Posts Tagged ‘crisis’

There’s nothing to thank China for.

[ Tags | crisis | Questions ]

Those who attentively observe the world economic news must have noticed how much the attitude to China has recently changed.

Only yesterday the world press teemed with articles forecasting China would save the world economy and take a leading position in the world. The former statement caused everybody’s enthusiasm while the latter was not so univocal and even seemed threatening for many. Now everything has radically changed. The connotation of the comments is not that pathetic, and more authors tend to impart negative color to this theme in their articles. China – from the savior of the world economy – has turned into its almost main threat. They report it quite in this key – the time-bomb.

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Dubai and the world’s problems

[ Tags | crisis | dollar | dubai ]

The growth of new bubbles in different world economy sectors had scarcely stirred up the expert community as the old bubble at once rose to the surface. Dubai World state-owned corporation asked for restructuring of its debts and all the world considered it to be an actual declaration of default of not the corporation only but of the Dubai Emirate in whole.

No wonder this story goes as it does. It’s an open secret that the real estate market in Dubai has long been declined. Moreover, for everybody Dubai has become an ideal sample of bursting bubble. Thus, if anybody supposed that the money he had lent to Dubai and buried it in their ambitious projects would someday come back out of the blue to the creditors, he was surely a thoughtless and inadequate person.

But the problem is not only with Dubai. This spring IMF has estimated the world financial system toxic assets at $4 trillion. To our mind their estimate is understated but that’s not the point. The point is that today only $1.5-1.75 assets are written off whereas the rest is just waiting its turn and all the events concerning Dubai are just minor but quite remarkable episode of an impending drama. But in fact everybody has suddenly forgotten about toxic assets and changed for the green shoots which without fail have become full-grown bubbles promising a new series of toxic assets.

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