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Home / Business / A global "shock to the markets" could trigger the next financial crisis, warns Roubini

A global "shock to the markets" could trigger the next financial crisis, warns Roubini



It is generally expected that the US Federal Reserve will put moderate pressure on its meeting this week. This paves the way for a rate cut in July – the first in more than a decade – that nearly 40% of economists expect to participate in a poll in the Wall Street Journal.

While a hawkish Fed is no longer above the aging bull market, Nouriel Roubini, NYU's economics professor and perhaps the media's most popular permeance, now says the world has "an even bigger problem in their hands."

In our The Call of the Day Roubini examines "the growing risk of a recession in 2020" and the crisis specter of an already fragile global economy.

"A sufficiently serious shock could even trigger a global recession if central banks react quickly. & # 39;


Nouriel Roubini

Last year, he warned of 1

0 possible downside risks that could lead to a global recession next year. A friendlier Fed, he says, removes one of them, but the others are still in the game and have proven to be more dangerous than before.

"U.S. The stock markets have remained frothy since our first comment, "he wrote. "There are additional risks associated with the emergence of newer forms of debt, including in many emerging markets where many loans are denominated in foreign currencies."

China-US tensions pay particular attention to key risks This is particularly the case when China retaliates by closing its market to US multinationals like Apple

AAPL, + 0.98%

.

Read: Wilbur Ross lowers expectations of a trade agreement resulting from the G20 talks between Trump, Xi

triggering a global crisis, regardless of what major central banks are doing " , warned Roubini. "Given the scale of private and public debt, there would probably be another financial crisis."

Also read: Business conditions are at their worst since the financial crisis of 2008, says Morgan Stanley [19659002] At this point, central banks around the world are increasingly forced to illiquid financial markets "lightning" and other disturbances, such as the conflict between Trump and a country like Iran. "That could strengthen his domestic election numbers," he said. "But it could also trigger an oil shock."

Spike oil prices and trade wars are more than just a supply-side risk, according to Roubini. They also threaten an increase in consumption – tariffs and higher fuel costs absorb disposable income. As a result, uncertainty increases, companies' investments and investments are cut, and great relaxation begins.

There are no signs of shock earlier this week, as markets around the world are looking green in the US before the opening bell on Monday.

The Markets

The Dow

DJIA, + 0.22%

S & P

SPX, + 0.29%

and Nasdaq-100

COMP, + 0.79%

are all on the rise. Following a volatile expansion last week, oil

CLN19, -0.70%

has fallen while gold

GCQ19, -0.18%

are in plus and the dollar

DXY, -0.18%

is lower.

European stocks

SXXP, -0.05%

are mostly mixed, and that was the story for Asian markets

ADOW, -0.17%

and

In cryptocurrencies the price for Bitcoin

BTCUSD, + 4.34%

BTCUSD, + 4.34%

exceeded the $ 9,000 threshold for the first time in more than a year .

The Graph [19659017] Donald Trump warned investors over the weekend that they should vote better for him, or else. "If someone other than myself takes the helm in 2020 … there's going to be a market crash like it is he never saw before! "he wrote. The assumption that the rally we saw is solely due to his work in the White House.

The blog of the Heisenberg report, however, took advantage of this descriptive graph to show how the stock market rose in triple digits at the time of Trump's inauguration and that the unemployment rate was already close to historic lows.

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                            
                            
                                      

              

                  
                  
                      
            
              

                  
                      

    

      
      
      
      
      
      
      
      
                                         

He did not name names, but Apple

AAPL, + 0.98%

Chef Tim Cook seemed to be aiming for greats like the Silicon Valley technology giant Facebook

FB, + 2.82%

Twitter

TWTR, + 1.11%

and alphabet

toget, + 0.95%

YouTube during his speech to graduates of Stanford University on Sunday. "If you've built a chaos factory, you can not shirk responsibility for the mess," he said. "Too many seem to believe that good intentions excuse harmful consequences."

A huge part of South America is in recovery mode after millions of people in Argentina, Uruguay and Paraguay suffered a massive blackout in the network of countries due to an unexplained failure.

The Economy

Along with the upcoming FOMC meeting, which begins on Tuesday, data on new developments in May and the sales of existing homes will be due later this week. On Monday, before the opening, we'll take a look at the New York Empire State Manufacturing survey, followed by the NAHB Homebuilder poll in June. No change in policy is expected for the Fed meeting.

The Tweet

Here comes O.J. Simpson … no, really:

Occasional Readings

Tourists must be kicked out from time to time.

Starbucks

SBUX, -0.65%

The billionaire Howard Schultz slows down in his White House run in 2020, citing back pain.

The Chernobyl HBO version "just scratches the surface".

This lawnmower goes from zero to 100 m.p.h. in 6 seconds.

Potential future gay president says we probably already have a gay president.

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