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Page added on October 30, 2017
WB Concerned Over Global Debt
The World Bank has warned that unless countries across the globe address issues relating to borrowing, the world could be heading for another financial crisis.
In its World Economic Outlook report for October 2017, it noted that discouraging further debt build-up through measures that encourage business investment and discourage debt financing will help curb financial risk taking is the only solution out of a potential crisis, news outlets reported.
In its ‘Africa’s Pulse’ report released earlier this month, the financial institution had warned on the growing debt overhang and how it was impacting negatively on development. Interestingly, there are fervent calls for the federal government to cut down on its borrowing which many economic watchers say is sustainable.
The report also noted the need for monetary and fiscal authorities to provide clear paths for policy changes as it will help anchor market expectations and ward off undue market dislocations or volatility.
According to the World Bank, central banks should ensure a smooth normalization of monetary policy through well-communicated plans on unwinding their holdings of securities and guidance on prospective changes to policy frameworks.
“Financial authorities should deploy macro-prudential measures, and consider extending the boundary of such tools, to curb rising leverage and contain growing risks to stability.
“For instance, borrower-based measures should be introduced and/or tightened to slow fast-growing overvalued segments, and bank stress tests must assume more stressed asset valuations. Capital requirements should be increased for banks that are more exposed to vulnerable borrowers to act as a cushion for already accumulated exposures and incentivize banks to grant new loans to less risky sectors.
“Regulation of the nonbank financial sector should be strengthened to limit risk migration and excessive capital market financing. Transition to risk-based supervision should be accelerated, and harmonized regulation of insurance companies—with emphasis on capital—should be introduced. Tighter micro-prudential requirements should be implemented in highly leveraged segments,” the report added.
Unlocking FDI
The report also said that reducing risks in the Caribbean and other developing countries is key to spurring investment and growth. The report says a stable business environment, effective regulations and political stability are among significant drivers of foreign direct investment into developing countries.
The survey of 750 executives of multinational corporations is part of the Global Investment Competitiveness Report 2017–2018, the first of a biennial series exploring the drivers of investment competitiveness in developing countries, the World Bank said.
The report was launched earlier this week at the World Bank’s Investment Competitiveness Forum in Vienna, Austria, that brought together corporate executives, donor partners, and academics and senior policymakers of developing countries that have implemented significant investment policy reforms.
The report finds that international investors prioritize political stability, security, macroeconomic conditions and conducive regulatory environment when deciding where to make investments that can spur growth and create jobs.
“A business-friendly legal and regulatory environment—along with political stability, security and macroeconomic conditions—are key factors for multinational companies making investment decisions in developing countries,” said Anabel Gonzalez, senior director of the World Bank Group’s Trade & Competitiveness Global Practice.
“Combining a survey of global investors with analysis of investment policy issues makes this report a powerful contribution to our understanding of how developing countries—including fragile states—can de-risk their economies and unlock FDI,” it adds.
The World Bank said the effort to increase FDI flows into developing countries reflects the importance of the private sector in meeting global development goals.
New Poverty Lines
Living on $1.90 a day might seem impossible in a developed country, but the World Bank estimates that 10.7% of the world’s population, or about 760 million people, face this reality. These people live in what the World Bank calls “extreme poverty”, Business Insider reported.
In an attempt to be more precise with its classifications, the organization recently added new standards of poverty for people living in middle- and high-income countries. They are the first additions since the poverty line was initially set in 1990, then at $1 a day.
The new standards are set at $3.20 a day for people in “lower-middle-income” countries, such as Egypt or India, and $5.50 a day for “upper-middle-income” countries, such as Jamaica or South Africa. The World Bank also released a third standard for high-income countries, like the US, at $21.70 a day.
29 Comments on "WB Concerned Over Global Debt"
MASTERMIND on Mon, 30th Oct 2017 12:32 pm
‘WORSE THAN 2007’: Top banker warns of looming wave of worldwide bankruptcies
http://www.businessinsider.com/worse-than-2007-top-banker-warns-of-looming-wave-of-worldwide-bankruptcies-2016-1
The Fed has caused 93% of the entire stock market’s move since 2008: Analysis
https://finance.yahoo.com/news/the-fed-caused-93–of-the-entire-stock-market-s-move-since-2008–analysis-194426366.html
Perching Tree: Return of the Global Depression 2.0
https://www.perchingtree.com/return-of-great-depression/
Perfect Storm: Energy, Finance and the End of Growth -Dr Tim Morgan Global Head of Research
https://www.tullettprebon.com/Documents/strategyinsights/TPSI_009_Perfect_Storm_009.pdf
Shortend on Mon, 30th Oct 2017 12:44 pm
Maybe there needs to be a universal TAX CUT to help pay it off..?that works for me and the Republicans! While we are at it, start a World War, that should help also.
