cvb booklet pt2 r5-web

7/31/2019 CVB Booklet Pt2 r5-Web

1/15

Sleepwalking Toward a Precipice

ObservatiOns & OutlOOk


2/15

WHat We Will COver...

Its structural: Te credit crisis and Great Recession revealed

structural problems in the United States, Europe and China which m

hinder their uture growth prospects.

PolItIcal DysfunctIon: Political leadership has been unwilli

unable to address these structural issues eectively, resulting in tempo

expedient solutions that oten make problems worse.

fourth Branch solutIons: With the ailure o political lead

central planning has been ceded to central banks to reate markets

reliquiy insolvent banking systems and insolvent sovereign nations.

the unknowns: Given the ragile nature o global economies co

out o crisis, a variety o uncertainties could also negatively impact gr

Market Matters: Over the next decade, we see double-wide

possibilities or economic growth translating into double-wide

possibilities or U.S. and global markets. We hope you enjoy.

Jason B. Leach, CFA

Director of Research/Portfolio Management

Cravens Brothers Wealth Advisors

PROPRIETARY AND CONFIDENTIAL | Cravens Brothers Wealth Advisors is a branch o and Securities oered through WFG Investments, Inc. (WFG), member

FINRA/SIPC. John Cravens, Jason Leach & Miguel Kremenliev are Registered Representatives o WFG Investments, Inc. | COPYRIGHT Cravens Brothers 2012


3/15

eurO ZOne: the failed experiment

euro Zone InsolVency MIX: Te European Monetary Union

(EMU) is a 17-member subset o the larger 27-member European Un

In 1999, this Euro Zone adopted both a single currency and singlemonetary policy administered by the European Central Bank (ECB).

frst decade o its existence, use o the Euro across countries with di

in competitiveness, tax collection, wages and entitlements, inevitably

led to wide trade imbalances, high defcits and rising debt in weaker

periphery Euro Zone countries. Te 2008-2009 fnancial and econom

shocks catalyzed this mix o structural problems, raised borrowing co

signifcantly or periphery countries, and in 2010, set o periphery E

Zone nation solvency crises.

enrIcheD crIsIs-InIuM: Euro Zone, EU, and IMF leaders (

troika) umbled over numerous liquidity and austerity measures to f

sovereign debt crisis, but their actions served only to enrich it. In 2

2011, troika leaders secured over 1/2 trillion dollars to bail out Portu

Ireland, and Greece (twice), and orced adoption o strict budget cuts

tax increases, and labor reorms. In 2012, leaders orced a $132B priv

sector haircut on Greek bonds, approved enhanced bailout unds to

Spain and Italy, and orced all countries to adopt a fscal compact to

defcits. Te fxes let Greece with more debt, eliminated uture privbuyers o distressed sovereign debt, provided insuffi cient capacity or

outs (~$650 billion), and reduced growth through austerity.


4/15

eurO ZOne: the change bank, thats what we

sInGle worD scores: As European leaders administered m

acronym fxes, world markets shuddered with every new hal-baked

solution. Te European Central Bank vigorously resisted becoming o last resort or distressed countries and banks, but relented in late

2011 and early 2012, lending trillions to Euro Zone banks via Long

Refnancing Operations (LRO) as Spanish and Italian yields (the ra

which they borrow) spiked, and normal channels o bank unding dri

Te ECB became the single word score that could calm ears o ano

fnancial crisis. As in the U.S., ailure o political leadership ceded pow

the central bankers to reliquiy insolvent banking systems, and in the

Zones case, insolvent sovereign nations.

fonZI fInance: In a scheme too cool to be called Ponzi, the

provided insolvent banks $1.3 trillion in 3-year, cheap loans (LRO)

the banks in turn bought hundreds o billions in distressed Euro Zon

sovereign bonds, and then deposited the risky sovereign bonds back a

ECB as collateral or the original loans. Tis game o pass the parc

may have prevented a second fnancial crisis in late 2011/early 2012,

also made the sovereign debt crisis bigger (allowing or hundreds o b

in immediately impaired sovereign debt to be issued), will weigh on l

term growth by misallocating capital to insolvent banks and insolvennations, and let taxpayers o the Euro Zone on the hook or the baili

banks and countries indefnitely.


