Ever wonder what happened to geopolitical risk?
With the falling energy prices, and, for now at least, the luster off gold after a 12 year bull run, one of the bigger surprises of 2014 was geopolitical risk didn't hurt the market.
On the surprise front, it's right up there with the bond market activity that few got correct.
Well, don't get too complacent. At least that's the view of New York University economics professor Nouriel Roubini as noted in a recent interview.
Roubini, who gained some attention lately with his warning about the current asset bubble and when it will go snap, crackle and pop, outlines his views to Yahoo Finance, naming five troublesome areas heading into 2015--geopolitical risk, a hard China landing, the failure of Abernomics to revive the long slumbering Land of the Rising Sun, a global currency shock owing to the strong U.S. dollar and a repeat Eurozone crisis.
"So far the impacts are more economic than financial," he said, citing the Russia-Ukraine situation and its knock on growth in Europe. "You don't see the financial impact but you can see the real economic impact."
Outbreaks of war are always there, since one is usually being waged somewhere on the globe nearly all the time, but cyber wars are the fairly new kid on the scene unless you've already been a victim of identity theft. The risk of their growing in scope and intensity remains large.
As for China, he expects growth to slow there to around 6% in 2016, but it could fall much lower to 3% or 4%, he postulates. Boiled down, it's a matter of importers versus exporters given, in his view, the strong dollar, citing India, Indonesia and Mexico as expected beneficiaries owing to their U.S. ties.
Just make sure should one or more of these risks hit the global financial fan, you're not running around asking: "Whatever happened to my portfolio?"
http://finance.yahoo.com/news/economic-dangers-coming-our-way-in-2015--nouriel-roubini-002244045.html
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