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Amidst the deflation of the Chinese bubble gaining momentum, Beijing is responding with increasing desperation, resorting to extreme measures to salvage the nation’s financial stability. The property market is at the epicenter of the storm, with policymakers applying unprecedented pressure on banks to address a monumental $446 billion funding shortfall. This funding is urgently needed to stabilize the industry and complete millions of unfinished apartments. A draft list of eligible developers, including industry giants like Country Garden Holdings Co. and Sino-Ocean Group, reveals a strategic pivot to aid some of the most distressed builders. However, the challenges are far-reaching, encompassing...

This crisis has unfolded by design, leading to significant shifts in market expectations and Fed policy. In a recent development, the 10-Year Note Yield has surged to 4.45%, a level not seen since November 2007. Markets have adjusted rapidly to this change, with rate cuts no longer being priced in until September 2024. Just three months ago, the expectation was for four rate cuts by the end of 2023, but now the possibility of another rate hike by December is back on the table, and rate cuts are not expected for a year. This shift indicates that the Fed is...

Argentina's central bank approved a payment delay through the end of the year for imports of services and freight transport worth $2 billion in an effort to manage a severe shortage of foreign currency in bank coffers needed for such transactions. South America's second-largest economy after Brazil is struggling with a prolonged financial crisis marked by triple-digit inflation ... The center-left government of President Alberto Fernandez has over several months launched measures meant to boost the inflow of foreign currency as well as to buck up a steadily weakening local peso currency, but so far the efforts have mostly met...

American banks experienced a historic contraction in the final two weeks of March, greater than even during the 2008 financial crisis, in the clearest indication yet that credit conditions are tightening as a result of deteriorating economic conditions.According to Federal Reserve data dating back to 1973, commercial bank lending saw a drop of nearly $105 billion in the two weeks ending March 29th. The final week saw a decrease of over $45 billion, which can be attributed primarily to a decline in small banks’ loan offerings.This reduction in lending has particularly impacted real estate, commercial, and industrial loans. The most...

Despite recent hedge fund disasters and almost every economic indicator pointing to a potential stock crash, Biden’s administration has completely ignored a potential equities bubble.Since March 2020, $5.9 trillion in so-called relief spending authorized by Congress, as well as $3.3 trillion in quantitative easing from the Federal Reserve, has been pumped into the U.S. economy. America’s pandemic response resulted in 22 million jobs lost in a matter of months, and we still have 10 million fewer jobs than before March of last year. The fiscal and economic repercussions of going from stronger than expected job and wage growth in January...

The great financial historian, Charles Kindleberger, pointed out in the 1970s that over several centuries, history showed there was a financial crisis about once every ten years.His observation still holds.In every decade since his classic Manias, Panics and Crashes of 1978, such crises have indeed continued to erupt in their turn, in the 1980s, 1990s, 2000s, 2010s, and again in 2020. What could cause the next crisis in this long, recurring series? I suggest seven possibilities:1. What Nobody Sees ComingA notable headline from 2017 was “Yellen: I Don’t See a Financial Crisis Coming in Our Lifetimes.” The then-head of the...

Have you been watching economists around the world discussing the American economy? Extremely interesting conversations. One of the things they have in common is that they are unable to arrive at a logical reason why there exists no financially sound basis for the high public spending the government is doing. This leads us to a bright ray of hope coming our way. For as long as I can remember, the economy has always been the number-one concern of voters, always, and therein is the light. The influence of the radical left on our government is about to be its downfall....

Consumer Price Index (CPI) data for April came in much hotter than expected. Year-on-year, inflation is up 4.2%. The big number even prompted Federal Reserve Vice Chairman Richard Clarida to say, “We were surprised by higher than expected inflation data.”Peter Schiff appeared on Tucker Carlson’s show to talk about the consequences of more printed money chasing fewer goods. Peter said inflation is going to hit the middle class harder than the pandemic.Peter said this hot CPI print is a cause for concern and ultimately it is a tax.It is the inflation tax. And if you look at how much the...

AEI scholar Peter J. Wallison has a new book out today titled “Hidden in Plain Sight: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again.” Though the standard narrative is that the 2008 financial crisis was caused by Wall Street greed and insufficient regulation, Wallison argues that US government housing policies played a crucial role. On January 14th, AEI is hosting an event on “Hidden in Plain Sight” — more details here. Below, Wallison answers questions on the future of Fannie and Freddie, the effect of government involvement in the financial crisis, the bankruptcy of...

What caused the financial crisis and Great Recession? A decade later, economists still don't have a good answer. Of course, the financial bubble in the housing market was the proximate cause, but this begs the question of what inflated the bubble that burst in the first place. This isn't just an academic exercise for the history books. It's critical that we never repeat the mistakes that liquidated more than $7 trillion of wealth and sent unemployment rates to their highest levels in three decades. The real estate bubble was certainly exacerbated by half-witted national housing policies that offered low-down-payment mortgages...

