“If you have a boom and then a bust, you create economic losses,” said Alberto Gallo, head of global macro credit research at the Royal Bank of Scotland in London. “You can hope the losses one day turn into profits, but if they don’t, they are a drag on the economy.”
“The world has never seen credit growth of this magnitude over a such short time,” she said in an email.
“We believe it has directly or indirectly impacted nearly every asset price in the world, which is why the market is so jittery about the idea that credit problems in China could unravel.”“This estimate really isn’t that unreasonable,” Ms. Chu said in the email. “We’ve seen similar ratios in other countries. What’s different is the scale, which reflects the massive size of China’s credit boom.”
“My sense is that the Chinese policy makers seem like a deer in the headlights,” Mr. Balding said. “They really don’t know what to do.”
“The big problem in the Italian system is that they acted very late,” said Silvia Merler, an affiliate fellow at Bruegel, a European research firm that focuses on economic issues. “They could have done something smarter — and they could have done it earlier.”
Oh well. I am sure the governments of the world will be able to resolve their differences, come together and make sure no rich person loses any money.