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Global economic shakeout

Analysis and Comment (35)

Satyajit Das: “I think the democratic process and the politics of the world relies on a very fragile construct. One is trust. And trust relies on economic growth.” Supplied

Satyajit Das: Europe will have far-reaching consequences for everybody

Welcome to the latest in our In Conversation series, between risk analyst and author Satyajit Das and Kevin Davis, Research Director of the Australian Centre for Financial Studies. Satyajit Das is an internationally-known…
Greek Prime Minister George Papandreou will use the referendum to try to win a mandate for austerity measures. AAP

Pain or more pain? The political gamble behind Greece’s debt referendum

Greek Prime Minister George Papandreou has taken the bold step of planning a referendum on the country’s EU-imposed austerity measures, in a bid to claim a mandate for his efforts to avoid a default on…
After the global financial crisis, a more restrained and open-minded approach to economics is needed. AAP

Time to accept economic known unknowns? The case for ‘pluralism’

Confidence in economics has been dented by the global financial crisis. But what is reasonable to expect of economists? People joke about economists disagreeing, but is it feasible for there to be one…
Euro banks have been urged to reinforce their balance sheets. AAP

Can ‘living wills’ protect the banking system?

Eurozone leaders have moved to address liquidity fears, with the European Central Bank announcing new measures to head off a credit crunch. Britain has also announced quantitative easing measures. Outgoing…
London trader Alessio Rastani has told the BBC he “dreamed” of recession. But traders often don’t know how they’ll react to losses. YouTube

‘Dreaming’ of recession: what to make of market makers and their noise?

Trading in financial securities has sometimes been regarded as a “black box”. This is particularly the case in markets where there is increased uncertainty. The current world economy is a prime candidate…
Is a partial default one of the steps to recovery for Greece? AAP

Defend or default? It’s the three trillion euro question

Will Greece default and exit the Eurozone? The best-case scenario is a managed, orderly, partial default with the European Financial Stability Facility (EFSF), a fund created in 2010 to manage Eurozone…
World Bank chief Robert Zoellick and IMF head Christine Lagarde have doubts about global growth. AAP

Spooking the markets: should financial leaders keep quiet during crises?

Global markets have tumbled again this week, following the downgrading of Italy’s debt rating and a series of negative comments from leaders of the world’s financial institutions. International Monetary…
Italy’s Silvio Berlusconi wants closer ties with China - but Europe shouldn’t believe this will save the EU. AAP

Why China won’t – and can’t – save the Eurozone

Earlier this week, reports emerged that Italian finance officials had held talks with their Chinese counterparts regarding the possibility of China making significant purchases of Italy’s public debt…
If Greece’s economy collapses, it could easily lead to a breakdown of civil order. AAP

What will happen if Greece defaults?

Global markets look set for a rough week amid new concerns that Greece could default on its massive debt. The Australian share market has spent most of the day down 3% after reports that Germany could…
In announcing his $US447 billion stimulus, Obama has his eyes firmly on the US election in 2012.

Obama throws down electoral gauntlet with economic plan

Barack Obama has laid out a US$447 billion (A$421 billion) plan to cut payroll taxes and boost government spending to create jobs, in a bid to “jolt” the stalled US economy back to life. Obama told a joint…
Germany’s Angela Merkel and French President Nicolas Sarkozy: has the need for last resort measures arrived? AAP

Does Europe need a lender of last resort?

German Chancellor Angela Merkel and French President Nicolas Sarkozy appear to hope their recent Summit will avoid further increasing Euro rescue fund, the European Financial Stability Facility (EFSF…
AAP

Should the renminbi be re-valued?