5/15

eurO ZOne: moles follow the gold

the new BarBarous relIc: Te root cause o the seeming

never ending Euro Zone debt crisis is the core structural problem o th

and related adjustment processes. Te use o a single currency across meconomies is much like the mis-priced gold standard o the 1920s and

1930s (Keynes barbarous relic). Te Euro orces uncompetitive, high

indebted countries to adjust internally (pushing down wages and prices

as opposed to externally (devaluing currency to improve competitivene

increase growth, and pay down debt). ied to the new barbarous relic

no means o external adjustment, weak periphery countries ace years o

deationary depression and debt deault/restructuring.

euro Zone whack-a-Mole 2012:

Debt crisis contagion inthe Euro Zone is the inevitable post-economic crisis outcome o high

indebted countries beholden to a single currency union and thus hard

math limits. Changes in sovereign debt levels depend on: (i) growth,

borrowing rates, and (iii) budget surpluses/defcits beore interest pay

When there is doubt that growth will challenge borrowing rates, and/

that budgets will worsen, perception that debt levels will perpetually

causes new borrowing rates to spike. At borrowing rates above 7% (w

Greece and Portugal reside and where Spain and Italy are going), high

indebted countries without control over their currency cant ever pay their debt - moles go up.


6/15

eurOPe: straightjackets, walks, & transmiss

fIscal straIGhtJackets & walkInG stIcks: Te surviv

scenario or the Euro Zone eatures: (i) years o transition to a United

o Europe with centralized budget and Eurobonds, (ii) the ECB bridggap via LRO and direct sovereign bond purchases, (iii) core countries

their AAA ratings, (iv) sovereign debt deault or restructuring o multip

Euro Zone members, (v) multiple large bank ailures/nationalizations,

exibility on austerity limits (fscal straightjackets), (vii) slow growth

recession in the core, (viii) depression in the periphery, (ix) ever increas

social unrest and political swings to ringe parties, and (x) possibly on

more members leaving (e.g., Greece, Portugal).

euroPean transMIssIon: Te degree to which the Euro Zo

resolution transmits to the rest o the world relies on how orderly it

and whether there are Euro Zone exits. Te orderly deault o Greec

2012 had a minor eect on the global economy. Alternatively, disor

deaults and/or orderly and disorderly exits could cause a collapse o

the European economy and banking system, fnancial and economi

contagion around the world, and global depression. It is not a ques

o i or when, but rather, how bad. Te major structural prob

o the Euro Zone cannot easily be fxed by politicians or, in turn,

central bankers, and thus Europe is sleepwalking toward a precipiceunortunately, dragging the rest o the world with it.


7/15

CHina: what in the whirl?

the structural Junk: Te dramatic slowdown in global grow

and trade in the fnancial crisis and Great Recession shone a light on

structural issues in Chinas state-capitalist economy.

Chinas economy has an extreme over-reliance on public investment a

exports (70% o GDP growth over 10 years), with domestic consump

(30% o growth) hindered by violent ination swings, misaligned tax

policies (middle/lower classes 50% o taxes vs. 3% in the U.S.), artifc

high savings rates (inadequate social saety nets, limited investment

opportunities), a rapidly growing wealth divide, aging population, an

distortions rom the one child policy.

Small and medium-sized enterprises (SMEs) are handicapped by Chin

preerence or monopolistic, ineffi cient state-owned enterprises (SOE

wasteul state-directed banking system that lends predominately to SO

widespread corruption, random enorcement o rule o law, and overa

tension between which orm o capitalism should drive growth, state

capitalism or ree market capitalism.

Local governments are over-reliant on continuous local real estate

speculation (land sales 20%-40% o gross revenues) and overburdene

state emphasis on continuous investment in public works (no long-tepublic bond markets).