JJHMAN on Mon, 30th Oct 2017 3:59 pm
Shortend:
Just try to remember that deficit spending is only justified if it funnels money to those who need it the least.
Martin on Mon, 30th Oct 2017 4:38 pm
The Riyal-Yuan potential nexus will put pressure on US Dollar which can lead to catastrophic consequences. Saudis are warming up to China and Russia and Saudis could pull the rug under our feet.
China has grand ambitions to dethrone the dollar. It may make a powerful move this year
https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html
Riyal Dollar Peg Trilemma – A Primer on Peg Breakonomics !
https://www.perchingtree.com/riyal-dollar-peg-trilemma-will-saudi-abandon-peg-dollar-crash/
China will ‘compel’ Saudi Arabia to trade oil in yuan — and that’s going to affect the US dollar
https://www.cnbc.com/2017/10/11/china-will-compel-saudi-arabia-to-trade-oil-in-yuan–and-thats-going-to-affect-the-us-dollar.html
Davy on Mon, 30th Oct 2017 6:29 pm
martin, old news and all your links have been picked over. Read this and this:
http://tinyurl.com/y7fme7gu
http://tinyurl.com/ycgm7ptx
http://tinyurl.com/yd697c9n
Not saying it is not happening or will not, what I am saying is don’t hype the hype
Go Speed Racer on Mon, 30th Oct 2017 6:40 pm
I am glad the world bankers are
concerned about excessive debt.
That means they will immediately
implement plans to raise wages for
the oppressed middle class by a
minimum of 25% raise. And they will
be happy to lower their corporate profits
to make sure their workers have good pay.
And also the global bankers will be
concerned about all the money I owe
on my mortgage, so they will gladly reduce
my principal balance by 30%
Together these policies will put me on
the fast track to bring debt free.
I am so glad the global bankers,
concerned about debt, are implementing
these policies to help the abused
and ripped-off middle class.
makati1 on Mon, 30th Oct 2017 6:56 pm
Maybe this will help…
http://www.visualcapitalist.com/60-trillion-of-world-debt-in-one-visualization/
Or this…
http://www.zerohedge.com/news/2017-10-28/visualizing-63-trillion-world-debt
The US is Number One! LMAO
makati1 on Mon, 30th Oct 2017 7:09 pm
“The US government quietly added $200+ billion to the debt this month alone.”
“The only realistic way out is for the US government to eventually capitulate… and default.”
https://www.sovereignman.com/trends/the-us-government-quietly-added-200-billion-to-the-debt-this-month-alone-22558/
Do it now! lol
onlooker on Mon, 30th Oct 2017 7:23 pm
Rumblings of inflation and subsequent threat of whole countries going broke in the worlds Bond Markets
http://www.zerohedge.com/news/2017-10-30/worlds-five-largest-bond-markets-are-syncing-disaster
makati1 on Mon, 30th Oct 2017 7:28 pm
“For the majority of Americans, the 2020s will likely be remembered as a demoralizing decade of rising prices, stagnant wages, and fading international competitiveness,” McCoy writes. The loss of the dollar as the global reserve currency will see the U.S. unable to pay for its huge deficits by selling Treasury bonds, which will be drastically devalued at that point. There will be a massive rise in the cost of imports. Unemployment will explode. Domestic clashes over what McCoy calls “insubstantial issues” will fuel a dangerous hypernationalism that could morph into an American fascism.”
https://www.theburningplatform.com/2017/10/30/the-end-of-empire-2/#more-162445
“Short of a sudden and widespread popular revolt, which does not seem likely, the death spiral appears unstoppable, meaning the United States as we know it will no longer exist within a decade or, at most, two.”
It won’t last even that long.
Boat on Mon, 30th Oct 2017 7:39 pm
JJHMAN on Mon, 30th Oct 2017 3:59 pm
Shortend:
Just try to remember that deficit spending is only justified if it funnels money to those who need it the least.
After a Trump bump the US military has a 600 billion a year budget. Is that what you mean by needing it the least?
makati1 on Mon, 30th Oct 2017 7:56 pm
We worry about how much oil is left or the price tomorrow but what if:
“One Day Tomorrow Won’t Arrive”?
