Tag: news

Over the years, China has valiantly struggled to convince the international public it will end its debt addiction any minute now, with the Politburo vowing year after year that it would if not delever in the immediate future, then surely limit the issuance of household loans. So far, every such attempt has been a failure, for one simple reason: as goes China’s debt, so goes the most important asset in China’s economy, its housing stock.

So while there are ample reasons to be skeptical, overnight China’s Banking Regulatory Commission unveiled its latest attempt to halt the country’s relentless debt load when it imposed limits on lending by peer-to-peer platforms to individuals and companies in an effort to curb risks in one part of the loosely-regulated shadow-banking sector. An individual can borrow as much as 1 million yuan ($150,000) from P2P sites, including a maximum of 200,000 yuan from any one site, the CBRC said in Beijing on Wednesday. Corporate borrowers are capped at five times those levels.

The regulator added, in what we doubt was an attempt to reassure industry watchers, that China had found problems in 1,778 online lending platforms, accounting for 43.1% of total.

China’s authorities are rightfully concerned about defaults and fraud among the nation’s 2,349 online lenders. In December, the country’s biggest Ponzi scheme was exposed after Ezubo, which until then had been China’s largest P2P lender, defrauded more than 900,000 people out of the equivalent of $7.6 billion and promptly folded (the response was hardly enthusiastic, as we revealed in a clip from February.)

The measures will probably leave about 200-300 P2P platforms by this time next year, said James Zheng, chief financial officer of Lufax, the top lending platform in China. “That’s okay because they’re cracking down on all the bad guys,” he said at a conference in Hong Kong. “What doesn’t kill will make you stronger. That’s the case for us.” Good luck.

Under the new rules, P2P lenders are barred from taking public deposits or selling wealth-management products and must appoint qualified banks as custodians and improve information disclosure. 

“The P2P business is not very strictly regulated yet, but you can see the regulator is taking a step forward,” said Xu Hongwei, chief executive officer of Shanghai-based Yingcan Group, which tracks the industry. Products offered by P2P platforms in China can include anything from loans for weddings, guaranteed against the cash gifts that couples expect to receive, to high-yield lending for risky property or mining projects.

As Bloomberg notes, China’s P2P industry brokered 982 billion yuan of loans in 2015, almost quadruple the amount in 2014 and an approximately 10-fold increase from 2013, according to Yingcan. P2P firms attracted more than 3.4 million investors and 1.15 million borrowers in July, with loans extended at an average interest rate of 10.3 percent, according to Yingcan. Still, despite its torrid growth, P2P lending is still a tiny fraction of the overall loan market, and certainly of the broadest Total Social Financing universe, which infamously saw $1 trillion dollar in aggregate new loans created in the first quarter of 2016, providing a global credit impulse, which has since faded.

In any case, it appears that in this particular case, China is eager to halt this problem before it becomes too big. In April, China’s cabinet launched a campaign to clean up illicit activities in Internet finance, focusing on areas such as third-party payments, peer-to-peer lending, crowdfunding and online insurance. It suspended the registration of all new companies with finance-related names.

And we have our doubts that this latest “debt cap” will last, because earlier today, Peer 2 Peer lender Yirendai, the company which Bloomberg has dubbed “China’s answer to LendingClub” plunged 22%, the most on record since its December 2015 IPO, on massive volume, following yesterday’s imposed P2P limits. For a sense of scale, YRD created some $680 million in loans in Q2, up 118% Y/Y, with net revenue more than doubling to $110 million, or 140% Y/Y. 

Needless to say, the company acts, and is priced like, a growth stock. The problem, as the chart below shows, is that the growth suddenly stopped.

Furthermore, if the company is indeed China’s answer to the recently devastated LendingClub, this is just the beginning, as the bubble has now popped with a little help from the government.

So will the CBRC relent, and lift the caps? It depends on just one thing, the only thing that the politburo is more worried about than asset bubbles – social unrest.

If enough people protest, get angry or downright violent as a result of the collapse in P2P stocks, and eventually, the entire industry, or simply are unable to obtain loans elsewhere should the industry falter, then Beijing will promptly undo what it has done. Until then, however, keep an eye on risk levels in China, where suddenly the most permissive marginal source of lending – and this risk asset upside –  was just advised ordered to go into a state of near hibernation.

via http://ift.tt/2bCU7bl Tyler Durden

The majority of millennials are living paycheck to paycheck.

