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Private credit market has grown to $2 trillion in 2025 in 10 years  reaching $3.5 trillion in 2028 yet remains unregulated. Private credit is when investment funds such as Blackstone and Apollo, others, loan money to large companies. After the 2009 financial crisis bank regulation was tightened so that riskier loans were kept off the banks books to avoid another financial crisis. This led to the private credit market as a source of loans for small companies.Over 10 years the loans are now going to large companies and it is growing fast. As is typical in the capitalist economies regulation falls behind new financial developments or tech developments. Congress is always playing catchup and is distracted by other issues or has lobbyists asking for less regulation.  This report in the WSJ says when companies like Blackstone have private credit loans of $260 billion this can pose substantial risks for the US economy when this area of lending has no regulation as is required for a modern economy to function correctly. Private credit offers returns of 14-16% for these funds with risks associated and regulators are not asked to set the required rules. It only makes bank regulation ineffective as lending goes to unregulated parts of the economy. ...

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The Chief Economic Adviser to the Indian Government Mr. Anantha Nageswaran, makes these comments on the economy of India before the presentation of the new Budget for April 2023 to March 2024. The Economic Survey of India states that "India is prepared to grow at its potential once the one-off shocks of the Covid pandemic and of the supply chain recede." He sees the sweeping effects of the reforms across multiple dimensions taken from 2016 to 2022 having a lag effect and now making their impact. This means that potential growth can go up to 7 or 8% with macroeconomic improvement, fiscal improvement, infrastructure efforts, women's employment, and getting rid of LIC (License, Inspect and Compliance) across local, state and central levels. He says the central bank estimate of 6.8% retail inflation for 2022-2023 is outside its target range but yet not high enough to deter private consumption, and no low enough to weaken the inducement to invest. He says slower growth in the world including the US will bring two advantages for India- low oil prices and a better current account deficit situation.  ...

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U.S. president Trump's statement calling for a list of goods for tariffs on $200 billion of Chinese goods leaves China without a clear response and facing new risks. The U.S. exports about $150 billion in goods to China so that China would have to impose penalties to respond at the same level. Placing restrictions on American firms on access to China's market, and imposing other penalties would have the effect of reinforcing the perception of unfair practices targeting American business and lead to hardening of U.S. response.  The U.S. sees itself as being in a better position with the U.S. economy experiencing a growth trend. China with large local government and bank debt faces a difficult situation. President Jinping's policy of reducing the risks of bad debt in the banking system involved sacrificing some growth to stabilize the system. China's GDP growth in 2017 was 6.9%, the target at 6.5%. Future targets and actual growth now look to be much lower.The trade war with the U.S. has the effect of dampening growth leading to calls for the central bank to loosen its monetary stance. In response to Trump's announcement the People's Bank of China pumped $31 billion into the nation's banks. China is studying Japan's response in the 1980's and 1990's when the U.S. took strong action against Japan's growing trade surplus. Japan responded by appreciating its currency and using stimulus to cushion the effect of lower exports on the economy. The stimulus led to the housing bubble and over time a period of low growth and stagnant economy. The large China stimulus in 2008-2009 has compounded the problems in the banking system. Not deleveraging and controlling financial risks in China's banking system because of the trade war would bring a new set of risks. ...