8/15

CHina: middling kingdom of growth

steroID econoMy: China targets GDP growth at the state leve

to onboard millions o new workers every year. Consensus is that 8%

annual GDP growth is the minimum to achieve Chinas aims, below is, in eect, a China-cession, and well below 8% may have consider

negative eects (large scale social unrest). Since Chinas economy is

precariously dependent on its distorted investment-led growth model

investment were to atten (build the same amount o projects as the y

beore), GDP growth could all by more than 50%. Te second majo

contributor to GDP growth, exports, is subject to at to alling Euro

and American demand due to post-crisis deleveraging.

traDe wInDs a slowIn: In response to a all in exports and G

growth during the fnancial crisis, the central government authorized

$580 billion stimulus package and the Peoples Bank o China (PBO

allowed banks to issue $2.7 trillion in new loans (~45% o GDP) or

investment projects. Te massive stimulus allowed China to weather

slowing trade winds and maintain above 8% GDP growth, but it

exacerbated Chinas structural issues as investment increased rom 40

50% o GDP at the expense o consumption, SOEs became a larger p

o the economy, real estate bubbled and is busting, ination skyrocke

and banks lent and local governments borrowed to virtual insolvency.the U.S. and Euro Zone, actions taken ater crisis only served to enha

existing structural problems the same dierence.


9/15

CHina: the orient of debt

the orIent of DeBt: Chinas state-led growth model is heading

towards a debt crisis. Te state-owned banking system is the largest in

world history with over $17 trillion in assets, but it misallocates capitto fxed proft margins, exible accounting standards, and politicized

directed lending to local governments, SOEs, high profle political pr

and over 100 countries. Publicly, Chinas debt/GDP ratio is around 2

30%, but it is around 100%-200% when inevitable bailouts o banks

other SOEs are included (on par with the U.S and Euro Zone). Te r

path to remediation would be state asset sales, but it is more likely Ch

will socialize bad debts. Again - the same dierence.

the Great reBalance: Chinas investment-led growth mode

unsustainable. In order to rebalance toward more consumption, Ch

needs to: (i) privatize SOEs (sell them), (ii) remove its currency peg

benefts exporters at the expense o consumption (high ination), (i

remove capital controls (allow consumers to earn inve stment incom

(iv) marketize the fnancial system so banks compete or consume

deposits (consumers earn more interest) and lend to proftable SME

(SMEs increase wages more than SOEs), (v) allow lo cal governmen

issue bonds and not be as dependent on land sales or revenues (det

real estate speculation by consumers), (vi) reorm the tax system (rmiddle class spending power), and (vii) institute a viable social secu

program (lowering savings rates and increasing consumption).


10/15

CHina: an 800 lb panda named Status Qu

status Quo : Ultimately, i China doesnt rebalance eectively, it

lead to unsustainable debt levels, prolong Chinas growth downturn

be a drag on growth not only in China, but in the U.S., Europe, anemerging economies due to delayed Chinese consumption o oreig

goods. Te grip on power and money by the communist party, asso

elites and avored state-owned champion enterprises is the major

obstacle to rebalancing. Te 800 pound panda in the room is that n

believes the status quo is sustainable long term, but then again, no

power is incented to change it. For all the admiration o Chinas me

rise to a global economic powerhouse, its structural aws are just as

inspiring, they have been exacerbated by political ailure and centra

excess as in the West, and i they are not rectifed, China is sleepwaltoward a precipice along with the West.


11/15

unkOWns: white pigeons & black swans

Mena In fluX: Egypt, the largest Arab country, is poised or rule

radical Muslim Brotherhood and Saudi Arabias royal rule may be rep

by extremists within a decade. Tere is growing enmity between Iran

Israel with heightened risk that the U.S. and/or Israel will use militar

to stop Irans nuclear development. An oil price shock due to conict

Middle East North Arica (MENA) could roil global markets and cau

global growth to slow dramatically (90% o post-WWII U.S. recessio

have been preceeded by oil price shocks).

