Here’s The Biggest Threat To America’s Economy

Nearly a decade of economic stagnation has fostered an environment of distrust and anger around some of our most important institutions, and this has lead us to Bernie Sanders and Donald Trump.

Both candidates pose as warriors for the underclass, promising that their policies and/or personality will break the vice grip of the “establishment” or the “1%” or the “upper class” or any other number of buzzwords thrown around at campaign rallies to generalize America’s wealthiest and most powerful citizens.

The way our politicians talk about the rich, it’s as if they’re a monolithic class of people.

The top one percent are not a homogenous group of monetary zealots hell bent on destroying civilization one Machiavellian step at a time; they’re a somewhat diverse group of white people (roughly 96%) whose jobs range from pediatricians, to athletes, to “managers” of everything you could possibly imagine.

The Chief Economic Adviser to global insurance giant Allianz, Mohamed El-Erian essentially wrote the thesis for this piece in his interview with Business Insider:

“Don’t underestimate the power of a simple framework to put into context a lot of the unusual and improbable things we see.”

Looking at the composition of Fortune 500 directors, we see a distorted example of the same issues surrounding race and gender that we have struggled with since the dawn of humanity.

Fortune 500

Credit: Dr. William Domhoff/ University of California, Santa Cruz.

When Bernie Sanders derides “the one percent,” he’s doing the truth in his message a disservice.

“The one percent” stretch across nearly every industry in America. Surely Senator Sanders does not believe that LeBron James is engaged in a cynical attempt to drive middle class workers’ wages down, but the generality of his rhetoric implies just that.

When trying to determine the central issues surrounding our economic malaise, simply saying “the rich are winning and we’re all losing” does not do the importance of the topic justice. In short, no shit.

We need to dive deep into the causes of our problems, instead of blanketing people and industries with cheap generalizations that barely scratch the surface, and then retreating to our corners.

All that said, there is one industry that stands out when searching for the genesis of our modern economic dysfunction: finance.

Ever since the crash of 2008, the world of investment’s public perception has taken a major blow, and it was not exactly in the best shape to begin with.

Matt Taibbi has popularized the term “Vampire Squid” as a nickname for Goldman Sachs in his reporting on financial malfeasance. Goldman Sachs has certainly done plenty to earn this derisive moniker, with one example being their complex plan to drive up the price of aluminum in order to further pad their wallets.

However, just because executives at some of our largest financial institutions have proven to be corrupt and inhumanly greedy, even at the expense of the people supposedly working for them, it does not mean that the entire industry is rotten.

My father worked as a stockbroker for 35 years, and I can promise you that a lot of the complexity coming out of the executive offices of Wall Street is nothing like what your average broker does while trying to create wealth for their clients.

Nearly one million people work in financial services in America, and the majority of them are trying to do right by their customers and play by the rules.

Many of the problems with finance don’t stem from some nefarious, evil plot to enslave mankind in some sort of New World Order (like Alex Jones’ four million monthly unique subscribers to Infowars might assert), but from what precipitates the fall of all great empires: a toxic combination of secrecy and ego.

The world of “shadow banking” has been blamed for much of our economic corruption, as it is an easy target due to its complex nature.

An eagle outside of the Federal Reserve building in Washington, D.C. Photo Credit: Tim Evanson/ Flickr (CC By 2.0)

An eagle outside of the Federal Reserve building in Washington, D.C. Photo Credit: Tim Evanson/ Flickr (CC By 2.0)

Tucker Hart Adams is one of the few people who foresaw the economic crash of 2008.

Her travels have taken her everywhere from leading classrooms in Russia to the heads of boards in both the private and public sector.

“We’ve just outsmarted ourselves,” Adams said in an interview with RISE NEWS. “Shadow banking isn’t some sinister thing, it’s simply something that we don’t know that much about.”

It’s similar to how scientists call dark matter “dark” because we know it’s there, and we can measure its impact on us, but we can’t even begin to rationally explain its inner mechanisms; the same can be said of shadow banking.

In fact, “shadow banking” has been around for ages.

Izabella Kaminska asserted in the Financial Times that Pompey’s offensive against the Cilician pirates in 67 BC is similar to today’s battle against offshore banking and off-balance sheet accounting.

