Hi, need to submit a 3000 words paper on the topic Critical Review on Roubini, Nouriel, and Stephen Mihm. Crisis Economics: A Crash Course in the Future of Finance. (New York: Penguin Press, 2010). According to the writers the recession would spill elsewhere in the world through trade. If the product output and the quantity demanded could fall there would be a decline in the private consumption, spending by companies. This will lead to a drop in the importation of consumer goods, capital goods and other raw materials from foreign countries. Majority of South East Asia rely heavily on their exports to the United States. China for example exports most of its products to the United States, its growth is attributed to these exports and if the Americans are reluctant to buy, they will have no market for their products. China also enjoys indirect trade links with the United States. Asian countries produce components such as computer chips, which are exported to China. China in turn takes these parts and assembles them into finished commodities such as computers. This are thus exported to the American consumers and if there is a fall in US imports, then the Chinese exports will also fall. This will also lead to a fall in Chinese demand for component parts from Asian countries resulting in a global economic downturn (Peter, 2008).

Also other factors that led to the spread was the collateralized debt obligation, these obligations had actually been sold abroad and majority of them to the European banks. These banks ended up all over the world as they were looking for safes high yielding assets. Some of the banks bought United States subsidiaries which participated in household lending. British banks such as the HSBC bought one of the leading US mortgage lender and others bought securities. This was one of the reasons that this financial crisis became global. Some of the worst hit banks included the UBS, the Swiss bank was involved with a pro active American subsidiary which was involved in this and ended up being worst hit. This is one of the reasons as to why the Swiss government had to come to its rescue (Thomas, 2008).