The Asian Crisis

[Aman A.K.A. Ahamburger]

Aug 20, 2015 10:42:35 GMT -5 tyfighter3 said:

All you have to do is look at the DOW, S&P. A year ago was the time too raise cash and what is funny is the Market will let you do it over time. How many times did the DOW hit 18000? I can hardly wait to put my cash to work into stocks like XOM, COP, the Majors in Energy. Where I can get 5% or more and the Stock could double over the next 5 years. WIN, WIN even at my age. JMO  But I'm waiting for better prices.

Ya man, gotta let all the buddies get out too ya know!

Seems to me you have been doing just fine for someone "your age", especially because you have a nice pile of cash to work with! Nest egg anyone?!?

I hear ya about prices, too. Although like you I've got a list together, just to be ready.

[Aman A.K.A. Ahamburger]

*cough*Recession*cough*

China Caixin manufacturing PMI hits 6 1/2 year low

[Aman A.K.A. Ahamburger]

It's a crisis when it spreads.. China's Neighbors Step Up Stock Market Support.

Proving that the Chinese believe in futility, China plans more steps to boost bank lending

Why even bother? This is an interesting anecdote, stay .

The next shoe to drop in China? The banks

My own experience with a Bank of China ATM at the Hong Kong-Shenzhen border last Friday certainly got me thinking — just how bad is China’s liquidity crunch?

The problem was the ATM menu options had been limited to funds balance, transfer and deposit but none for withdrawal. And it did not appear personal, as all three cash machines were the same, refusing locals and foreigners alike.

This might be dismissed as merely anecdotal but it comes in the same week that global markets have zeroed in on Chinese capital flight risks and authorities have been scrambling to inject liquidity into the banking system.

[Aman A.K.A. Ahamburger]

Well the good news is - as was called, China is most likely in a recession. Now consider that the economic numbers in the ISI report are for July, and the numbers for August are registering weaker across the board. Now consider that they have been dumping money into the market and trying to stimulate the economy for the last six moths straight.... Yeah, and I'll bet the housing numbers are real too...

Late to the party but still arriving none the less, Citigroup Says China Will Respond Too Late to Avoid Recession. Respond to late? They have been throwing everything and the kitchen sink at this, and the are still already in a recession. Yes, it's true; China is proving in real time that when you build a historic real estate bubble there is NOTHING that anyone can do to stop it from unwinding.

I like how the market is acting like something has changed in China though. It's going to be a wild ride into the New Year.

[Aman A.K.A. Ahamburger]

Aug 24, 2015 11:06:33 GMT -5 Aman A.K.A. Ahamburger said:

It's a crisis when it spreads

The truth always comes into the light.

On Second Thought, China Slowdown Will Hit Global-Growth Outlook

China’s deepening struggles are starting to make a bigger dent in the global economic outlook.

Moody’s Investors Service on Friday cut its 2016 growth forecast in Group of 20 economies to 2.8 percent, down 0.3 percentage point from the company’s call less than two weeks ago.

[Aman A.K.A. Ahamburger]

A merger between the war and the Asian Crisis is underway. Stay , as I'm sure this is going to make one hell of an interesting development.

Central Asia's Economic Crisis Arrives

When the price of oil started falling and Russia's economy began to weaken in 2014, it was clear the five Central Asian states -- Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan -- would face economic difficulties.

The economies of the five sputtered along as the effects slowly set in across the region. But Kazakhstan's recent decision to devalue its national currency, coupled with the sudden downturn in China's economy, herald the start of the bad economic times the region has been dreading......

...Azatlyk director Muhammad Tahir moderated the discussion. Participating were Dr. Luca Anceschi, professor of Central Asian studies at Glasgow University; Paolo Sorbello, deputy editor and analyst at the Conway Bulletin; and I chimed in with a few comments.