The problem with determining if she is correct is that no matter how far and wide you search, there is no universally agreed upon definition of “shadow banking.” Kaminska goes on to write in the FT:

“The nearest thing to a formal definition comes from Perry Mehrling, professor of economics at Barnard College in New York City, who suggests that anything involving money market funding of capital market lending qualifies as shadow banking. For others, it’s simply lending done by any unlicensed institution, or non-bank, which doesn’t have access to ‘lender of last resort’ liquidity in a crisis.”

Even though the term conjures up images of the executive suites of Manhattan’s skyscrapers, there are many financial entities that would qualify as “shadow banking,” like Bitcoin.

So when we’re talking about “shadow banking” in the sense that most TV news discusses it, we’re really talking about the derivatives market, which is a real problem.

It was one of the prime causes of the 2008 crash, which stemmed from an effort to try to get ahead of the market, and the market nearly swallowed itself whole using financial instruments that Wall Street didn’t quite understand.

These complex swaps that basically amount to various forms of financial insurance have led to a situation where only the biggest banks have the capital and the expertise to play in this space. However, just because a bunch of wonks are on the case with a nuclear silo full of cash doesn’t mean that they will succeed in this post-2008 world, as it was revealed that five Wall St banks just failed living will tests.

Now, this doesn’t mean that derivatives were solely responsible for that result, but given the explosion of their popularity in the first part of the 21st century and its resulting impact on the economic crash, one would have to imagine that they played a role in these failures.

Four large commercial banks were responsible for 91% of the total banking industry notional amounts in the derivatives market in Q4 2015, which is a fairly tenuous situation.

Given the amount of this space that is controlled by so few entities, one misstep might cause a hiccup that could have drastic consequences for the rest of the economy.

Our government has a hand in all of this mess, as it creates the conditions for everyone to operate within. The derivatives market is in the shadows because the federal government has not found a suitable method to regulate these securities, yet will not ban them outright either. This ambivalent position sows the seeds of confusion for later crises.

The chart below further demonstrates the dramatic effect that certain government policies can have on the economy. Accounting for capital gains, which the government taxes at less than half of the tax rate for labor, the top 10% are taking a greater share of the income than they did during the Gilded Age.


Photo Credit: Emmanuel Saez/UC Berkeley

The Panama Papers, which will dominate much of the news cycle over the coming months, will produce a veritable truckload of stories about companies dodging taxes (amongst many other potentially scandalous revelations once the 11 million documents get sorted through and litigated).

A report just stated that the 50 biggest US companies stash an estimated $1.3 trillion overseas. Ironically enough, the Financial Secrecy Index ranks the United States as the 3rd best place in the world to hide money.

Somehow, we manage to chase our own cash out of the country with one of the highest corporate tax rates in the world, yet we let much of it and others back in through faceless shell companies exempting millions (billions? trillions?) of dollars from taxation.

The statistic that most embodies the absurdity of US tax havens is that 64% of Fortune 500 companies are based in Delaware (I’m sure that it has nothing to do with their state tax code and everything to do with Joe Biden’s charm).

Andy Fastow, the former felon/CFO of Enron, is lending his expertise to help firms spot fraud, sometimes even pro bono. He gives lectures on how companies engage in tactics today similar to what he performed at Enron.

Because of the shitshow that is the US tax code, it’s more beneficial for Apple to station their global HQ in Ireland than in Cupertino.

“If Apple did not do this, your iPhone would cost $2,000,” Fastow told the Irish Times. “They run over $50 billion of earnings through this building [in Ireland].”

Once accounting for state taxes, the average corporate tax rate in the United States is 39.2% (unless you have an army of lawyers, accountants, and Congress on your payroll, then you pay much less). To compare, the global average is around 25%.

Tucker Adams provided RISE NEWS with a simple solution to keep tax money within our borders:

“You have all these companies going through all this to avoid taxes at 39%, you’ll collect more revenue if you bring the rate down to match everyone else.”

According to the Atlantic, only three OECD countries (Mexico, Turkey and Japan) bring in less tax revenue as a percentage of GDP than the United States.

Photo Credit: Lindsay Eyink/ Flickr (CC By 2.0)

Andy Fastow, the former CEO of Enron has warned that big companies are doing similar things that he did. Photo Credit: Lindsay Eyink/ Flickr (CC By 2.0)

Now, that’s not a list that you necessarily want to find yourself at the top of; tax policy should be focused on funneling as much money into the hands of consumers, because my spending is your income etcetera, etcetera, etcetera…but if your tax rate is high and the relative income you gain from it is low, something is fundamentally wrong.

