The Participant: Glencrash
October 8, 2015
GlencrashGlencore is the world’s largest listed commodity supplier. It employs more than 180,000 people worldwide. It’s number ten on the Fortune Global 500 list, with revenue of more than $220B.

It’s also imploding. An investment bank estimates the financial system’s exposure to Glencore at more than $100B.

What happens if banks backing this creative borrowing operation decide they’re too exposed to it going wrong? What if Glencore isn’t the only problem? A couple of keyboard pecks later, up goes the cost of commodity credit, down goes its availability for trading, and out the window goes the commodity business model. This would be the dreaded liquidity squeeze, and that phrase is what gets knees knocking when remembering back to the dark days of 2008. Read the article…

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