The U.S. investors, in particular, anticipate an easy landing. ''It may be wishful thinking, but it does seem that the U.S. fund managers think the U.S. economy will slow of its own accord,'' said Trevor Greetham, a global strategist for Merrill Lynch. A full 100 percent expect the economy to strengthen in South Africa where GDP growth is projected to almost treble to 3.1 percent next year. The Merrill Lynch survey is just one of the signs that the U.S. markets may be ailing. A loss in appetite for U.S. Treasuries was the first and most obvious symptom. It is trading at three-year lows against the Japanese yen and has slid almost 4 percent against the euro in the past two months.
Investors cite the widening U.S. trade deficit as their principle reason for selling dollars.
That is the largest quarterly gap on record. Now, the equity market is starting to suffer. In July, flows were up just 0.97 percent, compared with a January gain of 3.51 percent, according to the most recent data available from Lipper Analytical in New York. At the same time, net inflows into Japanese funds were up 3.71 percent in July after a staggering jump of 22.70 percent in June. Pacific regional funds and Pacific funds that exclude Japan are also recording big inflows this year.