Tax rates are not the only area where the government is fomenting big problems, central bank policies have contributed as well. Keeping interest rates near 0% for nearly a decade has been punishing savers, as Larry Fink, the CEO of Blackrock, one of the largest hedge funds in the world said in an annual letter to his shareholders:

“Not nearly enough attention has been paid to the toll these low rates — and now negative rates — are taking on the ability of investors to save and plan for the future. People need to invest more today to achieve their desired annual retirement income in the future. For example, a 35-year-old looking to generate $48,000 per year in retirement income beginning at age 65 would need to invest $178,000 today in a 5% interest rate environment. In a 2% interest rate environment, however, that individual would need to invest $563,000 (or 3.2 times as much) to achieve the same outcome in retirement.”

Interest rates are a double edged sword.

When they’re low, it encourages borrowing but discourages saving. If I take on $1,000 in debt at 1% interest, I’ll only owe $10 on my interest payment. I don’t know about you, but a $10 interest payment that I have to make sounds a lot more appealing than a $10 interest payment that I will receive.

The main reason for this dependence on the Fed to play the role of economic Batman comes from the fact that our political system is completely paralyzed, which lets markets know that any major tax reform is completely off the table.

People should be angry. The deck is stacked, the game is rigged, and the bad guys have already won before you even finished reading this sentence, yet no one seems to be doing anything about it.

However, just because all you hear on TV is gloom and doom does not mean that is all that’s occurring. Our most pressing issues are largely concentrated in rectifiable areas; there’s simply a lack of will to undertake the effort to correct them. Perhaps it’s an issue of culture, as we assume that the “smart guys” will eventually fix it.

Warren Buffett’s right hand man, Charlie Munger certainly thinks so, as he stated during Whitney Tilson’s annual meeting:

“Too much of the new wealth has gone to people who either own a casino or are playing in a casino. And I don’t think the exaltation of that group has been good for life generally, and I am to some extent a member of that group. Both Elizabeth Warren and Bernie Sanders are not two of my favorite people on earth, but they are absolutely right.”

Some investors like Bill Ackman are speculating that the next economic calamity will come from student debt, as they say it could resemble the housing crisis.

But Tucker Adams disagrees with this assessment, telling RISE NEWS:

“No I do not believe this is like 2005, 06, 07. The average student debt is about $28,000, and there isn’t the speculation around it like there was with housing, so it’s much more manageable.”

If there is a bubble that could be created by this student debt, it might be in apartments, as millennials have been reluctant up to this point to seriously invest in housing, but we would be the first American generation in history to buck this trend.

“These new apartments they’re building just outside the city and not near much public transportation, those are the ones I would worry about, but I think it would be very very sad if millennials decided not to buy houses,” Adams said. “They’re a solid investment.”

Whatever economic future we are entering, the general sentiment amongst experts seems to be that it is manageable, so long as we have the political will to do what is needed.

Given that Donald Trump is the overwhelming favorite to win the Republican nomination, political will to do real, challenging things seems to be off the table right now.

Things are bad, but they’re fixable.

There are simple steps we can take to tilt the scales back in favor of the many. One example is to find a better way to compensate federal regulators in the financial sector.

America is fighting off a recession with one arm, and we need the government to function properly and join the Fed in this fight. The fact of the matter is that our political and economic futures are intertwined. Without government creating the right conditions, economic growth stalls, and the levers of power are leveraged by the powerful to grab a larger slice for themselves while the rest of us struggle to grow the pie.

Our economic dysfunction is largely in response to a tax code devised to help a select few and waste resources for everyone else. Nearly everyone agrees that the current tax code is less valuable than a Nickelback cassette, but nothing is being done about it.

Why? It makes no sense. Americans have abandoned our responsibility to govern ourselves effectively, or even show up for an election every two years.

Congress’ approval rating hovers near 10%, yet we reelect our Congressmen at a 90% clip, effectively proving that Americans are political hypocrites. We despise our Congress, but don’t care enough to change it, thus creating the conditions for corruption to flourish.

Hopefully we will use this election as a moment to understand how our apathy has helped to create all of this misfortune. We demand that government be for the people, of the people, and by the people, but we don’t hold any of the people accountable.

