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Had to mention this… predicting Black Swans!!!

Black Swan 1:

The Sovereign Debt Crisis

From Iceland and Dubai to more recently Greece and Hungary, news of countries defaulting on their sovereign debt obligations or being on the verge of bankruptcy has dominated the headlines in recent months, leading to bouts of volatility in global stock markets.

Even though different international organizations have jumped to the rescue, and Hungary’s debt crisis proved to be a false alarm, the frequent scares have punctured the myth that “countries can’t go bankrupt.” They have also revealed that the strategy of piling up new debt to service old debt to cope with the financial meltdown in late 2008 has created serious structural problems.

“The fundamental problem behind the financial crisis in 2008 was private debt. Now the threat to the global economy comes from sovereign debt,” says Wu Ho-Mou, a Taiwan native who is now the deputy director of Peking University’s National School of Development.

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