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Inflation is receding as an issue in the 2024 elections as the CPI index dropped below 3% in July as reported by the Labor Department. It was 2.9% lowest since 2021. Greg Ip says when Trump is saying bacon costs 5 times more now he needs to find another supermarket. That is the joke as Trump is really getting ripped off. Ip says bacon prices are up 18% since 2020 when Biden took office. Trump says at rallies grocery prices are up 70%, Ip says fact correction -up 21% since January 2021 not 70%. Trump says gas prices are $5.00 a gallon. Fact correction- gas prices are $3.75 a gallon and falling, says Ip. Trump wildly exaggerates. Trump says he will cut energy and electricity prices by 50% in 12-18 months. His answer "Drill Baby Drill." Experts cited by Greg Ip say even if new offshore and onshore leases are given, increase in supply is marginal and years away. Gas prices are determined by the world price determined by OPEC and Russia, says Ip.  Trump will increase inflation says this report because of tariffs he plans of 60% on imports from China and 10% from other places. That would increase inflation by 1.4 to 1.7% say analysts. Greg Ip of WSJ offers more clues. Inflation linked bonds see inflation dropping to 2.2% in 2025 instead of 2.6% predicted earlier. Jerome Powell at the US central bank the Fed and president Biden hav done their job well and are not letting up, continue to work on it diligently every day. ...

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JP Morgan and Citicorp announced profits of $5.4 billion and $3.3 billion respectively in the second quarter of 2011. Christopher Whalen points to one area of serious risk on bank balance sheets, which is second liens or home equity lines of credit. FDIC data show U.S. banks holding $624 billion in second lien loans in the 1st quarter 2011. Core Logic data shows 11 million of the U.S. mortgaged properties - or 23% of all properties- being underwater in March 2011. Of this 4.5 million properties carry home equity loans. The average amount of negative equity for borrowers was $65,000. Whalen says the largest banks are pretending that the second liens are good because interest payments are being made. Borrowers pay only the interest for ten years on many of these home equity lines of credit. He says banks have written off $500 billion so far in assets related to housing, but this has not included much in the way of writing down second liens. If housing prices do not stabilize banks will need to make writedowns of first and second liens. Whalen says this loss is probably as large as the $500 billion already charged off by the banks. For the 1st quarter of 2011, the second liens were $136 billion for Bank of America, and it has written down $6.8 billion in 2010, Wells Fargo had $108 billion, and it had written down $4.7 billion in 2010. J.P. Morgan had $60 billion aso of the 2nd quarter of 2011. JP Morgan spokesman said the bank charged off $3.44 billion in 2010, and $1.3 billion in the first half 2011. Citibank had $46 billon in March 2010....

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The "negative Tier 1 capital" at Deutsche Bank's U.S. bank holding company Taunus Corp. of negative 7.58% cited by FDIC chairman Sheila Bair. Parent Deutsche Bank has total equity lower than U.S. banks Citicorp, Chase and Bank of America, with total equity equivalent to 4.4% of assets using a U.S. style approach says Eavis, making the Bair criticism relevant and timely in 2010.

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Banks in the US are moving away from cryptocurrency and shunning connections with the cryptocurrency business after a regulatory crackdown by the SEC and public warnings about its future. Banks are reevaluating exposure to the crypto sector no matter how small, says this WSJ report. In early 2020 the regulatory agencies were not vigilant enough about this sector which is now seen as highly risky and not for the private sector- digital currencies being the province of central banks just like the US dollar which is issued with the backing of the US government. The Federal Reserve website says about CBDC, Central Bank Digital Currency in highlighted language.- "Like existing forms of money the CBDC would enable the general public to make digital payments. As a liability of the Federal Reserve, a CBDC would be the safest digital asset available to the general public, with no associated credit or liquidity risk." It is because the US Congress failed to act and a prevailing culture of laissez faire, failure of regulatory agencies to act quickly that allows this to happen, that the private sector was allowed to dabble in what is clearly the province of central banks. Laissez faire is originally a French word meaning "allow to do" which has been taken to extremes such as letting private sector issue digital currencies in the prevailing culture. The Fed's Lael Brainard, Jay Powell, Treasury's Janet Yellen did not come out saying what the Fed's website now says and highlights that the only safe digital asset is the central bank's digital currency. Compare this with the caution taken from the beginning about crypto sector by India's finance minister Nirmala Sitharaman and the head of the central bank of India the RBI Mr. Shantikanta Das. ...