Like every single one in recent memory, the main issue in this election is the economy. We want government to fix it for us, but in order for that to happen, Americans need to step up and fix our government first.

RISE NEWS is a grassroots journalism news organization that is working to change the way young people become informed and engaged in public affairs. You can write for us.

Cover Photo Credit: Kurtis Garbutt/ Flickr (CC By 2.0)

Africa’s First Billion Dollar Start Up Is A Bet On The Rise Of The Continent’s Middle Class. But Is It A Smart Bet?

For decades, the narrative around African business has been pretty negative. But things are changing as demonstrated by the recent achievement by the Africa Internet Group– as it became the first ever African based “Unicorn” start up company.

Africa Internet Group just received an $85 million investment, valuing the company at over $1 billion, and making it a “Unicorn”.

AIG is essentially Silicon Valley, but all packed into one business.

They invest in and help manage over 30 African companies like Easy Taxi, Jumia, and Lamudi, which mimic the Uber’s, Amazon’s, and Zillow’s of the world.

Glassdoor reviews from former employees of AIG give it a 3.2 rating out of 5 with 21 reviews. The pros largely coalesced around the work: always busy and challenging.

The cons all focused on the same issues surrounding management, with every negative review either highlighting a lack of communication or unrealistic expectations for their subordinates.

These complaints about management seemed to be shared by ownership, as last December, the company began to lay off upper level staff left and right, with one of its largest companies, Jumia, firing over 300 workers in Nigeria, its largest market.

It is not unusual for one startup to go through upheaval like this, but when many companies all operating under the same umbrella go through the same issues, it is a bit worrisome.

However, AXA and Orange would not have invested in AIG at the valuation they did unless it was satisfied with its executive team, so one would think that this massive shakeup is largely a good thing for the company.

Given the timing of the overhaul and the subsequent transaction, this management purge was most likely a contingency for these large firms’ financing, because ultimately, they are not investing in AIG, but in the rising African middle class.

The common theme amongst AIG’s portfolio is e-commerce, as they have laid the foundation of their company on the emerging proletariat.

The size and the economic maturity of the middle class is the subject of fierce debate, as companies like Nestle serve as cautionary tales; their billion dollar expansion hit a rut and was forced to scale back its African workforce by 15% once returns proved to be smaller than expected.

WATCH: Inside a Africa Internet Group Office in Lagos, Nigeria. 

Much of the investment in Africa has been based around the notion that one third of Africans are “middle class,” which emerged from a 2011 paper from the African Development Bank Group which stated that the middle class had tripled over the last 30 years.

However, the AfDB defined it as Africans living off of $2 to $20 in purchasing power per day, with it divided into three separate tiers which further muddied the certainty surrounding the definition of “middle class.”

Standard Bank released a study last September that looked at 11 African countries which account for over half the continent’s GDP, and found the size of their middle class to be 15 million people, or about 300 million less than AfDB estimated for the entire continent.

The middle class of the largest African country by GDP, Nigeria, is estimated at 11%, with 86% of all Africans reportedly falling under “low income.”

The Pew Research Center provides extra support to this assertion as they estimate that just 6% of Africans qualify as “middle class,” which they define as living off of $10 to $20 per day.

90% of Africans are estimated to still live off of less than $10 per day according to Pew.

However, even though the data seems to hint that investors may be too bullish, it does not mean that they should reverse course and become bearish on the many different African economies.

Capital is still flowing into the continent, as foreign direct investment is up over 12% since 2008.

Additionally, some of the struggles companies like Nestle experienced could be due more to cultural misunderstandings than a lack of disposable income across Africa.

“There was no presumption [from the AfDB] that this middle class would exhibit Western modes in terms of consumption of food formula for middle-class babies [Nestlé] nor for whisky [Diaego],” Kayizzi-Mugerwa, one of the chief economists for the AfDB said. “In the latter case, Africans have always had a partiality for beer − irrespective of class – and the beer companies are doing roaring business.”

Many African countries are still dealing with structural issues that go back centuries, as Egypt’s inflation is 210th in the world due to the instability that has arisen over the last 5 years.

Nigeria needs to modernize its workforce as 70% work in agriculture, yet farming accounts for just 20% of its GDP.

