Four factors – three of them related to President Donald Trump – explain this strange phenomenon: 1. The Federal Reserve Bank Former Fed chief Janet Yellen guided the US economy through the Great Recession, keeping interest rates very low to ensure recovery. But she had been appointed by Barack Obama, so President Donald Trump fired her and picked as his Fed chief Jerome Powell, who started to raise rates. Wall Street is now worried that he will raise rates so far that he sabotages the economy and drives it into a recession. Professional stock traders are simply trying to get ahead of the curve. 2. The trade war with China The ruling Communist Party sorely represses the people of the country, and at the same time refuses to open its markets all the while demanding transfer of high technology secrets by Western firms that want to produce goods there. We do need to support the democratic aspirations of the Chinese people, and we have to stop this trade abuse. Trump, … [Read more...] about What is happening with Wall Street?
What triggered the 2008 financial crisis
PARIS: Too much debt has made the world's financial system as vulnerable as it was 10 years ago, Europe's top central banker during the 2008 global meltdown has warned as he looks back on the crisis."There is now agreement that the excessive debt level in advanced economies was a key factor in the triggering of the global financial crisis in 2007 and 2008," Jean-Claude Trichet, who ran the European Central Bank between 2003 and 2011, said in an interview."The growth in debt, especially private debt, in advanced countries has slowed, but this slowdown has been offset by an acceleration of emerging country debt," said Trichet, a Frenchman who ran his country's central bank, the Banque de France, before taking the helm at the ECB."This makes the entire global financial system at least as vulnerable as it was in 2008, if not more so."Trichet was only the second president at the ECB, which was barely a decade old when US bank Lehman Brothers collapsed in September 2008, a date widely seen … [Read more...] about Global finance ‘as vulnerable’ as in 2008: Ex-ECB chief
caption On the other hand, it might be nothing. source (Photo by Matt Cardy/Getty Images) The yield on 10-year Treasury notes declined for a fifth consecutive week. We’re getting closer to a scary “yield curve inversion” – an event that has historically presaged recessions. But we’re not there yet. This time it’s different, allegedly. The yield on 10-year US Treasury notes declined for a fifth consecutive week, taking the US economy yet another step toward recession. A contraction in America would hurt growth across the planet. Treasury yields don’t automatically trigger recessions, of course. But there has been a worrying historical correlation between the moment that the percentage yield on the two-year Treasury becomes greater than the yield on the 10-year note. That phenomenon is called a “yield curve inversion,” and it means that investors are so worried that they’re unwilling to bet on short-term … [Read more...] about We’re nearly at zero: The US just passed another flashing-red indicator on the way to recession
caption Alistair Darling. source Reuters/Dylan Martinez Former British Chancellor Alistair Darling tells BI cyber attacks could cause another global financial crisis. Darling said it would be a “profound mistake” for governments and institutions to ignore the possibility that another crisis could be just around the corner. Darling was Britain’s Chancellor of the Exchequer during the 2008 financial crash and oversaw the bailout of UK banks Lloyds and Royal Bank of Scotland. Ignoring the possibility of another looming financial crisis would be a “profound mistake” for governments and institutions, according to Lord Alistair Darling. Darling, who was the UK’s Chancellor of the Exchequer during the 2008 financial crisis, told Business Insider in an interview: “If you look at the causes of the last crisis, yes the banks are stronger, but don’t assume that the … [Read more...] about The man who guided Britain through the 2008 financial crisis worries cyber attacks could trigger the next crash
Global stock markets are selling off amid fears about tightening monetary policy from central banks. Goldman Sachs: The data is “fundamentally good.” We’ve rounded up the analyst reaction from big banks and trading houses. LONDON – Stock markets around the world have been tanking over the last 24 hours, following the biggest single-day points drop for the Dow Jones Industrial Average in history. Traders are concerned that US inflation could rise faster than expected and force the Federal Reserve to tighten monetary policy faster than has been forecast. That could mean tougher business conditions for companies who have grown used to cheap and free-flowing money in the year’s since the 2008 financial crisis. Business Insider has rounded up what analysts from big banks and trading houses are saying about the sell-off. There doesn’t seem to be consensus around whether we’ve reached the … [Read more...] about Here’s what Goldman Sachs, UBS, Deutsche Bank and more are saying about the global stock market rout