A recent survey of millennials by HowMuch.net found that 51.8% of those aged 18-34 have less than $1,000 held between bank accounts and cash savings.

As Visual Capitalist's Jeff Desjardins notes, this echoes previous data we’ve seen – not just on millennials, but Americans in general. For example, we know that 14% of Americans have “negative” wealth. We also know that 62% of Americans don’t have emergency savings that could cover a $1,000 hospital visit or a $500 car repair.

Taking that into consideration, let’s dive deeper into this more recent millennial data…

YOUNGER VS. OLDER MILLENNIALS

The broad survey data can be further divided into “younger” and “older” millennial segments: those aged 18-24, vs. those between 25-34.

Based on the survey question, an intuitive expectation would be that younger millennials are much more likely to have less than $1,000 in savings. After all, many of the people in this group would still be in school, and many are struggling withstudent debt.

However, the difference is far less than one may expect. While it is true that 57.6% of the younger demographic has less than $1,000 in savings, the older group is not much better off with almost half (47.1%) of them being in the same boat. This shows that many millennials in their late 20s and early 30s are still not able to generate substantial savings.

MALE VS. FEMALE MILLENNIALS

There is also a significant divide between male and female millennials here, with 56.7% of females having less than $1,000 in savings. Compare this number to the male percentage of 46.5%, and it is clear there is a substantial divide between genders.

Lastly, males are also more likely to have a substantial amount stored away in their bank account. According to the survey, 21.5% of males have more than $20,000 of savings, while only 11.9% females can say the same.

via http://ift.tt/2bhHAF4 Tyler Durden

In a refreshing and stark contrast to other universities that have seemingly tripped over themselves to accommodate every silly request from America's pampered Millennials in their never ending quest for "safe spaces," the University of Chicago has sent the incoming class of 2020 a letter making very clear that they will find no "safe spaces" in their intellectual journey at Chicago.  The full letter is presented below but here are a couple of the best comments for your reading pleasure:  

You will find that we expect members of our community to be engaged in rigorous debate, discussion, and even disagreement.  At times this may challenge you and even cause discomfort.

 

Our commitment to academic freedom means that we do not support so-called “trigger warnings,” we do not cancel invited speakers because their topics might prove controversial, and we do not condone the creation of intellectual “safe spaces” where individuals can retreat from ideas and perspectives at odds with their own.

Just when we thought all hope had been lost, an establishment of higher learning finally steps up to interject some rational thoughts into the public discourse surrounding freedom of expression.

.@UChicago does not:

???? "support so-called 'trigger warnings'"
???? "cancel invited speakers"
???? condone "safe spaces" http://pic.twitter.com/DH7IVfYZ4U

— Justice Don Willett (@JusticeWillett) August 25, 2016

The letter also directs students to a note it had previously written on freedom of expression…

The full letter can be reviewed in its entirety at the end of this post, but below are a couple of the gems that we particularly liked:

“Education should not be intended to make people comfortable, it is meant to make them think. Universities should be expected to provide the conditions within which hard thought, and therefore strong disagreement, independent judgment, and the questioning of stubborn assumptions, can flourish in an environment of the greatest freedom.”

 

Of course, the ideas of different members of the University community will often and quite naturally conflict. But it is not the proper role of the University to attempt to shield individuals from ideas and opinions they find unwelcome, disagreeable, or even deeply offensive.

 

In a word, the University’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the University community to be offensive, unwise, immoral, or wrong-headed.

For Millennials getting ready start at University of Chicago might we suggest some reading material (here) that we shared a few months back that might help you cope in the absence of "safe spaces" at your new home…

No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.

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Authored by Todd Buchholz, originally posted op-ed at MarketWatch.com,

Nations are just as likely to unravel after periods of prosperity as afte periods of depression

Have you ever met an Ottoman? Or a Habsburg? Neither have I.

Like a chopped-up Magritte painting, all that is left of the Habsburgs is a homburg hat. Yet in the 1800s, the Ottoman and Habsburg Empires controlled a huge chunk of the modern world. One in 10 Americans can trace his or her heritage to Habsburg lands, which spanned most of middle Europe from Poland down to Dracula’s castle in Transylvania.

