Finance

• Greenspan: Greek Default Will Trigger Another U.S. Recession

  European finance ministers, IMF officials and a coalition of other international institutions, are in the process of developing a new bailout program for Greece, as many maintain doubts as to whether a second cash infusion will turn the country’s economy around. The outlook for Greece is not very bright. It is commonly accepted that the predicament in Greece is due to the economy’s inability to grow coupled with a monstrous debt burden. Violent demonstrations have erupted throughout the streets of Athens as the public protests government efforts to implement the demands of the country’s creditors, including spending cuts and tax…

• The Bitter Medicine for the United States

  On a map, it appears that the United States is made up of 50 states. The fiscal reality is that we have 20. Portugal’s, 15 Italy’s, 10 Irelands, 3 Greece’s, and 2 Spain’s. In Q1, state and local GDP shrank by 3.8%, chopping growth at the national level by 0.5%, the sharpest drop since that last year from hell, 1981. States are shoveling money out of the economy nearly as fast as Obama is shoveling it in. During the bubble, the states thought incomes were higher than they really were, were richer than they really were, and bulked up on…

• Big Opportunities Ahead for Smart Energy Investors on Internet Reform

  Many of our readers are affluent investors seeking to better their fiscal situation. So, below is one of the best news tips you’ll receive in 2011 for making money. That’s the good news – the downside is that the opportunity won’t come cheap. The Internet Corporation for Assigned Names and Numbers (ICANN) has announced that it will accept applications for domains with new suffixes from 12 January 20212. What does this mean? Simple – next January, the restrictions on previous Internet high-level domain names are about to expand. That includes ones in Arabic, Chinese, Russian, Japanese and other non-Latin scripts.…

• Roubini: QE3 Will be With us Before the End of the Year

  According to the latest Wall Street Journal economic forecasting survey, sluggish hiring along with a lowered estimate of job creation anticipated in the next year are the leading threats to an economic rebound. News that the nation’s unemployment rate shot above nine percent last month has only intensified economists’ fears that the less-than-inspiring performance of the economy could persist for years to come. Thus, the debate over what action to take to ignite expansion and how to create much-needed jobs endures. Nouriel Roubini, a.k.a. “Dr. Doom,” the head of Roubini Global Economics, an independent, global economic and market strategy research…

• The China View from 30,000 Feet

  I have long sat beside the table of Mckinsey & Co., the best management consulting company in Asia, hoping to catch some crumbs of wisdom. So, I jumped at the chance to have breakfast with Shanghai based Worldwide Managing Director, Dominic Barton, when he passed through San Francisco visiting clients. These are usually sedentary affairs, but Dominic spit out fascinating statistics so fast I had to write furiously to keep up. Sadly, my bacon and eggs grew cold and congealed. Asia has accounted for 50% of world GDP for most of human history. It dipped down to only 10% over…

• Making the Most of the Coming Market Meltdown

  Executive chairman of Templeton Asset Management’s emerging markets group, Mark Mobius, who oversees more than $50 billion, firmly believes another financial crisis is “inevitable.” Sounds ominous, right? Mobius doesn’t think so. He explained that such a predicted problem would turn out as “no big disaster,” rather an opportunity to buy cheap stocks once again. Mobius, who spoke on the subject at the Foreign Correspondents’ Club of Japan in Tokyo, is of the opinion that the original causes for concern, created three years ago, have yet to be solved. The proliferation of unregulated derivatives tied to U.S. home loans failed to…

• Renewed Crisis in the Eurozone

  Earlier this year it appeared that economic and financial policy officials were finally coming together with an effective approach to addressing the critical debt crisis in the smaller “peripheral” economies of the Eurozone — Greece, Ireland, Portugal — and ring-fencing the other Eurozone economies, particularly Spain, Italy, and Belgium, from the risks of contagion. Recent events, however, have led to a renewed sense of crisis in Europe that is having a depressing effect on investment sentiment around the globe. The latest cause for worry, as we write, is the warning by Standard & Poors that Italy’s sovereign debt rating of…

• When to Buy Japan?

  It has been three months since the horrific Japanese tsunami, the economy is in free fall, and radiation is still lingering in the air and water. It now appears that the beleaguered nation’s GDP shrank at a 4% rate, in line with my own expectations, but far worse than anyone else’s. The down leg of the “V” is well underway. When does the up leg begin, and when should we start positioning for it? One need look no further than Toyota’s Motor’s stunning year on year decline in domestic sales of -69%. Consumers in the US want to buy their…

• Earth’s Limits: Why Growth Won’t Return

  The 2008 crude oil price, $147 per barrel, shattered the global economy. The “invisible hand” of economics became the invisible fist, pounding down world economic growth to match the limitations of crude oil production.—Kenneth Deffeyes (petroleum geologist) We have just seen why, since 2007, growth has languished for reasons internal to the world financial system—the system of money and debt. Problems arising from speculative overreach, real estate bubbles, and the inherent Ponzi dynamics of our global debt-based financial structures are endemic and profound. Still, if these were our only difficulties, we might reasonably expect that eventually, once they are sorted out…

• World Bank Predicts the Demise of the US Dollar by 2025

  This week, the World Bank published a report predicting the demise of the US dollar as the major reserve currency by 2025. The transition will be driven by emerging market growth rates of 4.7% a year, compared to only 2.3% for developed countries. Six countries, Brazil, China, India, Indonesia, Russia, and South Korea, will account for half of the world economy by then. The greenback will be replaced by a multi-currency system made up of the dollar, the euro, and the Chinese renminbi. The evolution will be driven by a sharp rise in third party international trade, direct investment, and…