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Pragmatic Capitalism

Practical Views on Money & Finance

6 Downside Market Risks

Since I already provided 5 reasons to remain cyclically bullish I figured I’d offer the other side of the coin as well.  Here’s 6 downside risks via Deutsche Bank:

1.  US – failure to raise debt ceiling: political deadlock, government shutdown, weak confidence hurts growth.

2.  Europe – political breakdown raises tensions: e.g., antireform government in Italy, political unrest in Greece, antieuro sentiment in core countries amid recession.

3.  Global growth weakens on spill over from a shock in one economic region: e.g., EM lags amid failure to reform, Europe fails to return to growth, slowdown in the US.

4.  Disorderly sell-off in core rates: concern over excess money printing leads to a bond and risk asset sell-off .

5.  China – non-performing loans: rising NPL’s on bank balance sheets constrain credit availability and growth.

6.  Middle East tensions escalate and push up oil prices.

Got a comment or question? Feel free to contact Cullen via email here or on Twitter here.
Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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