Sunday, September 15, 2019

Tag: Loans

China facing full-blown banking crisis, world’s top financial watchdog warns

China has failed to curb excesses in its credit system and faces mounting risks of a full-blown banking crisis, according to early warning indicators released by the world’s top financial watchdog. A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese...

China Is About to Get Serious With Bad Debt

China's banks, which dialed down fundraising efforts this year even as bad debts swelled, are making up for lost time. Both lenders and the companies set up to acquire their delinquent assets are bolstering their finances. China Citic Bank Corp. last month announced plans to raise as much as 40...

Biggest China Banks Grind Out Meager Profit Gains as Loans Sour

China's biggest banks are grinding out meager profit gains as they grapple with pressure from loans going bad. Agricultural Bank of China Ltd. on Friday posted a 0.5 percent increase in net income in the second quarter from a year earlier. China Construction Bank Corp. reported earlier in the week...

Trillions in Murky Investments Could Rock China’s Economy

A Shanghai investment firm is offering a fat return of up to 10 percent a year, handily beating both the local stock market and the paltry payouts from bank accounts. It requires a minimum deposit of about $15, making it accessible to just about anyone. Investors can pull out...

When Energy Loans Go Bad: Why America’s Largest Bank Is Sliding

Following yesterday's stronger than expected results from JPM, today Wells Fargo - America's largest bank by market cap - is having a far less pleasant day, trading down 3%, on what superficially was disappointing earnings. What was the problem? There were several. First, net income slid to $5.6 billion, or $1.01...

Consumer Credit Jumps $19 Billion In May Thanks To New All Time Highs In...

The latest consumer credit report confirmed what we have now known for years: revolving credit remains stagnant at best, with just $2.3 billion in credit card debt added in May, a modest rebound from last month's $1.4 billion but certainly nowhere near pre-crisis monthly increase levels. Why not? Because...

China Bank Bailout Calls Grow Louder as Markets Seen Vulnerable

Predictions of a Chinese banking system bailout are going mainstream. What was once the fringe view of permabears and short sellers is now increasingly being adopted by economists at some of the world’s biggest banks and brokerages. Nine of 15 respondents in a Bloomberg survey at the end of last month,...

Italy Said to Seek Opening to Fund Lenders With $44 Billion

Italy, which failed to gain European Union approval for a bad bank just months ago, is considering ways to inject funds into some of its lenders after the U.K.’s vote to leave the trade bloc sparked a fresh selloff, according to people with knowledge of the talks. The government is...

China will need to cut 3.5 million jobs across six core industries as tonic...

A 10 per cent capacity reduction is needed in six main industries, according to new research. China's excess capacity problem is daunting by any yardstick. The nation’s ability to produce manufactured goods outstrips not only the demands of the mainland economy, but that of the entire global economy, as indicated by...

IMF loan gives net win for oil-rich Iraq

IMF last week agreed to the terms of $5.4 billion loan arrangement with Iraq. LONDON, May 24 (UPI) - Though a loan agreement with the IMF should help, Iraq will continue to face economic headwinds because of issues in the oil sector, Moody's said. The Iraqi government and the International Monetary...

Americans Unleash Epic Debt-Fuelled Spending Spree As Credit Card Debt Jumps Most On Record

While one of the recurring complaints about the US consumer has been the willingness to dig into their savings which recent matched the highest level since 2012, something unexpected was revealed today when the March Consumer Credit data showed that not only did total consumer credit soar by $29.7...

Shadow Lending Crackdown Seen Forcing China Banks to Sell Bonds

A crackdown on banks hiding bad loans in China looks set to trigger a flood of capital raising just as global investors warn of risks to the financial system. New rules require lenders to make full provisions for loan rights they have transferred to other financial institutions, people familiar with the matter...

Soros Says China’s Economy Looks Like the U.S. Before the Crisis

Billionaire investor George Soros said China’s debt-fueled economy resembles the U.S. in 2007-08, before credit markets seized up and spurred a global recession. China’s March credit-growth figures should be viewed as a warning sign, Soros said at an Asia Society event in New York on Wednesday. The broadest measure of...

