The Economist suggests that the world has learned few lessons of the global financial crisis from 2008 to 2009.

Becky Berkman

2018-09-07 07:33:00 Fri ET

The Economist re-evaluates the realistic scenario that the world has learned few lessons of the global financial crisis from 2008 to 2009 over the past decade. Good times breed complacency. As the Trump administration rolls back key Dodd-Frank rules and regulations, the Federal Reserve has yet to raise countercyclical capital buffers for most banks. When prudence prevails, no regulator is a perfect judge of financial risk.

The Economist points out that the current news is both good and bad. The good news suggests that most U.S. large banks finance themselves with proportionately more equity. The average bank equity capital ratio increases substantially from 3% to double digits in the decade after the Lehman financial meltdown.

However, the bad news suggests that most U.S. households, firms, and financial intermediaries react slowly to the U.S. subprime mortgage crisis from 2008 to 2009.

Former U.S. Treasury Secretary and Harvard President Larry Summers shares his ingenious insight that the U.S. economy suffers secular stagnation, government debt, and inflation in the recent decade after the global financial crisis. In light of gradual greenback appreciation and national populism, Harvard chair professor Kenneth Rogoff indicates that the Trump stock market rally may be the calm before the next financial storm.

Despite hefty Trump tax cuts and infrastructure expenditures, the U.S. economy operates near full employment with high inflation, currency, and interest rate risks. This trifecta poses a red alert to the Trump administration and its advisory troika (National Economic Council, Federal Reserve, and Treasury).

Both the U.S. Treasury and National Economic Council favor imposing draconian tariffs on at least $200 trillion Chinese imports. This trade tactic aims to help curtail bilateral trade deficits with China. These tariffs may affect Canada, Europe, Mexico, and Japan.

Moreover, the Federal Reserve accelerates the current interest rate hike (with at least one rate increase in September 2018 and another in December 2018). This hawkish interest rate hike is likely to continue until late-2019. All of these fiscal and monetary measures can help contain the high-risk trifecta of inflation, fiscal debt and deficit, and secular stagnation.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Higher public debt levels, interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy.

Daphne Basel

2019-01-23 11:32:00 Wednesday ET

Higher public debt levels, interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy.

Higher public debt levels, global interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy from 2019 to 2020.

+See More

Management consultants can build sustainable trust-driven client relations through the accelerant curve of business value creation.

Monica McNeil

2020-11-17 08:27:00 Tuesday ET

Management consultants can build sustainable trust-driven client relations through the accelerant curve of business value creation.

Management consultants can build sustainable trust-driven client relations through the accelerant curve of business value creation. Alan Weiss (2016)

+See More

IMF chief economist Gita Gopinath indicates that competitive currency devaluation may be an ineffective solution to improving export prospects.

Fiona Sydney

2019-10-09 16:46:00 Wednesday ET

IMF chief economist Gita Gopinath indicates that competitive currency devaluation may be an ineffective solution to improving export prospects.

IMF chief economist Gita Gopinath indicates that competitive currency devaluation may be an ineffective solution to improving export prospects. In the form

+See More

President Trump now agrees to cease fire in the trade conflict with the European Union.

Laura Hermes

2018-07-23 07:41:00 Monday ET

President Trump now agrees to cease fire in the trade conflict with the European Union.

President Trump now agrees to cease fire in the trade conflict with the European Union. Both sides can work together towards *zero tariffs, zero non-tariff

+See More

What is our asset management strategy?

Andy Yeh Alpha

2026-02-28 10:29:00 Saturday ET

What is our asset management strategy?

AYA fintech network platform provides proprietary alpha stock signals and personal finance tools for stock market investors. As of March 2026, we have up

+See More

Peter Isard analyzes the proper economic policy reforms and root causes of global financial crises of the 1990s and 2008-2009.

Jonah Whanau

2023-08-14 09:25:00 Monday ET

Peter Isard analyzes the proper economic policy reforms and root causes of global financial crises of the 1990s and 2008-2009.

Peter Isard analyzes the proper economic policy reforms and root causes of global financial crises of the 1990s and 2008-2009. Peter Isard (2005) &nbs

+See More