PanDoras cyBer BoX: In 2010, the U.S. or Israel unleashed

Stuxnet, a virus that successully took control o nuclear acilities in I

the frst ever use o a computer virus to cause physical damage. Postin

the source code on the Internet made advanced cyber terrorism availato anyone, and in 2011 American hackers demonstrated how to blow

plant or open doors at a correctional acility. Cybercrime is growing r

with over 90% o U.S. companies hacked at least once per year, and o

trillion worth o intellectual property stolen annually.

Bull Market In BaD: In 2011, total global economic cost rom

natural disasters was $380 billion, 70% above the 2005 record o $22

billion. In the next 10 years, the number o natural disasters could do

with population growth in dangerous coastal areas (21 o 25 megaciticlose to coasts). 2011 was the costliest disaster year ever in the U.S. w


12/15

unkOWns: continued

record 14 separate billion dollar disasters, including 400-year drough

wildfres, 1000-year de luges and ooding, the 2nd highest tornado co

U.S. history, and soaring heat (26,500 records and 4th warmest wint

the new Markets - return free rIsk: U.S. stock exchan

have become server arms or high requency trading with 80% o tra

just 2% o participants, 90% o orders cancelled, and ash crashes

market manipulation becoming the norm. Commodity fnancializatio

time high asset correlations, rising volatility, and a shrinking AAA co

world (7 o 19 AAA countries have lost ratings) all increase ri sk in m

and economies. Te $700+ trillion over the counter derivatives mark

(10X the size o global GDP) daisy chains enormous risk across instit

and billions o new structured notes tying bonds and CDs to derivaon stocks and commodities may be brewing a Subprime II.

aMerIcan reVolutIons: Energy demand met by domestic so

rose to 81% in 2011 (the highest in 20 years), and the U.S. is on cou

to be the worlds top energy producer by 2020. Advances in sotware

robotics, materials and processes could lead to a manuacturing revol

in the U.S. with exible actories relocating near cheap energy and

consumers (up to 30% o goods imported rom China could be made

the U.S. by 2020). Tese positive disruptions could boost jobs, incom

government revenues, cut the U.S. trade defcit, and provide greater

exibility in dealing with the Middle East and China.


13/15

Central bank rule:one big monetary experimone BIG Monetary eXPerIMent: Ater crisis, central banks

printed money to buy bad bank assets and inate markets, doublin

size o their balance sheets in the process. When balance sheet expans

stops, it may quickly deate asset prices and reverse the 10%+ boostto GDPs rom the stimulus. Unwinding the unprecedented monetary

experiment without damaging global growth will require uncanny

judgment and timing on the part o central bankers.

the DIstorter: Te market eects o expansionary monetary po

are evident in the strong moves up ater the beginning o QE program

and the anticipatory alls toward the end o stimulus. Market depend

on Fed stimulus is distortionary. Future rollercoaster rides depend on

Feds view o ination expectations, employment and economic data,movements in the Euro and Chinese Yuan versus the U.S. dollar.

PaPer, BoXes & steel: In times o economic stress, nations de

their currencies or growth and debt reduction. But, all countries can

devalue at once, and competitive currency devaluations (currency wa

have arisen between both developed and developing nations. On the

ront, tensions have escalated rom attempts to label China a currenc

manipulator to trade duties on American SUVs and enormous tari

on Chinese solar panels. Currency and trade wars weigh on growth an

sometimes worse.


14/15

tO reCaP

Te Euro Zone experiment, with its numerous structural aws, was

destined to encounter major diffi culties ater crisis and economic

slowdown. How the Euro Zone experiment is resolved has largeimplications or global growth. Te decisions Chinese leaders make

address myriad structural aws and change or maintain the status q

will determine that countrys economic uture and aect global grow

as well. A variety o unknowns ace global economies and markets

in coming years with wide ranging po tential eects. Central banker

acting as central planners or economies ace an unwinding o a ma

monetary experiment, which may harm growth. Existing currency w

and potential trade wars loom large over global economies.