Anceschi summed up the situation aptly: "I think this is probably the worst possible scenario for Central Asia because last year we had the crisis of the ruble, which of course impacted Kazakhstan and Turkmenistan but more so Uzbekistan, Kyrgyzstan, and Tajikistan, who actually have a big number of migrants in Russia. So financial crisis in Russia, monetary crisis in Russia in turn hit the real economy back home because those migrants were not sending home the same amount of remittances that they used to, whereas this year the crisis hit the big purchaser of commodities, so now the other side of Central Asia."

[Aman A.K.A. Ahamburger]

I know I have mentioned it before, but we all know how much of a canary in the coal mine Vegas was well, Macau Economy Slumps 26.4%.

A nice little read on how we are watching in real time there is no stopping gravity: Beijing’s incompetence is now China’s biggest problem

That crisis creep is now showing up all over. Stay

Asian shares slip as downbeat China PMIs revive growth fears

the private Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) showed a final reading of 47.3 in August, the lowest since March 2009...

...China's cooling demand is already taking a toll on the economies of its trade-reliant Asian neighbors. South Korea reported on Tuesday its exports fell 14.7 percent in August from a year earlier, worse than expected and the biggest drop in six years.

[Aman A.K.A. Ahamburger]

I'm lovin' the headlines today: Markets rise on China Stimulus hopes. HAHAHA.. WTH do they think CHina has been doing all year? As discussed earlier in this thread, the fact that China's banking system is drained - a.k.a. screwed - will start showing up in their reserves as they try to stimulate economy... China forex reserves slump by record $93.9B in August

The drop left market watchers questioning how sustainable China's efforts to support the yuan are, as capital flows out of the country due to fears of an economic slowdown

Of course China's "brilliant" plan to deal with that problem is the exact same thing they did to "stop" the markets drop; China Freezes Outbound Investment Quotas as Outflows Hurt Yuan. I'll bet the big players in the market are real happy being forced to hold their shares while watching their profits evaporate too.. Yeah, that's not going to cause a problem at all when those six months are up...

One positive though, we can thank the commies in China for proving that gravity is real. For all the money they have thrown at their black hole of debt, all their efforts to "command" the economy into growth - all they have shown is that they should have just let the real estate and stock market run its course. The fact is, once a financial system is filled with BS wizardry and mountains of real estate debt there is no escaping the ILL-liquidity trap.

[Aman A.K.A. Ahamburger]

......

China Just Killed the World's Biggest Stock-Index Futures Market

Add the world’s biggest stock-index futures market to the list of casualties from China’s interventionist campaign to stop a $5 trillion equity rout.

Volumes in the country’s CSI 300 Index and CSI 500 Index futures sank to record lows on Tuesday after falling 99 percent from their June highs. Ranked by the World Federation of Exchanges as the most active market for index futures as recently as July, liquidity in China has dried up as authorities raised margin requirements, tightened position limits and started a police probe into bearish wagers.

But they are stimulating the economy....

[Aman A.K.A. Ahamburger]

It's okay though, China assures us that the property market is on the mend...

Property bubble risks popping in China’s rural southwest

After spending a week in Sichuan Province, it is clear that land sales, prices and transactions are all declining in double digits.

Sichuan province is one of China’s largest, in the heart of the country. We spent some time at a residential project called Universal City Centre, about 20km from Chongqing. The 1.08m sqm property has seen prices fall one-third from 4,000 to 5,800 psm one-third to 3,000 to 4,000 psm.

The sales agent told us this project was the best among the ten or fifteen projects in the area. “It’s not a good time to invest,” the agent noted. “It’s gone back to 1997 prices. No one is buying to invest any more,” she said.

[Aman A.K.A. Ahamburger]

The amazing thing is that some seem to think China's one trillion yaun announcement was a good thing..

China's `New Normal' Growth Model Is Starting to Get Expensive

$236 billion spent boosting stocks, reserves down $286 billion

For China Brokerages, the Market Rescue Hurts More Than It Helps

[Aman A.K.A. Ahamburger]

Don't worry, the commies got this under control.

