Greg Ip writes about the market rout
The usual suspects of China, the US economy and the Fed analysed.
Greg Ip is a smart guy and one of the best Fedwatchers ever but he struggles to understand the potential fallout in the WSJ.
He touches on oil but I don't think he understands all the risks.
"The collapse in oil prices, for example, has caused yields on corporate bonds issued by both energy and nonenergy companies to jump, and many banks have reported big loan losses to energy companies...banks have little exposure to energy compared with their exposure to subprime mortgages in 2008 or Latin American debt in 1982."
Comparing it to subprime is a mistake. You know who does have exposure to oil debt? Oil companies -- one of the biggest industries in the world. On top of that, dozens of countries rely on oil sales to fund budgets.
That's where the risk lies.
