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Tuesday, 17 September 06:17 (GMT -05:00)



Business And Politics News

No Global Financial Crisis This Year, Roubini Says


Famous American economist Nouriel Roubini is sure that there is not going to be any major crisis in 2016. Still, this year is going to be a tough one for international commodity markets as well as many economies out there, especially emerging ones, the expert says. By the way, Mr. Roubini has been famous for his prediction of the 2008 global crisis, which is why he has been enjoying respect in the international financial community ever since.

 

 

 

 
Multiple Reasons For Economic Challenges           
 
Mr. Roubini is convinced that there are at least 7 major sources of global risk at this point while over the past years there used to be one one or another source of such risks at a time – the Eurozone crisis, the market hysteria of the Fed’s plans to start raising interest rate, possible Brexit, China’s hard economic landing and so much more…
 
First off, it is all about concerns over China's hard landing. The thing is, China is the world’s second biggest economy, which is why it cannot but affect other economies and international stock markets. China keeps on seeing its economy slowing down amid a flight of capital.  
 
Secondly, a lot of emerging markets are facing major challenges in the form of macroeconomic imbalances, budget deficits, growing inflation, devaluing national currencies, and economic slowdowns. Most of those countries have still failed to implement all the necessary structural reforms. In the meantime, devaluing currencies make their dollar debts even more expensive than ever.
 
Thirdly, the Fed might have mistaken when putting an end to the policy of zero interest rates. Lower inflation (caused by lower oil prices), economic slowdown, tougher financial conditions (due to a stronger dollar, weaker stock markets, and wider credit spreads) are now threatening the U.S. economic growth and inflation expectations.
 
The forth factor to keep in mind is, multiple geopolitical threats start reaching the boiling point. As usual, the Middle East brings us more and more uncertainty, especially amid the possibility of a long-term cold war between local states – for example, Saudi Arabia and Iran.
 
Number 5 is all about oil prices, which are going down and affecting many of the stock markets out there, simultaneously driving credit spreads higher, not to mention oil-exporting economies around the globe.
 
The 6th challenge to consider is crisis in the banking sector. Banks all around the world are seeing their profits going down amid bad debts, unfavorable legislation, risky business models, negative interest rate policies and so on.
And finally, the Eurozone may turn into the epicenter of a major financial hurricane this year. European banks have a lot of problems to solve. At the same time, migration crisis may trigger more challenges, including the disintegration of the Schengen Area and the dismissal of Merkel’s government.

At the same time, Great Britain may quit the European Union. The Brexit referendum is planned for late June 2016. This may provoke the domino effect. For instance, Greece also starts confronting the lenders, which may result in a Grexit. All in all, Europe’s integrity is in jeopardy. The situation in Ukraine is still unstable.

 

The bottom line is, 7 major problems plus extra ones may seriously affect the world in the future. They make the global economy slow down. Eventually, riskier assets are going to lose value since few investors are going to stay interested in them. While those risk are real, Mr. Roubini says that even if there is a major crisis, those 7 factors may take some time to escalate and trigger a crisis. That’s why he doesn’t expect something like that this year. Well, that remains to be seen…

 

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Fed Cuts Key Interest Rate For The First Time In 10 Years

The U.S. Federal Reserve is reported to have cut the key interest rate, which is something really outstanding since the Fed has done it for the first time since 2009.

Publication date: 11 August 03:05 AM

New Prime Minister Names Brexit Date

It seem that the new Prime Minister of the United Kingdom is really determined about everything related to the Brexit. The process is expected to start in later 2019. Boris Johnson's standpoint on the matter didn't come as a surprise to the international expert community, Market Leader reports. The thing is, he has been well-known for being an advocate ad big supporter of quitting the European Union in general, and doing so without a major agreement in particular, which is also known as the hard Brexit scenario. 

Publication date: 07 August 06:54 AM

Johnson Launches Hard Brexit Ad Campaign

Boris Johnson, who has recently been appointed new UK Prime Minister, is on his way to launch an ad campaign to promote the idea of quitting the EU the hard way, which is also known as the hard Brexit. For those of you who don't know, the hard Brexit scenario implies quitting the European Union without signing a major agreement.

Publication date: 31 July 11:43 AM

U.S-China Trade War Is Sponsored By Consumers

According to the IMF, consumers and producers are the biggest losers in the trade war between the United States and China. Despite growing duties, American companies are not in a hurry to move their production back to the USA.

Publication date: 12 July 01:19 AM

US-China Trade Conflict May Trigger Another Global Financial Crisis

Beijing and Washington are one step away from escalating their trade conflict. The confrontation may harm the entire global economy. Some experts belive that the trade war may also trigger another global financial crisis. At this point, the parties seem to have come to a standstill, which is why the chances of the conflict escalating into a move severe trade war are still growing.

Publication date: 18 June 10:18 AM

WTO Lowers Global Trade Growth Forecast

 WTO experts are reported to have revised their forecast for the pace of global trade growth. The renewed forecast names figures below the previous ones - 2,6% against 3,7%. It's also interesting to note that the previous forecast for 2018 failed to match the actual figures.

 
Publication date: 19 May 02:58 AM

How to Protect Investment Capital in 2019?

Existing political and economic risks are pushing international investors into thinking about the security of their investment capital. Chasing big profits becomes secondary to this kind of security.

Publication date: 31 March 11:26 AM

EU Comes Up With Workaround to US Sanctions

The representatives of Germany, France, and the UK have registered a company to let it trade with Iran despite the US sanctions. The company still needs to be approved by 28 EU members.

Publication date: 31 March 02:33 AM

Beijing and Washington are getting ready for the final talks

Publication date: 17 February 08:58 AM

US-China Trade War Reaches Next Level

Washington and Beijing have announced a new round of talks. International experts say that the trade war is indeed going to a whole new level.
Publication date: 08 January 10:17 AM