Financial Crisis

Article Index

Congress Just Set the Stage for the Next Financial Crisis

Next financial crisis

Last month, Congress agreed to free thousands of banks from tight restrictions put in place by the 2010 Dodd-Frank law - legislation put in place to prevent a new financial crisis.

According to Money Morning Capital Wave Strategist Shah Gilani, we shouldn't be surprised.

"It's no surprise that Congress is pushing bank deregulation," Gilani said. "After all, it's a midterm election year, and both parties want bank and financial services money directed their way."

However, Shah thinks Washington is missing the bigger picture. In fact, it's likely that they've set the stage for the next financial crisis.

Congress Is Paving the Way for the Next Financial Crisis

Ever since the Republican Party assumed control of Congress in 2012, conservative leaders have pushed to roll back banking regulations in an effort to turbocharge financial growth.

As Money Morning Capital Wave Strategist Shah Gilani points out, this isn't new. "It's no surprise that Congress is pushing bank deregulation.

After All, it's a midterm election year, and both parties want bank and financial services money directed their way," he says...

Crippled European Banks Threaten a New Crisis

Only a short-covering rally on Friday saved stocks from a truly horrendous performance last week.

The Dow Jones Industrial Average lost 231 points or 1.4% to close at 15973.84 on the week while the S&P 500 dropped 15 points of 0.8% to end the week at 1864.78. The Nasdaq Composite Index fell 0.6% on the week to finish at 4337.51.

All three indexes are solidly in the red for the year with the Dow down -8.33%, the S&P 500 down -8.77% and the de-FANGed Nasdaq down -13.38%.

China Just Made the GUTSIEST Move of the Entire Financial Crisis

China's grave dancers have taken great pleasure in convincing millions of investors that the nation will never succeed based on any number of erroneous arguments...

...not democratic

...not capitalist

...not worthy of world leadership

Underneath it all, this was little more than thinly veiled contempt for Beijing's 35-year-old "one child" policy. Called yousheng, the law has averted an estimated 400 million births over the years in the name of modernization and efficient resource consumption.

Now that law's been scrapped, and couples will be allowed to have two children.

The White House and much of the mainstream media wasted no time posturing after the announcement. Press Secretary Josh Earnest, for example, noted that the policy is a "positive step," but that "we also look forward to the day when birth limits are abandoned altogether." Amnesty International said bluntly that the policy change was "not enough."

They're missing the point.

China's policy reversal is the gutsiest move yet in the ongoing global financial crisis. It's a game changer of the highest magnitude. Moreover, it's great news for savvy investors.

Today we're going to talk about why and, of course, how to align your money for maximum profits...

Here's how to align your money for maximum profits.

Why a Greek Default Is a Global $360 Billion Problem That Affects Us All

A Greek default is inevitable. Years of piling up bailout loans without a reprieve in the Greek debt crisis prove that.

But it's not just the 300 billion or so euros in Greek debt are the problem. It's the complicated spider web of cross-collateralizations and derivative trades tied to Greek debt that are the real terror.

Here's how a Greek default could be a much bigger problem than you're being lead to believe...

This Ultimate Financial Meltdown Insider Is Worried... About Another One

Editor's Note: Shah spotted this crisis unfolding. It affects your money, so he wanted to let you know about it immediately. Here's Shah...
Do you remember the financial crisis of 2008?
The one caused by a meltdown in mortgages... trillions of dollars of which were owned and "guaranteed" by government-sponsored enterprises Fannie Mae and Freddie Mac?
Do you remember that Fannie and Freddie had to be bailed out by the government - I mean taxpayers - so their total implosion wouldn't trigger a global depression?
Well, the man behind their bailout, former Treasury Secretary Henry Paulson, remembers, and vividly.
He's now going public with his recollections because Congress is blocking theirs out... reaping the profits... and setting the table for a repeat performance... Full Story...

Why Did the U.S. Government Sue Standard & Poor's?

The U.S. Justice Department slapped Standard & Poor's Rating Services with a lawsuit claiming the agency sidestepped its own standards when rating mortgage bonds that collapsed during the financial crisis, resulting in billions of dollars in losses for investors.

U.S. Attorney General Eric Holder's civil charges, filed late Monday against S&P, are the first federal enforcement charges against a credit rating firm over the financial crisis.

Reports say the government is going after S&P to the tune of more than $1 billion.