“Before the idiots in Washington get us blown off of the face of the earth, the morons had better come to terms with the fact that the US military is now second class compared to the Russian military.”
https://www.theburningplatform.com/2017/10/30/one-day-tomorrow-wont-arrive/#more-162434
“For example, the speed and trajectory changes of the Russian Sarmat ICBM has nullified Washington’s ABM system. One Sarmet is sufficient to take out Great Britain, or France, or Germany, or Texas. It only takes a dozen to wipe out the United States.”
Sleep easy, America… lol
Boat on Mon, 30th Oct 2017 8:35 pm
mak,
“Before the idiots in Washington get us blown off of the face of the earth, the morons had better come to terms with the fact that the US military is now second class compared to the Russian military.”
Military Spending
United States 611.2 billion
China 215.7
Russia 69.2
Saudia Arabia 63.7
India 55.9
France 55.7
United Kingdom 48.3
Japan 46.1
Germany 41.1
South Korea 36.8
mak at his finest.
makati1 on Mon, 30th Oct 2017 9:17 pm
Boat, dollars do not designate superiority, just hubris. If a $12,000,000,000. US carrier can be destroyed with a $1,000,000. Chinese or Russian missile, who has the superior military? Hint, NOT the US.
Dooma on Tue, 31st Oct 2017 4:36 am
Boat, just to echo Mak’s sentiments you can spend a King’s ransom on all the technology but as soon as the rest of the world get their chance to go for your throat, no billion dollars problematic fighter plane is going to save you.
And the majority of the world has been fucked over by Uncle Sam in some way, shape or form. So the smell of revenge is wafting in the air.
Davy on Tue, 31st Oct 2017 4:46 am
“And the majority of the world has been fucked over by Uncle Sam in some way, shape or form. So the smell of revenge is wafting in the air.”
Good thing your nation is so insignificant and never had the opportunity because you would have done worse. Talk about bad attitudes as exampled by you.
makati1 on Tue, 31st Oct 2017 5:10 am
Dooma, Most Americans have their heads so far up their ass they cannot see anything but their own shit. That “exceptionalist/indispensable” brainwashing has killed their ability to reason or even see reality. Most fall back on put-downs or name calling because they are scared shitless that we are correct and that the rest of the world is turning against them, and it is. The bully country is about to get the shit kicked out of it, and it is about time.
Davy on Tue, 31st Oct 2017 5:16 am
Mad kat, when and if that happens you need to be lynched because you and your generation allowed it to happen. Don’t think you can run and hide and get out of jail free. Everything about you is the reason for this. You are afraid to accept responsibility for your sins. You spend your days blaming others when it is you that are to blame. I hope you get your ass kicked good when your megaregion collapses in chaos and disorder as it surely will from the first big global shock. There is no way 20MIL people in such a small area will manage. Your little fantasy farm that you will never get to will be overrun too. Nice try running from responsibility
Davy on Tue, 31st Oct 2017 5:59 am
“Second Crash Warning From The IMF – This Time It’s About Vol”
http://tinyurl.com/y8rn36dv
“In “Here Is The IMF’s Global Financial Crash Scenario” last week, we highlighted the institution’s surprisingly candid discussion hidden away in its latest Financial Stability Report “Rising Medium-Term Vulnerabilities Could Derail the Global Recovery”…or as we paraphrased the IMF’s “politically correct way of saying the financial system is on the verge of crashing”. As we noted previously, in the section also called “Global Financial Dislocation Scenario” because “crash” sounds just a little too pedestrian, the IMF uses a DSGE model to project the current global financial situation, and ominously admits that “concerns about a continuing buildup in debt loads and overstretched asset valuations could have global economic repercussions” and – in modeling out the next crash, pardon “dislocation” – the IMF conducts a “scenario analysis” to illustrate how a repricing of risks could “lead to a rise in credit spreads and a fall in capital market and housing prices, derailing the economic recovery and undermining financial stability.”
“This week the IMF has gone a step further, courting the mainstream financial media to publicise its warning about the dangers of historically low volatility and related short volatility strategies. As The FT reports, The International Monetary Fund has warned that the increasing use of exotic financial products tied to equity volatility by investors such as pension funds is creating unknown risks that could result in a severe shock to financial markets. In an interview with the Financial Times Tobias Adrian, director of the Monetary and Capital Markets Department of the IMF, said an increasing appetite for yield was driving investors to look for ways to boost income through complex instruments. “The combination of low yields and low volatility facilitates the use of leverage by investors to increase returns, and we have seen rapid growth in some types of products that do this,” he said.”
