Way out for a debt-laden world? Yet more debt
5 years, 1 month ago

Way out for a debt-laden world? Yet more debt

Live Mint  

Zombie companies in China. “Previous conventional wisdom about advanced economy speed limits regarding debt to GDP ratios may be changing,” said Mark Sobel, a former US Treasury and International Monetary Fund official. “Given lower interest bills and markets’ pent-up demand for safe assets, major advanced economies may well be able to sustain higher debt loads.” A constraint for policy makers, though, is the legacy of past spending as pockets of credit stress litter the globe. At the sovereign level, Argentina’s newly elected government has promised to renegotiate a record $56 billion credit line with the IMF, stoking memories of the nation’s economic collapse and debt default in 2001. As for corporate debt, American companies alone account for around 70% of this year’s total corporate defaults even amid a record economic expansion.

Economic Growth Debt Policy Makers  makers  debtladen  policy  record  companies  monetary  way  world  spending  economic  growth  international  debt

History of this topic

America Needs to Break Its Debt Addiction — Crisis or Not
2 weeks, 2 days ago

America Needs to Break Its Debt Addiction — Crisis or Not

Live Mint  

-- This is the first part of a series of Bloomberg Opinion columns exploring the risks related to the US’s rapidly expanding debt and budget deficit. There are many answers, not least of which is probably the idea that the Fed, which has already crossed the Rubicon and engaged in quantitative easing through its purchases of Treasury and related securities, …

How Trump, Starmer and Macron can avoid a debt crunch
1 month, 2 weeks ago

How Trump, Starmer and Macron can avoid a debt crunch

Live Mint  

America’s gross national debt is $36trn, or $107,000 per person. In rich countries, government bonds are as close as they can get to a “risk free" asset, making them less likely than foreign ones to stage a “buyers’ strike". Although it might seem that rich countries would balk at such measures, a paper in 2015 by Ms Reinhart found that …

Why the G-20 ‘Common Framework’ for Debt Relief Isn’t Helping Poor Nations
9 months ago

Why the G-20 ‘Common Framework’ for Debt Relief Isn’t Helping Poor Nations

Bloomberg  

More than half of the world’s low-income countries are at high risk of debt distress or are already in it, and several have defaulted. But despite the world’s 20 largest economies having agreed in 2020 to a plan called the Common Framework to smooth the process of restructuring loans that governments could no longer afford to service or repay, progress …

As US 'debt bomb' spirals towards $35 trillion, hedge fund boss warns politicians are spending 'at the expense of future generations'
9 months ago

As US 'debt bomb' spirals towards $35 trillion, hedge fund boss warns politicians are spending 'at the expense of future generations'

Daily Mail  

debt is currently above $34.6 trillion, according to official data Hedge fund billionaire Ken Griffin has warned that the 'surging' US national debt is a 'growing concern that cannot be overlooked.' It comes after fellow hedge fund manager Paul Tudor Jones warned earlier this year that a 'debt bomb' is on the verge of exploding in the US - and …

Global debt surges to record high as borrowing costs bite
10 months, 2 weeks ago

Global debt surges to record high as borrowing costs bite

The Telegraph  

Global debt has surged to a record high of $313 trillion, as higher interest rates drive up borrowing costs for companies and governments worldwide. Jan Friederich at Fitch Ratings said higher borrowing costs mark “a quite substantial change from the environment of. Speaking at the launch of the IIF’s Global Debt Monitor he said that “average interest expenditure relative to …

The $2 trillion interest bill that’s hitting governments
1 year, 1 month ago

The $2 trillion interest bill that’s hitting governments

Live Mint  

The world spent the past decade-plus taking advantage of rock-bottom interest rates to binge on debt. Governments are expected to spend a net $2 trillion paying interest on their debt this year as higher interest rates make borrowing more expensive, up more than 10% from 2022, according to an analysis of International Monetary Fund data by research consulting firm Teal …

Why the world is drowning in debt – again
1 year, 2 months ago

Why the world is drowning in debt – again

The Telegraph  

Emre Tiftik, a director at the IIF, believes countries have become addicted to debt. And there’s this omnipotent feeling that central banks and governments can manage all of this stuff I’m cautious.” Mohamed El-Erian, chief economic adviser at Allianz, says the debt reckoning will not hit countries equally. “While debt burdens are rising in most countries around the world, the …

Global debt surges to record $307 trillion amid borrowing binge
1 year, 3 months ago

Global debt surges to record $307 trillion amid borrowing binge

The Telegraph  

Global debt has surged to a fresh record of $307 trillion as governments and financial services companies fuel a jump in borrowing. Borrowers added $10 trillion to the debt mountain in the first half of 2023, according to the Institute of International Finance. It comes as US government debt hit a record $33 trillion this month amid heavy borrowing and …

China's great wall of debt driving ‘unsustainable’ increase in borrowing, IMF warns
1 year, 3 months ago

China's great wall of debt driving ‘unsustainable’ increase in borrowing, IMF warns

The Telegraph  

China is driving global debt back towards unsustainable levels amid an “unparalleled” borrowing binge by property developers and local governments, according to the International Monetary Fund. The IMF warned that a declining global debt share in 2022 risked being just a “pandemic blip” and said there was an urgent need to “restore fiscal sustainability”. “Global debt, which remained significantly higher …

3.3 billion people live in countries that spend more on debt interest than education, UN says
1 year, 5 months ago

3.3 billion people live in countries that spend more on debt interest than education, UN says

Associated Press  

UNITED NATIONS — Some 3.3 billion people – almost half of humanity – now live in countries that spend more money paying interest on their debts than on education or health, according to a new U.N. report released Wednesday. U.N. Secretary-General Antonio Guterres told a press conference launching the report that because this “crushing debt crisis” is concentrated mostly in …

How does US debt rank compared with the rest of the world?
1 year, 7 months ago

How does US debt rank compared with the rest of the world?

