The return of economic risk - Macleans.ca

The return of economic risk

A number of not unsubstantial problems that have dogged the economy in recent times threaten to flare up again

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Not long ago it seemed  the global economy had settled into a healthy recovery mode—albeit a fragile one.  But lately,  economic headwinds are blowing strong again. The attacks on Libya suggest oil fears will not ease anytime soon and the extent of the fallout from Japan (nuclear and economic) is still largely unknown. What’s more, a number of not unsubstantial problems that have dogged the economy in recent times threaten to flare up again. David Rosenberg, chief economist at Gluskin Sheff, outlines a few of those risks today, including:

-The chance that the foreclosure crisis in the U.S. could intensify.

-The unresolved European debt crisis (banks are still carrying billions in toxic loans and there remains the possibility that “some combination of Greece, Portugal, and Ireland will be defaulting at some point in the future”)

-The sorry state of U.S. finances (and the possibility that “its interest expense to revenue ratio will trigger a downgrade within the next seven years”).

-And onging geopolitical troubles in the Middle East.

2010 had its shares of ups and downs. 2011 could be even worse.

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