Goldman Sachs Says 40% of Lending to Oil and
Gas Firms Is Junk - (www.bloomberg.com) Goldman
Sachs Group Inc. said about 40 percent of its oil and gas loans and lending
commitments are to junk-rated firms. The figure, which counts both loans made
and future promises to lend, accounted for $4.2 billion of a total $10.6
billion as of the end of December, the New York-based bank said Monday in its
annual regulatory filing. Goldman Sachs has $1.5 billion in loans to energy
companies rated below investment grade and $2.7 billion in unfunded
commitments. The total exposure jumps $1.9 billion counting derivatives and
other receivables, which were “primarily" to investment-grade firms,
Goldman Sachs said. The bank’s market exposure to oil and gas firms was
negative $677 million compared with $805 million a year earlier.
Signs
of Mortgage Meltdown in Australia - (www.wolfstreet.com) Real estate is local – until it isn’t. Cities
have their own housing bubbles that implode on their own time. But once
contagion spreads to mortgages and banks and infects confidence of real estate
investors and homebuyers alike, and once debt levels are so high that they have
become unsustainable and can’t be pushed higher, then a real estate bubble
suddenly becomes a national economic issue with terrible consequences. In
Australia, which has the highest household debt in the world, “homes are
so expensive that nearly half of all mortgages are interest-only.” They’re
offered by the biggest banks with loosey-goosey lending standards. And “that is
a red flag for imminent disaster.” “It’s not a question of if but when there
will be a mortgage crisis in Australia,” explained Jonathan Tepper, CEO at
research firm Variant Perception, on the local 60-Minutes
segment, Home Groans, that aired in Australia on Sunday.
Emerging market bonds hit as foreign investors
dump debt - (www.ft.com) Twenty years ago, a dangerous cocktail of debt
accumulated in foreign money and deteriorating exchange rates led emerging
markets into financial meltdown. In the aftermath, countries vowed to repent of
the “original sin” of borrowing huge sums in non-domestic currencies. Major
emerging markets went from having more than three-quarters of their debt in
foreign currencies to around half. Finance ministers were applauded for
better protecting economies from swings in global market sentiment. Yet as the
world recoils from risky assets amid a slowdown in China and collapsing oil
prices, emerging market bonds are once again being dragged into the fray.
The
NY Times wants to get rid of the $100 bill - (www.cnbc.com) The
New York Times has joined the chorus calling for the elimination of
large-denomination bills. In an editorial published Monday, the Times argued that "there
is no need for large-denomination currency" and that big bills make it
easier for criminals to conceal their business. The editorial cited a Europol study that found that the 500 euro note is used
disproportionately "in the various stages of criminal activity and money
laundering." The 500 euro bill is known as the "Bin Laden" in
underground circles, according to a paper on high-value bills
and illicit activity written
by Peter Sands, a senior fellow at Harvard's Mossavar-Rahmani Center for
Business and Government.
More Subprime Borrowers Are Falling Behind on
Their Auto Loans - (www.bloomberg.com) More
borrowers with spotty credit are failing to make monthly car payments on time,
a troubling sign for investors who have snapped up billions of dollars of
securities backed by risky auto debt. Delinquencies on subprime auto loans
packaged into bonds rose in January to 4.7 percent, a level not seen since
2010, according to data from Wells Fargo & Co. Rising delinquencies come as
a warning sign that more loans may end up in default down the road,
said John McElravey, an analyst at the bank. What may be most troubling,
however, is that the default rate is already climbing, up to 12.3 percent in
January from 11.3 the prior month. That is the highest rate since
2010, the data show.
BOJ's Kuroda blames 'excessive' risk aversion for market tumult - (www.reuters.com)
The World's Debt Is Alarmingly High. But Is It Contagious? - (www.bloomberg.com)
A New Breed of Trader on Wall Street: Coder With a Ph.D. - (www.nytimes.com)
Beijing to Raise Threshold on Red Alerts for Smog - (www.nytimes.com)
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