Tag: Global Debt

April 23, 2018

If you were only to read one thing…

FT – Spanish now richer than Italians, IMF data show – Valentina Romei 4/19

  • “Spaniards have become richer than Italians — a heartening indication of Spain’s economic revival but a worrying sign for Italy, the eurozone’s third-largest economy, which is stuck in political gridlock.”
  • “Spain’s per capita gross domestic product exceeded that of Italy in 2017, according to IMF data published this week that compare countries on a so-called ‘purchasing power parity’ basis. The IMF also forecast that Spain would become 7% richer than Italy over the next five years. A decade ago Italy was 10% richer on the same basis.”
  • “By 2023 some former Soviet bloc countries, including Slovakia and the Czech Republic, are also expected to become richer than Italy on a per capita basis, the IMF forecasts show.”
  • “Italy’s stagnation is one of the main causes of the country’s increasingly bitter political divisions, with the electorate losing faith in the ability of its traditional parties to create jobs and restore growth. Anti-establishment and protest parties emerged as the big winners of Italy’s inconclusive general election last month, where voters deserted more moderate center-left and center-right forces.”
  • “Italy’s underperformance — and in particular any threat to its ability to service its debt, the largest in the eurozone after Greece’s relative to the size of the economy — is also seen as one of the biggest risks for the single-currency area.”
  • “The fact that Spain has overtaken Italy owes more to Italy’s problems than Spain’s economic progress, which has only recently gathered pace.”
  • “At the end of the 1990s, Italy — which now has almost 15m more people than Spain — had an economy twice as large as that of Spain. It is now only 50% larger and the difference is expected to shrink even further in the next five years.”
  • “Back in 1997, Italy was the 18th richest economy on a per capita basis among the countries for which the IMF has a complete data set. After 10 years, its ranking dropped 10 positions — and it has now slipped five more positions in the decade to 2017.”
  • “By 2023 Italy is expected to be only the 37th richest country on a per capita basis.”

Perspective

FT – Young buyers are being priced out of global city property – George Hammond 4/18

Worthy Insights / Opinion Pieces / Advice

Bloomberg View – Mexico Didn’t Hit the Jackpot With Nafta – Justin Fox 4/18

FT – The quiet revolution: China’s millennial backlash – Yuan Yang 4/17

WSJ – Chines Banks Find Another Funding Wheeze – Andrew Peaple 4/20

  • “Pressure from regulators means it’s been getting harder for the country’s banks to get enough money.”

WP – Trump lied to me about his wealth to get onto the Forbes 400. Here are the tapes. – Jonathan Greenberg 4/20

WP – The staggering environmental footprint of all the food that we just throw in the trash – Chris Mooney 4/18

Markets / Economy

WSJ – Daily Shot: Morgan Stanley Research – Country Inflation Targets and Actuals 4/20

WSJ – Daily Shot: @Not_Jim_Cramer – Major Central Bank Balance Sheets 4/20

WSJ – Daily Shot: IMF – Global Debt to GDP 4/20

Real Estate

John Burns RE Consulting – Challenges Mount for First-Time Buyers – Devyn Bachman 4/20

WSJ – Rising Sea Levels Reshape Miami’s Housing Market – Laura Kusisto and Arian Campo-Flores 4/20

Energy

FT – Major dilemma: oil companies hedge bets on low-carbon future – Andrew Ward and Leslie Hook 4/17

  • For the world to attain lower carbon dioxide emissions, the oil majors will need to be leaders in this initiative. They’ve taken on the charge to some degree committing larger sums to renewable energy sources; however, it’s hard when they’re so good at making money with carbon dioxide emitting sources.

Finance

FT – Sovereign wealth fund assets ‘could reach $15tn in two years’ – Chris Flood 4/20

  • “Assets managed by SWFs globally reached $7.45tn spread across 78 funds as at March 2018, an increase of $866bn, or 13%, over the past 12 months, according to data provider Preqin.”  
  • “A recovery in oil prices and strong gains for equity markets drove the increase in assets, which will come as welcome news to investment managers as SWFs are among their most prestigious clients. SWFs pulled about $85bn from asset managers over the 24 months ending on December 16 as low oil prices forced governments in the Middle East to raid these rainy-day funds to prop up public spending.”

