Monday, 8 August 2016

A New Financial Crisis 2016-2017

After 2008 crisis, exponential growth peaked in financial markets. S&P 500 Index, Dow Jones Industrial Average, NASDAQ Composite, FTSE 100 Index rose dramatically. We may think that this is a bubble and will burst and it seems like it is not so far. I made a research and found that graphs are so similar just before Great Recession and at some point, early 2000 recession.
Photos below illustrate correlations among daily high prices, standard deviations and forecast prices.
S&P 500 Index

NASDAQ Composite

Dow Jones Industrial Average

FTSE historical chart
FTSE Historical Chart

Another sign of financial crisis is LIBOR rate change. LIBOR rate is moderately rising.
6 month LIBOR rate

Unemployment is the United States of America is between 4-5% which is almost the same just before 2008 crisis.
US unemployment rate

UK unemployment rate is also similar to 2007-2008.
UK unemployment rate

As well as, EU unemployment rate.
EU unemployment rate

There are a number of potential triggers to a new crisis. Equity prices, Brexit, US Presidential Elections, slowing down of Chinese economy and some overvalued rates.
There is a big reason can slow down economic crisis, crude oil price. Crude oil which is main energy product, is much more cheaper than 2007-2008 prices.

by Ilkin Ismayilli