Saudi Arabia Admits To A Full-Blown Liquidity Crisis: Will Pay Government Contractors With IOUs, Debt

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Previously we documented that as a result of the still low oil prices, largely a result of Saudi Arabian strategy to put high cost producers out of business and to remove excess supply, none other than Saudi Arabia has been substantially impacted, with the result being dramatic state budget, a sharp economic slowdown and  mass worker layoffs.

Just three weeks ago we reported that the biggest construction conglomerate in the middle east, the Saudi Binladin Group had announced it would layoff 50,000 workers ot a quarter of its workforce, slammed by the weak economy.

Now, Saudi Arabia has admitted that in addition to acute economic problems, which will manifest themselves most directly in a soaring Saudi debt load… Continue reading

Goldman Sachs executive foreshadows next financial crisis

The second most senior Goldman Sachs executive has warned the world risks sowing the seeds of the next financial crisis through regulation aimed at making banks safer.

Gary Cohn, the global chief operating officer of the Wall St bank, today highlighted the risks of rules forcing banks to hold larger capital buffers so they can absorb bigger losses.

Speaking in Sydney, Mr Cohn said that in forcing banks to hold more capital, regulators risked encouraging the unregulated “shadow” banking sector, so it became the next problem. Continue reading