Hidden cause of great recession and next financial crisis? Debt

Posted by Matt in March 18th, 2010 | no comment

Published in Financial Crisis, 10 Years, Christian Science Monitor, Csmonitor, Debt Service, Federal Debt, Feds, Financial Crisis, Gdp, Inflation Rates, Interest Rates, Math, Money, Recession, Reliance, Tax Receipts, Tax Revenues, Undercurrents, World Economy

But here’s the interesting point: by failing to address the real causes of the crisis, the feds only allowed those undercurrents to grow more powerful and more dangerous.
Instead of reducing the world economy’s reliance on debt, they increased it!
…
Now, let’s do a little math. The US has total tax receipts equal to about 15% of [...]

Are sovereign debt crises inevitable? – The Curious Capitalist – TIME.com

Posted by Matt in March 17th, 2010 | no comment

Published in Financial Crisis, Authors, Carmen Reinhart, Centuries, Conclusions, Consequences, Countries, Crises, Debacle, Developing World, Economists, Financial Crisis, Folly, Government Debt, Greece, Harvard University, Kenneth Rogoff, Sovereign Debt, Trend, University Maryland, University Of Maryland

Thanks to the ongoing debacle in Greece, we’ve become all too aware about the dangers of the rapid build-up of government debt throughout the developed world in the wake of the financial crisis. The potential consequences of that trend are made ever more frightening in a new study by economists Carmen Reinhart of the University [...]

Is Financial Regulatory Reform Possible?

Posted by Matt in March 16th, 2010 | no comment

Published in Financial Crisis, Banking Sector, Europe And America, Financial Crisis, Financial Regulation, Global Banking, Governments, Oversight, Regulatory Reform, Tensions, Trans Atlantic, Visions

Europe and America Wrestle over Tighter Financial Regulation
In the wake of the financial crisis, governments in Europe and the US sought to rein in the global banking sector. One year later, little has been accomplished — and success in the near future seems doubtful. Competing oversight visions could increase trans-Atlantic tensions.
Read More…

Steven Pearlstein reviews ‘The Big Short’ by Michael Lewis – washingtonpost.com

Posted by Matt in March 14th, 2010 | no comment

Published in Financial, Authoritative Analysis, Bond Salesman, Crazy Steven, Credit Bubble, Deutsche Bank, Fiasco, Financial Crisis, Folly, Fraud, Hedge Funds, Led, Michael Lewis, Signals, Steven Pearlstein, Washingtonpost

If you read only one book about the causes of the recent financial crisis, let it be Michael Lewis’s, “The Big Short.”
That’s not because Lewis has put together the most comprehensive or authoritative analysis of all the misdeeds and misjudgments and missed signals that led to the biggest credit bubble the world has known. What [...]

Chinese facing debt time bomb – Telegraph

Posted by Matt in March 13th, 2010 | 1 comment

Published in China, Economy, Chinese Banks, European Banks, Face, Financial Crisis, Mirror, Telegraph, Time Bomb

Chinese banks face a $350bn (£230bn) debt time bomb that could mirror the financial crisis suffered by US and European banks, according to banking experts.
Chinese facing debt time bomb – Telegraph

How Greece’s Debt Crisis Affects America – US News and World Report

Posted by Matt in March 11th, 2010 | no comment

Published in Economy, Financial, Area Exports, Brown Brothers Harriman, Council Of Economic Advisers, Currency, Debt Crisis, Economic Downturns, Economic Report, Financial Crisis, Gaps, Global Head, Greece, Interest Rates, Investment Firm, News World, Recession, S Council, Us News And World Report, White House

If Greece defaults, “it risks exacerbating the economic downturns and could even reignite an acute financial crisis” through higher interest rates, Marc Chandler, global head of currency strategy at investment firm Brown Brothers Harriman, wrote in a report.
A Greek default would hit Americans hard in one major area: exports. According to the Economic Report of [...]

Economy ‘Far too Close’ to Double Dip: Roubini

Posted by Matt in March 10th, 2010 | no comment

Published in Economy, Financial, Challenges, Debt Crisis, Double Dip Recession, Economy, Europe, Financial Crisis, Fiscal Stimulus, Measures, News Headlines, Poor Economic Data, Research Paper, Risk, Roubini, Second Half, Tipping Point

Poor economic data in the US coupled with Europe’s debt crisis are contributing to an increase of the risk of the US economy going through a double-dip recession, Nouriel Roubini, who predicted the 2007 financial crisis, wrote in a research paper.
At best, the US economy is headed for a U-shaped recovery this year, Roubini said. [...]

China’s Hidden Debt Risks 2012 Crisis, Northwestern’s Shih Says – BusinessWeek

Posted by Matt in March 2nd, 2010 | no comment

Published in China, Financial, Businessweek, China Crisis, Evanston Illinois, Factions, Financial Crisis, Government Debt, Government Entities, Gross Domestic Product, Hidden Debt, Interview March, Local Government, March 1, Northwestern University, Phone Interview, Political Economist, Professor Victor, Risk, Slowdown, World Economy, Worst Case

China’s hidden borrowing may push government debt to 96 percent of gross domestic product next year, increasing the risk of a financial crisis in the world’s third-biggest economy, Professor Victor Shih said.
“The worst case is a pretty large-scale financial crisis around 2012,” said Shih, a political economist at Northwestern University in Evanston, Illinois, who spent [...]

Fair Game – Who Will Rein In Those Credit Default Swaps? – NYTimes.com

Posted by Matt in February 27th, 2010 | no comment

Published in Financial, Bank For International Settlements, Congressional Reform, Credit Default Swaps, CreditDefaultSwaps, Derivatives, Face Value, Fair Game, Financial Crisis, Loopholes, Nytimes, Second Quarter, Trillion

Congressional “reform” plans for credit default swaps are full of loopholes, guaranteeing that another derivatives-fueled financial crisis awaits us. According to the Bank for International Settlements, credit default swaps with a face value of $36 trillion were outstanding in the second quarter of 2009, the most recent figures available.
Fair Game – Who Will Rein [...]

Risk taking, regulatory capture and bailouts: The doomsday cycle | vox

Posted by Matt in February 23rd, 2010 | no comment

Published in Economy, Financial, Best Route, Crises, Disaster, Doomsday, Economic System, Economists, Federal Reserve, Financial Collapse, Financial Crisis, Financial Risk, Gdp, Interest Rates, Last Three Decades, Lead, Proportions, Safer System, Trajectories, Vox

Over the last 30 years, the US financial system has grown to proportions threatening the global economic order. This column suggests a ‘doomsday cycle’ has infiltrated the economic system and could lead to disaster after the next financial crisis. It says the best route to creating a safer system is to have very large and [...]