sell! sell! sell!

[tiznow]

[h=1]EXCLUSIVE: China to lay off 5-6 million workers, earmarks at least $23 bln[/h][COLOR=rgba(0, 0, 0, 0.65098)]

Reuters/Stringer​

An employee works on an assembly line producing automobiles at a factory in Qingdao, Shandong Province, China, March 1, 2016. Reuters/Stringer


[/COLOR]
By Benjamin Kang Lim, Matthew Millerand David Stanway
BEIJING (Reuters) - China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution, two reliable sources said, Beijing's boldest retrenchment programme in almost two decades.
China's leadership, obsessed with maintaining stability and making sure redundancies do not lead to unrest, will spend nearly 150 billion yuan ($23 billion) to cover layoffs in just the coal and steel sectors in the next 2-3 years.
The overall figure is likely to rise as closures spread to other industries and even more funding will be required to handle the debt left behind by "zombie" state firms.
The term refers to companies that have shut down some of their operations but keep staff on their rolls since local governments are worried about the social and economic impact of bankruptcies and unemployment.
Shutting down "zombie firms" has been identified as one of the government's priorities this year, with China's Premier Li Keqiang promising in December that they would soon "go under the knife"..
The government plans to lay off five million workers in industries suffering from a supply glut, one source with ties to the leadership said.
A second source with leadership ties put the number of layoffs at six million. Both sources requested anonymity because they were not authorized to speak to media about the politically sensitive subject for fear of sparking social unrest.
The ministry of industry did not immediately respond when asked for comment on the reports.
The hugely inefficient state sector employed around 37 million people in 2013 and accounts for about 40 percent of the country's industrial output and nearly half of its bank lending.
It is China's most significant nationwide retrenchment since the restructuring of state-owned enterprises from 1998 to 2003 led to around 28 million redundancies and cost the central government about 73.1 billion yuan ($11.2 billion) in resettlement funds.
On Monday, Yin Weimin, the minister for human resources and social security, said China expects to lay off 1.8 million workers in the coal and steel industries, but he did not give a timeframe.
China aims to cut capacity gluts in as many as seven sectors, including cement, glassmaking and shipbuilding, but the oversupplied solar power industry is likely to be spared any large-scale restructuring because it still has growth potential, the first source said.
DEBT OVERHANG
The government has already drawn up plans to cut as much as 150 million tonnes of crude steel capacity and 500 million tonnes of surplus coal production in the next three to five years.
It has earmarked 100 billion yuan in central government funds to deal directly with the layoffs from steel and coal over the next two years, vice-industry minister Feng Fei said last week.
The Ministry of Finance said in January it would also collect 46 billion yuan from surcharges on coal-fired power over the coming three years in order to resettle workers. In addition, an assortment of local government matching funds will also be made available.
However, the funds currently being offered will do little to resolve the problems of debts held by zombie firms, which could overwhelm local banks if they are not handled correctly.
"They have proposed this dedicated fund only to pay the workers, but there is no money for the bad debts, and if the bad debts are too big the banks will have problems and there will be panic," said Xu Zhongbo, head of Beijing Metal Consulting, who advises Chinese steel mills.
Factories shut down would have to repay bank loans to avoid saddling state banks with a mountain of non-performing loans, the sources said. "Triangular debt", or money owed by firms to other enterprises, would also have to be resolved, they added.
Although China has promised to help local banks transfer the bad debts of zombie steel mills to asset management firms, local governments are not expected to gain access to the worker lay-off funds until the zombie firms have actually been shut down and debt issues settled.
($1 = 6.5476 Chinese yuan)
(Additional reporting by Ruby Lian in Shanghai; Editing by Raju Gopalakrishnan)

 

[eek.]

I reckon we'll simply stumble along forever, like Japan, stagnant growth and low interest rates

And if they put rates up... the sky will be raining financial dudes, just like in 1929

 

[tiznow]

Chesapeake founder and key player in the shale boom.. offed himself in car crash day after being charged with conspiring to rig bids for oil and natty gas leases..

 

[PatsFan1283]

Guess he couldn't do the two days?

Wire reference

 

[tiznow]

