China jitters could trigger global market bloodbath, IMF warns

Jitters over the health of the Chinese economy could trigger a bloodbath on financial markets if a hard landing materialises, the International Monetary Fund has warned.

The IMF said policy choices in the world’s second largest economy would also have “increasing implications for global financial stability” in the coming years as the country opens up its bond and equity markets.

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Global Recession Coming – Even “Powerhouse” Germany and UK Slow “Dramatically”

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IMF 2015 Global National Debt Map – IMF

 

– IMF warn of “fresh financial crisis”
– German exports fall 5.2%, largest slump since recession of 2009
– German imports also fall 3.1%
– Many sectors across German economy see unexpected declines in factory orders and industrial production
– UK Chief Financial Officers (CFOs) report sharp rise in uncertainty
– UK PMI has fallen to lowest level since April 2013
– Hope for the best but be prepared for less benign scenarios

The IMF have been growing more vocal in recent weeks about the possibility of another financial crisis and severe recession. The head of financial stability at the IMF, José Viñals has said that this outlook “does not rely on extreme assumptions at all”. Continue reading

U.S. system designed to prevent financial crisis ‘likely to fail,’ say experts

“The current U.S. institutional set-up is likely to fail in a crisis, and will be doing less to prevent a crisis than it should be,” said Adam Posen, president of the Peterson Institute for International Economics, at a two-day conference on financial stability sponsored by the Boston Federal Reserve.

Posen said that U.S. regulators, including the Fed, don’t have the tools or the mandates from Congress that they need. Continue reading

China’s Debt-to-GDP Ratio Just Climbed to a Record High

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China’s debt is still growing faster than its economy

While China’s economic expansion beat analysts’ forecasts in the second quarter, the country’s debt levels increased at an even faster pace.

Outstanding loans for companies and households stood at a record 207 percent of gross domestic product at the end of June, up from 125 percent in 2008, data compiled by Bloomberg show. Continue reading