A 'Sense Of Crisis' Now In A Chinese Boomtown Gone Bust

A $5 billion business and financial district for the coal city of Luliang was scheduled to open next year. But today, the area, which was to house at least 300,000 people, remains mostly grass and cornfields. A few workers are trying to finish what would have been the district's main boulevard — which is now a road to nowhere.

What went wrong?

The mayor who pushed for this new district was fired for corruption — a common fate in Luliang — and the government ran out of money....

...Eventually, overcapacity so outstripped demand that it crashed the local economy, which is now among China's worst.

The failed new district has had ripple effects across the city, beginning with thousands of farmers like Liu Yihu, whose house was demolished by the government to make way for the now-failed project.

"There used to be irrigation ditches, but those were blown up for the construction of the new city," says Liu, 63, who wears a worn suit coat as he sells tomatoes and peppers by the side of a road. "Without water, ordinary people can't grow crops. The yield isn't even half of what it was in previous years."

About an hour's drive from where Liu hawks his vegetables sits the Chuandong cement plant. The factory had banked on orders to help build the new district. Today, it's largely abandoned. Workers' dorm rooms are strewn with trash, bunk beds sit empty and dust and mud blanket the floor of an office building.

Among the survivors is a low-level manager named Gao, who's sitting on a bed in a dorm room, watching a rerun of a huge, recent military parade in Beijing. Gao says when plans for the new business district collapsed, his plant – like others in town — was caught with way too much capacity.

"The economic situation now is very bleak," says Gao. "The construction industry, the entire real estate market is bankrupt....

....Last year, though, GDP here shrank by 2 percent. And this year, Gao's cement plant only produced 30,000 tons. The company's employment fell from a high of 1,000 workers to just 100. Gao says no one seemed to see the crash coming.

"We didn't worry," says Gao, whose wages have been decimated and had to borrow money to pay his son's college tuition, room and board. "We felt in our hearts that things would always be good and there would be no problem. Now we have a sense of crisis."

Gao blames government officials for ignoring the basic law of supply and demand. Instead of managing supply, Gao says, officials pushed to open more coal mines and build more housing developments to boost GDP numbers on which their promotions were based. Those projects also generated lots of bribes.

And it's the same story right across the entire nation. Stay

[Aman A.K.A. Ahamburger]

But it's okay because, China Home-Price Growth Widens to More Cities Amid Rate Cuts....

Nationwide, unsold new homes rose 16 percent from a year earlier to 428.6 million square meters (4.6 billion square feet) as of Aug. 31, the statistics bureau said Sunday.

[Aman A.K.A. Ahamburger]

....

Signs point to deepening China distress

Suddenly, the debate in China has shifted from a perception of too much money sloshing round and too many reserves earning meagre returns, to a concern about the adequacy of reserves given the extent of debt — much of it hidden. After all, the downdraft in the stock market was all about the use of borrowed money, invisible to regulators and almost everyone else.

Meanwhile, the capital flows out of China continue. It is difficult to calculate what is prudent diversification and what is capital flight. At the same time, more alarmingly, the signs of distress in the real economy are deepening, with ripple effects far beyond the mainland.

Greek shipyards, for example, report that the yards in China are desperately discounting the containers they construct. The Chinese shipbuilders have to discount to compensate for the fact they are competing against builders whose currencies have fallen dramatically against the renminbi.....

...
Meanwhile, across the Pacific, financial markets have won the latest round in their game of chicken with the Federal Reserve, as the central bank decided (surprise!) not to raise rates. The sense of relief, though, does not address the fundamental issues now plaguing the global economy — which is why there was little sign of a relief rally in global equity markets.

It is not so much that the Fed has lost credibility as that its actions have come to matter less. The efficacy of monetary policy that acts only on financial asset prices eventually loses its power.

More importantly, the Fed matters far less for world growth than China does.

