Panic Grows as Moody's Cuts China's Rating Outlook

China  Another  Enron?

Really, when you think about it , what is  the  difference between the two, when they both  are great benefactors of ghosts and zombies and then go on to apply the most opaque and misleading accounting practises, at all levels of organization with utter impunity? No wonder investors and creditors are heading for the hills. To answer the question: there is no difference - and the results are sure to be  the same.

Now  that   brings up the next question  regarding Bernie Madoff...

Moody's Cuts China Outlook to Negative

US ratings agency Moody's has cut its outlook for China from "stable" to "negative".

While reaffirming its current debt rating, the agency warned that reforms were needed to avoid a downgrade.

Moody's said the change in outlook was based on expectations that Beijing's fiscal strength would continue to decline.

The negative outlook comes on the heels of fresh data suggesting China's economy is continuing to lose steam.

Moody's said it was concerned over China's incomplete implementation of much needed reforms.

High debt burden

"Without credible and efficient reforms, China's GDP growth would slow more markedly as a high debt burden dampens business investment and demographics turn increasingly unfavourable," Moody's said in a note.

'Even God Forgot This Place': Welcome to the Oilfields of Azerbaijan  

https://news.vice.com/article/even-god-forgot-this-place-welcome-to-the-oilfields-of-azerbaijan

It's unlikely that any European Games spectators will make it to Balakhani, yet the coveted crude that fuels what was the world's first oil industry was originally dredged from this exact spot. In 2013, while Europe was still bleakly trudging through recession, Azerbaijan sold an average of 880,000 barrels of oil per day, and was one of the world's fastest-growing economies for several years.

Chesapeake’s AIG Moment: Energy Giant Faces $1 Billion In Collateral Calls  

To be sure, the bond promptly surged, even as the stock priced tumbled, on what was seen as a very bondholder-friendly action (and thus to the detriment of shareholders) and hit a price of 95 cents while the stock tumbled by 15%, generating a 30% return for anyone who had decided to go along. At that moment we urged anyone in the trade to take their profits and go home, taking a few weeks, or the rest of 2016, off.

Douglas Rushkoff’s vision for a new, better world  

Today, the equivalent of those bankers are shareholders. They expect not just interest, but tremendous returns on their initial investments. They witnessed the success of Facebook and Google and want those sorts of returns, too. So they put money into a company like Twitter, and then expect to earn back 100 or 1,000 times on their original investment. The fact that Twitter makes 500 million dollars a quarter is considered an abject failure by the investors. And so Twitter must look for some way to “pivot”—that is, change from a super successful company that lets people send 140-character messages, into something else.

China  Prepares  Massive  Lay-offs and Compensation

Beijing has prepared a plan to lay off five to six million state workers in the next three years, Reuters reports. According to the media, the authorities are aiming to tackle overcapacity and pollution and have prepared lots of cash to prevent social unrest.

Remember  Ghost  Cities?

(Curator's  Vdeo Note) 

 

China will spend 150 billion yuan ($23 billion) in compensation for laid-off workers in just the coal and steel sectors. The overall job cut could reach 5-6 million workers in sectors facing a supply glut, the media reports, quoting two ‘reliable’ sources close to the Chinese leadership.

The figure will grow according to the report, as more spending will be needed to help other industries. China will also have to pay to handle the debt left behind by ‘zombie’ state companies. These are firms that continue to operate even though they are insolvent or near bankruptcy; some of them continue to pay workers fearing the social impact.

READ MORE

https://www.rt.com/business/334108-china-layoff-steel-coal/ 
 

Plus more...

http://uk.reuters.com/article/us-china-economy-layoffs-exclusive-idUKKCN0W33D

www.firstfinancialinsights.blogspot.com

Microsoft Records HUGE Loss; Revenues Crash 5.1%, Shuffle Looms & More

 Platinum Wealth Partner's Comments

Current markets have all the makings of a 2000 Dot-Com bubble, just  moments from bursting particularity when two giants Microsoft and Apple begin to stumble. 

Signs that the gadgets, social media and mobile boom are approaching a peak are everywhere, including Google's huge market lift a few days ago. In all., it just smells like the smart money is heading for the higher ground.

Perhaps this is because the rest of the world looks pretty gloomy as Korea, japan and Brazil continue to add bad news to the poor global economy. Then  remember there's China, Europe, Puerto Rico, pensions, bubbles real estate, low rates,  and on  ...

Who or what did we miss?  Hmm.

Good Luck; Be Careful Out There!

