6 Downside Market Risks

Since I already provided 5 reasons to remain cyclically bullish I figured I’d offer the other side of the coin as well.  Here’s 6 downside risks via Deutsche Bank:

1.  US – failure to raise debt ceiling: political deadlock, government shutdown, weak confidence hurts growth.

2.  Europe – political breakdown raises tensions: e.g., antireform government in Italy, political unrest in Greece, antieuro sentiment in core countries amid recession.

3.  Global growth weakens on spill over from a shock in one economic region: e.g., EM lags amid failure to reform, Europe fails to return to growth, slowdown in the US.

4.  Disorderly sell-off in core rates: concern over excess money printing leads to a bond and risk asset sell-off .

5.  China – non-performing loans: rising NPL’s on bank balance sheets constrain credit availability and growth.

6.  Middle East tensions escalate and push up oil prices.

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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