As stocks continue to climb and the U.S. economy sustains
its third longest period of expansion in history, market forecasters are
seeking clues for when our next crisis may strike.
So far, three uncommon signals have them worried.
Here’s an explanation of the three uncommon signs causing alarm, and what they mean for your savings...
As stocks continue to climb and the U.S. economy sustains its third longest period of expansion in history, market forecasters are seeking clues for when our next crisis may strike.
So far, three uncommon signals have them worried.
Here’s an explanation of the three uncommon signs causing alarm, and what they mean for your savings...
Sign #1: Resurgence of Synthetic CDOs
Depending on how the underlying asset performs, derivatives can generate either massive gains or crushing losses.
But it’s when big banks and financial institutions start gambling in derivatives that things become especially dangerous. And that’s exactly what happened in the case of our last crisis: A slew of “too big to fail” organizations took on excessive risk through derivatives (mortgage-backed securities and others), and they couldn’t shoulder their losses when the bets went bad.
Sign #2: Lenders Loosening Mortgage Standards
Well, there are two main incentives for banks to lend recklessly:
In the case of our last crisis, both of those incentives came into play
Followers of the index today believe conditions are shaping up for it to be proven right once again, as cities across China, India, Saudi Arabia, and the U.S. erect another round of the tallest skyscrapers in history.
A good example of this is in Denver where a Manhattan developer is moving forward with plans to build a 1,000-foot skyscraper, which would dwarf all the other buildings in Denver.
Read more: 3 Uncommon Signs That Economic Collapse Could Happen Soon
So far, three uncommon signals have them worried.
Here’s an explanation of the three uncommon signs causing alarm, and what they mean for your savings...
As stocks continue to climb and the U.S. economy sustains its third longest period of expansion in history, market forecasters are seeking clues for when our next crisis may strike.
So far, three uncommon signals have them worried.
Here’s an explanation of the three uncommon signs causing alarm, and what they mean for your savings...
Sign #1: Resurgence of Synthetic CDOs
Depending on how the underlying asset performs, derivatives can generate either massive gains or crushing losses.
But it’s when big banks and financial institutions start gambling in derivatives that things become especially dangerous. And that’s exactly what happened in the case of our last crisis: A slew of “too big to fail” organizations took on excessive risk through derivatives (mortgage-backed securities and others), and they couldn’t shoulder their losses when the bets went bad.
Sign #2: Lenders Loosening Mortgage Standards
Well, there are two main incentives for banks to lend recklessly:
- Increasing competition from other banks, and...
- Decreasing demand for credit.
In the case of our last crisis, both of those incentives came into play
Followers of the index today believe conditions are shaping up for it to be proven right once again, as cities across China, India, Saudi Arabia, and the U.S. erect another round of the tallest skyscrapers in history.
A good example of this is in Denver where a Manhattan developer is moving forward with plans to build a 1,000-foot skyscraper, which would dwarf all the other buildings in Denver.
Read more: 3 Uncommon Signs That Economic Collapse Could Happen Soon
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