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Fitch warns of downgrades for China, Japan
(Reuters) - Fitch Ratings warned on Thursday that it might downgrade China's credit rating within two years as the country's banks struggle with debt loads following a lending surge to help lift the economy during the 2008 financial crisis.
FULL ARTICLE:
http://www.reuters.com/article/2011/09/08/us-fitch-idUSTRE7870WI20110908
FULL ARTICLE:
http://www.reuters.com/article/2011/09/08/us-fitch-idUSTRE7870WI20110908
I don't know how old you are, so maybe you'll qualify when you "grow up"?...... :-)
At any rate, it will be cold day in "never never land" before the politicians vote themselves a pay cut; but rest assured, it probably won't be long before they think they deserve raises for all the "stonewalling" they've been doing....
At any rate, it will be cold day in "never never land" before the politicians vote themselves a pay cut; but rest assured, it probably won't be long before they think they deserve raises for all the "stonewalling" they've been doing....
I dont get anything...zip nadda nothing.
Sorry -- You'll see your SS/Medicare benefits (if you're on them) cut, long before the politicians agree to take a pay cut.
Sometimes, I wonder if some of us didn't do our children a disservice. I'll hold my hand up on that one.
My husband and I did our best to give our children things that our parents had not been able to afford when we were growing up. Once our children were grown and living on their own, they thought they should be able to maintain the same standard of living that we had provided, only they made less than 1/2 the $ we did (no, we weren't rich and it wasn't an easy time raising them).
Both of our children ended up in financial trouble, because they didn't earn the $ needed to sustain their spending. One has pretty much worked out of the difficulty, and at 38 yrs old is actually getting into a 401K to start saving for retirement; the other (early 30's) is still thinking the standard of living shouldn't change, even if you don't earn the $. This one had a 401K, but cashed it in for "more important" things - after all, retirement is 30 yrs away...
Our "boom to bust" has been coming for some time, but it did seem to escalate and get here a lot quicker than I'd expected.
I'm not so sure that our government is "really" cutting spending; if they were, they'd be talking about cutting programs like studies to see how often lizards are born with tails, or some of the other equally silly/trivial things that help out the special interest groups in their home districts (pork barrel projects); instead, they only threaten to cut Social Security, Medicare and Medicaid. If they threaten to hurt those that need help the most, they can dramatize things to no end and scare people into thinking their way.... this is not bashing anyone -- both parties are equally guilty.
Of course, it makes sense that they can't talk about (or even vote) cutting programs in their home districts, or they won't be re-elected. It's a "no brainer" - take care of their own constituents in order to get re-elected; to he!! with the looking at the whole picture or thinking of those who can't vote for/against them.
Have I gotten cyncial and distrusting of our government -- you can bet on it...
My husband and I did our best to give our children things that our parents had not been able to afford when we were growing up. Once our children were grown and living on their own, they thought they should be able to maintain the same standard of living that we had provided, only they made less than 1/2 the $ we did (no, we weren't rich and it wasn't an easy time raising them).
Both of our children ended up in financial trouble, because they didn't earn the $ needed to sustain their spending. One has pretty much worked out of the difficulty, and at 38 yrs old is actually getting into a 401K to start saving for retirement; the other (early 30's) is still thinking the standard of living shouldn't change, even if you don't earn the $. This one had a 401K, but cashed it in for "more important" things - after all, retirement is 30 yrs away...
Our "boom to bust" has been coming for some time, but it did seem to escalate and get here a lot quicker than I'd expected.
I'm not so sure that our government is "really" cutting spending; if they were, they'd be talking about cutting programs like studies to see how often lizards are born with tails, or some of the other equally silly/trivial things that help out the special interest groups in their home districts (pork barrel projects); instead, they only threaten to cut Social Security, Medicare and Medicaid. If they threaten to hurt those that need help the most, they can dramatize things to no end and scare people into thinking their way.... this is not bashing anyone -- both parties are equally guilty.
Of course, it makes sense that they can't talk about (or even vote) cutting programs in their home districts, or they won't be re-elected. It's a "no brainer" - take care of their own constituents in order to get re-elected; to he!! with the looking at the whole picture or thinking of those who can't vote for/against them.
