Tuesday, February 19, 2008

Warning Global Financial catastrophic is happening !!

I would tell audiences that we were facing not a bubble but a froth - lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy." Alan Greenspan, The Age of Turbulence. [ via FT ]

Heres the 12 warning indicators .
  1. housing recession in US history , would wipe out between $4,000bn and $6,000bn in household wealth
  2. further losses, beyond the $250bn-$300bn now estimated, for subprime mortgages.
  3. big losses on unsecured consumer debt: credit cards, auto loans, student loans and so forth.
  4. downgrading of the monoline insurers, which do not deserve the AAA rating on which their business depends.
  5. meltdown of the commercial property market
  6.  bankruptcy of a large regional or national bank.
  7. big losses on reckless leveraged buy-outs
  8. wave of corporate defaults.
  9. a meltdown in the "shadow financial system" (hedge funds etc)
  10. further collapse in stock prices.
  11. drying-up of liquidity in a range of financial markets, including interbank and money markets
  12. vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices

Sounds like a SCARY MOVIE !!

1 comment:

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