It is not only low income families who are struggling at the moment — billionaires have their problems too. The Bakrie family in Indonesia has a track record of buying companies, mortgaging them and using the new capital to buy more businesses. Its debt now stands at more than $3bn and the family has interests …
Category archives: Economic
Intervention with China’s banks
Following yesterday’s story about the fragility of the Chinese banking sector, the Chinese government today announced that it is increasing its stakes in the country’s largest banks. Chinese bank shares have fallen around 30% in the past few months. http://www.ft.com/cms/s/0/2caa65ec-f329-11e0-8383-00144feab49a.html
Gloomy global economic outlook
Volatility is making it difficult for fund managers to predict the future, and as a result they are trending towards pessimism. The focus is less on earnings growth and more on “balance sheet strength and sustainability”. At the same time, steel companies are still braced for falling prices as buyers delay orders because of nervous …
China’s “financial frailty”
Here’s a story you don’t hear every day. In 2009 China encouraged local government to borrow heavily to finance local infrastructure projects. The low interest rates they set to fund this spending spree (and keep the renminbi down) have led investors to place their savings with “shadow banking system”. That has now grown larger than …
US mortgage rate under 4%
Average US 30 year mortgage rates have fallen under 4% (variable). The 15 year fixed rate has also fallen, to 3.26%. However, widespread negative equity and more stringent qualification standards for mortgages mean that demand is expected to remain low. http://www.ft.com/cms/s/0/568cbb3c-f025-11e0-977b-00144feab49a.html
US economy stronger than expected
New figures on US manufacturing showed better than expected figures, lightening fears of a double-dip recession. At the same time US car sales rose strongly in September. (GM up 20%, Ford up 9% and Chrysler up 27% on a year ago.
Manufacturing and mid-sized companies are unexpected sources of growth
New research shows that just seven percent of companies, mid-sized, created half of all new jobs since 2002. These fast growers are spread across all sectors and industries, and Government is looking at whether anything can be done to help them grow faster. At the same time, with the global manufacturing sector in the worst …
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Gold still falling in price
Gold is still falling in price as investors seek safety in the US dollar in preference to gold, silver and the euro.
Pessimistic outlook for economy, x4
The UK building industry, PwC, the new director general of the IoD all have a pessimistic outlook on the economy. And the Treasury is concerned about the “very great” risks to the UK economy, if the euro were to break apart.
The plenitude economy / plenitude society
As Einstein famously pointed out, you cannot solve a problem by using the same thinking that created the problem in the first place. This short video proposes one idea for how we could move forward: shorten the working week from five days to four, and increase the number of employees (all on lower salaries).