Category Archives: Doomsday scenarios

Central Counterparties: The New Locus of Systemic Risk?

Central counterparties, also known as central clearinghouses, were supposed to reduce systemic risk. That story is not playing out according to its script.

Chinese Slowdown and the World Economy

China’s slowdown started years ago, not last year. And the impact on the US is likely to be lower than news reports would lead you to believe.

Flint: Let Them Drink Pollution?

Why the crisis in Flint, Michigan is about race and class, and the American nightmare of metastasizing inequality of wealth and power.

Office of Financial Research Warns of Corporate Debt Defaults, Particularly Related to Energy Loans, as Stability Risk

Nothing like the downgrades and the prospect of default to focus the mind….

Wobbly Italian Banks May Get “Bad Bank” Resolution Vehicle

Italian banks’ extend and pretend game may be coming to an end.

Former BIS Chief Economist Warns of Massive Debt Defaults, Need for Debt Jubilee; Fingers Europe as First in Line

Even though the former chief economist of the BIS calls for a debt jubilee, it’s only part of the medicine needed to get the economy out of the ditch.

How Europe Will Fail to Address the Migration Crisis in Early 2016

Explaining the reasons for Europe’s gridlock on its migration crisis.

Wolf Richter: Moody’s Explains Why Junk Bonds Will Sink Stocks Further

Why the high risk spreads in the junk bond market bode ill for the stock market.

Ilargi: Square Holes and Currency Pegs

The difficultly of maintaining currency pegs, most important the renminbi and riyal versus the dollar, will put even more stress on financial markets.

Bloomberg Spotlights Poor Private Equity Returns From Last “Peak of Cycle” Mega Deals

Buying at the peak rarely works out, as private equity’s pre-crisis mega deals confirm. Yet general partners fared really well.

Flooded Cities

Major cities are often located in low-lying areas that are flood-prone. Worse, after being flooded out, people and businesses tend to return even when relocating is the better choice.

Funds Hold Most Cash Since GFC

Fund manager cash holdings are at crisis-bottom levels, typically a sound bullish indicator. But will history predict the future this time?

Academics in Turkey Who Stand Up for Human Rights Threatened With Jail, Even Death

Authoritarianism in Erdogan’s Turkey is taking an even uglier turn.

Bond Investors Get Skittish as Record Wave of Acquisitions Push to Close Financings

Standard & Poors warns of the worst drop in the “net outlook bias” for bond investors since the financial crisis.

Why Larry Summers is Wrong and Bernie Sanders is Right on Glass Steagall

Larry Summers, acting as a proxy for Team Clinton, attacked Sanders’ reform proposals, particularly the an updated Glass Steagall. Her’s why Summers is wrong.