USA
The United States comes into the World Cup off what is arguably its best-ever showing in international soccer last year. In the Confederations Cup, the US side defeated Spain in the semis and led Brazil (yes, la Seleςão!) 2x0 at half-time of the final, only to succumb to a determined three-goal barrage led by Luis Fabiano. Still, the USA won a measure of respect and keeper Tim Howard was awarded the Golden Glove.
Expectations have certainly changed for the US team. For decades, it languished in the backwater of international soccer, and fans were pleased just to see the team make it into the 1990s World Cup tournaments. Now, there is considerable hope - if not an expectation - that the USA will make it out of group play. Home fans will no doubt dream for a reprise of the classic 1950 World Cup upset of group favorite England in the first match in Group C on June 12. But the US side probably has a better chance of pulling off wins against Algeria and Slovenia, currently ranked 31th and 23th in the world respectively.
In his State of the Union speech, President Barack Obama set forth a goal of doubling US exports over the next five years. That’s a tall order, but not impossible - and exports certainly should be a bright spot of the US outlook given what we expect to be strong global growth and a weakening of the US dollar on a trade-weighted basis.
The US needs exports to help offset what is likely to be sluggish domestic demand. In the aftermath of the housing and credit bubble and bust, we expect private spending - particularly residential investment - to recover much more slowly than is typical following a deep recession. Research by our Global Economics team as well as the International Monetary Fund points to slower recoveries after major housing busts and financial crises. Tighter credit and lower household wealth tend to impair the improvement, keeping growth moderate and unemployment high.
The US soccer community is certainly doing its part for the export push. Whereas in 1998 and 2002 a majority of the World Cup roster lived and played in the less competitive US leagues, more than 50 Americans now play for top professional clubs in Europe. (Admittedly, not all have been welcomed…winger DaMarcus Beasley’s car was recently firebombed near his residence in Glasgow, unfortunately not the only unfriendly incident for him or other US players in Europe.) The vast majority of the likely US roster will be current members of European club teams, giving them more familiarity with the players and level of competition they will face in the Cup. Indeed, as the chart above shows, US soccer exports to Europe have increased even faster than US exports overall!
The United States’ openness to immigration has always been a strong suit. Soccer has hardly been an exception, with several high-profile national team players in recent years who were born and lived much of their lives abroad. However, it’s quite possible that the entire squad in 2010 could consist of native-born Americans, a testament to the increasing development of competitive soccer in the States. In truth, soccer is the most widelyplayed sport among US schoolchildren - a fact that surprises many foreigners - but historically, many of the best athletes were siphoned off by other sports, especially since US professional leagues have not been as well established. Recent years have seen a virtuous cycle of increased success and exposure for the national team and a growing domestic fan base (led by ‘Sam’s Army’, the unofficial supporters’ group) that is getting exposed to World Cup excitement.
Policy authorities can assist in the export push - of both players, and goods and services - if an easy stance leads to further dollar depreciation. We think Fed hikes are very unlikely in 2010 and do not expect them in 2011 either. US manufacturers would certainly welcome the incremental competitiveness (and consequently higher demand for their products), and US players in European leagues will no doubt appreciate their increased purchasing power on visits home!
USA
The 2010 World Cup
The United States comes into the World Cup off what is arguably its best-ever showing in international soccer last year. In the Confederations Cup, the US side defeated Spain in the semis and led Brazil (yes, la Seleςão!) 2x0 at half-time of the final, only to succumb to a determined three-goal barrage led by Luis Fabiano. Still, the USA won a measure of respect and keeper Tim Howard was awarded the Golden Glove.
Expectations have certainly changed for the US team. For decades, it languished in the backwater of international soccer, and fans were pleased just to see the team make it into the 1990s World Cup tournaments. Now, there is considerable hope - if not an expectation - that the USA will make it out of group play. Home fans will no doubt dream for a reprise of the classic 1950 World Cup upset of group favorite England in the first match in Group C on June 12. But the US side probably has a better chance of pulling off wins against Algeria and Slovenia, currently ranked 31th and 23th in the world respectively.
In his State of the Union speech, President Barack Obama set forth a goal of doubling US exports over the next five years. That’s a tall order, but not impossible - and exports certainly should be a bright spot of the US outlook given what we expect to be strong global growth and a weakening of the US dollar on a trade-weighted basis.
The US needs exports to help offset what is likely to be sluggish domestic demand. In the aftermath of the housing and credit bubble and bust, we expect private spending - particularly residential investment - to recover much more slowly than is typical following a deep recession. Research by our Global Economics team as well as the International Monetary Fund points to slower recoveries after major housing busts and financial crises. Tighter credit and lower household wealth tend to impair the improvement, keeping growth moderate and unemployment high.
The US soccer community is certainly doing its part for the export push. Whereas in 1998 and 2002 a majority of the World Cup roster lived and played in the less competitive US leagues, more than 50 Americans now play for top professional clubs in Europe. (Admittedly, not all have been welcomed…winger DaMarcus Beasley’s car was recently firebombed near his residence in Glasgow, unfortunately not the only unfriendly incident for him or other US players in Europe.) The vast majority of the likely US roster will be current members of European club teams, giving them more familiarity with the players and level of competition they will face in the Cup. Indeed, as the chart above shows, US soccer exports to Europe have increased even faster than US exports overall!
The United States’ openness to immigration has always been a strong suit. Soccer has hardly been an exception, with several high-profile national team players in recent years who were born and lived much of their lives abroad. However, it’s quite possible that the entire squad in 2010 could consist of native-born Americans, a testament to the increasing development of competitive soccer in the States. In truth, soccer is the most widelyplayed sport among US schoolchildren - a fact that surprises many foreigners - but historically, many of the best athletes were siphoned off by other sports, especially since US professional leagues have not been as well established. Recent years have seen a virtuous cycle of increased success and exposure for the national team and a growing domestic fan base (led by ‘Sam’s Army’, the unofficial supporters’ group) that is getting exposed to World Cup excitement.
Policy authorities can assist in the export push - of both players, and goods and services - if an easy stance leads to further dollar depreciation. We think Fed hikes are very unlikely in 2010 and do not expect them in 2011 either. US manufacturers would certainly welcome the incremental competitiveness (and consequently higher demand for their products), and US players in European leagues will no doubt appreciate their increased purchasing power on visits home!
By Andrew Tilton
at +100 and Over 2.5 (2x) 
at +137
at -133