Just how bad is the money - or lack thereof - problem in China you ask?

China state group bailout highlights urgency of reform

Chinese bondholders facing the prospect of a debt default by a state-owned enterprise will receive a bailout, the company said on Tuesday, a sign that Beijing remains unwilling to impose market discipline on lossmaking state groups.

China National Erzhong Group, a unit of one of the elite club of 112 big enterprises directly owned by the central government, employed a workforce of more than 13,000 in 2012, when it had assets of Rmb25bn ($3.9bn). But a slowing economy and rampant industrial overcapacity has hobbled the heavy industry group, leading to losses of Rmb8.4bn in 2014.

But hey, the "beige book" from China signaled that people were too pessimistic.

[Aman A.K.A. Ahamburger]

If the Chinese Factory Gauge Slumps to Lowest Level Since March 2009 didn't highlight just how bad things are getting for the commies, from the mouths of the richest investors in China!!!

China's Richest Stock Traders Aren't Buying Xi's Bullish Message

"Cash is king for smart investors now"

[Aman A.K.A. Ahamburger]

But hey, the "beige book" from China signaled that people were too pessimistic.

Chinese industrial profits fall to lowest level on record

Money is an issue for China, without a doubt. However, the bigger issue is something that we() have touched on around here before - unrest! China has been trying very hard to move their economy to a consumer base from an industrial one. Had we not been faced with a new global conflict, they may have been able to pull off this transition over the next decade or so. This is precisely why I say that Putin has screwed the Chinese over more than anyone here. China has never wanted to fight a major war, and now they have hundreds of millions of workers that will have nothing to do but fight this war - all thanks to Putin's delusions of grandeur. Stay .

Xi’s China: A Place Called Hopelessness

Two years ago, the Chinese Communist Party (CCP) delivered a simple message to the people: Pursue the Chinese Dream. The exact details were fuzzy, but it went something like this: work hard, be proud, and you will get rich.

Chinese cities were blanketed with banners, posters, murals, and public displays glorifying the Chinese Dream. A hit song was penned with the lyric, “A dream of a strong nation… a dream of wealthy people! Follow the Dream and keep your feet on the ground, we are stepping toward a great revival!” It was performed by Chen Sisi, the singer of a musical performance group run by the Second Artillery Corps of the People’s Liberation Army, the guys who control China’s nuclear ballistic missiles. The song, unimaginatively called China Dream, topped the folk music charts for weeks.

Much has changed since then. That imagined great revival now seems a lifetime away.....

.....Mention the Chinese Dream to anyone in China now, however, and you’ll likely receive a round of salty insults exploding like lead shot.

Ask the ant tribe. They’re educated, young professionals who live in near-poverty conditions, grinding away at soul-crushing jobs—not careers—that yield no personal satisfaction and zero financial growth. Typically from rural areas, most have settled in northwest Beijing, where their living quarters are cramped and they have no personal space. They’re smart, they work hard, yet receive no recognition and can’t shake off anonymity. So, people call them ants.....

.....In the fantasy world that the Chinese Communist Party has created for its revised history books, the state takes care of every citizen. But the ant tribe knows firsthand that this is not the case. Calling the Chinese president by his nickname, Xiao said, “Xi Dada says the youth are this country’s future, but most of us don’t have any opportunities.

How farmers from rural China bet on the stock market and lost

[Aman A.K.A. Ahamburger]

You just can't stress this point enough because the gravity of it hasn't full set in yet. Stay

China Bear Jim Chanos: The Emperor Is in His Underwear

I said, wait a minute --you’ve got the decimal point wrong because 5.6 billion square meters is 60 billion square feet. And it can’t be. He looked at me and checked the numbers a few times and said, “It’s 5.6 billion square meters.”

That was the “ah-ha” moment. If half of that was office and mixed commercial space, -- 30 billion square feet out of the 60 -- and China has 1.2 -1.3 billion people, then you’ve got a 5’ x 5’ office cubicle for every man, woman, and child in the country! That’s all been built, by the way. I think the latest number on that time series shows 10.6 billion meters currently under development....

