Wednesday, October 05, 2016

China Shocker: A Quarter Of All Companies 
Can't Pay The Interest On Their Debt
Article highlights how profits at roughly a quarter of all Chinese companies were too low in the first half of this year to cover their debt servicing obligations, i.e., merely the mandatory interest payment let along debt maturities, as earnings languish and loan burdens increase .. "Chinese lenders are heeding Beijing's call to support the real economy and so are rolling over company debt or granting repayment waivers, sometimes for years, specialist lawyers and investors said .. According to Reuters, this is evidence that China may be in for a long period of Japan-like stagnation rather than a single event triggering a crisis - what some economists call a 'Lehman moment' .. It is now obvious that the next place to not have learned the lesson from Lehman's failure is China, the only difference is that while U.S. banks had under $10 trillion in assets at the time, China's financial sector has about $35 trillion in "assets" at this moment, and soaring."
LINK HERE to the article

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