Turkey’s Walking Dead: Zombie Companies Lurk Around Every Corner
Aykan Erdemir, John Lechner — War on the Rocks
Following Turkey’s failed coup attempt in July 2016, President Recep Tayyip Erdogan imposed a state of emergency, curtailing not only political but also economic freedoms, including a ban on corporate bankruptcies. When the Turkish government lifted the state of emergency two years later, it naturally led to fears of a bankruptcy surge. The Turkish lira’s meltdown in August, contributing to a 40 percent devaluation of the currency this year alone, has exacerbated such fears. Erdogan’s response has been to allow companies to exclude foreign currency losses from bankruptcy calculations, which risks creating a “zombie economy” to complement Turkey’s already lifeless democracy… Read more
A look at financing requirements for US Treasuries
BY DAVID P. GOLDMAN
All three main sectors that buy US debt are challenged
Debt: Challenges Ahead
mentioning John B. Taylor via World Bank Publications
Public debt is rising in both emerging markets and low income developing countries to levels not seen since the early 1980s. Forty percent of low income developing countries are now either in debt distress or at high risk of default. At the same time, corporate debt in emerging markets is also exceeding historical levels. This situation calls for new efforts within developing countries and the international community to contain vulnerabilities rising from these increasing levels of debt.
Breaking down the walls strangling China’s private sector
BY GORDON WATTS
Reformists join the fray as State-owned giants continue to dominate economic landscape and funding
Has the derivatives volcano already begun to erupt?
BY DAVID P. GOLDMAN
The risk remains that dollar credit will seize up globally, with disastrous consequences for countries that have to borrow dollars to cover deficits
China infrastructure recovery?
BY DAVID P. GOLDMAN
Big gainers among Hong Kong-traded Chinese stocks are infrastructure companies
Saudi Arabia offers millions to stave off Yemen currency collapse
Saudi Arabia said on Monday that it will transfer $200 million to Yemen’s Central Bank to support the country’s deteriorating economy. The pledge made by Saudi King Salman bin Abdul-Aziz Al Saud aims to ease the financial burden suffered by Yemenis who have been protesting the collapsing Yemeni riyal. The Central Bank increased interest rates as the national currency witnessed a free fall because of the ongoing war in the country.
In a separate announcement, Saudi Arabia admitted on Monday to making mistakes in its military operations in Yemen. “The task force recommended that perpetrators should be held to account and victims should enjoy redress,” Saudi Defense Ministry official Osaiker Alotaibi told the UN Committee on the Rights of the Child investigating the death of children in the Yemeni conflict. The kingdom has come under international criticism since its intervention in the Yemeni war in 2015, for killing civilians and bombing schools and hospitals. Read More
Iran is developing a range of new financial products, from Islamic bonds to warrants and insurance-linked securities, in an effort to give local firms more funding options as sanctions put pressure on the economy. - Reuters
China’s Belt and Road Is Buckling
Yuen Yuen Ang, Bloomberg
Beijing boosts influence in state-owned enterprises
BY BEN KWOK
State-owned enterprises are required to establish a Party Committee to support government policies
Are We Witnessing 'Peak China'?
by Charles Hill via The Caravan
Is there anything more to be said about China? If the twentieth century was "The American Century," then this twenty-first century, by general acclamation, has been assigned to The People's Republic of China. What more needs to be said?
A failure of responsibility
Yuval Levin and James C. Capretta | The Weekly Standard
Ignoring the federal deficit and debt problems don’t make them disappear. In fact, it makes them worse. While Washington is distracted, a fiscal crisis is looming over the nation as entailment spending balloons. Viable solutions are possible, but time is quickly running out.
Jeffrey Frankel marvels at the US president's failure to understand what is driving the depreciation of the renminbi.
CHINA WARNS US ABOUT RUSSIAN WAR SALES: PREPARE FOR CONSEQUENCES & WHY US CHINA RELATION NEEDS NEW RULES
AEI DESMOND LACHMAN ON TWO KEY GOALS TRUMP MUST MEET WITH CHINA OVER TRADE & CHINA MOVES TOWARD CONSUMPTION
Desmond Lachman explores US trade with China and argues that the current policy approach will fail to meet two of the administration's key objectives.
If the old US-China game is over, what comes next?
James Pethokoukis | AEIdeas
Here’s What ‘Winning’ at Trade Really Means
Lyman Stone, E21
President Trump wants to “win” at trade—by which he means: the United States should export more than it imports. Economists have rightly criticized this view as antiquated mercantilism. The idea that the country is a business for which net exports are like net revenues is not just wrong, it is economically destructive. It’s no surprise that President Trump’s policies have caused the U.S. trade balance to get worse. His administration’s mismanagement of trade policy is causing an unnecessarily sharp drop in the trade balance, leading to America being a bigger “loser” even under Trump’s own terms. Read more here....
Game Of Survival Of The Fittest Not Sustainable, Says Senior Chinese Official
mentioning Thomas J. Sargent via Straits Times (Taiwan)
In a world facing increasing protectionism, a game of survival of the fittest where the strong wipe out the weak and a zero-sum game may prevail for a short while but will not become mainstream, a senior Chinese official said.
Benny Avni writes: Xi increasingly uses China’s economic prowess to squeeze resistant neighbors and reward those willing to accept Beijing’s dominance. Once successful, China will control regions rich in minerals, rare earths, oil and other resources necessary for China’s economic growth. [...]Beijing will also export its model of controlled capitalism, using economic incentives and punishment as well as military tactics honed in the East and South China Seas. - New York Post