In a speech in Sydney earlier this week, World Bank President, Robert Zoellick, lent his support to an appreciation of the renminbi (RMB). As has become the norm, this support was couched in terms of an…
While the US is finding its footing, China is looking to expand its global economic power by pushing for the renminbi importance in international transactions. Fotopedia/Philip Roeland

How the West’s money problems could hasten global power shift

The downgrading of US debt by Standard & Poor’s may sound the starting gun for an enduring rebalancing of global economic power. For decades, investors worldwide sought the safety of US government…
The rise of the Chinese economy has been stunning - but it may not translate into world order dominance. AAP

This is evolution of the world economic order, not revolution

A new global economic order is not finally taking shape. Instead, the world economic order has been evolving over time, and it will continue to evolve into the future, more often than not, in unexpected…
German chancellor Angela Merkel and French President Nicolas Sarkozy have outlined a rescue plan for the Eurozone. AFP

PIIGs might fly - is a single economic government the way forward for Europe?

German Chancellor Angela Merkel and French president Nicolas Sarkozy have overnight laid out plans for a stronger European integration that seeks to control deficit restrictions on member countries and…
Australia’s retirees have been buffeted this week but remain unaware of how to manage the risks. AAP

Dazed, confused and uninformed: self-funded retirees bear the brunt

Two types of footage illustrated news reports of the financial market turmoil last week: the unlucky teams with frozen smiles ringing the start-of-trade bell at the New York Stock Exchange, and confused…
Downward trend: how should Australia respond to this week’s global meltdown? AAP

Returning to surplus in 2012-2013: the case for and against

In the midst of global stockmarket turmoil, talk of a double dip US recession and global downturn, focus is turning to whether the Labor federal government should stick to its promise to return Australia’s…
If we’re facing a downturn, the right thing to do to drop the insistence on returning to surplus.

Should we return to surplus by 2012-2013? The case against

In the face of the global financial crisis of 2008-09, the Australian Government’s overall fiscal policy response was both well-timed and well-calibrated (even if some of the specific programs within that…
The only way out of this crisis is to dishonour some of the debt that is weighing down the global economy. AAP

Ireland, Greece … France? Accepting default is Europe’s only option

The dramatic falls in share prices of Greek debt-laden French banks overnight highlights just how closely tied the current market chaos is to the world’s worsening debt woes. Market crashes like that of…
The share market is often driven back into the black by canny investors looking for a bargain. AAP

Global economic shakeout: the zig-zag market heralds nasty times ahead

After falling by almost 20% in week-long sell-off, the Australian share market has bounced back and began trade today up more than 3.5%. The market’s recovery follows a strong comeback on Wall Street overnight…
The US must “choose between bankruptcy, raising taxes and cutting payouts”. AAP

Not China, not S&P: why the US has only itself to blame

If the United States thought it could stave off its day of reckoning, it was wrong. Standard & Poor’s prompt downgrade of US credit worthiness late Friday sent stock markets worldwide into a nosedive…
Stock markets around the world plummeted after news of the US credit rating downgrade (EPA/FRANK RUMPENHORST)

Debt dive: why is the US at the mercy of anonymous credit agencies?

Without the firing of a single shot in anger, a country has been, at least in a sense, brought to its economic knees. The capitalist system, with variations and aberrations, is now reacting. Shares are…
As a new global financial crisis looms, Australia shouldn’t overestimate its dependence on China. AAP

Is Australia’s economic stability really made in China?

Amidst the widening global financial turmoil, a strong Chinese economy is certainly one positive for the Australian economy. But should we believe it is only factor that will save the day? The answer is…
Can China continue to float our boats as the global economy teeters? AAP

Amid global market turmoil, can China keep our economy afloat?

Federal Treasurer Wayne Swan has seized on positive comments about Australia’s economy in an International Monetary Fund report as evidence the country can endure another global financial crisis. The report…
Global markets have fallen dramatically over fear of a US double dip recession and global downturn. AAP

Global market carnage: experts respond

The Australian share market has followed Wall street overnight and other global markets, with as much as $60 billion wiped in value throughout the day. The Reserve Bank of Australia has cut the forecast…
Standard & Poor’s could still downgrade the US credit rating, despite the debt ceiling deal. AAP

Explainer: the role of credit ratings agencies

Washington lawmakers in the US House of Representatives have passed an agreement hammered out between Republican and Democrat leaders designed to avert a US debt default. The move is a further step towards…

Research and News (1)