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New York Times (April 17)

2023/ 04/ 18 by jd in Global News

“If one country defaults on its loans, it’s a big problem for its citizens. If a dozen countries default, it’s a big problem for the world.” Nearing the “verge of yet another debt crisis,” world leaders can still act to prevent it. “They should dust off the tool kit that helped end the Latin American debt crisis, especially the measures that convinced creditors to share the pain and accept less than what they were owed.”

 

American Banker (April 14)

2023/ 04/ 16 by jd in Global News

“Investors have been fretting over whether commercial real estate loans, particularly at small banks, will hold up in the coming months. One prominent investor warned recently that urban office buildings should be demolished because demand won’t return and converting towers into apartment buildings is often impractical.”

 

American Banker (November 9)

2022/ 11/ 09 by jd in Global News

“Lenders made it harder in the third quarter for both consumers and businesses to access credit,” and this trend looks likely to continue. “If the U.S. economy falls into a recession, more than 80% of banks said they would ‘somewhat’ or ‘substantially’ tighten lending standards for credit cards and loans backed by commercial real estate. More than 70% of banks said they would do the same for auto, commercial and industrial and residential real estate loans.”

 

Sydney Morning Herald (August 10)

2022/ 08/ 12 by jd in Global News

“There are 68 trusts in China with about $4.3 trillion of assets – property loans, shares, bonds and commodities – under management, with property accounting for at least $500 billion of the total.” The National Audit Office has been instructed “to inspect the books of the country’s biggest trust firms.” This shows “the increasing concern of the Chinese authorities that the implosion of their property development sector could ignite a wider financial crisis.”

 

Mercury News (February 17)

2021/ 02/ 19 by jd in Global News

“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.”

 

Financial Times (July 23)

2019/ 07/ 25 by jd in Global News

“Computer algorithms encoded with human values will increasingly determine the jobs we land, the romantic matches we make, the bank loans we receive and the people we kill, intentionally with military drones or accidentally with self-driving cars.” The way those human values are embedded “will be one of the most important forces shaping our century. Yet no one has agreed what those values should be” and the “debate now risks becoming entangled in geo-technological rivalry between the US and China.”

 

Bloomberg (February 23)

2016/ 02/ 25 by jd in Global News

“For Chinese leaders, the need to prop up faltering GDP growth outweighs fears about a rapid buildup in debt.” New loans from banks were 70% higher in January than a year prior. “Debt now tops 230 percent of GDP and could reach as high as 300 percent of GDP if current trends continue…. Even the Bank for International Settlements, a body not known for hyperbole, has warned that Chinese debt is reaching levels that typically trigger financial crises.”

 

Wall Street Journal (February 6)

2015/ 02/ 07 by jd in Global News

“The Greek effort to divide and conquer by negotiating individually with other EU members instead of with the bloc as a whole is going nowhere.” Nevertheless, there may still be “room for a prudent compromise that might involve a bridge deal to allow time for a permanent agreement, followed by some easing of the terms of bailout loans in exchange for a commitment to economic reform.” 

 

The Economist (October 18)

2014/ 10/ 18 by jd in Global News

At 250% of GDP, China has a debt problem. Still, this “is unlikely to cause a sudden crisis or blow up the world economy. That is because China, unlike most other countries, controls its banks and has the means to bail them out.” The lack of crisis may drive China down the same road Japan took in the post-bubble decades. “The biggest risk is complacency: that China’s officials do too little to clean up the financial system, weighing down its economy for years with zombie firms and unpayable loans.”

 

Forbes (May 5, 2013)

2013/ 05/ 07 by jd in Global News

Urging financial institutions to adopt one-size fits all risk models has can be disastrous. “We have real-life proof of the folly in this kind of forced uniformity: the Basel Accords. For years regulators around the world have been concocting uniform risk assessments to judge bank loans. The results of this exercise have been disastrous. Banks had to hold no reserves against government debt yet hold hefty set-asides for business loans. Greek government bonds were seen as infinitely safer than a loan to, say, IBM. Mortgage-backed securities also got preferred regulatory treatment–and we all know where that led.”

 

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