Following a report in The Wall Street Journal Monday afternoon that the government planned to file the suit, S&P acknowledged it was expecting the action and claimed the firm was being wrongly punished by the U.S. government for "failing to predict" the housing meltdown or financial crisis.

New York-based S&P, one of the three major rating firms, has denied any wrongdoing. The firm said in a statement before the government filed the suit that it would be "entirely without factual or legal merit."

To continue reading, please click here...

The Frightening Financial Crisis Facing Young Americans

Young Americans are falling deeper and deeper into a financial crisis that will be nearly impossible to escape from in their lifetimes.

Unfortunately, the problems start at a very young age. Not only do a record number of school-age children live in poverty, but the number of homeless children in the public school system has reached an all-time high.

Even young adults who are able to attend college have trouble supporting themselves after graduation. Students take on mountains of debt to pay for school, but all too many of them can't find a decent job that covers their bills and their loans.

And those who do find jobs will likely be working for many more years than previous generations. That's because Social Security is expected to run out well before today's youngest workers retire. Those who have failed to save enough will end up working into their 60s, 70s and 80s.

"We don't know how the story ends, but we know how the story is beginning," Paul Taylor, executive vice president of the Pew Research Center, told CNN. "At the beginning, today's young people are not doing better than yesterday's young adults."

Here are 14 startling statistics painting a bleak financial picture for many young Americans.

To continue reading, please click here...

Four Debt-Free Companies to Own if the Markets Tank--and Even if They Don't

Many investors remain on the sidelines under the impression that every company has been stopped in its tracks by the financial crisis. Somehow they've convinced themselves there's nothing worth owning.

The problem is it's just not true. Companies that carry little or no debt are kicking butt and will continue to do so even if the markets stumble.

Not only are most of them tacking on solid numbers in very volatile markets, but over time these debt-free companies are proving themselves to be stable and reliable performers.

Take last year for example. The S&P 500 returned 2%. Yet, the top 15 firms as measured by the highest amount of cash and short-term investments as a percentage of total assets returned an average of 15% according to CNBC analyst Giovanny Moreano.

That's 650% more than their debt-laden brethren over the same time frame.

So far this year, my favorite debt-free companies have tacked on average gains of 19.82% versus the S&P 500, which was up 9% as of July 3. That's a 120% advantage over the same time period.

Going further back these same companies have done even better.

In fact, my favorite debt-free choices have returned an average of 349.16% versus a loss of -3% for the S&P 500 as a whole since the top of 2007 when the financial crisis broke.

Over the past decade that number jumps to over 2,061%. And, I'll bet you dimes to Bernanke dollars that these same debt-free companies will pull ahead further in the years to come.

To continue reading, please click here...

Barclays Libor Scandal: Britain Hopes for "New Culture" of Banking

The Barclays Libor scandal involving price fixing of key interbank lending rates has already led to two major resignations at the bank, and has increased scrutiny on the global financial industry.

Barclays (NYSE ADR: BCS) last week was slapped with a $456 million fine for rigging Libor rates, the rates banks charge each other for loans.

The record fine was levied to settle an investigation into attempted manipulation and false reporting related to two benchmark interest rates. Those rates help determine terms of loans and financial contracts around the world that form the basis for hundreds of trillions of dollars' worth of transactions.

The news has been a major blow to Barclays' once stellar reputation, and now led to the fall of Chief Executive Officer Bob Diamond.

Barclays CEO Diamond Resigns

Diamond resigned Tuesday, a day after Chairman Marcus Agius stepped down amid the scandal.

"The external pressure placed on Barclays has reached a level that risks damaging the franchise - I cannot let that happen," Diamond said in a statement Tuesday.

Agius took the blame Monday, acting as the fall guy. He said in a statement, the "buck stops with me, and I must acknowledge responsibility by standing aside."

Then a pressured Diamond announced he would leave, and Britain's politicians and regulators labeled this the first step towards "a new culture of British banking."

Scores of shareholders lobbied for Diamond to take responsibility.

John Mann, a Labour politician and among the panel of lawmakers who this week will question Diamond and Agius, said Monday on Sky News, "He (Diamond) must resign. He"s got to go. There is no role for people like him if banking is to be trusted again in this country and if British banking is to restore its tarnished reputation in the world, which of course is of great importance to our economy."

Agius will lead the bank temporarily and help search for a new CEO.

Barclays' board, trying to do some damage control, announced it would begin an audit of the financial services firm's business practices.

To continue reading, please click here...