PowerSwitch

Are we about to experience the next financial crash?

Will the problems in Greece, the Euro and the other Euro countries that are hanging on by their fingertips precipitate the next crash? Falling dominoes spring to mind...

I doubt that we will see a repeat of 2008. The near collapse in 2008 was the result of the financial authorities following their own rules right up to the point that they realised the rules were broken and from that point on they would have to make it up as they went along

We are still in that phase, except that Greece has called foul and saying the emperor has no clothes. Since no-one who matters is wearing any clothes, no-one who has any power is going to listen to the naughty little boy.

There will be managed redistribution of the debt default. Austerity will be moved up the ladder a rung or two. Greece will be hung out to dry as a warning to the next set of marginal economies.

Collapse is inevitable, but it can take a very long time.

edit

In this environment, I think it is funny that Cameron is trying to rock the boat with a demand for re-negotiation of EU membership treaty with an implied threat of BREXIT if he doesn't get it.

Can the Troika/ECB risk further contagion?

Perhaps we'll see them buckle under the weight of international pressure in an attempt to restore 'market confidence'. Ahem.

PS_RalphW wrote: In this environment, I think it is funny that Cameron is trying to rock the boat with a demand for re-negotiation of EU membership treaty with an implied threat of BREXIT if he doesn't get it.

Well, to be fair, Cameron was always going to demand that re-negotiation if the tories won a majority. The fact that there is a Greek crisis going on at the same time is co-incidental. But the threat of a BREXIT is twice as potent in this environment, because it would leave the EU with one less major net contributor to support the floundering periphery.

I honestly believe the entire EU project is now in jeopardy, at least in its current form. A complete rethink is required, not just a Greek and British rethink.

snow hope wrote:Are we about to experience the next financial crash?

No - because this is just the continuation of the crash that occurred in 2008.
Why is this just a continuation of that crisis?
Well for a start, there has been no effective overhaul of the banking sector whatsoever. Do we know how large bank exposure is to the derivatives market? Apparently Deutsche Bank has exposure to at least $54 trillion - which could sink the entire EU- let alone Germany. Don't think we in the UK will escape the worst of this - it is systemic. The system is rotten to the core and needs to be replaced, not tinkered with.

October seems like a likely time, to me. Don't ask why, though.

RenewableCandy wrote:October seems like a likely time, to me. Don't ask why, though.

Financial crashes tend to happen in September rather than October. There is a reason for this, but I can't remember exactly what it is. Something to do with people coming back from their summer holidays and it being half way through the financial year.