The Agenda

2015

Assuming we survive the Mayan apocalypse, Annie Lowrey warns that 2015 might see yet another financial crisis:

According to some creative analysts at the management consulting firm Oliver Wyman, that date is April 26, 2015. In a paper presented last week at the World Economic Forum in Davos to much chattering from the fur-and-cashmere class, Wyman analysts imagine an all-too-familiar scenario coming back all too soon. The next time, the authors say, the fat-cat financiers will be in Singapore or Hong Kong, chased away from New York and London by stricter reserve requirements and emboldened regulators. The bubble will appear in developing markets, with easy developed-world money and the promise of ever-spiraling commodity prices funding unnecessary building and silly investments. So there you have it—again: a big pool of money chasing market-beating returns and ultimately inflating asset-price bubbles that burst with awful consequences, from bank failures to sovereign-debt crises.

There are many other scenarios that come to mind, e.g., what if we see a more widespread public sector debt crisis? But the idea of a more Asia-focused financial panic raises many interesting questions, in part because the last Asian financial crisis led to political change in a number of countries, including Indonesia and Thailand. Might a 2015 financial crisis badly weaken the Chinese government? Though many have criticized the supposed relative stinginess of the U.S. social safety net, a sharp slowdown in China could have dire consequences for a CCP that has made a strenuous effort to contain the news from Tunisia and Egypt. 

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