Global Debt Bubble, European Turmoil and US Bank earnings dropping

 Croatia recently decided to forgive the debt of its poorest citizens. The point of the debt-forgiveness program is to kick start the economy and get consumers spending again now that their bank accounts have been unfrozen. “Fresh Start” isn’t without its critics, though – some argue that the measure is a response to the country’s parliamentary elections later this year. Erin weighs in.

Then, Erin is joined by Reggie Middleton – CEO of Veritaseum. Reggie tells us how the earnings season been for US banks and what it says about their longer term earnings. He believes earnings for banks are going to permanently lower as multiple revenue streams will be negatively impacted for the foreseeable future. In the meantime, he sees cryptocurrencies acting as a financial services disintermediator despite recent scandals involving Bitcoin. And bitcoin is not just about payments in Reggie’s view, there are all manner of transactions that can be accomplished securely at zero or no cost.

After the break, Erin sits down with Frances Coppola – associate editor at Pieria and author of the blog “Coppola Comment.” Frances tells us if negative interest rates in Europe are working and gives us her take on the ECB’s recent move to stop accepting Greek collateral for loans. She is negative on both outcomes with negative interest rates not adding to credit growth and the ECB’s moves having no positive impact on helping prevent a catastrophic outcome over Greece. Frances also opines on Denmark’s plight in defending its euro currency peg with negative interest rates and currency intervention.

And in The Big Deal, Erin and Edward Harrison discuss debt. Global debt has skyrocketed since the financial crisis began despite all of the talk of develeraging. What has happened, a recent McKinsey study shows, is that debt has simply been transferred from private agents in advanced economies to the public sector. Asia has added considerable amounts more debt on top of this. We think this ends as a bust. Take a look!



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