...It was as if they had combined our commercial real estate bubble of the late 80s with our residential bubble of the millennium. Only they were doing it all at the same time. As we began to dig deeper into the numbers, we saw that their physical investments as a percentage of GDP was 50 percent. What they were doing was just stunning. They were literally building a whole country in a matter of years.

[Aman A.K.A. Ahamburger]

This absolutely leaves me .

The next thing to worry about in Chinese markets

a rapid increase in local government debt.

The latest figures on regional and local Chinese government debt show a 34 percent increase from June 2013 to 24 trillion yuan ($3.7 trillion) at the end of 2014, Moody's Investor Service said in a September report. That's 38 percent of China's 2014 GDP...

...."They're beginning to reach the limits of their balance sheets. There's no magical number to say they're pushing their balance sheet. There is a debt issue. They can handle it. They haven't gone beyond the limits of their balance sheet," said John Mauldin of Mauldin Economics. The firm released last Wednesday a documentary, China on the Edge, which highlights the critical state of China's debt issues.....

...."China's OK internally within its boundaries," Mauldin said. "The rest of the world is going to have to adapt because they are not going to have debt-fueled commodity growth. That's a huge adjustment."

So let me get this straight: there is enough commercial and most likely residential property for every man, women, and child in China. Their local government debt is also completely out of control - whcih we already knew - and this Mauldin Economics releases a study stating that China's balance sheets are hitting their breaking point. Yet this same economic firm turns around and says the rest of the world is going to have to adjust to the end of China's debt driven growth Like, WTF? Really? Really? .... Really? The rest of the world will have to adjust to the end of a debt driven expansion, but the economy that was built off this debt will be okay!?!? Now that is what I call fantasy island!!

Stay

PS. I think this is what we call trying to stop a bank run? China limits overseas cash withdrawals for it's citizens

[Aman A.K.A. Ahamburger]

As we move closer to the date when big investors have their funds unlocked from selling in China....

Li Ka-shing under attack by Chinese media for selling assets on the mainland

Li Ka-shing, the richest man in Asia, has fallen victim to attacks by Chinese media who view his selling of assets on the mainland as immoral and ungrateful.

The Hong Kong tycoon, who until recently enjoyed the adulation of media both on the mainland and in Hong Kong for his investing prowess, has been criticized for withdrawing from China via a series of asset sales and domiciling his flagship investment vehicles offshore rather than in Hong Kong.

An article in the People's Daily attacking Li read: "Li Ka-shing’s choices do appear particularly brazen. In the eyes of ordinary people, we shared comfort and prosperity together in the good times, but when the hard times come he abandons us. This has really left some people speechless.”

As doubts grow over the future prosperity of the Chinese economy, Li's sales have been interpreted by some as a sign of fading confidence. Local media report that in the past three years he has sold around 100 billion yuan ($16 billion) of assets.

[Aman A.K.A. Ahamburger]

I love how the market is acting like the FED keeping rates low is a good thing. That trend is done.

-Fed minutes show worries about overseas led to caution at rate meeting
-German exports record biggest slump since 2009 Exporters endure worst post-recession slump raising fears that global slowdown will bring Germany to a standstill
-China Has No Good Plan to Deal With Its Achilles Heel
-Man Who Called China's Boom and Bust Says Use This Rally to Sell

[Aman A.K.A. Ahamburger]

That trend is done.


The earnings say it all. Stay

Alcoa slashes its outlook for China's production of cars, heavy duty trucks

Alcoa Inc. AA, (-4.81%) indicated that China's industrial economy is slowing more rapidly than expected

[Aman A.K.A. Ahamburger]

It's a good thing China has deployed a whole bunch more in the way of stimulus measures, it's worked so well so far: China imports collapse in September, exports remain weak

More real time evidence that once a real estate bubble causes a black hole banking system, no amount of stimulus seems to fill it. On the bright side, for all the people that had wet dreams about China dropping the USD - China is set to drop a ton more trying to save their commie asses.

