Tag Archives | defaults

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Prime Beijing house prices drop 40% since December

China’s property market is the epicentre of the global debt bubble discussed yesterday.  It has been red-hot since urban residents became free to buy their own home in 1998.  Before then, they lived where the state told them.  With interest rates held low to boost state-funded infrastructure spending, people had few options for investing their money. The […]

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Eurozone crisis gets worse, not better

Global bond investors have found a new worry. 10 year interest rates in Spain, the world’s 12th largest economy, have risen alarmingly in recent weeks. As the chart shows, they are now above 7% (blue column) compared to 4% when the blog first focused on the Eurozone crisis (red). 7% is a critical level, as […]

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Europe’s banks turn to bullfight loans

The blog’s IeC Boom/Gloom sentiment indicator (blue column) continues to be neutral on the outlook. As the chart shows, this is quite unlike its performance in early 2009. Then it rose rapidly from February – accurately forecasting the major recovery that was about to start. The problem, of course, is that the austerity reading (red […]

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Greece needs a managed default

Many Greeks have always preferred not to pay taxes, and to retire in their 50s. This lifestyle was well understood by their new partners when they joined the Eurozone a decade ago, since when German/French banks have happily funded it with support from their governments. The chart, from the Bank of International Settlements (the central […]

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‘Who is this guy Margin that keeps calling me?’

I am indebted to Paul Krugman for passing on this piece of black humour, now going the rounds in financial markets. Unfortunately, these problems are getting closer to home. Carlyle, who have a number of private equity investments in chemical companies, defaulted on a $16.6bn bond fund today.

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What next for the credit crunch?

For the chemical industry, much depends on whether the US economy goes into recession during 2008. The signs are not encouraging, with even former Fed Chairman Alan Greenspan believing it is a 50:50 chance. So how would any recession impact the current credit crisis? Writing in the Financial Times their banking editor, Gillian Tett, provides […]

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