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Alternative Visions - Contagion - Brexit as ‘Bear-Stearns’ Financial Instability Event – 07.01.16
As Jack Rasmus predicted last week, the initial scenario for the Brexit
vote is not an immediately global financial crash. The threat is more
intermediate than short term. The analogy is not Brexit as a ‘Lehman
Brothers’ event, the US bank collapse that ushered in the financial
crash of 2008-09, but more similar to a ‘Bear Sterns’ event, the US bank
that collapsed in the US early in 2008. Brexit is a warning shot fired
across the bow of the global capitalist economy, not the precipitating
event for another crash. Jack explains how global investors are waiting
to see what happens next before dropping the other shoe. Jack reviews
the likely intermediate effects of Brexit on global markets—currencies,
bond rates, stocks, real investment, deflation, productivity, bank
lending, consumption, and GDP. The relative effects of Brexit on
economic regions are also covered: the UK, EU, US, China, EMEs.
Recession in the UK will occur first, Jack explains. Europe will
stagnate further. Japan’s recession will deepen, the US will enter
recession in 2017 soon after the elections. China eventually will have
to devaluate its currency with severe global consequences—i.e. the
effects of Brexit on financial markets and real economies is just
beginning. Political instability in the UK, in both conservative and
labor parties is reviewed, with splits deepening in both. What Brexit
also means for growing political instability for France, Spain,
Netherlands, and Italy; how Brexit is penetrating the US election
campaigns, as US elites and corporate push back on both candidates. Jack
warns the weak spots of global capital today are Italy’s banks and
Japan, where the most likely next ‘Bear Stearns’ event will emerge.
Longer term, the UK currency and London as global financial center are
finished as global players.
View all episodes
By Progressive Radio Network
4.8
2525 ratings
As Jack Rasmus predicted last week, the initial scenario for the Brexit
vote is not an immediately global financial crash. The threat is more
intermediate than short term. The analogy is not Brexit as a ‘Lehman
Brothers’ event, the US bank collapse that ushered in the financial
crash of 2008-09, but more similar to a ‘Bear Sterns’ event, the US bank
that collapsed in the US early in 2008. Brexit is a warning shot fired
across the bow of the global capitalist economy, not the precipitating
event for another crash. Jack explains how global investors are waiting
to see what happens next before dropping the other shoe. Jack reviews
the likely intermediate effects of Brexit on global markets—currencies,
bond rates, stocks, real investment, deflation, productivity, bank
lending, consumption, and GDP. The relative effects of Brexit on
economic regions are also covered: the UK, EU, US, China, EMEs.
Recession in the UK will occur first, Jack explains. Europe will
stagnate further. Japan’s recession will deepen, the US will enter
recession in 2017 soon after the elections. China eventually will have
to devaluate its currency with severe global consequences—i.e. the
effects of Brexit on financial markets and real economies is just
beginning. Political instability in the UK, in both conservative and
labor parties is reviewed, with splits deepening in both. What Brexit
also means for growing political instability for France, Spain,
Netherlands, and Italy; how Brexit is penetrating the US election
campaigns, as US elites and corporate push back on both candidates. Jack
warns the weak spots of global capital today are Italy’s banks and
Japan, where the most likely next ‘Bear Stearns’ event will emerge.
Longer term, the UK currency and London as global financial center are
finished as global players.
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