Yesterday, at an event sponsored by the World Affairs Council in Philadelphia, Jamie Dimon, CEO of JPMorgan Chase & Co., said that “it’s going to be 25 years before banks are forgiven” for the bailouts our government doled out to the nation’s largest banks a decade ago during the worst financial crisis since the Great Depression. Unfortunately, Dimon’s acknowledgement of the lingering anger of Main Street Americans, who suffered the brunt of the Great Recession, was quickly eclipsed after an association of unapologetic Wall Street bankers issued the following satirical statement: We, the bankers of these United States, want to...

It seems as though everyone and his publicist is commenting on Harvey Weinstein and the Hollywood sex culture, but there is an interesting exception: the Motion Picture Association of America.  The scandal is not noted on its blog, nor in its news section, nor in its press releases, nor in the recent speeches by its chairman extolling the First Amendment and the institution of copyright. One would normally expect a major trade association to be active on such a big issue, but the explanation for the silence seems pretty easy.  The MPAA chairman (until the end of this year, which...

BADEN-BADEN, Germany — Governments need to do more to create growth that benefits everyone, and the U.S. should spend more on roads, highways, bridges and airports, the Organization for Economic Cooperation and Development said Friday. The body, which includes the world's better-off countries, said in a report that governments should focus on providing better access to high-quality education and supporting employment for women through measures like affordable child care. It also highlighted the need for more spending on infrastructure. OECD Secretary-General Angel Gurria called for an "upskilling of the workforce" to address worker anxiety about the future of their jobs...

Authored by Jeff Reeves via The HillI’m not a fan of the “greed is good” mentality of Wall Street investment firms. But the next financial crisis that rocks America won’t be driven by bankers behaving badly. It will in fact be driven by pension funds that cannot pay out what they promised to retirees. According to one pension advocacy organization, nearly 1 million working and retired Americans are covered by pension plans at the risk of collapse.The looming pension crisis is not limited by geography or economic focus. These including former public employees, such as members of South Carolina’s...

Posted 2008 Who shall separate us from the love of Christ? shall tribulation, or distress, or persecution, or famine, or nakedness, or peril, or sword? Nay, in all these things we are more than conquerors through him that loved us. Romans 8:35,37 KJV All the outrage over Bernie Madeoff is pretty surprising. Sure he bilked people out of everything they had, putting them in financial disaster and bankruptcy? So he lied to people over decades taking everything they saved in a fraudulent investment Ponzi scheme bankrupting Pension/Charity and College funds. So he was lying to investigators about those cooked books...

The third leg of the world's intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history. It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity. "Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out," said the annual report of...

US authorities are targeting Deutsche Bank for a record $14 billion fine, mark(ing) the latest blow to Germany’s biggest lender, which since the 2008 financial crisis has run a gauntlet of setbacks. The weighty demand from the Department of Justice (DoJ) comes after Deutsche has already paid out billions in fines over interest-rate fixing and sanctions violations, and as it battles through some 8,000 ongoing legal cases and a painful restructuring. […] Deutsche Bank is among several major financial institutions accused by US authorities of misleading investors about the values and quality of complex mortgage-backed securities sold before the 2008...

Today a big Korean shipping company called Hanjin declared bankruptcy. It may be far away, but that move is a testament to an industry in trouble. Volume is way down all over the world as trade remains sluggish. Add to that the fact that just as demand wanes, a whole load of new vessels come online, and there’s a problem. Shipping hit a crisis in 2008 as demand for goods plunged. It’s never fully returned. John Butler is CEO of the World Shipping Council. He said after the financial crisis, when oil prices were spiking, “There was an expectation that...

China’s financial system The coming debt bust It is a question of when, not if, real trouble will hit in China May 7th 2016 | From the print edition Timekeeper CHINA was right to turn on the credit taps to prop up growth after the global financial crisis. It was wrong not to turn them off again. The country’s debt has increased just as quickly over the past two years as in the two years after the 2008 crunch. Its debt-to-GDP ratio has soared from 150% to nearly 260% over a decade, the kind of surge that is usually followed...

When James Adams walked into Waffle House in 2009 and requested a job application, the manager asked if he'd been sacked because of the meltdown. "Yeah," Adams said. "Firms like mine caused it." The manager gave him a sympathetic look. She said he could start Monday as long as he had a pair of black pants and vowed not to steal anything. He took the job. Adams went from pulling in six figures a year as a hedge fund vice president to serving bacon and grits for $2.13 an hour (plus tips). The job came with a side of "humble...