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Scott Bessent on restoring the mission of the IMF "brutally calling out imbalances" including China's surplus economy and unfair trading practices instead of "whistling by the graveyard"- in his address to the IMF, Feb 15, 2025. Bessent says the IMF and World Bank had mission creep and lost track of financial stability and were not asking the hard questions about China's focus on exports at the expense of the manufacturing capacity and jobs of America and Europe.  Hee are his remarks meant to show that Bessent is taking an all of the above approach on energy, knows climate change is real but cals for flexible approach, an approach he wants the World Bank to take. And for the IMF to focus on key issues that have led to deindustrialization of US and Europe essential for financial stability before getting into social and cultural issues that are not its mandate for which it is ill equipped to address. Bessent told the IMF and World Bank - "Instead, the IMF has suffered from mission creep. The IMF was once unwavering in its mission of promoting global monetary cooperation and financial stability. Now it devotes disproportionate time and resources to work on climate change, gender, and social issues.   These issues are not the IMF’s mission. And the IMF’s focus in these areas is crowding out its work on critical macroeconomic issues. The IMF must be a brutal truth-teller, and not just to some members. Instead, today’s IMF has been whistling past the graveyard. Its 2024 External Sector Report was entitled “Imbalances Receding.”  This pollyannish outlook is symptomatic of an institution more dedicated to preserving the status quo than asking the hard questions."  Some of these hard questions are about surplus countries- about China and their focus on exporting their way till they destroy the manufacturing sector of the rest of the world. ...

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NYT's Landon Thomas gives this exceptional report on how Deutsche Bank changed from a lender to the German auto industry and safe banking practices to enter the derivatives business and other opaque financial products that led to taking on huge risks. Deutsche Bank has agreed on Dec. 22, 2016 to settle with the U.S. Justice Department paying a fine of $7.2 billion for practices relating to faulty mortgage securities. This report says the problems started in 1995 with Deutsche Bank's leadership hiring Edson Mitchell of Merrill Lynch to promote the investment banking business at Deutsche Bank. Mitchell hired two derivatives traders Broeksmit and Anshu Jain. Mr. Mitchell died in plane crash in 2000 when he was 47 years age, Mr. Broeksmit committed suicide in 2014, 58 years in age, Mr. Anshu Jain, 53 years old, is the only surviving person of the three. Under Mr. Jain Deutsche Bank assumed more and more risk, and was involved in complex and opaque financial products leading to the toxic mortgage crisis, and manipulation of the lending rate for London banks.  It also lent $300 million to Donald Trump's businesses. Most of the profits generated from this venture have evaporated, with analysts estimating $15 billion in fines and penalties owed of the $20 billion that these ventures generated. Not counting the serious damage to the bank's reputation in Germany and the U.S. This report points out the role played by the CEO from 2002 to 2012 of Deutsche Bank, Josef Ackermann, in encouraging these ventures converting the bank from its original loan as a contintental lender to business to a bank selling opaque financial products for most of its profits. Landon Thomas also describes the events and days leading up to the suicide by Broeksmit, including a visit to a psychiatrist and Broeksmit's facing enormous stress about the investigations underway in Germany and the U.S. looking into the opaque financial products and practices of Deutsche Bank. This is also a cautionary tale about what happened in banking from the late 1990's leading to the collapse in 2008, leading to the problems of today- the need to rescue the economy in 2008-2009 and the low rate world that ensued damaging the savings of ordinary people, the infrastructure that was never built, the parallel crisis of the hollowing out in manufacturing as a false prosperity boomed in banking and finance. In a sense it is also a story of everyday lives that were damaged in the high flying boardrooms of finance in New York, London and Frankfurt. The revolving door between regulators and the banks made it harder to monitor and control banking risk letting this story unfold over decades, damaging the credibility of governments and the established political parties without clear alternatives from outside; as the dominance of Wall Street executives in the new outsider Trump administration shows.  ...

