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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

The things about guaranteed debt – China edition

There won’t be an update until Monday, 22 April 2013.

Yesterday…
the aftershock of the events in Boston continued to dominate the front pages, with President Obama speaking to the nation in the early afternoon, saying the FBI was investigating the explosions as an “act of terror”. read article

The IMF cut its global growth forecast for 2013 again from 3.5% to 3.3% in its World Economic Outlook, which left the 2014 forecast at 4%. Last week, Managing Director Christine Lagarde‘s argued that a three-speed [economic] world was developing, in which some countries are still very far away from recovering. Lagarde also embraced the quantitative easing approach and argued that Japan was moving into the right direction. read article

It’s things like this that could make for an uncomfortable atmosphere at this week’s G20 meeting in Washington, especially with regards to Japan. read article

This morning…
London is dressed in metal barricades as Margaret Thatcher’s funeral is putting more or less everything on hold until the afternoon.

In China, the poultry sector has recorded losses of CNY 10bn ($1.6bn) since the outbreak of bird flu virus H7N9. So far 77 people have been diagnosed as infected; 16 people died. read article

Also in China, a local auditor has said that regional government debt was OOT and it was only a matter of time until a bigger-than-American-housing crash if things were to continue. Here just a taste of how we got here:

Local governments are prohibited from directly raising debt, so they have used special purpose vehicles to circumvent these rules, issuing bonds under the vehicles’ names to fund infrastructure projects.

and

Bonds issued by government-owned investment companies almost always receive top-tier credit ratings from domestic agencies because they are seen as being guaranteed by the provinces and cities that back them.

Right, because that has never been a problem before… Last week, Fitch cut China’s credit rating on the back of “underlying structural weaknesses.” further reading

So long.

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