible without blowing stuff up, and it’s working on a plan”.
[9] See David P. Goldman “Restoring American manufacturing: A practical guide”.
[10] See Global Times “China to impose export controls on key materials for chipmaking as West’s chip war escalates”.
[11] See Louise Low; Sujai Shivakumar, Charles Wessner and Thomas Howell.
[12] See Robert Ferris.
[13] Banks in Japan, Europe and Canada apparently have significant exposures to US properties.