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Monday, 29 February 2016
HSBC: YIKES - Arab States Going Broke!
How many businesses can withstand a drop in revenues of 50% or more and expect to survive? Few, if any! With oil prices being down by that percentage, expect many of the resource based countries to start defaulting on their debt and thereby crashing the global banking system along with the stock markets. It will cascade!
It was all a house of cards built on an exuberant credit bonanza fueled by unprecedented low loan rates that was doomed from the start. Now here comes the payback - and it won't be pretty.
All things revert to the mean - that's the first law of common sense, just ask Soros!
It has been just five years since the Global Financial Crisis, and the world – in brazen defiance of the lessons of 2008 – is already back to blowing massive bubbles and naively praising the countries that are benefiting from these “fool’s gold” economic booms. The Southeast Asian island nation of Singapore is currently inflating one of the most egregious examples of these post-2009 bubbles, and is displaying parallels to Iceland’s bubble that are causing me to believe that its boom will end in a similar (but not necessarily identical) manner.
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