The Global Stall

Fueled by technology and a strong U.S. dollar, world economies grew rapidly and became more entwined. But then the engine ran out of gas. Our guide to the slump--and what to expect in the next 12 mont


WHAT HAPPENED: Simply, the high-tech boom went bust. After five years of astonishing growth, fueled by an irrationally exuberant stock market that showered money on everything to do with the Internet, both businesses and consumers decided they had all the gizmos they needed. That left companies with massive amounts of inventory on their shelves. The downturn then began to spread to the rest of the manufacturing segment, such as autos. High levels of household debt--all those credit cards and home-equity loans--don't help.

OUTLOOK: U.S. stocks and bonds remain the best value for investors around the world. Housing...

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