Recently, several financial heavyweights have begun predicting and warning of a new financial crisis. In February, Ray Dalio, founder of Bridgewater Associates, warned that international relations have entered a new phase of a "Great Cycle" governed by the "law of the jungle". This implies that trade, technology, geopolitical, and capital wars will become the norm and could eventually escalate into military conflict. He cautioned that the security of traditional financial assets will face immense challenges. Meanwhile, Michael Burry, the famed "Big Short" investor who has been quiet for years, recently sounded the alarm on an Artificial Intelligence (AI) bubble, stating that a long-term downturn is imminent due to the impact of AI on the economy and employment. Renowned investor Jim Rogers also warned in late 2025 that the worst financial crisis of our lifetime will occur in 2026, driven primarily by two factors: the frantic post-pandemic debt growth across nations and the AI bubble. These warnings and predictions have not only triggered volatility and adjustments in major markets like the U.S. stock exchange but have also sparked panic and anxiety regarding global economic stability. After all, 18 years have passed since the 2008 global financial crisis; the evolution of the economic cycle suggests that the shadow of a "financial crisis" is drawing closer.

Faced with uncertainty and a complex politico-financial environment, researchers at ANBOUND believe that a financial tsunami does not form overnight, nor should the threats be ignored. The evolution of risk is a process that requires rational analysis and adjustment to find a "boundary of safety" amidst uncertainty.

Warnings of a financial crisis are neither groundless nor mere scare tactics; they reflect an increasingly complex international economic and financial environment, specifically the accumulation of risk and uncertainty in the financial sector. These factors can be summarized by the escalation of geopolitical risks, the impact of technological innovation like AI on financial and economic activity, and the accumulation of debt risk coupled with shifts in monetary policy. These risks are not sudden outbursts but have been brewing and evolving over time. In early 2025, many predicted a crisis due to the convergence of these factors. Under the broad trend of de-globalization, these risks have been accumulating and spreading since the COVID-19 pandemic, surfacing alternately as uncontrollable variables affecting security and development. While this situation shares historical similarities, the progress of technology and civilization means that economic and political games now follow a different logic. Furthermore, while these risks fluctuate, their targets and focal points differ. Currently, they have not yet formed a "resonance", which means that they have not reached the stage capable of triggering systemic risk.

Recent U.S. and Israeli strikes against Iran and the deteriorating situation there are yet another example of the rising global geopolitical risks. The worsening Middle East situation has brought a new round of shocks to global economic and financial markets. However, most investors currently view this as a short-term disruption. While it has driven up prices for traditional energy sources like oil and gas, which affects Europe most significantly, its impact on financial markets remains localized rather than worldwide, given the shifting global energy landscape. Presently, the Russia-Ukraine conflict remains the most significant influence on Europe, bringing follow-on effects such as increased defense spending and a bolstered military-industrial sector, which began influencing market trades in 2025. The impact of its being long-term is gradual, and associated risks and opportunities have been largely recognized and addressed. As long as the U.S. maintains military flexibility and avoids a full-scale invasion, the escalation of conflicts or regime struggles in places like Iran, Venezuela, or Cuba is unlikely to cause major tremors in the financial sector. In fact, as the global "trade war" triggered by U.S. tariffs in 2025 begins to recede, the post-truce global landscape is entering what Kung Chan, ANBOUND’s founder, calls a "G2 competition". Within this framework, localized military conflicts lack the energy to ignite a global financial shock or economic crisis.

Naturally, concerns regarding the impact of AI on the economy and employment have intensified recently, reflecting a period of uncertainty as the world navigates the unknown stages of its implementation. As AI is a capital-intensive field, market anxieties are focused on two fronts: the lack of clarity regarding the competitive landscape, which sparks fear that market clearing could jeopardize capital security, and the risk that rapid technological iteration could devalue existing legacy assets. These factors have triggered a series of market reactions, including a pullback in U.S. tech stocks and the emergence of the so-called “HALO” (Heavy Assets Low Obsolescence) trade to navigate the value re-evaluation caused by AI’s impact on the real economy. Goldman Sachs notes that under the triple pressure of rising interest rates, geopolitical fragmentation, and surging AI capital expenditure (CapEx), the market is undergoing a repricing where tangible production capacity has become a rare resource. While there may be a bubble element to AI, its efficiency gains span almost every sector, offering a net positive for most industries. The core issue lies not with AI itself, but in how enterprises and markets adapt to this shift. Even software companies currently facing valuation pressure stand to improve performance and expand their market reach through AI integration. This cycle differs from the late-90s internet bubble because current investment is heavily concentrated in digital economy infrastructure. While investors may face a “high spend, slow return” outlook, these hardware assets maintain relatively stable long-term value, making a total market collapse less likely. Furthermore, this re-evaluation is a long-term process that evolves with the depth and breadth of AI adoption, meaning that as long as there is sufficient market liquidity, the structural adjustment is unlikely to result in a comprehensive downturn, but rather a period of volatile consolidation without a unified direction, as seen in the current U.S. stock market.

