Let’s reflect on 2015, and in those reflections get a sense of what’s coming in the new year.
After all, no one likes surprises in the market.
Business Insider reached out to some of the smartest people on Wall Street to get a sense of what they’re thinking as 2015 ends.
Jim Chanos of Kynikos Associates sent us two pie charts. They show how global GDP and global private debt are divided among nations.
It highlights “The Players” in China’s growth model:
- The People’s Republic of China; Greater China: Hong Kong, Singapore, Taiwan, Mongolia, Macau.
- Pacifica: Australia, Indonesia, Malaysia, Thailand.
- Tristan: OPEC, Canada, Russia.
- South America: Minus OPEC countries; and Africa ex-OPEC.
The bottom line is, all these countries and regions — which make up 38.7% of global GDP — depend on China’s hunger for commodities for their own growth.
Right now, that growth is slowing dramatically as China is trying to transition its economy from one based on investment to one based on consumption. Its hunger for commodities has diminished significantly, and all these segments have been, and will continue to be, affected.
What’s more, this ugly scenario is made worse by the fact that, all together, these segments are carrying 26.2% of the world’s private-sector debt. Prepare for a fallout.
Happy New Year.
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