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Project 2025, originating at the Heritage Foundation, most dangerous idea similar to abolishing Social Security is to consider abolishing the US Federal Reserve. Why? Because the Fed was established to avoid banking panics and setup a sound banking system, a sound economic system. It suggests unravelling solutions that were developed after one hundred years of experience gained by US that has made the period since 1950 the least crisis prone compared to prior to Fed's formation in 1913.  Mr. Trump himself said in 2022 that the Heritage Foundation will "lay the groundwork and detail the plans" for what our movement will do, according to the WSJ report." It has become a matter of huge controversy with plans for outright attacks on the civil service, a blueprint of plans to shut down important government agencies such as the Education Department, Department of Homeland Security, and affect the functioning of the government of the United States in accordance with the Constitution.  The most radical is to change the financial system of the US that evolved from the Great Depression and previous economic crises since 1900 that led to the formation of the US Federal Reserve as the central bank that monitors aspects of the economy such as inflation and unemployment. Project 2025 says consider abolishing the US Federal Reserve and replace it with 'free banking' that does not control interest rates or the supply of money. These are untested ideas but more significant is the fact that it is the US Fed that under different presidents has taken the lead in managing the economy when a crisis happened. President Woodrow Wilson signed into law the founding of the US Fed, and its regional Fed system with a. supervisory board in Washington on Dec 23, 1913. Before the Fed the US currency was printed by individual banks and inflation or the economy could not be controlled. This led to banking panics the last in 2007, with great loss to the working people and families of America. It is unthinkable today that individual banks not the central bank the US Fed would issue US currency dollar banknotes. Yet it is just this kind of radical Barry Goldwater type of idea that is being put forward in Project 2025 that is written for a future administration running the country. ...

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Anxiety in financial markets about exposure of French banks to Greece pulled down French bank stocks on August 10, 2011. Societe Generale shares were down 15%. A British tabloid the Daily Mail published an article on Societe Generale saying that it was in a perilous condition, and on the "brink of disaster." The Daily Mail later retracted its report. The rumors spread quickly in a jittery market, reminiscent of the rumors that affected Morgan Stanley at the height of the U.S. financial crisis in 2008. Sanford Bernstein analysts say in a report that the selloff in French banking stocks was based more on anxiety and the rising price of insurance of thinly traded credit default swaps, and not based on rational concerns about earnings and raising capital. Societe Generale says it has no exposure to Greek bonds maturing after 2020 on its books- to deflect fears of additional bank bondholder haircuts beyond 2020- and has taken a 395 million euro provision against losses on Greek sovereign bonds maturing upto 2020. The jittery condition of markets was also affected by rumors that France was about to be downgraded. Moody's, Fitch, and S&P reaffirmed that French credit ratings of triple A and stable outlook would not change....

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The Democratic Party's progressive wing and Mr. Biden support the effort by president Trump for $2000 checks to go to American families as direct payment instead of the paltry $600 approved by McConnell in the Senate and Pelosi in the House. The delay in providing relief has hurt Americans working in retail and restaurants, hotels, and travel, tourism, sectors hard hit by the pandemic lockdowns. To make up for the delay and because the pandemic after the second wave looks to be not just for 2020 but for at least the first half of 2021 $2000 is essential for American  families to support themselves. Food insecurity unknown to Americans for most of the twentieth century has returned in ways that are unimaginable. The same is true for southern Europe as pictures of Barcelona in DW,com show. It is high time both the European Commission and the U.S. Congress get their act together. Partisan press is one thing, and debate is the oxygen of society in a democracy, and making ends meet on a day to day basis is another thing.  Working from home remotely one half of society the professionals may not see the other half, yet they are there as the pictures from Barcelona of people collecting metal and other scrap  on streets for sale to buy food in the El Raval neighborhood show, and the pictures of Americans in long lines at food banks show.  ...

