Credit-Driven
China Glut Threatens Surge Into Bank Crisis - (www.bloomberg.com) In China’s “Shipping Valley,” where the Yangtze River
empties into the sea north of Shanghai, the once-bustling home of the nation’s
biggest private shipbuilder is deadly quiet on a recent morning. Rows of
dilapidated five-story dormitories in the city of Nantong, previously housing China Rongsheng Heavy
Industries Group Holdings Ltd.’s 38,000 employees, were abandoned after the
shipbuilder teetering on collapse cut almost 80 percent of its workers over the
past two years. Most video arcades, restaurants and shops serving them have
closed. A $6.6 trillion credit binge during
the past five years, encouraged by Beijing policy makers as stimulus to combat
a global economic slowdown, now threatens to stoke a debt crisis. At stake are
trillions of yuan in
bank loans that companies producing everything from ships to steel to solar
power are struggling to repay as the world’s second-largest economy heads for
the weakest annual expansion since 1999. Rongsheng, which is seeking a
government bailout after accumulating 25 billion yuan ($4.1 billion) in unpaid
loans as of June, including to Bank of China Ltd., is a casualty of over-investment gone bust.
Junk
Glistens Under ‘Bernankecare’ as Worst Win in Stocks, Bonds - (www.bloomberg.com) Carl
Giannone says he’s given up hunting for quality stocks. Now he’s simply riding
the wave of upward momentum in
the U.S. market. “It’s a game of musical chairs,” said Giannone, who manages a
team of stock pickers at T3 Trading Group LLC in New York. “You just want to make sure you can sit
down.” The Federal
Reserve’s
near-zero interest rate turns five years old next month, the
longest period without an increase in history. Coupled with more than $3
trillion of asset purchases, it adds up to “Bernankecare,” said Joshua Brown,
chief executive officer of Ritholtz Wealth Management in New York. And it’s
causing parts of the market to behave strangely. Stocks of companies with weak
balance sheets are rising twice as fast as stronger ones; junk borrowers get
rates lower than their investment-grade counterparts did before the credit
crisis; and initial public offerings are doubling on their first day of
trading.
Obamacare
Failure May Shave 30% From U.S. Drug Sales - (www.bloomberg.com) Potential
shortfalls in enrollment for President Barack Obama’s health-care overhaul would put a 30 percent
dent in projections for U.S. prescription-drug sales in 2017, a report from IMS
Health Inc. shows. That worst-case scenario would translate to $320 billion in
drug spending, according to the report. The best case is supposed to be $460 billion,
boosted by demand from the health law’s expansion of insurance coverage and
medical screenings, and removal of restrictions on pre-existing conditions. Expenditures
in the $2.7 trillion U.S. health-care system have doubled since 1980, growing
to 18 percent of gross domestic product and leading to financial success for
drugmakers, hospitals and insurers. The 2010 health law’s promise of making
medical coverage an affordable possibility for at least 25 million uninsured
people was projected to provide another boost.
Obamacare may need a taxpayer bailout: Ex-HHS
head - (www.cnbc.com) The rollout of Obamacare has been
"absolutely chaotic," said Tommy Thompson, who served as U.S. Health
and Human Services secretary under George W.
Bush.
But worse, he added, the new law is flawed and needs dramatic changes. "It's
actuarially unsound," the former Republican governor of Wisconsin said on
CNBC's "Squawk Box" on Tuesday. "If you don't have the
healthy young people involved, ... Obamacare cannot function. It's going to
require a huge infusion of tax dollars or huge cuts." One of the
cornerstones of the new health-care law is that healthy young people will pay
for medical insurance that they use less frequently than the elderly or the
chronically ill. But, Thompson said, from the view of a healthy young person,
they may ask: "''Why do I want to do that?''" Under Obamacare, most
Americans have to buy insurance or face a tax penalty.
Census 'faked' 2012
election jobs report | New York Post - (www.nypost.com) In the home stretch of the 2012 presidential
campaign, from August to September, the unemployment rate fell sharply —
raising eyebrows from Wall Street to Washington. The decline — from 8.1 percent
in August to 7.8 percent in September — might not have been all it seemed. The
numbers, according to a reliable source, were manipulated. And the Census
Bureau, which does the unemployment survey, knew it. Just two years before the
presidential election, the Census Bureau had caught an employee fabricating
data that went into the unemployment report, which is one of the most closely
watched measures of the economy. And a knowledgeable source says the deception
went beyond that one employee — that it escalated at the time President Obama
was seeking reelection in 2012 and continues today. “He’s not the only one,”
said the source, who asked to remain anonymous for now but is willing to talk
with the Labor Department and Congress if asked.
Analysis: As market bubbles form, investors may
want to take cover - (www.reuters.com)
Icahn cautious on stocks, will not walk away from Apple - (www.reuters.com)
Icahn cautious on stocks, will not walk away from Apple - (www.reuters.com)
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