China’s economic problems are causing global concern
China’s economic problems are causing global concern, with the US economy being a “risk factor” due to its slowdown. Asian neighbors are also affected, and Beijing is facing increased calls for monetary and fiscal stimulus. The central bank has resisted direct consumer support to encourage expenditure. China’s activity indicators show the economy slowing into the…
China’s interest rate has been cut due to consumer spending drop
China’s central bank unexpectedly cut a key interest rate by 15 basis points to 2.5%, following a deteriorating property downturn and sluggish consumer spending. The move was preceded by gloomy July economic activity statistics, with consumer spending, industrial output, and investment falling and unemployment rising. The National Bureau of Statistics emphasized the need for macroeconomic…
Oil prices dipped again today
Oil prices fell 1% on Monday, mainly due to concerns about China’s economic rebound and a stronger currency. Brent crude futures fell 93 cents to $86.46 a barrel, while WTI fell $1.03 to $82.81. The rebalancing is overdue, but may need a reality check in the markets. OPEC+ has pledged to tighten supplies and stabilize…
China yuan has lost 5% against the dollar
China’s central bank will maintain medium-term policy loan rates on Tuesday, despite economic slowdown signals. Market experts believe monetary easing is needed to counter the slowdown, but a weaker Chinese yuan has hampered the central bank’s efforts. 20 out of 26 polled market watchers predicted the central bank to keep the interest rate on its…
The NAIC has declared a new statement against states
The NAIC’s methodology differs from banking regulators’, which do not allow banks to defer interest rate-related losses. This change is criticized by consumer advocates, who argue that it will encourage insurers to risk investment losses to boost returns. The American Council of Life Insurers (ACLI) lobbied for the reform, which aims to standardize interest rate-related…
New regulators on insurers will benefit long term bond investors
The relaxation of a 31-year-old regulation on disclosing interest rate-related losses could potentially net US insurers hundreds of millions of dollars. After lobbying, regulators in Seattle changed how insurers acknowledge these losses, allowing them to use the cash for new policies, business investments, or share price enhancements. As of December, 23% of Fitch-rated life insurers…
J.P. Morgan offer alternative financing channels to China
J.P. Morgan warns that Chinese REITs’ 2.8 trillion yuan ($385.78 billion) assets are at risk due to a “vicious cycle” of real estate financing issues. Country Garden, China’s largest private developer, plans to defer payment on a private onshore bond for the first time. JPM analysts warn that alternative financing channels, such as trusts, may…
IRA will be savior for US inflation
The IRA could shield the U.S. economy from rising oil prices and broken supply chains that caused the recent high inflation. It could protect the economy from rising oil prices, which have caused nearly every recession since World War II. The IRA may have spurred $500 billion in business factory investments, despite measures to lower…