You don't get a fast recovery,Harvard economist Ken Rogoff points out.It doesn't mean you're about to enter something worse.The larger risk is government debt.There is always a sovereign debt problem after a crisis as spending explodes.He thinks housing prices still have further to fall,but a double dip recession is about as likely as in a random year.He wouldn't say there's an elevated risk of one.
There are fears that slowing Chinese growth and the Euro Zone debt crisis could hinder recovery.As China normalizes and grows,it's going to have bumps like everyone else.To think it's all upside is just absurd.Property prices and leverage are probably the best indicators you're going to have a problem.China cannot keep growing its exports at the same rate it's been doing.At some point,they have to redirect their strategy.
The Euro Zone banking system has moribund banks in it,but it's not gonna get better if there's denial,Professor Rogoff believes.
Results of stress tests of Euro Zone banks are to be released this month.U.S. banks passed a similar test earlier in the financial crisis.
iShares FTSE/Xinhua China(FXI)
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