Environment / Science

Visual Capitalist – Visualizing the Prolific Plastic Problem in Our Oceans – Nick Routley 4/21

China

FT – Tencent and JD.com lead $437m investment in LeEco unit – Emily Feng 4/18

India

Hindustan Times – Cash crunch at ATMs could be the after-effects of demonetization – Roshan Kishore 4/18

  • “Analysis suggests shortage of cash in ATMs could be a result of persistence of tightness in overall money supply after demonetization.”

NYT – India’s A.T.M.s Are Running Out of Cash. Again. – Hari Kumar and Vindu Goel 4/20

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April 19, 2018

Markets / Economy

FT – IMF sounds alarm on excessive global borrowing – Chris Giles 4/18

  • “The world’s $164tn debt pile is bigger than at the height of the financial crisis a decade ago, the IMF has warned, sounding the alarm on excessive global borrowing.”
  • “The fund said the private and public sectors urgently needed to cut debt levels to improve the resilience of the global economy and provide greater firefighting capability if things went wrong.”
  • “Worldwide borrowing is more than twice the size of the value of goods and services produced every year and at 225%t of global gross domestic product, is 12 percentage points higher than during the peak of the previous financial crisis in 2009.”
  • “Half of the $164tn was accounted for by three countries: the US, Japan and China. The latter’s borrowing surged from $1.7tn in 2001 to $25.5tn in 2016, accounting for three-quarters of the increase in private sector debt in the past decade.”
  • “With the global economy expanding strongly, it recommended that countries such as the US stop using lower taxes or higher public spending to stimulate growth and instead try to reduce the burden of public sector debts so that countries have more leeway to act in the next recession.”
  • “The outliers were Germany and the Netherlands, which the IMF said had ‘ample fiscal space’ to boost public investment in infrastructure and enhance the long-term resilience of their economies.”

Real Estate

WSJ – South Korean Investors Pile Into U.S. Commercial Property Debt – Esther Fung and Kwanwoo Jun 4/17

  • “In all, investors based in South Korea accounted for 21% of foreign investment in U.S. real-estate debt as of mid-April, the largest proportion among foreign investors, according to data firm Preqin. Canada and Australia are second and third place, at 12% and 11%, respectively. Global fundraising for U.S.-focused real-estate debt reached $17.8 billion in 2017, up from $10.8 billion in 2016, Preqin said.”

Bloomberg – The Retail Real Estate Glut Is Getting Worse – Noah Buhayar and Lauren Coleman-Lochner 4/17

  • “At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017.”

Finance

FT – Eurozone investors race up chart of US debt owners – Kate Allen 4/17

  • “Eurozone investors have been the biggest overseas net buyers of US debt securities in the past half-decade, a trend that could reverse as the European Central Bank continues to tighten monetary policy, according to new research.”
  • “Euro area holdings of US corporate and Treasury bonds reached $2.75tn at the end of last year, the report by investment bank Jefferies shows, an 80% increase since the start of 2012.”
  • “By contrast the volume of US debt held by investors in Japan and China remained flat over the period, while investors in the UK increased their holdings by 40% to $700bn.”

Construction

WSJ – Daily Shot: CME Lumber (May) 4/17

China

WSJ – Daily Shot: China Required Deposit Reserve Ratio 4/17

  • Effective April 25, 2018. More liquidity into the system.

Other Interesting Links

WSJ – The Trophy Homes Linked to Chinese Conglomerate HNA Group – Katherine Clarke 4/18

  • “Chen Guoqing, the brother of HNA chairman Chen Feng, and a company Chen Guoqing heads called Pacific American Corp., have purchased more than 20 homes in New York and New Jersey over the past two decades through various limited-liability companies, the Journal’s review shows.”
  • “Those deals include four pricey residences at the megatower One57, the Billionaire’s Row megalith where owners include titans of industry such as Michael Dell and Bill Ackman. The units were purchased for a combined $151.34 million in 2014 and 2015, the records show.”