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GFC II GFC2 New Global Financial Crisis Mark 2 Alert; Almost half of Australians believe world is on cusp of another financial crisis
Topic Started: 27 Jun 2011, 01:21 PM (14,286 Views)
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New global financial crisis alert

Peter Martin

June 27, 2011

There are fears Greece's financial crisis could help spark another global financial crisis.

THE international organisation of central banks says the scene is set for a new global financial crisis unless Greece and other countries increase interest rates and slash debt more rapidly.

In a warning released overnight in Basel, the Bank for International Settlements said three years of near-zero interest rates in the advanced economies were building the risk of ''a reprise of the distortions they were originally designed to combat''.

''Pessimism has become tiresome, so optimism is gaining a foothold,'' the report says, before asking if the reasons for global pessimism have really been superseded by events.

Read more: http://www.smh.com.au/business/new-global-financial-crisis-alert-20110626-1gm3e.html
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No new GFC, predicts Morgan Stanley chief

Malcolm Maiden

June 28, 2011

EUROPE'S sovereign debt debacle is unlikely to metamorphose into a new global financial crisis, Morgan Stanley's global head, James Gorman, says. Financial giants including Morgan Stanley are significantly stronger than they were going into the crisis that brought the world to its knees in 2008 and 2009, he says, and the market's worst fear, of a cascading series of sovereign defaults in Europe, is unlikely to occur.

''I don't think Greece is going to default,'' Mr Gorman said yesterday during a whistle-stop visit to Melbourne, where he began his career. ''I don't think European governments are trying to make that happen, and my suspicion is that the banks with the biggest exposure are European national banks - ones that if necessary would be supported by their own governments. Is Germany going to let its big banks fail, Switzerland? France? I don't think so and that's why I think Europe's governments are working with the banks to try and figure out a no default option.''

Read more: http://www.smh.com.au/business/no-new-gfc-predicts-morgan-stanley-chief-20110627-1gneo.html
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Risk of new financial crisis prompts RBA to leave rates on hold

Peter Martin

July 6, 2011

THE Reserve Bank no longer expects to raise interest rates this year. The new position follows an upgraded assessment of the risk of a new global financial crisis and a decision to abandon its Australian economic growth forecasts for 2010-11 and 2011.

For the first time, the statement released after yesterday's board meeting acknowledged the possibility that the global economy might not grow as strongly as expected, saying if it did not, Australia's medium-term growth prospects would be in doubt.

The bank revised down its short-term growth forecasts. It had forecast growth of 2.5 per cent in the year to June 2011 and 4.25 per cent in the year to December. It now says neither forecast will be met, primarily because of a slower-than-expected return to production in Queensland's flood-hit coalmines.

Read more: http://www.smh.com.au/business/risk-of-new-financial-crisis-prompts-rba-to-leave-rates-on-hold-20110705-1h0v6.html
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SuperEgo
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OP the banking industry represents a very small portion of the population and does not represent a global finacial crisis but merely a handful of companies who employ relatively few people becoming insolvent.
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PuntPal
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SuperEgo
6 Jul 2011, 01:51 PM
OP the banking industry represents a very small portion of the population and does not represent a global finacial crisis but merely a handful of companies who employ relatively few people becoming insolvent.
I thought insolvencies were at record highs and a lot more than "a handful"....

Also, havent we lost 60,000 full time jobs over the past 2 months.

And with manafacturing, tourism and housing dead...what exactly is going well in Australia?
"Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." - Paul Krugman 2002

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SuperEgo
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PuntPal
6 Jul 2011, 02:57 PM
SuperEgo
6 Jul 2011, 01:51 PM
OP the banking industry represents a very small portion of the population and does not represent a global finacial crisis but merely a handful of companies who employ relatively few people becoming insolvent.
I thought insolvencies were at record highs and a lot more than "a handful"....

Also, havent we lost 60,000 full time jobs over the past 2 months.

And with manafacturing, tourism and housing dead...what exactly is going well in Australia?
Hi PuntPal,

"the finacial system" is the "fractional reserve banking system"

its a very sound system the loss of 60,000 full time jobs and the downturn of manufacturing, tourism or housing
will have no affect at all on the fractional reserve banking global finacial system

even if the Banks who employ very little people become insolvent this will not threaten the fractioanl reserve banking system as the banks that dont go insolvent can simply start doing business with the customers of the insolvent banks
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b_b
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SuperEgo
6 Jul 2011, 03:24 PM
Hi PuntPal,

"the finacial system" is the "fractional reserve banking system"

its a very sound system the loss of 60,000 full time jobs and the downturn of manufacturing, tourism or housing
will have no affect at all on the fractional reserve banking global finacial system

even if the Banks who employ very little people become insolvent this will not threaten the fractioanl reserve banking system as the banks that dont go insolvent can simply start doing business with the customers of the insolvent banks
Australia (nor any other major economy) does NOT have a fractional reserve banking system.

Banks do not lend reserves. Banks expand the money supply endogenously.

For more, this is a very useful explanation
http://bilbo.economicoutlook.net/blog/?p=10733
(S – I) + (T - G) + (M - X) = 0
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PuntPal
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SuperEgo
6 Jul 2011, 03:24 PM
PuntPal
6 Jul 2011, 02:57 PM
SuperEgo
6 Jul 2011, 01:51 PM
OP the banking industry represents a very small portion of the population and does not represent a global finacial crisis but merely a handful of companies who employ relatively few people becoming insolvent.
I thought insolvencies were at record highs and a lot more than "a handful"....

Also, havent we lost 60,000 full time jobs over the past 2 months.

And with manafacturing, tourism and housing dead...what exactly is going well in Australia?
Hi PuntPal,

"the finacial system" is the "fractional reserve banking system"

its a very sound system the loss of 60,000 full time jobs and the downturn of manufacturing, tourism or housing
will have no affect at all on the fractional reserve banking global finacial system

even if the Banks who employ very little people become insolvent this will not threaten the fractioanl reserve banking system as the banks that dont go insolvent can simply start doing business with the customers of the insolvent banks
Sorry I thought you were referring to the first article with your comment, as you didnt quote anything to show me what you were talking about
"Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." - Paul Krugman 2002

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raveswei
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b_b
6 Jul 2011, 03:36 PM
Australia (nor any other major economy) does NOT have a fractional reserve banking system.

Banks do not lend reserves. Banks expand the money supply endogenously.

For more, this is a very useful explanation
http://bilbo.economicoutlook.net/blog/?p=10733
right,
banks keep deposits and create (from thin air) money that they lend
http://popping-bubble.blogspot.com/

Thinking of an Australian property speculator (PI):
Inaction = missing opportunities.
Missing opportunities = losing.
Too much thinking = inaction.
Thinking = missing opportunities.
Therefore thinking = losing.

disgraceful little man Frank Castle owes a house to Salvation Army

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b_b
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raveswei
6 Jul 2011, 05:15 PM
right,
banks keep deposits and create (from thin air) money that they lend
No - the loans they approve create the deposit
(S – I) + (T - G) + (M - X) = 0
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