In Part III o this work, we discuss our ideas or navigating these unc

times, protecting and growing wealth. Well see you there.

Jason B. Leach, CFA

Cravens Brothers Wealth Advisors is a branch o and Securities oered through WFG Investments, Inc. (WFG), member FINRA &

SIPC. Jason B. Leach is a Registered Representative o WFG. The above commentary is the opinion o Jason Leach and not nec-

essarily those o Will iams Financia l Group or its a liate, WFG Investments Inc. PAST PERFORMANCE IS NOT A GUARANTEE

OF FUTURE RESULTS. This market commentary is provided or inormatio nal and education al purposes only. It is not intended

as and should not be used to provide investment advice and does not address or account or individu al investor circumstances.

Investment decision s should always be made based on the clients specifc fnancial needs and objectives, goals, time horizon and

risk tolerance. All opinions and views constitute our judgments as o the date o writing and are subject to change at any time without

notice. Inormation was obtained rom third party sources, which we believe to be reliable but not guaranteed. An index is an unmanaged

weighted basket o securities generally representative o a certain market or asset class. An investment cannot be made directly in an index.


15/15

Durden, Tyler. Guest Post: The Making o Chinas Epic Hard Landi ng. Web log post.Zero Hedge. 9 Jan. 20

Liei, Zheng. China Risks 4-Point Growth-Rate Cut in Case o Europe Worsening: Economy. Bloomberg. Web.

Miller, Rich, and Simon Kennedy. U.S. Enters Sweet Spot as Chinas Growth Slows.Bloomberg Brie (3 ApPrint.

Year o the Tortoise. The Economist. The Economist Newspaper, 10 Mar. 2012. Web.

Pages 16-19

Bamboo Capitalism. The Economist. 1 0 Mar. 2011. Web.

Barboza, David. A Call or Beijing to Loosen Its Grip on the Economic Reigns. The New York Times. 28 FWeb.

Barboza, David. The Imbalances o Chinas Economy. Web log post. Economix. 11 Apr. 2012. Web.

Chovanec, Patrick. China Radio: Chinas Slowdown. Web log post. An American Perspective rom China

2012. Web.Chovanec, Patrick. Dont Blame the (Chinese) Banks. Web log post. An American Perspective rom Chin

2012. Web.

Das, Satyajit. Chinas Feast Is Ending. Web log post. Prudent Bear. 23 Mar. 2012. Web.

Forsythe, Micahel, and Henry Sanderson. China Debts Dwar Ocial Data With Too-Big-to-Finish Alarm.Bloomberg. 18 Dec. 2011. Web.

From Brawn to Brain. The Economist. 10 Mar. 2012. Web.

McDonough, Michael. China Must Overhaul Banking Sector or Risk Winchester House Syndrom. BloombMar. 2012). Print.

Meanwhile, in China, the Warning Signs Keep Piling Up. WSJ 15 Dec. 2011. Print.

Miller, Leland R. The Crisis Ahead or Chinas Policy Banks. Web log post. The Institutional Risk Analyst. 2012. Web.

Pettis, Michael. Building Debt in China.EconoMonitor. 24 Jan. 2012. Web.

Pettis, Michael. When Will China Emerge rom the Global Crisis. Web log post. China Financial Markets. 22012. Web.

Zarathustra. Chinese Banks and Stealth Easing. MacroBusiness. 26 Apr. 2012. Web.

Fears o a Hard Landing. The Economist. 17 Mar. 2012. Web.

Pettis, Michael. The Japan Debt Disaster and Chinas (non)Rebalancing. Web log post.Credit Writedown2012. Web.

Shuli, Hu. The Rise o Chinas State Capitalism Is Not a Point o Pride but a Reason or Worry. South ChPost 1 Mar. 2012. Print.

Pages 20-21

1000-Year Rainall in Ft. Belvoir. NBC4 Washington. 13 Sept. 2011. Web. 03 June 2012 .

