Word: creditably
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...might finally overheat. The latest inflation report signals that time may be at hand. China has recorded four straight years of double-digit economic growth, and 2007 will likely be the fifth: first-quarter GDP expanded by 11.1%. At a moment when the rest of the world fears roiling credit markets might reduce growth, China faces a different challenge: how to slow its economic locomotive before it jumps the tracks...
...gotten ugly out there. the recent panic sparked by the global credit crisis has triggered the most serious market turbulence since the aftermath of the dotcom mania in 2001 and 2002. The Federal Reserve, European Central Bank and other central banks were forced to pump over $150 billion into the world's banking systems to stabilize short-term lending markets and reassure worried investors...
Many are now hoping the worst is over, but it's probable that a long and painful period of correcting the excesses in the credit markets has only just started. After several boom years, we are likely witnessing the early signs of a protracted decay in the world's credit cycle. Odds are, there will be more shocks over the next several months, and rather than starting to hunt for bargains now, investors would be better advised to remain cautious...
There are four reasons why investors everywhere should fear the ongoing fallout from the bust in the U.S. housing market. First, U.S. housing-credit problems have spread to other sectors. Not only have several hedge funds suffered or failed as a result of their exposure to U.S. mortgage products, but some banks and insurance companies as far afield as Australia, Germany and Taiwan have also run up large losses. And they are likely just the beginning, with major firms like Goldman Sachs and Bear Stearns announcing in recent days that some of their own investments have been badly hit. Second...
Third, it's likely that commercial and investment banks will have to impose tighter credit standards on borrowers, and possibly even start pulling out of deals that are already under way. As credit becomes more expensive, capital spending will slow and companies will have less money available to fund share buybacks - a key prop for the equity markets. These factors, along with weakening consumer and business confidence, could tip an already stalling U.S. economy into recession...