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Chevron posts revenue of $247 billion in 2022 and profit of $35.5 billion. Profits are double that in 2021. High oil prices have increased profits for oil companies when households in the US and Britain are suffering the effects of inflation. President Biden has said the higher profits are "the windfall of war" when average American households are suffering the effects of higher energy prices. The Guardian has shown the increase in demand for food banks in Britain even from people working as nurses and teachers which has never happened in this way before with higher prices for energy and food following the war in Ukraine.

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Kharg Island near Hormuz and Jask Island on Gulf of Oman two of Iran's main oil export terminals. Oil is pumped by underwater sea pipelines to storage tanks that hold 30 million barrels on Kharg Island then loaded onto oil tankers that make their way through the Hormuz Straits. The oil is shipped to teapot refineries in China- smaller independent oil refineries in China that have not faced sanctions. This oil is shipped at a discount. How does China pay for this oil? China gets 2.1 million barrels a day from this source. It is paid for with a $400 billion Chinese investment in Iran under a 25 year Comprehensive Partnership Agreement signed in 2021 during the Biden Administration in the US. The investment covers energy, infrastructure and technology in Iran. At $60 a barrel before the Iran War China would have an import oil bill of $46 billion for 1 years supply of oil from Iran. This was paid for in yuan based transactions and barter systems which involved Iranian construction projects performed by China and exchange of other products, raw materials. ...

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The stimulus checks in government pandemic aid packages are being spent prudently in the US. Government aid checks were sent out in the first wave since March 2020 and now again in the second wave in 2021. The stimulus pandemic checks are being allocated wisely. A Federal Reserve Bank of New York study shows that Americans saved about 36% of the first stimulus payment checks, 29% was spent, and 35% was used to pay down debt. For the second stimulus payment underway in 2021 this survey also shows Americans are expected to spend even less and use even more to pay down debts. With stores mostly closed, travel restricted, and consumers not having the opportunities to spend, and the sense of insecurity, additional income from unemployment checks, saving has increased. Americans saved $1.4 trillion in the first 9 months of 2020 compared to half that in the same period in 2019, according to analysis by Berenberg Economics. That amount is about 10% of household spending. The tight spending during 2020 means, say economic researchers, that spending will jump in 2021 after the vaccination drive. The trend is positive in that Americans tended not to save enough. People in China and India, tend to save more giving government a larger pool of savings to draw from in national infrastructure spending. In November 2020 Commerce Department estimate is that saving in the U.S. was 12.9%, up from 7.5% in November 2019. Anecdotal evidence shows U.S. savings accounts for people at the lower end of incomes have been depleted for years, hit by the unemployment of the 2009 recession. This was caused by errors by the banking community and business. To this is added people in arts and culture, people in professions involving contact, travel and leisure, food, during this pandemic ten years later. National priorities need to be set to bolster this part of American society and its core social fabric. The steps to bring home manufacturing jobs under Mr. Trump and the "Buy American" initiative under Mr. Biden is just the first step. More steps are needed and the resources, implementation and drive to bring America back to the healthy society of social cohesion and upward mobility aspirations under presidents Truman and Eisenhower in the 1950's. ...

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The drop in the value of the Turkish currency, the lira, hits ordinary Turks as it pushes up the price of food, medicine and other essentials. The lira has dropped by over a third of its value against the dollar in 2021. This is leading to a decline in living standards in Turkey, says this report in WSJ. President Erdogan is pushing an unconventional strategy to increase growth, by having the central bank cut interest rates as the value of lira drops sharply. This could lead to further drops in the lira making it difficult to make dollar debt repayments says this report in WSJ. The problem extends beyond drop in standard of living for average Turks. The country's banks are affected and companies that have borrowed heavily in US dollars and foreign currency denominated debt. A large mismatch between foreign currency debt such as dollar debt and the country's foreign exchange reserves has led to countries such as Argentina falling behind and seeking IMF assistance. WSJ points out that Turkey has about $160 billion in foreign exchange assets, and $280 billion in liabilities as of August 2021, according to the Turkish central bank. Bank lending in foreign currency is 24% to 45% of their total loans in the first half of 2021, according to Fitch Ratings. This could lead to dollar debt rollover difficulties as debt repayment comes due in April 2021. ...

