Fortune (September 18)
“Any prominent investor comparing China with Japan prior to its lost decades of stagnation ought to be alarming.” It’s even more alarming when it’s Ray Dalio, the founder of massive hedge fund, Bridgewater. Long known as China bull, he now “fears the property crisis in China has left local governments unable to service their debt by extracting equity through land sales” and that China’s economy now “faces problems as severe as Japan in 1990.”
Tags: Alarming, Bridgewater, China, Dalio, Debt, Economy, Equity, Founder, Hedge-fund, Investor, Japan, Local governments, Property crisis, Severe, Stagnation
Bloomberg (June 12)
“The owners of the Westfield San Francisco Centre mall are giving up the property to lenders, adding to deepening real estate pain in a city struggling to bring back workers and tourists after the pandemic.” Unibail-Rodamco-Westfield and Brookfield Corp. will default on $558 million in remaining debt. “San Francisco has been among the hardest-hit cities since the pandemic as office vacancies soar, retail vacancies rise and concerns about safety deter visitors.”
Tags: Brookfield, Cities, Debt, Default, Hardest-hit, Lenders, Mall, Office, Pain, Pandemic, Real estate, Retail, Safety, San Francisco, Struggling, Tourists, Unibail-Rodamco-Westfield, Vacancies, Workers
Commercial Observer (June 1)
“For the illiquid world of private credit — which provides debt for commercial real estate projects -– and that of private equity, the recent upheaval in the U.S. regional banking sector and issues plaguing downtown office space has sparked questions surrounding the type of returns CRE can generate for investors. The primary question being: Is a golden moment possible in the darkest of times?”
Tags: Commercial real estate, Debt, Downtown, Illiquid, Office space, Plaguing, Private credit, Private equity, Regional banking, Returns, U.S., Upheaval
Bloomberg (April 8)
“Almost $1.5 trillion of US commercial real estate debt comes due for repayment before the end of 2025. The big question facing those borrowers is who’s going to lend to them?” Morgan Stanley has estimated “office and retail property valuations could fall as much as 40% from peak to trough, increasing the risk of defaults.” Regional banks are now skittish about lending and “the wall of debt is set to get worse before it gets better.”
Tags: $1.5 trillion, 2025, Borrowers, Commercial real estate, Debt, Defaults, Morgan Stanley, Office, Peak, Regional banks, Repayment, Risk, Skittish, Trough, U.S., Valuations
CNBC (November 13)
As large U.S. retailers report earnings, inventory levels will dominate the gaze of analysts and investors. Retailers including Walmart, Target and Gap “are trying to sell through a glut of extra merchandise piling up in store backrooms and warehouses…. Balancing inventory has taken on additional urgency, as economists warn of dwindling savings accounts, rising credit card debt and the risk of a recession.”
Tags: Analysts, Debt, Dominate, Earnings, Economists, Gap, Glut, Inventory, Investors, Merchandise, Retailers, Risk, Savings, Target, Urgency, Walmart, Warehouses
Reuters (October 17)
“Local governments have long been a pump-primer of China’s growth, but declining state land sales revenue in the wake of an ongoing crackdown on debt in the sector has severely eroded their financial power – a situation exacerbated this year by China’s feeble growth, weak tax income and crippling COVID restrictions.” These bodies now face budget shortfalls of roughly $1 trillion. Amid China’s wobbly economy, “the timing couldn’t be worse.”
Tags: Budget shortfalls, China, COVID restrictions, Crackdown, Debt, Declining Land sales revenue, Economy, Eroded, Feeble, Financial power, Growth, Local governments, Pump-primer, Tax income
Wall Street Journal (February 22)
“Small businesses are bearing the brunt of supply-chain pressures and rising prices, with many tapping their cash reserves or taking on debt just to compete with larger rivals.” Most of them lack “the heft and sophistication to thrive in an environment of booming demand and short supply.” This further exacerbates “the existing power imbalance between small and big firms.”
Tags: Big firms, Booming demand, Brunt, Cash reserves, Compete, Debt, Power imbalance, Rising prices, Rivals, Short supply, Small businesses, Supply-chain pressures
Reuters (January 28)
“A growing number of Chinese construction and decoration companies are writing off assets or issuing profit warnings as debt woes at China Evergrande Group and other property developers debilitate their suppliers.” Despite government measures “to ease developers’ liquidity stress and support the cooling economy, recent data suggests the problem will get worse.”
Tags: Assets, China, Companies, Construction, Debt, Evergrande, Government, Liquidity, Profit warnings, Property developers, Suppliers, Woes
Wall Street Journal (August 23)
The Government of Japan “is already on the hook to pay out nearly $10 trillion to its creditors.” This may appear *an impossibly large sum to rustle up” when annual tax collections amount to “less than $600 billion.” But today’s “economists talk more about the risk of issuing too little debt” and the U.S. may soon follow Japan’s lead. “Congress is debating trillions of dollars more in proposed spending that would push America’s borrowing toward levels policy makers in Tokyo have long embraced.”
Tags: $10 trillion, Borrowing, Congress, Creditors, Debt, Economists, Government, Japan, Risk, Spending, Tax collections, U.S.
Mercury News (February 17)
“Despite an unprecedented 2.4 million jobs lost in the spring, Californians joined fellow Americans in paying down interest-heavy debt such as credit card bills while acquiring wealth-building loans by taking out mortgages…. But looks can be deceiving.” Aggregate figures can obscure real suffering. “Millions of Californians suffering job losses have accumulated crippling debt that goes uncounted in national measures: unpaid rent, utility bills, borrowed money from loved ones and, in some cases, predatory loans.”
Tags: California, Credit card, Debt, Interest, Jobs, Loans, Mortgages, Predatory, Rent, Suffering, U.S., Uncounted, Unprecedented, Utility bills, Wealth-building