2011 Tornado Inormation. NOAA. 20 Mar. 2012. Web.

Duy, Phil, and Becky Fried. U.S. Winter 2011-2012 Is Fourth Warmest in Recorded Hi story. Oce o ScieTehnology Policy. The White House, 26 Mar. 2012. Web.

Durden, Tyler. $707,568,901,000,000: How (And Why) Banks Increased Total Outstanding Derivatives By$107 Trillion In 6 Months. Zero Hedge. 26 Nov. 2011. Web.

Gave, Louis. Weeks When Decades Happen. Outside the Box. 14 Mar. 2012. Web.

Global Natural Disasters May Double in next Decade - WWF. Web log post. Ria Novosti. 13 Oct. 2011. We

Goldman, Russell. Recession Turns IT Workers Into Hackers. ABC News. 06 Mar. 2009. Web.

Miller, Rich, Asjylyn Loder, and Jim Polson. U.S. Gaining Energy Independence as Top Producer. BloombFeb. 2012). Print.

Reynolds, Brian. The Upcoming Sub-Priming o Stocks And Commodities. WJB Capital Group, Inc. 22 Web.

Stuxnet: Computer Worm Opens New Era o Warare. CBSNews. 04 Mar. 2012. Web.

Texas Sets Record or Hottest Summer on Record in U.S. GlobalPost. 8 Sept. 2011. Web.

The Third Industrial Revolution. The Economist. 21 Apr. 2012. Web.

Pages 22-23

Brusuelas, Joseph. Sluggish Economies Show Central Banks Work Unfnished.Bloomberg Brie (4 Apr. 2

Durden, Tyler. The Fed Is Losing The Ra ce To Debase Zero Hedge. 25 Mar. 2012. Web.

Hubauer, Gary Clyde, and Martin Vieiro. US Anti-Dumping Duties on Chinese Solar Cells: A Costly Step. 21 May 2012.

Liedtka, Dave. Ben Bernanke. Bloomberg. 21 May 2012. Web.

Short, Doug. The S&P 500 and Federal Reserve Intervention. Web log post. Dshort.com. 10 Apr. 2012. W

Pages 4-5

Euro Zone to Bolster Firewall as Spai n Concerns Grow. Financial Post 26 Mar. 2012. Print.

European Union. Eurogroup. Statement o the Eurogroup. 30 Mar. 2012. Web.

Eurozone. Wikipedia. Wikimedia Foundation, 8 Dec. 2011. Web.

Greene, Megan. Eurozone Crisis: In the Eye o the Storm. EconoMonitor. 23 Mar. 2012. Web.

Powell, David. Italy Stumbles Toward Bailout as Finances Unsustainable. Bloomberg Brie (11 Nov. 2011): 1-2. Print.

Rastello, Sandrin, and Simon Kennedy. IMFS Lagarde Enjoys Funds Victory Exposing Europe Rits. BloombergNews, 23 Apr. 2012. Web. 25

Snider, Jerey. The Instability o Monetary Conormity. RealClearMarkets - Atlantic Capital Managem ent, 3 Apr.2012. Web.

Pages 6-9

Berlin., Jack Ewing A nd Raphael Minder.Central Bank Not Expected To Try to Ease Europes Crisis. The New YorkTimes. 17 Apr. 2012. Web.

Davis, Phil. TGI Fixed Again - The Rube Goldberg Solution. Web log p ost. Phils Stock World. 9 Dec. 2011. Web.Finch, Gavin. European Banks Facing Funding Squeeze Devour Record ECB Emergency Funding. Bloomberg. 21

Dec. 2011. Web.

Joined-up Thinking. The Economist. 21 Apr. 2012. Web.

LTRO: What It Meant, What It Means. Web log post. Seeking Alpha. Mac ro and Cheese, 1 Mar. 2012. Web.

Powell, David. ECBs LTRO May Save Italy, Spain as Portugal Nears Deault. Bloomberg Brie (1 Mar. 2012). Print.