South Africa, which remains the model for many African countries, has 66% of its workforce comprising the services industry, which accounts for 67.4% of its GDP, yet the rest of the continent’s labor pool is much closer to Nigeria than its most modernized nation at its southernmost tip.

The historic investment in Africa Internet Group must be seen as a larger investment in Africa as a whole, because without a modernized Africa, the e-commerce that AIG provides would have no market for buyers or sellers.

Africa is still an emerging economy, but it has shed many of the 3rd world caricatures that the West has forced upon it over the years, with Sacha Poignonnec, CEO of Africa Internet Group providing a mission statement for the company that could be construed as one for the entire continent as well:

“We want to be profitable but we are very long-term oriented. Amazon is a great model to look at. They have a great valuation, they have a great customer base. Everyone one is confident that Amazon has a great future but they are still yet to make money.”

RISE NEWS is a grassroots journalism news organization that is working to change the way young people become informed and engaged in public affairs. You can write for us

What Are The Panama Papers And Why Should Young People Care?

You’ve probably been hearing a lot about something called the Panama Papers in recent days.

That’s because on Sunday morning The International Consortium of Investigative Journalists and other media organizations announced the largest data leak in the history of journalism.

The leak contained 2.6 terabytes of information with over 11.5 million files that identified corruption amongst some of the top political figures in the world. It’s larger than the Wikileaks leak in 2010 or what Edward Snowden brought to light in 2013.

Now, what is in the leak exactly?

Mossack Fonseca is a law firm which specializes in the creation of shell companies and offshore accounts. It’s where the rich stash their ill-gotten or legally obtained earnings from their governments. These accounts are completely legal and can be used to protect their assets from raids or simply for inheritance reasons and estate planning.

However, there are other common reasons for stashing money in a offshore company, such as money laundering, dodging sanctions, and avoiding taxes.

The firm is based out of Panama but runs a worldwide operation.

On their website they claim to have a global network with 600 people working in 42 countries. It has franchises around the world.

It operates in tax havens including Switzerland, Cyprus, the British Virgin Islands, Guernsey, Jersey and the Isle of Man.

Mossack Fonseca has their fingers dipped in many questionable pies. From Africa’s diamond trade, the international art market, to dealing with Middle Eastern royals and Russian oligarchs.

Data. It's what's for dinner. Photo Credit: Flickr (CC By 2.0)

Data. It will get ya bro. Photo Credit: Flickr (CC By 2.0)

The firm rejects that it has ever been involved with dirty money.

“Recent media reports have portrayed an inaccurate view of the services that we provide and, despite our efforts to correct the record, misrepresented the nature of our work and its role in global financial markets,” a statement on the Mossack Fonseca reads. “These reports rely on supposition and stereotypes, and play on the public’s lack of familiarity with the work of firms like ours.”


FIFA, the international football association, an organization often connected to corruption and scandal, is also featured.

The leaked documents allegedly show that FIFA ethics committee member Juan Pedro Damiani, a Uruguayan lawyer, had business links with three men who have been indicted by U.S. officials on corruption charges: former FIFA vice president Eugenio Figueredo and father and son Hugo and Mariano Jinkis.

The latter two were convicted of paying bribes to obtain broadcast rights for soccer matches in South America. Documents show that Damiani’s law firm represented a company registered to Jinkis and seven others registered to Figueredo in a tax haven.

World Leaders: 

Interestingly, the British government has been especially vocal against offshore companies in recent years, but Prime Minister David Cameron hasn’t come out of this squeaky clean. His late father is one of the names revealed in the leak.

It is not yet clear, if Cameron himself has financially gained from off shore accounts.

According to some of the reporting in the aftermath of the leak, Mossack Fonseca has helped Russian President Vladimir Putin hide $2 billion, setting up offshore banks under the name of two of his close acquaintances.

Iceland's Prime Minister Sigmundur Davíð Gunnlaugsson resigned Tuesday after a large public outcry from the Panama Papers. Photo Credit: Control Arms/ Flickr (CC By 2.0)

Iceland’s Prime Minister Sigmundur Davíð Gunnlaugsson resigned Tuesday after a large public outcry after he was named in the Panama Papers. Photo Credit: Control Arms/ Flickr (CC By 2.0)

The now former Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson, has also been implicated and was facing calls for his resignation as the public’s confidence in his leadership had been shattered.