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China's consumer prices declined by 0.3% in July. There are signs that the economy is slowing. A deflationary trend is taking shape with buyers declining to spend following layoffs at companies, higher unemployment and less growth. Expectations of falling prices could further sap demand worsening the debt situation in China. China's economy has grown in the last decade by assuming ever larger debt burden. The debt in 2022 was three times the GDP of China. Servicing this debt becomes harder when consumer demand is weak. The situation in the US is different with the central bank the US Fed increasing interest rates to lower inflation from 9% in 2022 to 3.2% in July, and expectations of a drop ion inflation with lower shelter costs in rest of 2023.

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The checks and balances put inplace by the founders who designed the US Constitution with the two houses of parliament, the Supreme Court, the US Federal Reserve as central bank, and the state governments and large city governments, in a delicate system of balance. The entire house elected every 2 years and the presidency for 3+1 years 3 for governing and the 4th year of primaries and preparing for the next election are other forms of this checks and balances.

Jerome Powell at the Fed will be governor till Jan 2028 and Fed chair till May 2026. Powell plans to complete his term in office and preserve the Fed's independence as designed in the charter for the central bank.

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With the strong jobs growth report in September the US Federal Reserve, America's central bank, is expected to increase interest rates by 0.75% at its meeting on Nov. 1-2. That will be the fourth interest rate increase in 4 consecutive meetings of the Fed. It is designed to tackle inflation yet it also reverses the period of low interest rates for savers that extended from 2000 to 2020. This period covered two crises one created by irresponsible behaviour of banks in the financial crisis of 2000 and the second a natural health disaster from the pandemic when interest rates were brought down to zero as a policy response. During that period savers who suffered decline in savings with little interest income and lower income groups were hit by both the financial crises, employment gaps that hurt income and savings, and the shift of jobs overseas as jobs were shifted to China and American manufacturing declined. Economic policy was determined in that period by economists who failed to grasp the dangers to American manufacturing, to American communities with loss of jobs from offshoring, rising inequality that fragmented society.   This has changed under the Fed run by Mr. Powell first appointed by Mr. Trump and now renominated by Mr. Trump, who is not an economist and brings a very different mindset to central banking, going with common sense about what works for average Americans. a sense of humility, and down to earth about American workers and American manufacturing and its place in America. ...

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In Lithium ion batteries and key pharmaceutical ingredients, special semiconductors China is able to use the concentration of manufacturing capacity anc dependence on China to prevent the US and EU negotiating a way to recover lost supply chains. Supply chains that were carelessly turned over to China, a developing country at that time, by business executives of the US and EU in the 1990-2020 period who lacked vision and foresight. China's policy is to increase the dependence of US and EU, to tighten this dependence to achieve its goals. XI Jinping says WSJ wrote in a 2020 essay- that he wasn't for weaponizing it but that China must “tighten the dependence of international industrial chains on our country” so that it would be a way to respond and create negotiating room for continued access to technologies and markets in the US and EU were the US and EU to make efforts to recover the supply chains they had inadvertently and carelessly turned over to China. This action by US and EU business executives should be considered one of the major and ignominous failures of American and European business management of that period 1990-2020 which has made it difficult to even make the initial effort to recover these lost supply chains. As with the banks in the 2009 financial crisis that generation of management continues to operate as if nothing has happened.  ...

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The US central bank, the Fed, signals smaller rate increases in the future after another rate increase of 0.75% in November 2022. "It is very premature to be thinking of pausing. We have a ways to go," says Fed chairman Jerome Powell. He added that - "the question of when to moderate the pace of rate  increases is now less important than the question of how high to raise interest rates and how long to keep monetary policy restrictive." The move raises rates in the US to between 3.75% and 4.0%. Rates could go up to 5% in 2023.