Charlton, Emma, and Lukanyo Minyada. Spanish Yields at 6% Show Risks o Banking Bailout. Bloomberg Brie (26Mar. 2012). Print.

Currency Disunion. The Economist. The Economist Newspaper, 07 Apr. 2012. Web.

Harrison, Edward. Why Questioning Italys Solvency Leads Inevitably to Monetization. Web log post. CreditWritedowns. 5 Nov. 2011. Web.

Johnson, Simon. Europes Crisis Is Still Likely to Conound the Optimists and End Badly. Bloomberg Brie (23 Jan.2012). Print.

Martin Wol on the Eurozone and Beyond. Interview by Robert Heubscher. Advisor Perspectives. 17 Jan. 2012. Web.

The Maths Behind The Madness. The Economist. 19 Apr. 2012. Web.

Minerd, Scott. Winning the War in Europe. Market Perspectives - Guggenheim Partners (12 Mar. 2012). Print.

Pages 10-11

Bradshaw, Myles. Thinking About the Implications o Rising Euro-Exit Risks. Web log post. PIMCO. Jan. 2012. Web.

Bransbourg, Gilles. Euro-Area Nations Await Better Days That Wont Come. Bloomberg Brie (23 Mar. 2012). Print.Bryson, Jay H. Some Thoughts on Recent European Developments. Wells Fargo Economics Group - S pecial

Commentary (25 Apr. 2012). Print.

Cesselman, Ben. U.S. at Risk I Europe Goes Bad. WSJ.com. 7 Nov. 2011. Web.

Durden, Tyler. On Contagion: How the Rest o the World Will Suer. Web log post. Zero Hedge. 5 Mar. 2012. Web.

Kashkari, Neel. Transmission Channels. Web log post. PIMCO. Mar. 2012. Web. 25 Mar. 2012.

McBride, Bill. Credit Stress Indicators. Web log post. Calculated Risk. 19 Dec. 2011. Web.

Tepper, Jonathan. A Primer on the Euro Breakup. Outside the Box (27 Feb. 2012). Print.

Pages 12-13

Borst, Nicholas. The Politics o Declining Land Revenues. Web log post. PIIE. 3 Jan. 2012. Web.

Borst, Nocholas. Negative Real Interest Rates and Credit Tightening. Web log post. PIIE. 17 Nov. 2011.

Chovanec, Patrick. China: Hard La nding in Sight? EconoMonitor. 17 Dec. 2011. Web.

Durden, Tyler. China Enters The Danger Zone, SocGen Presents The Four Critical Themes. Zero Hedge. 11 Jan. 2012.Web.

Durden, Tyler. Guest Post: The Making o Chinas Epic Hard Landi ng. Web log post. Zero Hedge. 9 Jan. 2012. Web.

Orr, Gordon. Whats in Store or China in 2012? McKinsey Quarterly (2012). Web. 22 Feb. 2012.

Pettis, Michael. Tough Medicine and a Ha rd Landing or China. Credit Writedowns. 11 Mar. 2012. Web.

Ruan, Victoria. PBOC May Assess Local Debt Burdens Beore Direct Bond Sal es. Bloomberg. 23 Mar. 2012. Web. 23

Tavaakoli, Janet. The Chanos Crash: Timing Chinas Financial Meltdown. Web log p ost. Hungton Post. 6 Dec. 2011.Web.

Pages 14-15

Chang, Gordon G. Foreign Policy Maga zine. Foreign Policy. Foreign Policy, 29 Dec. 2011. Web. 12 Jan. 2012.

Chinas Economic Stimulus Program. Wikipedia. Wikimedia Foundation. Web.

Chovanec, Patrick, and Andrew Batson. Should China Be Bracing Itsel or a Hard Landing? The Guardian. GuardianNews and Media, 22 Mar. 2012. Web.

Chovanec, Patrick. BBC: Chinas 2011 GDP Numbers. Web log post. An American Perspective rom China. 17 Jan.2012. Web.

sOurCespart2

cvb booklet pt2 r5-web

Documents