Al Jazeera  

The United States has the world’s highest national debt at $31.4 trillion. Global debt currently stands at $305 trillion, $45 trillion higher than before the COVID-19 pandemic, according to the Institute of International Finance – a global association of the financial industry. The IIF predicts that global debt will continue to rise as government borrowing remains high, affected by factors …

What it would mean for the global economy if the US defaults on its debt
1 year, 7 months ago

What it would mean for the global economy if the US defaults on its debt

Associated Press  

WASHINGTON — If the debt crisis roiling Washington were eventually to send the United States crashing into recession, America’s economy would hardly sink alone. Because the dollar’s dominance has made it the de facto global currency since World War II, it’s relatively easy for the United States to borrow and finance an ever-growing pile of government debt. “Even though we …

What it would mean for the global economy if the U.S. defaults on its debt
1 year, 7 months ago

What it would mean for the global economy if the U.S. defaults on its debt

LA Times  

People take in the twilight view in the business district of Beijing. If the debt crisis roiling Washington were eventually to send the United States crashing into recession, America’s economy would hardly sink alone. “A debt default would be a cataclysmic event, with an unpredictable but probably dramatic fallout on U.S. and global financial markets,’’ said Eswar Prasad, professor of …

White House warns of recession as debt limit fight drags on
1 year, 8 months ago

White House warns of recession as debt limit fight drags on

India Today  

White House economists on Wednesday warned of “severe damage” to the US economy in the event of a debt default, warning that a prolonged default could cause 8.3 million job losses and the stock market to tumble 45%. The White House analysis warned that a protracted default could cost more than 8 million jobs in the third quarter of 2023, …

White House warns of recession as debt limit fight drags on
1 year, 8 months ago

White House warns of recession as debt limit fight drags on

Associated Press  

WASHINGTON — White House economists on Wednesday warned of “severe damage” to the U.S. economy in the event of a debt default, warning that a prolonged default could cause 8.3 million job losses and the stock market to tumble 45%. The White House analysis warned that a protracted default could cost more than 8 million jobs in the third quarter …

Understanding short and long-term debt cycles
2 years, 1 month ago

Understanding short and long-term debt cycles

Live Mint  

A long-term debt cycle is less understood and even less spoken about. Ray Dalio, the founder of Bridgewater Associates, popularised the concept of the long-term debt cycle in his book “How the economic machine works”. As these short-term debt cycles string together, debt levels become unsustainable and interest rates become zero bound –marking the end of a long-term debt cycle. …

IMF, World Bank chiefs warn of debt squeeze in poor nations
2 years, 8 months ago

IMF, World Bank chiefs warn of debt squeeze in poor nations

Associated Press  

WASHINGTON — The heads of the International Monetary Fund and the World Bank warned Wednesday that rising interest rates are squeezing the world’s poorest countries as they struggle with the coronavirus and soaring food prices. There is “a huge buildup of debt, especially in the poorest countries,’' World Bank President David Malpass said in a press conference. “As interest rates …

Here’s what could really sink the global economy: $19 trillion in risky corporate debt
4 years, 9 months ago

Here’s what could really sink the global economy: $19 trillion in risky corporate debt

CNN  

London CNN Business — Companies have spent the years since the global financial crisis binging on debt. “This certainly is another match being lit the bonfire of corporate debt liabilities,” said Simon MacAdam, global economist at Capital Economics. “There’s definitely potential for systemic risk.” The coronavirus shock Investors became increasingly anxious about corporate debt this week as stocks sold off …

Corporate debt loads a rising risk as coronavirus hits economy
4 years, 9 months ago

Corporate debt loads a rising risk as coronavirus hits economy

India TV News  

A gyrating stock market is seizing headlines as the coronavirus threatens corporate profits and economic growth. Oxford Economics has warned that nearly $4 trillion of U.S. corporate bonds will come due within five years — a “massive wall of maturities,” it calls it. “High debt levels make the corporate sector in key economies, including the U.S., particularly vulnerable to the …

Coronavirus shook the foundations of a global stock market powered by debt
4 years, 10 months ago

Coronavirus shook the foundations of a global stock market powered by debt

ABC  

The news over the weekend was nothing short of grim. While western governments are sheeting home the blame for last week's market carnage on the virus, a much more sinister and barely concealed problem lurks at the heart of our financial system. Last October the International Monetary Fund warned that up to $US19 trillion of corporate debt could be "at …

Corporate debt is rising, but it’s safer than it looks
5 years, 6 months ago

Corporate debt is rising, but it’s safer than it looks

CNN  

Editor’s Note: Daan Struyven is a senior economist in the US Economics research group at Goldman Sachs in New York. And corporate debt has actually trended lower relative to corporate assets since the mid-90s.The lower debt-to-cash flow and debt-to-assets measures are more meaningful than debt-to-GDP, as they better capture the risks of bankruptcy and illiquidity. Most importantly, the large decline …

Why Corporate America’s debt problem matters
5 years, 7 months ago

Why Corporate America’s debt problem matters

CNN  

New York CNN Business — The next recession, whenever it arrives, could be deepened by Corporate America’s debt-riddled balance sheet. But the next recession will expose Corporate America’s debt problem, revealing that many businesses binged on too much debt. Business debt has clearly reached a level that should give businesses and investors reason to pause and reflect.” Federal Reserve Chairman …

Discover Related