So boring

(1) The tick-tock. Get with the indictments already. (2) The debates. We don’t watch them of course, but it’s hard to avoid the blathering about them. We’d commit to watching every minute if the candidates would do the 2 things we say should be a condition for a high school diploma: (a) take a few weeks to live on a 19th century farmhouse; and (b) watch all of the Top 100 TCM movies made before 1960, with a particular emphasis on WWII and some musicals. (Yeah, we know that Bernie is old enough to have done both, though we understand his flicks have an emphasis on 1917.)

One Response to “So boring”

  1. feeblemind Says:

    Meanwhile, over in China:

    China Faces “Systemic Risk” From Debt Cross-Default “Chain Reaction”, Top Central Bank Advisor Warns

    From the article:

    Just days after China’s “moment of reckoning” in the dollar bond market arrived, when China was rocked by not only the biggest dollar bond default in two decades but also the first default by a massive state-owned commodities trader and Global 500 company, when Tianjin’s Tewoo Group announced the results of its “unprecedented” debt restructuring which saw a majority of its bondholders accepting heavy losses, and which according to rating agencies qualified as an event of default, last week a top adviser to China’s central bank warned of a possible “chain reaction” of defaults among the country’s thousands of local government financing vehicles after one of these entities nearly missed a payment this month.

    . . . As Bloomberg notes, policy makers have been walking a tightrope as they try to roll back the implicit guarantees that have long distorted Chinese debt markets, without dragging down an economy already weakened by the trade war and tepid global growth.

    . . . Meanwhile, that “tipping point” could arrive much faster if a surge in government-linked defaults creates a crisis of confidence in China debt markets, which have long been protected by implicit state guarantees.

    . . . As the FT notes, China’s LGFVs have been key drivers of economic growth in China since the mid-1990s, backing many of the local infrastructure projects that have boosted growth rates in recent years. But they are also closely connected to China’s shadow banking sector, making it difficult for central authorities to fully assess the risk connected to the groups.

    Meanwhile, adding to Beijing’s list of “default domino” default woes, in addition to rising fears about the stability of LGFVs, Bloomberg points out that the rising default tide is now impacting even one of China’s wealthiest provinces, namely Shandong, where six privately owned companies have defaulted on their debt or come close to doing so in the last three months. With 68.1 billion yuan ($9.7 billion) in outstanding debt among those six companies alone, “the distress in Shandong has rattled even seasoned investors.”

    Of course, the problem isn’t the defaults themselves, as many other provinces have seen more and worse – just last month we showed how cash-strapped Tianjin could soon be ground zero for a Chinese default quake in 2020. The far greater risk as Bloomberg notes, is the practice common among Shandong companies of guaranteeing each others’ debts. As firms don’t have to make public such “off balance sheet” liabilities, investors are left in the dark who’s on the hook and for how much. And with China’s once-strong industrial economy flagging, the murky ties between the province’s private companies threaten to drag them all down together.

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