[Aman A.K.A. Ahamburger]

I'm lovin' this one. Even the South China Morning Post can't find a way to spin the dead cat bounce in China's property market.. Stay

China home sales disappoint during Golden Week holiday

es in many mainland cities saw large week-on-week declines according to CREIS, despite the People’s Bank of China announcing the relaxation of down payment ratios for first-time purchases on September 30.

The disappointing Golden Week sales came as the mainland’s retail sales growth slowed to 11 per cent during the week-long holiday, compared with 12.1 per cent for the same period last year, fuelling concerns about the central government’s ability to dodge downward risks for the world’s second-largest economy through growth in its retail and real estate sectors.

“The government started loosening policies, including cutting interest rates and lowering the amount of reserves banks must hold, to revive the property market since October 30 last year,” said David Hong, head of research at property consultancy China Real Estate Information Corp’s Hong Kong office. “We have seen a revival of home sales, especially in the second quarter of this year. But the impact has been weakening.

“Can the loosening measures stimulate the slow economy in the long run? I have reservations.”

The weakening impact of government policy moves was also evident in major developers’ contracted sales in September.

September is traditionally regarded as a peak season for real estate sales on the mainland. But Evergrande Real Estate reported a 35.4 per cent month-on-month decline in sales to 1.42 million square metres, down from the 2.2 million square metres it sold in August.

[bimetalaupt]

Oct 13, 2015 14:34:00 GMT -5 Aman A.K.A. Ahamburger said:

I'm lovin' this one. Even the South China Morning Post can't find a way to spin the dead cat bounce in China's property market.. Stay

China home sales disappoint during Golden Week holiday

es in many mainland cities saw large week-on-week declines according to CREIS, despite the People’s Bank of China announcing the relaxation of down payment ratios for first-time purchases on September 30.

The disappointing Golden Week sales came as the mainland’s retail sales growth slowed to 11 per cent during the week-long holiday, compared with 12.1 per cent for the same period last year, fuelling concerns about the central government’s ability to dodge downward risks for the world’s second-largest economy through growth in its retail and real estate sectors.

“The government started loosening policies, including cutting interest rates and lowering the amount of reserves banks must hold, to revive the property market since October 30 last year,” said David Hong, head of research at property consultancy China Real Estate Information Corp’s Hong Kong office. “We have seen a revival of home sales, especially in the second quarter of this year. But the impact has been weakening.

“Can the loosening measures stimulate the slow economy in the long run? I have reservations.”

The weakening impact of government policy moves was also evident in major developers’ contracted sales in September.

September is traditionally regarded as a peak season for real estate sales on the mainland. But Evergrande Real Estate reported a 35.4 per cent month-on-month decline in sales to 1.42 million square metres, down from the 2.2 million square metres it sold in August.

It looks like we are agreeing with the data., creating malinvestment.

[Aman A.K.A. Ahamburger]

,

I will have to read the article you posted later. The one thing I will point out is that if there is nothing about the war in there, we gonna have an issue.

Marshall Plan 2.0.....

Later,

[Aman A.K.A. Ahamburger]

Just like the last time, currency issues lead to defalts: Singapore Set to Suffer Indonesia's Defaults as Well as Its Smog

Don't worry though, China is still growing at just about 7%..

China State Steel Firm to Default After Government Said to Help

A Chinese state-owned steel trader is set to default on a bond payment even after the government was said to have stepped in to help, highlighting worsening corporate finances as an economic slowdown deepens.

[Aman A.K.A. Ahamburger]

Well it looks like it wasn't just the golden week that was a disappointment...

China housing market disappoints in September

New home sales in mainland China’s major cities failed to live up to expectations and prices fell in three of the four tier-1 cities, according to the latest SCMP-Creda index, putting on more pressure for developers to increase their destocking efforts.

