Margaret Atwood, a Canadian writer, narrates how frequent she noticed ads for debt settlement services on her CBC Massey Lectures in 2008. She discerned this as a cause of an anomalous number of people that are in debt. Currently, more than 10 years have passed since the worldwide debt-driven financial catastrophe, dread lingers.
An article published in Bloomberg has collected answers from investors and analysts by asking a simple question:
What could cause the next debt crisis?
Kathleen Gaffney, a Vice President and Director of Diversified Fixed Income at Eaton Vance Management, believes that it’s got to be the rate and liquidity. She says that it could also be everything at once as she disagrees that a particular factor could’ve possibly driven a crisis this huge.
‘The issue might be coming out of China’
In addition, Michael Temple, Director of Corporate Credit Research for the U.S. at Amundi Pioneer Asset Management, conjectures that the issue might be coming out of China should it be incapable of resuscitating its economic growth even after the implementation of its current stimulus program. Temple takes into account that development is significantly slow-moving in Europe and how several countries are in recession – in which Jim Blanco, President and Founder of Bianco Research LLC, states the same opinion.
Moreover, Michael Buchanan, a Deputy Chief Investment Officer at Western Asset Management, conjectures that a fair amount of money is flowing to private credit. There is a prodigious demand for private credit, and investors deliberately participated knowing there is a high probability of illiquidity in there. Buchanan takes note that while we can all hope that the fair value of an asset do grow, considering how the assets are administered, it all falls inside the illiquid bucket.
‘A credit crisis will not take place any sooner’
On the other hand, Adam Richmond, the Head of U.S. Credit Strategy at Morgan Stanley, and Peter Tchir, the Head of Macro Strategy at Academy Securities Inc., are convinced that a credit crisis will not take place any sooner as there is an absence of leverage in the trading system. Keywords: debt crisis examples, effects of debt crisis, us debt crisis, debt crisis us, how to overcome debt crisis, leading causes of debt in america