I went to a talk with Nouriel Roubini and Ian Bremmer, and now I'm worried about everything!!!

Everything is going to be terrible in 2015.

That's the message that I came away with after listening to Time's Rana Foroohar interview economist Nouriel Roubini and geopolitics expert Ian Bremmer. The three discussed global risk in the coming year.

There are major risks in China, Russia, Europe, the Middle East, and Nigeria.

Beyond just general terribleness, there are a few things to consider specifically:

The Global Economy

On the economy, Roubini said that he sees four major drivers of the global economy: the US, Europe, Japan, and China and other emerging-market economies.

The only one of the four currently on the upswing is the US. However, it's questionable whether the American economy can distance itself from the rest of the world if there are economic headwinds everywhere else. The Federal Reserve's ending of quantitative easing (QE) hasn't hurt the US. But it has hurt emerging markets in the rest of the world.

The economy in Europe, meanwhile, is more or less a disaster.

"I'm more negative about Europe than even during the euro crisis," said Bremmer.



Read more: [link to www.businessinsider.com]

In short, the quick fixes utilized by the world's financial institutions to resolve the 2008-9 financial crisis are coming undone. This is due to two basic and general factors: (1) the "fixes" were never fixes at all; (2) additional stresses have developed in the 5-6 years since the crisis.

(1) Financial institutions engaged in a mix of money "printing" and credit easing ("increased liquidity") in '08-9, coupled with a policy of fiscal centralization, particularly in Europe. Both of these "fixes" were in fact what caused the crisis in the first place, so the "fix" was akin to giving a drug addict a shot of heroin to get past short-term withdrawals. The withdrawal symptoms disappear, but he's still an addict.

This liquidity and centralization did no more than maintain and increase the problems in the market, further decoupling the fiscal market from the productive base of the world economy. For various reasons, we are now seeing this "fix" come undone, starting with the worst-hit European country, Greece, and the country that best survived the previous storm, Switzerland. As is clear, however, all major financial players are being hit.

(2) Since '08-9, we've seen the exacerbation of fiscal stress coupled with the rise of additional geopolitical-economic stresses, such as the Ukraine crisis and Russia standoff. Japan's inflationary policy in particular has helped destabilize currency markets. To add fuel to the fire, crude prices a dropping like a rock, which helps trigger financial instability.

A horribly short explanation, but generally speaking this is what's happening: The locus of the current crisis is currency and bonds, in contrast to the previous crisis which was centered in securities and mortgages. Inflation in loans and mortgages in the early 2000s caused the security/mortgage bubble that burst in 2008; inflation of currency and bonds in '08-9 to fight the previous crisis caused a currency/bond bubble that is now bursting. What's distinctive about a currency/bond bubble is that you can't increase liquidity to fight it - that deepens the crisis. There are only two proven ways to fight it: (1) correct the currency, (2) mass warfare to distract the markets from the severity of the crisis and to artificially boost necessary sectors of economic production (war supplies). Of course, there's a third option, which is to hide your head in the sand and ignore the total collapse of the world market. A market is built on its currency: if the currency goes, the market goes. If the market goes, everything goes.

yep-
"An ECB Board Member Says QE 'Has To Be Big' To Work

[link to uk.businessinsider.com]

and another fx broker down:

Alpari (UK) Important announcement - entered into insolvency
[link to www.forexfactory.com]

Big impact in the forexcommunity! Reading the comments below is pretty entertaining.


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Without QE, “Eurozone Financial Markets Would Collapse”

[link to wolfstreet.com]

Exactly.

WARNING Bank Deposits Will Soon No Longer Be Considered Money But Paper Investments
[link to www.economicpolicyjournal.com]

This is the "bail-in".

Harald Malmgren @Halsrethink · 40 min Há 40 minutos
@MishGEA Greeks,especially Greek Cypriots, are familiar with bail-ins. Fear of "The Great Greek Bail-in" should surprise no one.

The real question is. How will the QE get into the common mans hands to support his own economy ?

Were did the 30+ Trillion of QE go so far ?

How would anyone even qualify, in significant numbers to effect the economy by receiving this QE in the form of loans ? Just more propping up and kicking the can.

Next !

Dam Luis, your are the GLP finance reporter well done again...