China accounts for about half of global economic growth, Stephen Roach says
NEW HAVEN, Conn. (Project Syndicate) — Is the Chinese economy about to implode? With its debt overhangs and property bubbles, its zombie state-owned enterprises and struggling banks, China is increasingly portrayed as the next disaster in a crisis-prone world.
I remain convinced that such fears are overblown, and that China has the strategy, wherewithal, and commitment to achieve a dramatic structural transformation into a services-based consumer society while successfully dodging daunting cyclical headwinds. But I certainly recognize that this is now a minority opinion. Continue reading
Remember the mass layoffs of 2008-2009? The US economy shed millions of jobs quickly and relentlessly, as companies died and the rest fought for survival.
Then the Fed and the US government flooded the banks and the corporate sector with bailouts and handouts. With those giga-tons of liquidity sloshing around, as well as taking on massive amounts of new cheap debt, companies were able to finance their working capital needs, hire workers back, and even buy-back their shares en mass to make themselves look deceptively profitable. The nightmare of 2008 soon became a golden era of ‘recovery’.
Well, 2016 is showing us that that era is over. And as stock prices cease to rise, and in fact fall within many industries, layoffs are beginning to make a return as companies jettison costs in attempt to reduce losses. Continue reading
Stephen King of HSBC warns the world’s financial system may not survive another crisis without China as a backstop
China’s devaluation of the yuan reveals that the global economy will be without stabilisers if another crisis strikes, economists have warned.
The decision to cut the yuan’s value showed that Beijing had become scared, they said, suggesting that the world’s second-largest economy is in a far more precarious position than outsiders had assumed.
Stephen King, a senior economic adviser to HSBC, said that since the crisis China had done more than any other to provide “the heavy lifting to support global economic growth”, but that it may not step in to keep the world’s financial system afloat again.
Other articles (See HERE) suggest this has been talked about and planned for quite a while ago.
Plans for a new high-speed transport corridor that could potentially link London and New York by rail and superhighway have been unveiled.
The idea, dubbed the Trans-Eurasian Belt Development (TERP), would see a high speed railway and motorway built from Eastern Europe, across Siberia and over the Bering Strait to Alaska. Continue reading
As slumping oil prices dampen Russia’s economic outlook, the country’s President has said that “at some moments of crisis it starts to feel like it is the politics that prevails in the pricing of energy resources”.
Recent tumbles in the value of oil on global markets have been the creation of politicians, Vladimir Putin, President of Russia, suggested on Thursday.
“The obvious reason for the decline in global oil prices is the slowdown in the rate of [global] economic growth which means consumption is being reduced in a whole range of countries”, Mr Putin said. Continue reading
On Thursday, fears seemed to prevail once again, with the Dow Jones Industrial Average tumbling more than 300 points, reversing Wednesday’s big rally.
It was the third move in a row of more than 200 points by the blue-chip index—a roller-coaster ride that ranks as the most volatile stretch for the Dow since August 2011 Continue reading