Many people have written about poor countries that have fallen apart. But rich nations fall apart, too. In fact, nations are just as likely to unravel after periods of prosperity as after periods of depression. The 2016 presidential campaign appears so bitter precisely because so many Americans worry that the “other” party’s candidate will annihilate the nation.

I have found five forces that undermine nations after they achieve economic success – and they are biting down on the U.S. today. We have little time to spare to renew the nation. Whichever candidate wins in November better come up with tough and effective solutions.

Falling birthrates

As countries grow rich, people have fewer babies. (The average American women now gives birth to just 1.89 children.) To keep up their lofty standard of living, citizens need new workers to serve them, whether as neurosurgeons in hospitals or as manicurists. This requires immigrants. But immigrants can splinter the dominant culture. So countries face either declining relative wealth or a fraying cultural fabric. Great empires of the past, from the Roman to the Venetian to the British, have faced this challenge — and failed to surmount it.

 

Globalized trade

Nations cannot grow and stay rich without trading. Countries that fold themselves into a self-contained bubble grow fetid, like a badly aerated terrarium. Or a dank prison, which pretty much describes North Korea. South Koreans, who believe in trade, are 17 times richer, live 10 years longer, and stand several inches taller than their neighbors. South Korea produces super-sharp Samsung flat screens, fine Hyundai cars and charismatic K-pop singers.

 

But there’s a downside to trade. It shakes the customs and character of the nation. Donald Trump has skillfully tapped into this anxiety and is right to ask whether trade deals like the Trans-Pacific Partnership are vigorously negotiated to boost the incomes of typical Americans, or simply to boost the ego of the president.

 

Rising debt loads

As countries grow richer, they build bigger bureaucracies and inflate their debts. Here’s a puzzle I call “The Paradox of Theft:” As a family grows wealthier, it is less likely to fall into deep debt, default and bankruptcy. But the opposite is true of individual countries — wealthier nations may pile up proportionately more debt than poorer nations.

 

Amid the Great Recession of 2010, developing countries like Mexico and Russia had smaller debt burdens than Japan, the U.S. and the eurozone. Why do we borrow more? Because we can! And because today’s politicians aren't held responsible for the debts they leave for our children and grandchildren.

 

Eroding work ethic

When a rich nation shatters, people don’t go hungry. They just stop waking up early. The proportion of adults who want to work has been sliding over the last 17 years. In West Virginia, only half of working-age adults have a job. Between 2000 and 2013, disability claims across the country surged 43%. Even though jobs have grown less dangerous, the chances of a judge approving a disability claim has jumped 50% since 1980.

 

We are seeing a structural shift: Millions have decided they just don’t care much for the idea of showing up for work in the morning and staying on the job until the end of the day.

 

To prod the unemployed back to work, I propose they receive a signing bonus if they accept a new job before their unemployment compensation payments run out.

 

The challenge of patriotism in a multicultural country

Unless rich nations discover and embrace their national characters, they won't survive. In many schools, the Pledge of Allegiance and “My Country ’Tis of Thee” have been pushed aside in favor of self-esteem chants. Characters like Columbus, the Pilgrims and George Washington have been disdained as pillagers, rather than as symbols of exploration, religious freedom and courage.

 

To help ensure that all learn America’s story and values, all immigrants and any U.S. student applying for a federal loan be required to get their passports stamped at no fewer than five historical monuments or museums around the country.

Is it too late?

Should the U.S. and European nations simply hold a “going out of business sale” while the wealthiest individuals sneak off to private islands or to New Zealand? The odds are against us, as the Spartans, Romans, Ottomans, and Habsburgs would attest — if they were still around.

But as Bill Murray said in Stripes: “We’re not Watusi. We’re not Spartans. We’re Americans, with a capital ‘A”…that means that our forefathers were kicked out of every decent country in the world. We are the wretched refuse. We’re the underdog. We’re the mutts.”

And we can win again.

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Two weeks ago we reported that as part of its proactive effort to tackle future terrorist attacks, the French government announced that starting in September, French 14-year-olds would receive lessons how to survive a terrorist attack on their schools, following a spate of Islamist killings in recent months.  It appears that was not enough, because earlier today the France interior minister Bernard Cazeneuve announced France would deploy about 3,000 reserve troops, train school authorities and ramp up school anti-terror drills in case of attacks, its education and security ministers announced on Wednesday, a week before the start of a new academic year.