“Artemis estimates that financial engineering strategies that are short vol, either explicitly or implicitly, amount to more than $2 trillion. However, both Artemis and the IMF are “on the same page” when it comes to what would unfold if there was a sustained spike in volatility. The FT continues… The IMF believes that sustained low volatility increases incentives for investors to take on higher levels of leverage while causing risk models that use volatility as an important input to understate real levels of risk participants may be taking on.”
Davy on Tue, 31st Oct 2017 6:00 am
This is what happens in a late term civilization in a late turn expansion. In the beginning it was just a repression of fundamentals with ultra-low rates and liquidity easing to stoke consumption and confidence. It saved our ass and now many think it normal and the same will happen again. It is bubble economics and represents a Ponzi economic scheme. What is really worse about this scheme is it is funded by wealth transfer to those who can play. Those players will likely lose their gains because all Ponzi schemes end. It is extremely unfair that those who never had the opportunity were milked and have seen further decline. Worse is ahead for them but at least the fall will be less. Many of these disenfranchised are already acclimated somewhat to the end of affluence. It is unclear what would have happened post 08 crisis if repression and easing did not take place. We could have ended then. We just don’t know so it may be the case this unfairness is but the next step down of a delayed end.
Keep in mind this easing was not only the moral hazard of stoking a bubble it was also a moral hazard of easing the fundamentals of the rule of law and basic accounting principles to justify bubbles and wealth transfer. It is the rule of law and principals of accounting that keep the playing field level and honest. What is value today in an environment where price discovery is relative and for the privileged only? A civilization will not survive long when it foundational elements are compromised. This is law.
This financial predicament is only one segment of the human situation. We have other problems but all other problems need human productivity to negotiate the entropic decay of decline the global world is now in. If and when an economic shock comes it is unclear how we will deal with all the underfunded foundational elements of society like social safety nets, infrastructure investment, and basics of survival like food, water, and shelter. The environment and climate are ebbing away. We need economic productivity to slow that decline as we kill it by trying to save it.
Will this decline proceed quickly or will it be manageable. How long do we have before the bubbles begin seriously popping as in “crisis”? It is degree and duration of shocks that are the key to a species survival. We are no different. We know the tools to mitigate economic decline are being used up. The fact that exotic instruments of finance are being used should tell us we are losing the battle. When tax cuts are talked about with so much debt shouldn’t we get the hint? Credit to manage credit is a vicious circle. We are a linear ecosystem in a cyclical planetary ecosystem. Nature will make us cyclical again and soon we will be in succession and that will be down not up.
How long can this game continue. This is why I am here daily. The bitchfests is just a distraction. I make assholes pay for being assholes by treating them as assholes. I am here because I am trying to figure out how much time we have. Notice I said “we” and not they. The board assholes like playing blame and complain games. They think in terms of “they” and “I”. I am talk about “we”.
print baby print on Wed, 1st Nov 2017 12:36 pm
print baby print hahahhahha
dooma on Thu, 2nd Nov 2017 2:28 am
Yes David, such a fantastic retort.
“Good thing your nation is so insignificant and never had the opportunity because you would have done worse.”
You have absolutely no idea about our nation. Your assumptions are an absolute joke. Oooooooh, such violent people we are with our ban on military weapons and nuclear arms.
Just a sleepy backwater that you violent war monkey’s built a satellite tracking base on called Pine Gap…
“The facility consists of a large computer complex with 14 radomes protecting antennas”.
“The location is strategically significant because it controls United States spy satellites as they pass over the one third of the globe which includes China, the Asian parts of Russia and the Middle East.”
What’s that “strategically significant”? Maybe you do something good in your life and learn about the world you are trampling on…
makati1 on Thu, 2nd Nov 2017 3:41 am
dooma, Davy is the poster boy for the evil empire. If ever someone deserves what is coming, it is people like him.
Deaths are not important if they happen “over there”. The US has been wasting 25% of the world’s resources, at the expense of the rest of humanity, for far too long. Since 2000, they have been nothing more than murdering pirates. Even Al Capone would be ashamed of what they do in the name of “democracy”. I await the day of retribution. It is coming.
Davy on Thu, 2nd Nov 2017 5:43 am
“You have absolutely no idea about our nation. Your assumptions are an absolute joke. Oooooooh, such violent people we are with our ban on military weapons and nuclear arms.”
Sure I do dumba, look at you? You are a perfect example of the stupid youth of your country. Talk about a blowhard with few brains. It is hard to follow your comments because they are so lame.