Have I gotten cyncial and distrusting of our government -- you can bet on it...
Maybe all gov. officials would be willing to take a pay cut.
"In my opinion, the entire planet (financially speaking) has been living well beyond it's means for many, many years. "
For the most part, yep. And now we are paying the piper. We all wanted everything to be bigger and better, faster and more convenient. Instead of paying off debt so many of us have just been increasing our credit limits.
I am not certain if I agree with you that it went from boom to bust quite that quickly. I sort of see it as more of a slow slide over a longer period of time. But I guess that is less important then the fact that it's happened. But how in the heck are we going to get out of it.
I know your gov't is cutting spending. Ours is doing the same (so they say anyway). But I am still having a hard time seeing this end without a tax increase. I don't want a tax increase, but I just can't see any other way.
For the most part, yep. And now we are paying the piper. We all wanted everything to be bigger and better, faster and more convenient. Instead of paying off debt so many of us have just been increasing our credit limits.
I am not certain if I agree with you that it went from boom to bust quite that quickly. I sort of see it as more of a slow slide over a longer period of time. But I guess that is less important then the fact that it's happened. But how in the heck are we going to get out of it.
I know your gov't is cutting spending. Ours is doing the same (so they say anyway). But I am still having a hard time seeing this end without a tax increase. I don't want a tax increase, but I just can't see any other way.
"They" should have seen this coming. That's what we pay them for.
You mean to tell me I've been paying taxes on EVERYTHING, yearly, since the day I started work, and you STILL managed to put us in the hole?
I am taxed to death, and I'm sick and tired of being told that I'm not paying enough.
Idiots.
You mean to tell me I've been paying taxes on EVERYTHING, yearly, since the day I started work, and you STILL managed to put us in the hole?
I am taxed to death, and I'm sick and tired of being told that I'm not paying enough.
Idiots.
In my opinion, the entire planet (financially speaking) has been living well beyond it's means for many, many years.
It started just after the "Boomers". Their dollar was actually WORTH what they thought, and the subsequent generations tried to ride the coat-tails, and have failed miserably, although we cooked the books and pretended everything was kosher.
Our economy went into the toilet WAY too fast for it to be anything other than what I'm describing above. I remember 2008, and it was a good year. 2009 was horrible, and in reality, it hit in May or June of 2009 if I remember correctly, so technically it only took 6 months for it to go from BOOM to BUST.
We'll all be made to pay for the err of our governmental ways. After all... we're the ones that put all these idiots (over the years) in office.
It started just after the "Boomers". Their dollar was actually WORTH what they thought, and the subsequent generations tried to ride the coat-tails, and have failed miserably, although we cooked the books and pretended everything was kosher.
Our economy went into the toilet WAY too fast for it to be anything other than what I'm describing above. I remember 2008, and it was a good year. 2009 was horrible, and in reality, it hit in May or June of 2009 if I remember correctly, so technically it only took 6 months for it to go from BOOM to BUST.
We'll all be made to pay for the err of our governmental ways. After all... we're the ones that put all these idiots (over the years) in office.
I do think part of it is assets/debt ratio. But my understanding is that factors are also taken into consideration such as political climate (uncertainty) and things like that. I think there is more to it then just financial. It's a bunch of factors that help determine a countries stability. When a country like China is carrying a huge loan like it is with the US, then the US begins to show financial instability, it creates that whole domino effect.
Fitch warns of downgrades for China, Japan
"....Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could be downgraded over the next 12 to 24 months.
"We expect a material deterioration in bank asset quality," he said. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards."
Fitch downgraded the outlook on China's long-term local currency debt to negative from stable in April because of concerns about the country's financial stability following a lending surge encouraged by Beijing to help maintain economic growth during the global downturn.
Fitch's China long-term local currency rating is AA minus, its fourth highest level, on a par with Italy and a notch below Spain, Reuters data shows.
Fitch has sounded the loudest warnings of the three main ratings agencies about the surge in lending in China and is the only one with a negative outlook on the long-term local currency debt rating.