Primary home prices fell respectively by 5.6 per cent in Guangzhou, 3.5 per cent in Shenzhen and 0.9 per cent in Shanghai last month from August. But they gained in the remaining seven cities, led by a 7.1 per cent jump in Beijing, the highest pace of monthly increase in the capital city since March.

People who expected a traditional “golden September” would be disappointed at the meagre 1.4 per cent increase in sales during the period in the 10 major cities, as a 26.2 per cent slump in Beijing and 24.4 per cent dive in Shenzhen dragged on gains in the remaining eight cities.

The flattish sales number came despite a surge in new home supply to this year’s highest levels in some cities as developers beefed up efforts to hit their annual targets.

“The worse-than-expected September performance will increase pressure on most developers,” said Chen Sheng, dean of the China Real Estate Data Academy, partner of the South China Morning Post for the monthly index.

Remember, as sales aren't taking off even with unprecedented amounts of stimulus, China’s housing inventory totaled 428.6 million square meters at the end of August, up 15.7% from a year earlier and near a high of 431.5 million square meters in April.

Stay .

[Aman A.K.A. Ahamburger]

So after 35 years China decides to drop their one child policy. Wait.. That means there is enough commercial and residential property for every person in China, AND they have 35 years of declining of age population?? Hey, China, Scrapping One-Child Rule 'Too Little, Too Late' for Growth

However, even "better" than that, the big economic brains in China are now saying the CPC can use their savings to boost growth!! Brilliant! We have only been saying that China either uses their savings now, or after the bust for - at least - a year. Happy to see the commies finally joined to party.

Only problem is China Banks Enter Eye of Storm Adding Risky Debt to Wealth Funds. Someone needs to send these people a memo - "the EU is BROKE!!! And you guys are in a black hole of debt because you built TOO MUCH, TOO FAST!!"

Stay

[Aman A.K.A. Ahamburger]

But, but, but....

Standard Chartered's Bad Loans Reveal Cracks in Asian Economies

As China’s growth sputters, the troubles at Standard Chartered Plc are another bad omen for what were once Asian economic darlings.

The bank, which generates most of its income in the region, had gambled on success in emerging markets such as India, which instead saddled the lender with delinquent loans. As a result, the company which opened its offices in Mumbai under Queen Victoria is now axing 15,000 jobs and is asking investors for $5.1 billion.....

....With banks retreating, lending is drying up. Strip out Japan, loans in Asia plunged 25 percent this year to $259 billion, according to data compiled by Bloomberg. Fortress Investment Group LLC warned investors in September that the “contraction of credit” among developing countries would deepen a selloff that could rival the Asian financial crisis of 1997.

“There’s been dramatic change in values from energy and mining related holdings and the general sentiment of moving away from emerging markets,” said David Tawil, a founder of Maglan Capital in New York, an $80 million hedge fund specializing in distressed debt. “It’s only the beginning of the new wave.”

"only the beginning of the new wave".... Hey, that sounds just like what is going on in Europe - only the beginning of the wave of migrants.. Stay

[Aman A.K.A. Ahamburger]

Ah yes, the black hole that is the Chinese banking system... And they don't even get into how the loans are starting to go bad all over Asia.

The Bear Case for China Sees PBOC Following Fed to Zero Rates

“The rope the Chinese have is currently around their neck and they need to let it go,” said Gabay. “It’s going to hurt.”...

.....Its banks are now on perilous ground with non-performing loans totaling more than 20 percent of gross domestic product, more than the level witnessed in Japan in the 1990s before its economy entered deflation, according to Gabay.

“We haven’t yet had the final shoe drop,” he said. “There could be a larger further fall in Chinese activity if we’re right and the banking system implodes.”

But hey, they can just use their savings to boost growth ... or was it that they could use thier savings after the crash to rebuild