World stock markets 'heading for SECOND global crash WORSE than Lehman Brothers' – Daily Star

This post was originally published on this site

The warning comes ten years since the collapse of Lehman Brothers – a major finance firm that’s decline signalled years of global panic.

A fatal combination of “record-high debt, risky corporate bonds, and inflated share prices” could bring the world to its knees, they say.

Economist and stockbroker James Stack, 66, was one of the few to predict the 2008 crash almost three years ahead.

He believes another crash is just around the corner: “It is 2005 all over again in terms of the valuation extreme, the psychological excess and the denial.

“Overall, the situation is thus more dangerous than in 2008/09.”

Professor Max Otte

“People don’t believe housing is in a bubble and don’t want to hear talk about prices being a little bit bubblish.

“If we see mortgage rates at more historical levels, house prices can’t stay where they are.”

And German economist Professor Max Otte backs his claims – saying the next crash could be even worse than the Lehman Brothers disaster.

He said: “In 2008/09, there was a mixture of a bubble unloading especially on the property markets and over-indebtedness in a very fierce but relatively short blow.

DS

CRASH: Experts fear the next financial disaster could be even worse than 2008 (Pic: DS)

“Unlike in those days, however, there is not yet a bubble mood on the markets. I think a sudden blow is less likely.

“If only because the central banks increasingly close their cash locks, which gives stock markets vigorously ammunition, while at the same time threatening to slow down economic growth.

“Overall, the situation is thus more dangerous than in 2008/09.”

The pair join ex-British Prime Minister Gordon Brown, who this week warned another crash was coming and that “we are not ready”.

He told the Guardian: “Since 2008 the penalties for wrongdoing have not been increased sufficiently.

“The fear that bankers will be imprisoned for bad behaviour is not there.

“There has not been a strong enough message sent out that government won’t rescue institutions that haven’t put their houses in order.

“We have had a decade of stagnation and we are now about to have a decade of vulnerability.”

This post was originally published on *this site*