the current economic downturn is likely to focus its damage on asset prices – the U.S. dollar, home values, low and mid-quality debt, and equityprices (largely through the combination of narrowing profit margins andlower valuations). In short, I expect that we are in the process ofwhat might be called a “writeoff recession,” where significant amountsof asset value and perceived wealth will ultimately be written off.There will undoubtedly be some “wealth effects” on the real economy,but I would expect these to be only moderate.
