Satyajit Das, author of “A Banquet of Consequences,” sees a crisis brewing in financial markets. "There's a lot of kindling, and people are walking around flicking lighters." Das says there are three basic ingredients required to cook up a crisis. 1) Overvaluation. "You can take PE ratios, you can look at market cap relative to an economy, they're all overvalued, and they're all assuming much greater levels of growth than we've seen." 2) Debt. "Debt today is $60 trillion more than it was, globally, in 2009. As a percentage of GDP, it's 17% up," and 3) A banking problem. "Today, there's more than $3 trillion of worth of bad loans sitting around." Back in 2007, it was a ‘mere’ $1 trillion worth of subprime loans that triggered the GFC. Watch the full video below to find out what the triggers for the next crisis could be.
Thank you for saying it like it is! But what do we do about it? How do we protect what we have?
I enjoy Mr Das frank and clear analysis of the world economy. The big question for me is how to reduce the risk of what it seems imminent.
I agree completely with Mr Das and the facts are there for all to see. However, if only he would be good enough to solve our problem by telling us what we can do to protect ourselves from the coming crash. Please have livewire get him back and spell out the options for those of us who are invested and hold no debt.