It begins with the financial instability of a nation’s banking system. Rising interest rates and a higher price tag for insurance against default of a bank’s bonds are the harbinger of difficult fiscal times ahead. These increasing cost of funds for Indian banks are growing at the fastest rate in Asia and are creating a… [Read more…]
December 2, 2011
Do you remember a few years back when the major European banks were required to go through a financial examination to determine their fiscal stability? It was designated as the “European Bank Stress Test” and 91 of the foremost banks passed with flying colors. Initially, the market response was one of relief and reassurance. However, it was later disclosed that… [Read more…]
November 11, 2011
The Japanese Yen is the flavor of the day, the week, the month and the year. Whenever there is even a hint of economic and/or political commotion, the Yen is the sought out asset by international investors and speculators. It is an interesting phenomenon, considering that Japan’s budget deficit is almost twice the size of… [Read more…]
October 28, 2011
As part of a plan to lower Greece’s debt burden, and to try and contain the two year European Union crisis, it has been reported that euro zone leaders have come to an agreement with private banks and insurers. The agreement imposes upon those banks and insurers to accept a 50% loss on their holdings… [Read more…]
October 14, 2011
For many years and through many recessions, the United States’ economy was the steam engine for the world. It was joked that when the US caught a cold, the rest of the world got the flu. But what happens when the US economy gets the flu? With economic globalization, the symptoms for regional recessions and… [Read more…]
September 30, 2011
US Durable Goods orders dropped while consumer spending and consumer confidence are down. Corporations are not hiring new employees or investing, despite sitting on 2 trillion dollars in reserves. The financial markets are once again concerned with the growing number of people still being fired, and home sales are down to record levels – due… [Read more…]
September 15, 2011
The spiraling financial downfall towards default began with Greece and has spread to Ireland, Portugal, Italy and Spain. At first it seemed impossible, then unlikely, and now headlines actually predict that Greece is 98 percent likely to default on its sovereign debt. If Greece defaults, EU leaders and ECB officials will be trying to come… [Read more…]
August 31, 2011
Currency Carry Trade – A strategy in which investors sell a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate and investment opportunities. Safe Haven Currency – A currency that attracts capital investment and speculation flows, in times of uncertainty and disruptive… [Read more…]
August 24, 2011
The American population is divided into two classes. However, for the purpose of this article I’m not talking about the rich and the poor, although that division has been impacting the American economic and political scene since before the Declaration of Independence. The classes I am talking about are composed of those who have jobs… [Read more…]
July 29, 2011
Do you remember the short story “The Lady or the Tiger” written by Frank Stockton in 1882? It’s a fable about an accused individual having to select one of two doors. Behind one of the doors was a beautiful Lady who would make the person happy and take care of him for the rest of… [Read more…]
December 19, 2011
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