China reported local government debt of 10.7 trillion yuan ($1.67 trillion) as of the end of 2010. More than 347 billion yuan in urban construction investment bonds were issued in the five years to 2010.
Last month, China's top banking regulator Liu Mingkang said work to clean up local government debt was progressing smoothly, the latest comment from officials to try to reassure skeptical capital markets that risks were manageable.
Colquhoun said non-performing loans at Chinese banks were about 2 percent of the total, but if lending to local government financing vehicles was appropriately classified, the figure would be more like 6-7 percent.
"That by itself is sufficient to exhaust the banks' internal absorption capacity," he said. "So any further deterioration in asset quality beyond that... would lead to a requirement for sovereign support, which then affects the sovereign credit profile."
While in general terms it was known how much stimulus during the financial crisis cost European countries and the U.S., Colquhoun said, because in China it was done through the banking system, "in a nutshell we don't know how much it cost."
"We haven't seen the full cost come through yet."
FURTHER DETERIORATION?
There was a risk that asset quality could deteriorate further because bank lending was still running at a fast pace, Jonathan Lee, Fitch's senior director of financial institutions, said at a later media briefing.
Lee said Fitch estimated bank loans would increase this year alone by 18 trillion yuan.
"This is the equivalent to 55 percent of China's GDP, which is an extremely high number and a potential problem for banks' asset quality," he said......"
http://www.reuters.com/article/2011/09/08/us-fitch-idUSTRE7870WI20110908?feedType=RSS&feedName=topNews
"....Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could be downgraded over the next 12 to 24 months.
"We expect a material deterioration in bank asset quality," he said. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards."
Fitch downgraded the outlook on China's long-term local currency debt to negative from stable in April because of concerns about the country's financial stability following a lending surge encouraged by Beijing to help maintain economic growth during the global downturn.
Fitch's China long-term local currency rating is AA minus, its fourth highest level, on a par with Italy and a notch below Spain, Reuters data shows.
Fitch has sounded the loudest warnings of the three main ratings agencies about the surge in lending in China and is the only one with a negative outlook on the long-term local currency debt rating.
China reported local government debt of 10.7 trillion yuan ($1.67 trillion) as of the end of 2010. More than 347 billion yuan in urban construction investment bonds were issued in the five years to 2010.
Last month, China's top banking regulator Liu Mingkang said work to clean up local government debt was progressing smoothly, the latest comment from officials to try to reassure skeptical capital markets that risks were manageable.
Colquhoun said non-performing loans at Chinese banks were about 2 percent of the total, but if lending to local government financing vehicles was appropriately classified, the figure would be more like 6-7 percent.
"That by itself is sufficient to exhaust the banks' internal absorption capacity," he said. "So any further deterioration in asset quality beyond that... would lead to a requirement for sovereign support, which then affects the sovereign credit profile."
While in general terms it was known how much stimulus during the financial crisis cost European countries and the U.S., Colquhoun said, because in China it was done through the banking system, "in a nutshell we don't know how much it cost."
"We haven't seen the full cost come through yet."
FURTHER DETERIORATION?
There was a risk that asset quality could deteriorate further because bank lending was still running at a fast pace, Jonathan Lee, Fitch's senior director of financial institutions, said at a later media briefing.
Lee said Fitch estimated bank loans would increase this year alone by 18 trillion yuan.
"This is the equivalent to 55 percent of China's GDP, which is an extremely high number and a potential problem for banks' asset quality," he said......"
http://www.reuters.com/article/2011/09/08/us-fitch-idUSTRE7870WI20110908?feedType=RSS&feedName=topNews
NO idea...
Does anyone know what the "ratings" are based upon?
Is it based on how much you OWE, or how much you OWN (have liquidity on)?
Is it based on how much you OWE, or how much you OWN (have liquidity on)?
Something tells me that the Chinese don't really care about "ratings" and "downgrades".
Fitch gives the US Government a AA+ (or AAA) rating, but threatens to downgrade China, a nation to whom the US owes TRILLIONS?
Doesn't make any sense to me.
Fitch gives the US Government a AA+ (or AAA) rating, but threatens to downgrade China, a nation to whom the US owes TRILLIONS?
Doesn't make any sense to me.
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