Davy on Thu, 2nd Nov 2017 5:43 am
“dooma, Davy is the poster boy for the evil empire. If ever someone deserves what is coming, it is people like him.”
Mad kat, you forget that it is your generation that ruined the world. You try to run and hide like a coward but it is you who are guilty. You need to be put on trial and then punished. Right now you are just a complete human waste. You are just laying around a condo living off the boyfriend and the social security check. Many people continue to work and do good things after they retire. You on the other hand do nothing but lay around and bitch. What a disgusting example of a human.
Davy on Thu, 2nd Nov 2017 5:50 am
Mad kat, square this circle:
“China To Send People Who Mock The Country’s National Anthem To Prison”
http://tinyurl.com/y9f7hjy3
“People who disrespect China’s national anthem could face up to three years in prison if a draft amendment to the Criminal Law is approved. “Besides a prison sentence, those found guilty could also be put under surveillance or deprived of their political rights, according to the draft, which was submitted on Tuesday to the Standing Committee of the National People’s Congress, the top legislature, for its first reading.”
Davy on Thu, 2nd Nov 2017 6:00 am
Hey, dumb n dutch and mad kat, square this circle. No I am not posting this to say the US “good” and China “bad”. That is how you dumbasses operate. I am saying this because we are all in trouble. What happens in China does not stay in China and the US/Europe are equally in bad shape just not the contagion threat at the moment China is.
“Chinese “Ghost Collateral” Scam Leads To Market “Shockwaves”, Huge Loss For Giant Commodity Trader”
http://tinyurl.com/yanqderm
“For those unfamiliar there is an extensive selection of stories covering the topic, which peaked three years ago, and then quietly faded away as China did everything in its power to deflect attention from what some have said is the biggest threat facing its economy: a giant hole . Below we link to some of our more comprehensive articles on the topic:
China’s “Evaporated” Collateral Scandal Spreads To Second Port
What Is The Common Theme: Iron Ore, Soybeans, Palm Oil, Rubber, Zinc, Aluminum, Gold, Copper, And Nickel?
China Faces “Vicious Circle” As Commodity Collateral Collapses
China Scrambling After “Discovering” Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing
Copper Plunges Most In 3 Months As “Rehypothecation Evaporation” Concerns Grow
Western Banks Scramble As China’s “Rehypothecation Evaporation” Goes Global
BIS Warns About Rehypothecation Threats
How China’s Commodity-Financing Bubble Becomes Globally Contagious
China’s Collateral Rehypothecation Fraud Is Systemic
To be sure, the story briefly resurfaced in May when we reported that “Some Chinese Banks Suspend “Interbank Business” As Regulator Demands That Collateral “Actually Exists”, although it then quickly fizzled again, for two reasons: i) China watchers assumed that Beijing no longer had a “collateral problem” which had been somehow fixed after all the noise rehypothecation stories from in 2014, and ii) China now seemingly has even bigger problems on its hands, such as finding the right balance between maintaining the latest housing bubble, keeping capital outflows in check and its currency stable at a time when China’s debt (well over 300% of GDP) was downgraded by Moody’s (and later S&P) for the first time in 28 years, while its gargantuan shadow debt powder keg is one big red headline away from a $9 trillion shadow bank run.”
Cloggie on Thu, 2nd Nov 2017 6:08 am
Hey, dumb n dutch and mad kat, square this circle. No I am not posting this to say the US “good” and China “bad”. That is how you dumbasses operate
Furious Trailer Park Dave, with foam on his lips, is again suggesting things I never said. There is no “good and bad” in history, just rising and falling powers.
What I do say is: do not take the US empire too serious, because it is a has-been. The real danger comes from China (“yellow peril” at last) and we Europeans world-wide need to prepare for the inevitable event that China will break US dominance.
This is not to demonize the Chinese, but there is such a thing as geopolitical common sense, as any native American can confirm.
Davy on Thu, 2nd Nov 2017 6:12 am
“What I do say is: do not take the US empire too serious, because it is a has-been. The real danger comes from China (“yellow peril” at last) and we Europeans world-wide need to prepare for the inevitable event that China will break US dominance. This is not to demonize the Chinese, but there is such a thing as geopolitical common sense, as any native American can confirm.”
Dumb n dutch, are these your words or words of a reference? You never know with you? The real danger comes from a collapsing globalized world but you are not smart enough to understand global economics and systematic risk. You are stuck in revised pasts that construct a fantasy future like BPM Eurotard empire talk.