Wall Street’s Oil Crash, a Story Told in Charts

This is what it looks like on the down side of the biggest oil boom in U.S. history. JPMorgan Chase & Co., Wells Fargo & Co., Bank of America Corp. and Citigroup Inc., with a combined $190 billion in energy loan exposure, all announced this week that they’re setting aside...

Oil Drillers Feel the Pain as Banks Slash Their Credit Lines

Chesapeake Energy Corp., the deeply indebted shale producer, said this week that it can hang on to its $4 billion bank line as long as it posts just about everything it owns as collateral. Many of its competitors are faring far worse. Almost two years into the worst oil bust...

Used Car Price Plunge “Could Bring The Whole House Of Cards Down”

When we first warned that something was breaking in the American auto market, the Phil-LeBeau-ians crawled out of the woodwork to explain how everything is still awesome (brushing the weakness in stocks) despite soaring inventories and shrinking credit. Then when used-car prices began to leak lower, a few paid...

It’s Never Been This Hard for Chinese Debtors to Pay Interest

Just as monetary easing is pushing Chinese bond yields to record lows, the ability of listed companies to service their debt has dropped to the weakest on record. Firms generated just enough operating profit to cover the interest expenses on their debt twice, down from almost six times in 2010,...

Consumer Credit Rises $17.2 Billion; Holding Of Federal Debt Hit New All Time High

After a near record drop in non-revolving (student and car) loans in December, many were wondering if this pipeline which has kept the US auto sector afloat would remain shut. We are happy to report that for two consecutive months, this all important funding pathway has now been unclogged...

When Donald Trump Needs a Loan, He Chooses Deutsche Bank

Despite some clashes, the Republican front-runner has been a regular client of the German lender. One of Donald Trump's closest allies on Wall Street is a now-struggling German bank. While many big banks have shunned him, Deutsche Bank AG has been a steadfast financial backer of the Republican presidential candidate’s business...

China to ease commercial banks’ bad debt burden via equity swaps

China's central bank is preparing regulations that would allow commercial lenders to swap non-performing loans of companies for stakes in those firms, two people with direct knowledge of the new policy told Reuters. The new rules would reduce commercial banks' non-performing loan (NPL) ratios, and free up cash for fresh...

Saudi Arabia seeks $6-8 billion bank loan to shore up state coffers

DUBAI - Saudi Arabia is seeking a bank loan of between $6 billion and $8 billion, sources familiar with the matter told Reuters, in what would be the first significant foreign borrowing by the kingdom's government for over a decade. Riyadh has asked lenders to submit proposals to extend it...

China’s debt mountain is growing fast

As China's manufacturing sector stalls, the world's second-largest economy is relying on a more dangerous growth engine: Debt. The Chinese government is encouraging banks to lend and people and businesses to spend. Sound familiar? America did it for years, spurring people to buy homes, cars and just about everything else on...

China’s Global Ambitions, Cash and Strings Attached

EL CHACO, Ecuador - Where the Andean foothills dip into the Amazon jungle, nearly 1,000 Chinese engineers and workers have been pouring concrete for a dam and a 15-mile underground tunnel. The $2.2 billion project will feed river water to eight giant Chinese turbines designed to produce enough electricity...

Greece Makes €450 Million Payment to International Monetary Fund

Greece transferred around €450 million to the International Monetary Fund (IMF) on Thursday. As a result, Athens has repaid its second major loan without being able to access new assistance. The country had already paid the IMF €1.5 billion at the end of March. Greek Finance Minister Yanis Varoufakis had...

Epidemics of Control Fraud Lead to Recurrent, Intensifying Bubbles and Crises

Control frauds are seemingly legitimate entities controlled by persons that use them as a fraud “weapon.” A single control fraud can cause greater losses than all other forms of property crime combined. This article addresses the role of control fraud in financial crises. Financial control frauds’ primary weapon is...

Adam Smith Was Right about Corporate CEOs Incentives absent Effective Regulation

Our different views prove that hindsight is often myopic. Larry White’s take is that Clintonian regulations perverted private incentives. The boom and bust happened in a system with ... extensive legal restrictions on financial intermediation. Nor have we had banking and financial deregulation since ... 1999. (One can’t explain an unusual...

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