Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary “reading list” which will include very brief summaries of why each item has gotten our attention. Suggestions from readers for “reading list” items are gratefully reviewed, although sometimes space limits the number included.
- Bad loan write-downs soar at China banks (Simon Rabinovich, Financial Times) China has revealed that bad debt write-offs more than doubled in 2013 compared to 2012. S&P says that the pace of write-offs will “accelerate this year“. The question of how much economic stress this creates as China’s economy slows down remains to be seen. The quagmire that Japan and western economies have encountered is at least partly due to the failure to sufficiently write-off bad debts. Can China follow the Swedish model to handle failed credit? (See next article.)
- China’s Developers Face Shakeout as Easy Money Ends: Mortgages (Bonnie Cao, Bloomberg) Hat tip to Lambert Strether at Naked Capitalism. There are almost 90,000 real estate companies in China. How many of them will follow Zhejiang Xingrun Real Estate?
Zhejiang Xingrun Real Estate Co., a closely held developer based in Fenghua, is insolvent, with 3.5 billion yuan ($562 million) of debt. Its residential projects have been halted and authorities have detained its largest shareholder and his son, according to the city’s government.
- Exclusive: China seizes $14.5 billion assets from family, associates of ex-security chief: sources (Benjamin Kang Lim and Ben Blanchard, Reuters) Is this a crackdown on corruption or just political payback? Not clear. But what is clear is that in the U.S. the matter would have been settled with a payment of a few million dollars, if it had been dealt with at all, that is. Unless, of course, it involved political payback and then it would have been dealt with like a bridge in New Jersey. Note: Still more on China ‘behind the wall’.
- More Traction (Warren Mosler, The Center of the Universe) Warren Mosler contributes to Global Economic Intersection.
- The Two Numbers Climate Economists Can’t Stand to See Together (Alex Morales, Bloomberg) Separate reports from the IPCC (Intergovernmental Panel on Climate Change) provide an economic costs figure for climate change and a cost to mitigate factors causing climate change. The apparent problem? The cost of mitigating is greater than the cost of damages. The real problem? Scientists are not estimating the same things in the two estimates. And the estimates themselves are most probably based on poor methods. The article discusses some of these but Econintersect suggests an additional factor: The discussion is centered on estimates of GDP which may have little to do with true economic health. GDP is a process of measuring current cash flows and misses completely the present value of future consequences, what economists call “externalities”. In some ways, GDP is like a mouse and the “externalities” an elephant.
- Wearable ‘Heart Sock’ Helps You Avoid a Heart Attack (Kara, Care 2 make a difference) A new development now in research testing may be available for those at risk of heart attacks in about ten years. The implant device, called a “heart sock”, fits snugly over the entire surface area of your heart and is capable of monitoring virtually every useful statistic regarding your heart’s health. Any a abnormality can be transmitted directly to your doctor. In an emergency, the device is even capable of “massaging” your heart back to life with electrode-induced pulses.
There are 15 articles discussed today ‘behind the wall’.
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