Will China’s bubble burst?

Local governments have over-borrowed and are having cash flow problems. Beijing has allowed them to raise new money, via bonds (which previously were banned). This will help with short term cash flow issues, and buy time to get their borrowing in order. But the trend is that the situation is worsening. Much of the local …

New rules for ratings agencies?

European regulators are seeking to introduce new rules for ratings agencies. Ratings would be suspended for countries undergoing bailouts. (But what counts as a ‘bailout’, and how would the EU prevents ratings being applied by entities outside the EU?) The issuers of financial products would be forced to change the ratings agency they use, possibly …

China’s economic growth slows

China’s economy grew by 9.1% in the year to 30 September, down from 9.5% in the year to 31 July. Inflation is just over 6% and the slowdown in growth is seen as beneficial in helping to slow this inflation and achieve a ‘soft landing’ for the economy. China is a strong focus for global …

Dividends of FTSE 100 rise dramatically

How can it be that, at a time when the economy is struggling, economic forecasts are gloomy, the government is cutting back its spending significantly, “shareholders in UK companies enjoyed strong growth in dividends”? Growth in commodity prices helped mining companies in particular. Vodafone, in a sector reported to be “struggling”, posted the largest total …

European recession “likely” or “already here”

Several major European car manufacturers have scheduled days with zero production, on the expectation that the market will shrink again in 2012, “a further indication that the debt crisis is beginning to hit the real economy.”   And in this article the head of one of the US’s biggest manufacturers warns that the US and …