He resigned on Tuesday, and is the first political casualty. Also listed are Iceland’s minister of finance, Bjarni Benediktsson, and Iceland’s Interior Minister, Olof Nordal.

China’s leaders have relatives who are named in the leak, propelling the government to limit local access to western media coverage of the leak and accusing them of being biased.

In a further twist, documents show Mossack Fonseca’s links to Rami Makhlouf, a cousin of the Syrian president, even though Washington imposed sanctions Makhlouf in 2008.

Though the firm is under no obligation to comply with US sanctions, it was legally bound to react to EU measures in 2011. It took until September of that year for the firm to finally resign from Makhlouf’s companies. By that time, Syria was in the middle of a genocidal civil war.

Other world leaders in the leak include Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; and Alaa Mubarak, son of Egypt’s former president, just to name a few.

The list of questionable characters goes on, although it gets worse. It includes Ponzi schemers, drug kingpins, tax evaders, dictators and at least one jailed sex offender.

And that’s when it becomes unbearable. The sex offender was a U.S. businessman traveling to Russia to have sex with underage orphans. He signed papers for an offshore company while he was serving his prison sentence in New Jersey.

It’s notable that Mossack Fonseca is the fourth biggest provider of offshore services, meaning that if this much information is coming from this company, larger law firms with these same services must have shocking anonymous beneficiaries.

In reply to ICIJ questions about their methods, Mossack Fonseca said that backdating of documents “is a well-founded and accepted practice” that is “common in our industry and its aim is not to cover up or hide unlawful acts.” The company is extremely protective of their clients’ privacy.

Honestly, should we be surprised by this leak?

The exposé once again emphasizes the need for world financial reform. It shows that not only is the global tax system broken, but with so many world leaders involved, global governance itself is fractured too.

Due to this leak the ability of the super rich to hide their money may be made more difficult. But if government officials themselves are doing this, how are we meant to expect them to do anything about tax havens?

The storm may be about to arrive in the United States as well.

A reporter from the German newspaper Suddeutsche Zeitung responded to tweets about the lack of names from the United States, by saying “Just wait for what’s coming.”

RISE NEWS is a grassroots journalism news organization that is working to change the way young people become informed and engaged in public affairs. You can write for us!

Cover Photo Credit: Jon Gosier/ Flickr (CC By 2.0)

AbenomICS: Japan Slips Into Recession After Poor GDP Growth

The Japanese government announced that their economy shrank by 0.8% in the second quarter of the year and therefore into recession for the fifth time in seven years.

The announcement of the figures that covered economic growth (or the lack thereof) from July to September of this year came on the heels of a 0.7% loss in the previous quarter.

The back to back contractions have sent a shockwave across the world’s third largest economy and may increase the pressure on Japan’s Prime Minister Shinzo Abe and his tough fiscal policies.

Abenomics as the suite of policies are referred to, is basically a shock therapy meant to revive the stagnant growth rates in Japan.

As Bloomberg explains Abenomics:

“The central plan is built on unprecedented monetary easing, government spending and business deregulation to snap Japan out of its malaise. He calls it a “three-arrow” strategy, borrowing the image from a Japanese folk tale that teaches that three sticks together are harder to break than one.”

A recent IMF study on Abenomics made it clear how much was at stake for Japan, and how hard it would be for the Prime Minister to actually pull it off.

From the IMF study:

“What was being attempted under Abenomics was unprecedented, and nothing less than a leap from a low-growth deflationary equilibrium to a new equilibrium characterized by positive inflation and higher sustained growth. This requires a parallel shift toward more risk taking, requiring changes in expectations and behavior by businesses, consumers, and financial institutions. Confidence would be key, in both Japan’s growth prospects as well as the government’s ability to carry out needed reforms.”

So what caused the retraction and most recent recession in Japan?

“A big drop in inventory was the largest factor behind a third-quarter contraction. Weak capital spending was a concern, but excluding these factors, the GDP figures were not so bad,” Takeshi Minami, the chief economist at Norinchukin Research Institute told Reuters.

Despite the bad news, Japan is somewhat used to the up and down nature of growth in the country and faces larger long term causes for the crisis- including a dangerously rapidly graying nation.

But will Abe and his bold form of reform survive to find another day? Only time will tell.

Cover Photo Credit: Presidencia de la República Mexicana/ Flickr (CC By 2.0)

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