Category Archives: Financial Crisis

Could Greece Be The Trigger Of The Next Financial Crisis? | The Daily Caller

Greece is in battle over its next debt payment, and this time, if the conflict is not resolved, it could lead to the unraveling of the Euro.

Unless Greece is able to raise, or borrow, nearly $7.39 billion, it will default on its debt payments due in July. If Greece defaults, it could catalyze a domino effect in the Eurozone, causing sovereign debt crises to spread throughout Europe. A widespread fear is that defaults in Greece will trigger a debt crisis in Italy — one of the largest bond markets in the world.

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“If you get a Greek default, you also have very serious problems in Italy. We could be talking about the Euro coming unstuck,” Resident Fellow at the American Enterprise Institute Desmond Lachman, tells The Daily Caller News Foundation. “If the Euro does come unstuck, that is going to be a huge crisis globally. As soon as countries leave the Euro, they will almost certainly default on their debt.”

Could Greece Be The Trigger Of The Next Financial Crisis? | The Daily Caller

This is how you know something desperate is going on in China’s economy – Business Insider

Things are looking a bit desperate in China.

The country has been suffering from money outflows for months — something that troubles Beijing because it pulls down the value of the Chinese yuan and makes the economy harder to manage.

But government measures to stem the outflows — like requiring citizens to report transfers over $10,000 and discouraging overseas acquisitions— still aren’t showing up in the numbers. In January, up to $82.7 billion left the country, according to Bloomberg economist Tom Orlik, bringing currency reserves down below the $3 trillion mark.

This is how you know something desperate is going on in China’s economy – Business Insider

China And The Impending Debt Crisis | Investing.com

There is a giant debt-bubble looming over the Chinese economy. Despite measures by the Chinese government to reform, China’s private sector rely heavily on state lending by state banks. With debt mounting at twice the rate of growth, Let’s do an in-depth analysis into China’s debt and what it is made up of, to better understand the underlying factors of the second-biggest economy in the world.

China accounts for 33% of global GDP growth and the nation contributes to half of overall commodity demand. If China were to tumble into a recession it would create a vacuum that would reverberate globally.

China And The Impending Debt Crisis | Investing.com

Grexit? Greece again on the brink as debt crisis threatens break with EU | World news | The Guardian

In the week of Groundhog Day it seemed entirely appropriate: Greek farmers, many on tractors, have once again been blockading roads and border posts amid mounting signs that the country long at the centre of Europe’s debt woes is – once again – teetering towards crisis.

Protesting farmers have been a regular feature of the social unrest that has sporadically gripped Greece. It is now more than seven years since the Greek financial crisis erupted and the debt drama has often had a deja vu quality about it.

Grexit? Greece again on the brink as debt crisis threatens break with EU | World news | The Guardian

China is becoming ‘increasingly risky’ because of its economy: Analyst

A major risk to U.S. markets is looming, and it’s bigger than headlines and President Donald Trump’s tweets, Goldman Sachs’ Sharmin Mossavar-Rahmani told CNBC on Wednesday.

The threat is the Chinese economy, the Goldman Sachs Private Wealth Management chief investment officer told “Squawk on the Street.”

“We use the term that China could ‘submerge’ under the burden of its own debt,” Mossavar-Rahmani said. “If you look at any of the debt measures in China, they’re tremendously high.”

China is becoming ‘increasingly risky’ because of its economy: Analyst

Italy, Germany, And The Euro-Zone Are On The Brink Of A Conflict

As a new year begins, we look at a key forecast that will bridge 2016 and 2017: the Italian banking crisis. In Geopolitical Futures’ 2016 forecast, we said that the focal point of Europe’s financial crisis would shift from Greece to the Italian banking system. For 2017, we forecast that the evolution of this crisis will eventually force a confrontation between Italy, Germany, and the European Union. Here, we establish a starting point for the looming Italian banking crisis in 2017, which will unfold over many months and have a range of consequences.

Italy, Germany, And The Euro-Zone Are On The Brink Of A Conflict

I was one of the only economists who predicted the financial crash of 2008 – in 2017 we need to make urgent changes | The Independent

Economics is driven by ideology – it is ideology, not science, which drives them to assert that bank bailouts are tolerable but policies that protect the poor aren’t. Unsurprisingly, these flawed theories and models are a great comfort to financial elites – which is why so many economists are hired and funded by big banks, corporations and the wealthy

I was one of the only economists who predicted the financial crash of 2008 – in 2017 we need to make urgent changes | The Independent

The Bank of Canada just laid out how the economy could tank – Macleans.ca

In a video posted Monday on YouTube, in conjunction with the release of the Bank’s semi-annual financial system review last Thursday*, Bank of Canada senior policy adviser Joshua Slive sketches out how Canada’s dangerous brew of debt and inflated house prices could combine to devastate the economy.

Here’s the scenario that worries the Bank.

1. As the Bank has pointed out already, households are highly indebted and house prices are rising at an unsustainable rate, though as Slive observes, people can often cope with these vulnerabilities for an extended period.

The Bank of Canada just laid out how the economy could tank – Macleans.ca

Cracks in the Chinese Powerhouse | The Cipher Brief

First, mounting public and private debt has raised the risk of a financial crisis and of dramatically slower growth rates. Chinese debt has accumulated a dizzying 465 percent over the past decade, and totaled nearly 250% of GDP in 2015. Servicing the debt will consume a growing part of the country’s resources and is already exacerbating financial volatility. Worried about the size and pace of credit expansion, the IMF has called the resolution of Chinese debt an urgent task.

Second, the country’s adherence to an increasingly inefficient mode of economic growth threatens long-term growth. China powered its phenomenal rise on the backs of exports and investment. But this approach has grown less effective as world demand has fallen and capacity grown redundant. More debt is now required to generate less and less growth. According to economist Ruchir Sharma, China now borrows six dollars to generate one dollar in GDP growth.

Cracks in the Chinese Powerhouse | The Cipher Brief

The Big Short: is the next financial crisis on its way? | Money | The Guardian

In the Oscar-winning The Big Short, Steve Carell plays the angry Wall Street outsider who predicts (and hugely profits from) the great financial crash of 2007-08. He sees sub-prime mortgages rated triple-A but which, in reality, are junk – and bets billions against the banks holding them. In real life he is Steve Eisman, he is still on Wall Street, and he is still shorting stocks he thinks are going to plummet. And while he’s tight-lipped about which ones (unless you have $1m to spare for him to manage) it is evident he has one major target in mind: continental Europe’s banks – and Italy’s are probably the worst.

Why Italy? Because, he says, the banks there are stuffed with “non-performing loans” (NPLs). That’s jargon for loans handed out to companies and households where the borrower has fallen behind with repayments, or is barely paying at all. But the Italian banks have not written off these loans as duds, he says. Instead, billions upon billions are still on the books, written down as worth about 45% to 50% of their original value.

The Big Short: is the next financial crisis on its way? | Money | The Guardian