“The threat is high, it is real,” Education Minister Najat Vallaud-Belkacem, said during a joint news conference in Paris alongside Cazeneuve. “This is not about ceding to panic or paranoia,” she added quoted by Reuters.

About 12 million students are expected to head back to school across France from on Sept. 1. All students aged 13-14 will be adding basic life-saving measures to their portfolio of skills, in case they need to provide assistance to classmates in a worse-case scenario. Right now, only 30% of students are trained, the Education Minister said in a Wednesday press conference, according to AP.

Around 500 school administrators will be trained every year at the national gendarme training center to manage crisis centers and act as liaisons with security officials, while some 1.2 million students in the fourth year of secondary school are expected to be trained in first aid. In addition to training students and staff stepping up to the plate, security forces have been ordered to be particularly vigilant around schools, and some 3,000 gendarme reservists will be deployed to provide reinforcement for local authorities, including police, Reuters reported.

“Throughout the year, particular attention will be put around schools. Active surveillance around schools, high-schools and universities will be reinforced by roving patrols,” Cazeneuve said. RT adds that the government has decided to provide 50 million euros ($56.2 million) to local councils to help them pay for security equipment such as video door phones and new alarm systems.

As previously reported, anti-terror drills in schools will also be increased to three per academic year, up from the current requirement of two drills per year. During those drills, students will be taught how to hide or escape. At least one drill will include a mock assailant entering the premises. Children aged two to six should not be told of any attacks or dangers during the drills, but will be taught to hide and keep quiet through games.

The French announcement comes at the same time as Germany is deciding whether to put “troops on the streets” to protect the population from terrorism. While a formal decision has yet to be announced, Europe’s distinct creep toward increasing militarization of society continues.

via http://ift.tt/2c8v5Bv Tyler Durden

Despite the exuberant rebound in the price of oil – and the hope that this means something other than an over-financialized commodity being short-squeezed by rumors – all is not well across the oil producers of the world. Having noted the record surge in default protection for Saudi Arabia (ahead of its looming debt deal)…

We note that National Commercial Bank's stock price has collapsed to record lows.

h/t @pierpont_morgan

This is Saudi Arabia's largest bank, and is often used as a proxy for the royal family's wealth.

Interestingly,just as we were surprised to see Saudi CDS "stabilizing" amid record demand for protection, NCB CDS has tightened dramatically in the last few weeks – as the stock has crashed…

If we were the tin-foil-hat-wearing types, we might suggest that every effort is being made to put lipstick on Saudi's credit pig before the looming debt deal is done.

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Submitted by Pardes Seleh via The Daily Wire,

he State University of New York (SUNY) at Binghamton is now offering a course called “#StopWhitePeople2K16” as part of routine training for residential assistants.

The university’s residential assistant training schedule lists “#StopWhitePeople2016” on its roster, with the mission of giving RA’s an “overview of disabilities in Higher Education.”

The presenters of the course, Ciaran Slattery, Nicholas Pulakos, and Urenna Nwogwugwu, are all RAs at the state-funded college, which describes itself as New York’s highest-ranking public college. They state their purpose is to “help others take the next step in understanding diversity, privilege, and the society we function within,” presumably the “white” society they plan to "stop" at the event.

The three RAs claim they will give “#StopWhitePeople2K16” course attendees the “tools” to respond to “uneducated people” with “‘good’ arguments.” You know, the people who preach mutual respect, equality under God, and constitutional freedoms. Those people.

They also state they will help other RAs at the state-funded college “hopefully expand upon what they may already know”: that white people are cancer, of course?

College RAs hold important roles in college residential and dormitory life, serving as mentors, counselors, and peers to the student residents they oversee.

“These people should be sensitive to the issues of their residents, and to be prejudiced against someone on the basis of his or her skin color would seem, just like the hashtag itself, petty,” student Howard Hecht noted.

Binghamton Review, the university’s conservative student paper, publicized the course schedule, noting the university “seems to endorse it as a proper part of a RA training.” It was added:

At a public, state funded university, to potentially see racism endorsed is a frightening prospect for the future of higher education.

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