Global recession and risk factors
With the U.S. now firmly in recession, Syntagma looks at the causes of this spectacular downturn and speculates that the Iraq war may have a lot to do with it.
“The American economy is now in recession. A slew of new data clearly reveals both a marked downturn in activity, combined with a rise in inflation — something not seen since the stubborn “stagflation†period of the 1970s. Some economists expect a robust return to growth later in the year off the backs of aggressive rate cuts by the Fed…”
In another piece today, our sister site examines banks’ attitude to risk and how securitization let the side down, handing huge advantages to authoritarian Asian regimes.
“In the old days, banks took the risk of lending money on themselves and ensured that borrowers would be able to pay it back over time. Securitization means that they can lend to any Tom, Dick or Harriet, package up the debts into large parcels of small slices from many borrowers, and sell them onto other banks and finance houses.”
