Amid all the doom that continues to pervade markets, it is interesting to revisit the issue of “decoupling”.

We at Goldman Sachs have been guilty of popularising the notion of both decoupling and recoupling. Initially, for much of late 2006 and all of 2007, we advocated the notion of “decoupling” (from the US) of both the rest of the world’s economy and markets. Then at the end of last year, we raised the prospect of “recoupling” on the basis that some parts of the rest of the world would now find it difficult to ignore the US slowdown, but also that other equity markets were much less attractively valued relative to the US.