Microsoft reports biggest-ever quarterly loss

Microsoft Corp. said its revenue fell 5.1% in its latest quarter, hurt by continued weak PC demand, and posted its biggest quarterly loss ever on a hefty write-down and other items related to the Nokia mobile-phone business acquired last year.

For the period ended June 30, revenue decreased to $22.18 billion from $23.38 billion a year earlier. Analysts polled by Thomson Reuters expected revenue of $22.03 billion.

Per-share earnings, after stripping out the write-down and other one-time items, also beat expectations.

Microsoft's Windows smartphones have a tiny share of the smartphone market, which is dominated by market leader Apple Inc.'s iPhone.

Earlier this month Redmond, Wash.-based Microsoft said its was writing down about 80% of the $9.4 billion deal for Nokia's handset business and that it would cut more than 6% of its global workforce--mostly in its mobile-phone operation--a year after an earlier round of job cuts to the business.

Overall, Microsoft reported a loss of $3.2 billion, or 40 cents a share, compared with a year-earlier profit of $4.61 billion, or 55 cents a share. Excluding the write-down, restructuring charges and other items, per-share earnings were 62 cents. Analysts expected per-share profit of 56 cents.

1. Subprime Auto-Loan Titan Defends 
2. 
   
3. Longer Terms as New Normal

The man who created one of the biggest U.S. subprime lenders says there’s nothing dangerous about borrowers being given longer car loans.

When Thomas Dundon helped start the lender that’s become Santander Consumer USA Holdings Inc. in the 1990s, subprime borrowers typically were offered four-year car loans, he said Monday in an interview. Now, the standard is six years, he said, partly because wages haven’t kept up with vehicle prices.

Using longer terms to lower payments makes sense when the alternative for consumers and lenders is “a shorter term with an older, cheaper, less-reliable piece of transportation,” he said, after being replaced as the lender’s top executive this month when Banco Santander SA bought out his minority stake.

1. Canada’s Budget Watchdog Says
2. 
   
3.  Provincial Debt Unsustainable

OTTAWA—Canada’s budget watchdog Tuesday warned that the federal government’s push toward a budget balance masks a serious fiscal threat at the sub national level, where the country’s provincial governments are accumulating debt at an unsustainable pace.

1. Some Bank of Japan policymakers fret stimulus
2. effects diminishing: minutes

Several Bank of Japan board members said the impact of the bank's massive stimulus might be fading, according to minutes of its June meeting, a sign that not all shared Governor Haruhiko Kuroda's optimism on achieving his 2 percent inflation target.

The nine-member board agreed underlying inflation, which excludes volatile food and energy prices, would continue to improve in the long term, the minutes published on Tuesday showed.

Some members said the reach of the BOJ's stimulus, dubbed quantitative and qualitative easing (QQE), remained substantial given that interest rates in Japan had been stable at a low level despite higher overseas yields, according to the minutes.

But pessimists on the board, such as former market economist Takahide Kiuchi, were less convinced that the stimulus remained powerful enough to keep bond yields at ultra-low levels even as QQE reflated the economy.

"A few members said the effects of QQE might be diminishing, considering long-term interest rates had temporarily risen to a range of 0.5 to 0.6 percent," according to the minutes.

1. 
   
2. South Korea finmin says Q2 GDP growth to be “much lower” than Q1

South Korea’s finance minister said on Tuesday second-quarter growth is expected to be “much lower” than growth seen in the first quarter of this year.

“The global economic slowdown and lower oil prices have negatively affected Korea’s export performance,” Finance Minister Choi Kyung-hwan told reporters at a press event in Seoul.

Choi added domestic demand was dampened by the outbreak of the Middle East Respiratory Syndrome in late May.

“Taking these into consideration, we project that Korea’s real GDP growth in the second quarter will be much lower than the first quarter,” he said.

1. Brazilian Airline Cuts Flights, Staff 
2. 
   
3. amid Economic Slowdown

SAO PAULO – Brazilian airline TAM, partner with Chile’s LAN in Latam Airlines, announced Monday that it is reducing domestic operations by up to 10 percent and laying off 2 percent of staff as a result of the country’s economic crisis.

Brazil’s second-leading carrier in terms of market share said in a statement sent to securities regulators that the decision to trim operations responds to “the challenging economic scenario.”

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3. 
   
4. Shadow Lenders Are Pushing IntoRisky Real Estate Deals

Top Weekly Ideas and Insights

An Inconvenient Truth:

What Happens When The Fossil Energy Age Ends?

 EXISTENTIAL REALITY 

End Of Fossil Energy or Archaic Fabrications?