In The News

Treasuries Extend Global-Debt Rally on China, US Growth Worry

Ari Altstedter and Allison McNeely January 5, 2016
Investors seek secure havens for their savings and governments continue to issue debt. Manufacturing continues to decline in both the United States and China, adding to a surplus in oil stocks, and analysts suggest the news from China followed by a halt in trading prompted a steep decline in global stock prices. “The Treasury rally goes against the consensus that yields will rise in 2016 with...

The World Wary as US Federal Reserve Declares End to Debt Crisis

Chris Miller January 5, 2016
Central banks around the globe responded to the 2007-2008 global debt crisis by reducing interest rates and loosening monetary policy to encourage consumer spending, investment, employment and price stability. After seven years the US Federal Reserve lifted interest rates in December and signaled the possibility of gradual rate hikes, a move described by Chairwoman Janet Yellen as a process of “...

Microloans Don’t Solve Poverty

Ben Casselman December 31, 2015
Microloans for as low as $25 have long been praised for triggering innovative entrepreneurship and reducing poverty – by allowing the purchase of a few chickens or a cell phone. Ben Casselman takes a more critical look at microloans for FiveThirtyEight, writing, “A series of six independently conducted randomized controlled trials found that a variety of microlending programs had little to no...

How the Fed's Rate Hikes May Impact Asia

December 20, 2015
The US Federal Reserve responded to the 2007 financial crisis by reducing interest rates to stimulate spending and investment. Analysts since warned that a rate lift “could pose a challenge to a number of emerging market economies – particularly across Asia, a top exporter to the US – by pushing up bond yields, augmenting capital outflows and depreciating currencies,” reports Deutsche Welle. The...

The World's Multi-Trillion Dollar Bond Market Is Circling the Drain

Ben Wright November 23, 2015
The world is awash in debt, more than $225 trillion in all by some reports. Warning bells are going off about a lack of liquidity in bond markets amid anticipation for the US Federal Reserve to begin gradually lifting interest rates. Prices of bonds already in the market will fall as interest rates rise because investors will pursue the new bonds with higher yields. Stimulus spending by...

Goldman Fund Walks Away From BRICS Era

Ben McLannahan November 10, 2015
The economies of China, India, Brazil, Russia and South Africa, with 42 percent of the world’s population, totaled about 22 percent of global gross domestic product in 2015, as projected by the International Monetary Fund. The US economy represents the same share of global GDP with about one-tenth of the BRICS’s population. A former chief economist of the investment bank Goldman Sachs coined the...

What to Do About Debt

Richard Kozul-Wright November 9, 2015
The world must prepare for higher interest rates. The McKinsey Global Institute estimates 2014 global debt at $199 trillion, more than 2.5 times global GDP. “Servicing these debts will most likely become increasingly difficult over the coming years, especially if growth continues to stagnate, interest rates begin to rise, export opportunities remain subdued, and the collapse in commodity prices...