In The News

Global Risk of US Credit Crisis – Part II

David Crane September 24, 2007
The globalization of finance has made vast amounts of capital available to many across the world, allowing select leading firms and individuals to become fabulously wealthy. But a lack of effective regulation and opaqueness of many financial instruments also exposed many firms and individuals to enormous risk. Globally connected financial markets and high-speed technology mean that one nation’s...

Still Hanging On

Satoshi Kambayashi September 24, 2007
American foreign policy may have an independent streak, but the US depends on huge amounts of foreign capital. Despite some recent dire reports, the dollar’s recent decline has been small, considering recent volatility in the markets and tightening of credit worldwide, reports Satoshi Kambayashi. America’s tendency to accumulate debt contributes to the dollar’s dropping value. Kambayashi points...

Global Risk of US Credit Crisis – Part I

David Dapice September 21, 2007
Uncertainty swirling in the US financial markets and the Federal Reserve's rate cut leave world players, along with US homeowners and investors, in a quandary. In the first part of this series, economist David Dapice analyzes the global implications as the uncertainty and lack of confidence associated with the credit crunch spread beyond US borders, hurting banks in Europe and investors in...

“Fed, We Have a Problem”

Jeffrey Garten September 12, 2007
Governments with checks and balances are accustomed to internal quarrels over the best ways to solve problems. Such is the case for the US in confronting a sub-prime mortgage crisis that threatens consumer spending, credit availability and jobs around the globe. Firms and investors facing immediate losses from the crisis urge the chairman of the US Federal Reserve System, Ben Bernanke, to lower...

Paulson Urges Restraint in Policy on China Trade

Steven R. Weisman September 11, 2007
US Treasury Secretary Henry Paulson warned that any legislation aimed at punishing China could aggravate jittery markets and increase volatility. “Unilateral actions aimed at another nation” – especially a nation that continues to fund hefty portions of US debt – could disrupt the global economy, he warns. Increasing numbers of US firms report logging more revenue from overseas sales than those...

Calls Grow for Foreigners to Have a Say on US Market Rules

Heather Timmons September 1, 2007
Some US homeowners have adjustable rates on their home mortgages. As interest rates rise, they struggle to repay loans and keep the homes. The problem went global after lenders sold those loans: Financial firms packaged mortgages with other types of debt; US credit-rating agencies slapped high rates on the packages; and investors in Asia and Europe purchased the loan packages, assuming that the...

In an Interconnected World, American Homeowner Woes Can Be Felt From Beijing to Rio de Janeiro

The Associated Press August 31, 2007
The biggest surprise about the US mortgage crisis – even for the experts – is how some bad home loans led to a credit crunch that hurts insurance, textile, telecommunications and other industries around the globe. To prevent an economic slowdown, central banks around the world have inserted billions into the credit markets. Manufacturers around the globe worry about reports that debt-laden...