China
Has Its Worst-Ever Start to a Year For Defaults - (www.bloomberg.com) China’s
deleveraging push has racked up the most defaults on corporate bonds ever for a
first quarter, and the identity of the debtors is pretty revealing. Seven
companies have defaulted on a total of nine bonds onshore so far in 2017,
versus 29 for all of last year, according to data compiled by Bloomberg. In a
sign of the struggles facing China’s old economic model, most of them depend on
heavy industry and construction. While it’s still far from a crisis point, the
defaults shows how policy makers’ efforts to reduce the liquidity that
had propelled the bond market until late last year is exacting casualties. “Weak
companies can’t sell bonds, which adds to the pressure on their cash flow,”
said Liu Dongliang, a senior analyst at China Merchants Bank Co. in Shenzhen.
Four
Huishan Directors Resign in Wake of Mystery 85% Stock Plunge (www.bloomberg.com) China Huishan Dairy Holdings Co. said its four remaining non-executive
directors resigned and the company still can’t locate its treasury head, adding
to concern about the indebted farm operator’s corporate governance and
finances. The directors tendered their resignations effective March 31, with
all four citing other commitments, according to a stock exchange filing late
Friday. The Shenyang, China-based company said Ge Kun, who manages the
company’s treasury and cash operations, was last known to be in Hong Kong and a
missing person’s report has been filed with the city’s police. An unexplained
85 percent plunge in Huishan’s shares on March 24 has drawn attention to the
transparency of Chinese listed companies in Hong Kong, with such events
becoming a familiar sight. Huishan’s creditors held an emergency meeting the day before the rout to discuss a cash
shortage at the milk producer, according to Hongling Capital, a peer-to-peer
lender that attended the gathering.
Almost
a Decade Later, U.S. Money Markets Are Yet to Recover
- (www.bloomberg.com) Regulators’
effort to stamp out risk in the $2.6 trillion U.S. money-fund industry is
creating unintended ripple effects across financial markets, with far-reaching
consequences for companies and investors. Far less cash than anticipated has
returned to the higher-yielding slice of the money-fund world, after the
overhaul that took effect in October led to a $1 trillion exodus from what are
known as prime funds. They’ve been the principal buyers of the commercial paper
that companies and both foreign and domestic banks have sold for decades to
obtain short-term U.S. dollar-denominated financing. By squelching demand from
prime funds, commercial-paper rates relative to other money-market
securities have risen, and are now at the highest levels since the financial
crisis, causing borrowers to seek new sources of funding like the short-term securities
lending market.
Is
the Global Taxman Coming? - (www.wolfstreet.com) Credit
Suisse is once again under international investigation for allegedly helping
its clients evade the prying eyes of national tax authorities. This comes
after the bank was fined $2.6 billion by the U.S. government in 2014
for helping Americans evade taxes. Helping high net worth private clients
and corporations evade taxes, and then getting caught is not unique to Credit
Suisse. Fellow Swiss megabank UBS and UK giant HSBC were fined hundreds of
millions of dollars for their troubles. The banks are not just helping their
clients evade taxes. In a report titled Opening the Vaults, UK-based charity Oxfam International revealed
this week that in 2015, Europe’s 20 largest banks registered over a quarter of
their profits in tax havens – well out of proportion to the level of real
economic activity that occurs there. Once again, Luxembourg was a top
destination for funds, while in Ireland the same banks recorded profits that
were 76% higher than the global average in 2015. Only the Cayman Islands was
found to have a higher profitability rate. None of this should come as a
surprise. If any organization knows how to bend the rules and use and abuse the
tools and levers of global finance to minimize a company or individual’s tax
“footprint,” it’s today’s generation of global banks. And no matter how many
fines they are made to pay, they’re not going to change their ways.
A
Record 67% Of Low-Income Americans Are Worried "A Great Deal" About
Hunger And Homelessness - (www.zerohedge.com) Something
unexpected happened on the road to Obama's economic "recovery" - according to Gallup, over the past two years, a record
two-thirds, or an average of 67% of lower-income U.S. adults, up from 51% from
2010-2011, have worried "a great deal" about the problem of hunger
and homelessness in the country. They are not alone: concern has also
increased among middle- and upper-income Americans, but they still worry far
less than do lower-income Americans. Some details: since 2001, worry has been
highest among those residing in lower-income households, likely because those
with limited financial resources are more at risk of going hungry or becoming
homeless. A consistent majority of lower-income adults worried about the
problem before 2012, but that has only increased in the past five years.
Concern among middle-income Americans in 2016-2017 falls just short of the
majority level at 47%, while 37% of upper-income Americans are worried. Rising
concern among all income groups could be a result of the political and media
attention devoted to U.S. income inequality in recent years. Americans may also
worry more about hunger and homelessness when other issues are not dominating
the national consciousness, such as the economy and budget deficit were in
2010-2011 and terrorism was in the years after 9/11.
OPEC's
Barkindo Sees Progress in Oil Cuts as Stockpiles Fall - (www.bloomberg.com)
Rethinking the Widely Held 2% Inflation Target - (www.wsj.com)
Fading Trade-Crackdown Fears Power Overseas Rebound - (www.wsj.com)
Rethinking the Widely Held 2% Inflation Target - (www.wsj.com)
Fading Trade-Crackdown Fears Power Overseas Rebound - (www.wsj.com)
No comments:
Post a Comment