In The News

Globalization and the Markets – Part II

Xu Sitao January 24, 2008
As anxiety spread about a possible recession hitting the US, stock-indexes went into sharp decline in Europe and Asia. Not surprisingly, worried investors scrutinize the Chinese stock market, as conventional wisdom suggests that China investments are the world’s next over-valued bubble. But analyst Steven Xu points out that the Chinese market could continue to grow, especially this year as China...

Globalization and the Markets – Part I

David Dapice January 22, 2008
Stock-market indexes have tumbled like dominos around the globe, exposing vulnerability of intricate economic connections. A crisis in one nation – and the panic – can quickly bounce from one country to the next. A major cause behind the stock-market plunges the world over are US financial instruments designed to spread and protect risk by including all manner of home mortgages, explains...

The Invisible Hand of Globalization

Susan Froetschel January 3, 2008
Despite exponentially-advancing understanding of economic forces over the 20th century, Adam Smith’s invisible hand continues to elude. In his recently published book none other than former Chairman of the US Federal Reserve Alan Greenspan essentially throws up his hands. Every time a financial crisis hits the world, like the current turmoil caused by sub-prime mortgage lending in the US, calls...

The Dollar in Danger

Sebastian Mallaby November 14, 2007
Overseas investors are skittish about investing in the US, in light of the recent sub-prime mortgage defaults. The US government functions by taking on debt. But as foreign investors resist investing in low-yield government notes and similar instruments described as low risk, the dollar sinks in value. The value of many currencies and commodities, including oil, are linked to the dollar. So many...

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 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...

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...