The issues surrounding debt and interest rates currently remain the "gray rhino" posing a systemic impact on financial markets. In fact, this problem has recurred repeatedly since the COVID-19 pandemic. Whether it was the collapse of Silicon Valley Bank in March 2023, the global stock market crash on "Black Monday" triggered by the Japanese yen’s interest rate hike in 2024, or the crises of certain U.S. regional banks in 2025, all have been shadowed by interest rate adjustments and the intensification of U.S. dollar credit risk. At present, with the independence of the Federal Reserve under threat, the outlook for U.S. interest rates is unclear, particularly as heightened geopolitical risks may influence the trajectory of U.S. inflation and, consequently, the Fed's rate policy. The Fed is very likely to delay the pace of rate cuts. Such unexpected rate adjustments and changes in dollar liquidity can be considered the fundamental factors governing market direction. Naturally, a misjudgment of interest rates can be fatal for investors, yet since the 2008 global financial crisis, nations. including the U.S., have placed great emphasis on the stability of market liquidity. Therefore, even if large institutions fail, the derivative impacts are swiftly contained, similar to the measures taken by the Fed and the ECB during the Silicon Valley Bank crisis, where despite the eventual fall of entities like Credit Suisse, the contagion of risk was blocked, meaning overall systemic risk remains under the control of central banks. It should be noted that financial crises typically emerge during the Fed's rate-hiking cycles. In both U.S. and international markets, the associated interest rate risks are actually being continuously released during a downward cycle of interest rates.

Recently, the private credit issues currently concerning the market are, in essence, problems of interest rates and debt. When U.S. regional banks encountered these crises last year, JPMorgan Chase CEO Jamie Dimon compared them to "cockroaches", hinting at a potential crisis within this USD 1.8 trillion private credit market. This sector represents a new frontier of alternative investment pushed by Wall Street in recent years to drive higher yields, involving the extension of loans to institutions and enterprises through private equity funds. While this shadow banking business indeed offers higher fixed-income returns, it carries significantly greater risk than traditional commercial bank lending. Furthermore, some banks have been keen to funnel capital into these private vehicles. For instance, the recent bankruptcy of the British mortgage lender Market Financial Solutions (MFS) involved the exposure of several banks, including Barclays. However, with the Fed maintaining high interest rates, not only have private financing costs risen, but the underlying credit subjects have encountered trouble, placing the associated credit assets in jeopardy. Of course, the transmission of private equity risk is ultimately limited and its impact on banks remains indirect, stemming more from market panic caused by information asymmetry. As long as the situation is handled properly, it is unlikely to ignite a new round of financial crisis.

Various risks and uncertainties are surfacing one after another and continue to accumulate. However, they have not yet reached the point of triggering a new round of financial crisis. Nonetheless, as ANBOUND has previously noted, this does not mean the buildup of the risks can be ignored. The economic and financial outlook under such complex circumstances is, in fact, far from optimistic. The evolution of these risks may lead to many unforeseen outcomes. An expected crisis can no longer truly be called a crisis. Indeed, historical financial crises rarely occur under constant warnings and alerts; they tend to erupt in unexpected ways and at unforeseeable times.

Final analysis conclusion:

The wide array of complex and evolving information and signals suggests that economic and financial instability, along with associated risks, will not dissipate but will continue to surface. Mitigating the impact of financial crises, therefore, requires the continuous and dynamic monitoring and analysis of the deepening and evolving political and financial risks. It is essential to prepare proactively for uncertainties and to build the institutional resilience and confidence necessary to remain composed and effective in the face of change.