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African continent debt reached $1.1 trillion in 2024. About 900 million people live in African countries where interest payments on debt exceed money spent on healthcare and education. In Nigeria external debt is $40 billion, in Kenya $35 billion and Uganda $12 billion.  Take Nigeria with 220 million people. 40% of the revenue collected goes to meet interest payments on debt. For many African countries there is zero per capita income growth for a decade. During the 2010 crisis as interest rates reached new lows US and European Reagan era intellectuals including Democrats encouraged African countries to borrow at low rates and banks loosened restrictions putting more African countries into debt buildup borrowings. As interest rates went up the cost of paying the debt accumulated required more loans at higher interest rates. Nigeria paid a premium over that of 10% for a loan of $2 billion just for interest payments. The debt crisis means African currencies depreciate reducing purchasing power.  With war in Ukraine and Covid prices of food and energy rose. Only the strong and disciplined leadership and rapid industrialization provided breathing room as with Modi in India, Jinping in China, the African continent and Latin America lacked this and are feeling the pain. ...

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According to real estate data firm CoreLogic, 38% of U.S. home owners who took a second mortgage on their homes are under water on their loans. 18% of borrowers who did not take a second mortgage are under water and have negative equity in their homes. Second mortgages are loans taken out on a property that are subordinate to first mortgages, including home equity loans and lines of credit. Borrowers with second mortgages have an average of $83,000 in negative equity compared to $52,000 for borrowers without second mortgages according to CoreLogic. During the boom borrowers took out cash using home equity loans and lines of credit for everything from home renovations and automobiles to tution and other expenses. Federal Reserve Board data show homeowners took out a huge amount, $2.69 trillion, from their homes for 2004-2006. Overall the number of underwater homeowners, or homeowners with negative equity in their homes, remained steady, according to CoreLogic's report- 10.9 million Americans in the first quarter of 2011, compared to 11.1 million for the fourth quarter of 2010, 22.7% of all homeowners nationwide compared to 23.1%. The slight decline reflected completed foreclosures, suggesting that the market conditions have not changed. Roubini and other experts predicted large housing losses in 2011-2012. This also affects America's largest banks. While the large part of the first mortgages were bundled and sold as securities, the home equity loans remain on bank balance sheets. About three fourths of the $950 billion in home equity loans outstanding were held by commercial banks at the end of 2010. Over 40% of this is on the books of Wells Fargo, Bank of America, J.P. Morgan Chase, and Citigroup. A writedown on these loans could use up a significant part of the bank's capital....

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China Investment Corp., China's sovereign wealth fund, and its investment strategies. Efforts to separate investments in China's state banks from CIC. Changes made in 2011 resulted in the formation of CIC International, separate from the Central Huijin unit which is focussed on investments inside China. CIC controls both. CIC was started in 2007 to get better returns on China's foreign exchange reserves which upto that point were mostly in U.S. Treasury securities. At the end of 2010 CIC had assets of $410 billion. China's foreign exchange reserves are about $3.2 trillion. CIC initial funding of $200 billion was allocated with half going to investments overseas, and the rest in China's state banks. A new $30 billion in funding for CIC from the People's Bank of China will go to overseas investment.

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As the US central bank, the Fed, considers cutting high interest rates that affect housing costs and mortgages this WSJ report looks at the consumer debt in September 2024. It says consumer debt is at $17 trillion in 2024. This is high except that when inflation adjusted it is only 3% above the consumer debt in 2019, the peak happened in 2008 before the banking induced financial crisis. Then there is the question of what the debt composition is. Here overall debt has grown by 4% yet credit card debt is up 11%, not a good sign when the interest rates charged by banks is 12%, by cards 22%. Households are paying off credit card debt by borrowing from sources with lower interest costs.

This is more evidence why many households are hurting as debt servicing remains as and additional cost of living issue for Americans.