Visible symptoms of the financial crisisŽargi, Matic (Avtor) Mlinarič, Franjo (Mentor) financial crisisdebtleveragingleverageeconomic cyclesThe Great Recession of 2008 had such a huge impact on the global economy, hence it should be predictable? With a theoretical analysis of Early Warning Systems (EWS) we came to the conclussion that they do in fact work. However, due to complex dimensions of the crisis, there was no particular set of EWS which could actually predict the impact of the crisis. This complexity stems overleveraging and various financial innovations which made the financial markets riskier in unobservable ways. In order to observe the symptoms of a serious crisis we need to look at the economy as a simple machine. Ray Dalios principle about the long and short term debt cycle gave us a different approach. It enables us to spot the symptoms simply by analysisng interest rates, base money creation and federal spending. Rajan (2005) has proved that thesis in his paper, where he showed that the financial instruments became so complex, that they became too risky. Our analysis has brought us to a conclussion that right now interest rates in the US are starting ot rise, the inflation is rising and GDP growth stagnating. With the application of our system we can see that right now we are in the middle of a business cycle. We can predict that a downturn in the capital markets is about to occur. However no system is able to predict the impact of the crisis.[M. Žargi]20172017-08-18 10:08:43Delo diplomskega projekta/projektno delo67445UDK: 338.1COBISS_ID: 12852764NUK URN: URN:SI:UM:DK:1TVPDHEZsl