Karen Newton, Business and Wealth Strategy - Deciphering The Economy

The financial headlines are quietly echoing 2007 again — rising subprime exposure, this time not in housing, but in car loans, credit cards, and corporate debt . Barclays, for example, has heavy exposure through auto finance and consumer credit, while at the same time taking on major borrowing to buy assets. On the surface, everything looks stable — employment figures are holding and markets remain calm. But underneath, debt quality is deteriorating . More borrowers are defaulting, and the secondary lenders feeding these loans are tightening terms. It’s the same story told a different way: when credit expands faster than income, cracks appear. The subprime problem isn’t just about bad loans; it’s about systemic dependency on borrowed money . The banks profit while the public absorbs the risk. And when markets tighten, the ripple effect always lands hardest on ordinary households and small investors who trusted “safe” institutions to manage their savings responsibly. It's not just...

 When governments stop paying their workers, economies don’t just pause — they fracture. At the start of October 2025, the U.S. government entered another budget standoff, triggering a partial shutdown that left 1.4 million federal employees either furloughed or working without pay. The cause? Congress failed to agree on a spending package before the fiscal deadline. While the political headlines focused on partisan blame, the deeper question is far more structural: How does one of the world’s largest economies run out of money — again? Why the Money “Ran Out” In the U.S., federal agencies can’t spend without congressional approval. Each year, lawmakers must pass 12 appropriations bills that fund everything from border control to national parks. If they don’t, operations legally grind to a halt. This year, sharp divisions over defence spending, foreign aid, and deficit control led to a funding lapse. Without an approved budget or a temporary extension (known as a continuing reso...