Yahoo: The prolonged sell-off in risk assets across the globe will only abate if the U.S. Federal Reservechanges its path and begins to loosen its monetary policy once again, according to strategists at Deutsche Bank.
Chinese growth fears, stress in the U.S. energy sector and fragile balance sheets in European financial companies have all been credited in the last week for fueling the sell-off. However, there's only one real cure for this current bout of weakness, according to a team of European equity analysts at the German bank, led by Sebastian Raedler.
"Without policy intervention, there is more downside risk for equities," the bank said in a note entailed "The smell of default" on Monday.
They fear US debt defaults lower the value of their loans. Bad loans are piling up, some bridge borrowing by the banks to cover asset depreciation.
The real problem, the American consumer has no surplus. Regulatory costs, Obamacare costs, pension costs; the globe cannot bet on the American consumer for some time. Much pof the globe has been geared to the American consumer for 40 years, and that ios changing quite a bit.
No comments:
Post a Comment