[h=1]‘The Wire’ creator David Simon shines a harsh light on ‘Two Americas’ in Luskin Lecture[/h]Fractured. Rigged. Tragic.
David Simon uses those words often as he describes what’s become of America, or, as he puts it, our “two Americas.”
The talk by Simon, a former police reporter for the Baltimore Sun who left the paper and became a successful television screenwriter and producer, was the capstone of the two-day inauguration of the UCLA Luskin School of Public Affairs Institute on Inequality and Democracy. His keynote address at UCLA’s James Bridges Theater was part of the Luskin Lecture Series.
The event also featured a screening of one episode of the Simon-penned HBO series “Show Me a Hero.” Simon is perhaps best known for his critically acclaimed series on HBO, “The Wire.”
“‘The Wire’ showed us that the court of law, the police station, the city bureaucracy are as much a part of the game as the street,” said Ananya Roy, director of the Institute on Inequality and Democracy, who introduced Simon. “And the game, as the line in ‘The Wire’ goes, is rigged.”
Simon’s themes and messages, conveyed through his writing and television shows, reflect in many ways the mission of the new institute.
“How do we do a better job of living together?” asked Roy, professor of public policy who holds the Meyer and Renee Luskin Chair in Inequality and Democracy. “This is a question that animates David Simon’s work. How do we live together in the context that David Simon has described as two separate Americas? Simon’s artistic and journalistic work reminds us that the creation of these two separate societies is by will. It’s by policy, by plan.”
Simon’s lecture was titled “The Audacity of Despair,” which also happens to be the name of his blog, a self-described collection of “prose, links and occasional venting from David Simon.”
During his Luskin Lecture, Simon covered a broad range of topics, from politics to activism to police. And, yes, he did a little venting.

A Conversation with David Simon from UCLA Luskin on Vimeo.
“Nothing quite works in this very complicated and tragic and rigged system, if you believe that one singular ideology gets you out of every problem,” Simon said. “I think that one of the great plagues of our age is that right now there are any number of people — and I think we are witnessing it in this election cycle — who think they can explain what ails us and why we are so fractured, in a single paragraph.
“If you have an ideology that works in every set of circumstances,” he added, “you’re probably about to say something stupid. Or do something stupid.”
His experience as a newspaper journalist informed his screenwriting, and his views about policing, as well as the war on drugs.
“I know a lot of good cops who will tell you that the drug war destroyed us,” Simon said. “They sold us this drug war, and we committed our resources to it, and we bought it.
“When we are talking about the drug war, law enforcement issues and mass incarceration, I ask the question of whether or not poor communities are over-policed or under-policed,” he added. “The consensus was over-policed. It’s complicated. It’s in the complications that we lose ourselves.
“I’ve heard in the activism that we don’t need the police. I’ve heard that we don’t need the prisons,” Simon said. “The answer is these communities are brutally over-policed to the point of consigning hundreds of thousands to criminal histories. And yet these communities are utterly under-policed, for the things they desperately need.”
Simon also reflected on his experiences while covering the police in his hometown, Baltimore, and how not much has changed.
“I don’t believe in community policing,” he said. “If you want social work, hire a social worker. A good police department does one thing to make a city better. It figures out the right guy to arrest, and it takes him off the corner. If you get killed in Baltimore, you will not be avenged, and your family will not be avenged. But, more than that, the guy who killed people will still be standing on the corner with a gun. And he’ll do it again.”
Simon, who also wrote the HBO series “Treme,” which aired for four seasons on HBO, put a lens on democracy, and how it’s changed.
“(Winston) Churchill said democracy is the worst form of government, until you consider every alternative,” Simon said. “I think my critique would be, what’s fallen by the wayside, what we’ve permitted to become a shell of democratic ideal, because we’ve been able to construct these two Americas where the rules can be applied differently. That has to be deconstructed.”
Simon closed by issuing a challenge to all attending the lecture, saying that a simple act of civil disobedience would help bring an end to the war on drugs.
“If you are asked to be on a jury, on nonviolent drug use, and they ask you to send another human being to prison because of this disaster of a drug policy, acquit. No matter what the evidence is, acquit,” Simon said. “Search your conscience. Is my country really going to get better for putting another person in prison for nonviolent drug use? Does that make America stronger or weaker?”

 

[eek.]

The parallels have become quite uncanny, huge amounts of cheap debt have been used to purchase shares, just like in the 1920s

 

[tiznow]

cheap debt during latest cheap debt bubble phase has floated to auto market .. Lotsa subprime auto loans out there.. Sucking lotsa idiots into taking on debt for one of the most depreciating asset they can buy .. A new car..

----------

Bank of America revs up auto loans business despite warning signs

By Dan Freed
(Reuters) - Bank of America (BAC.N) is making a big push into auto lending just as regulators are sending warning signals, losses from auto loans are rising, and rivals are growing more cautious after years of strong returns.
The bank tapped mortgage executives Matt Vernon and John Schleck to lead the auto lending business last May, saying they would be able to sell auto loans alongside other products such as checking accounts and home equity loans.
In interviews, the executives and their boss, D. Steve Boland, who oversees a broad swath of consumer lending, said they still see room for growth from borrowers who have good credit. They have hired extensively in recent months, adding dozens of loan officers and salespeople.
But some competitors and bank analysts said hiring doesn't make sense at this stage, because auto sales may be close to peaking, and consumer credit is showing signs of weakness.
Industry-wide, banks classified $1.1 billion worth of auto loans as uncollectible in the fourth quarter, according to the Federal Deposit Insurance Corp. That is up 15 percent from the year-ago period, and up 39 percent since the fourth quarter of 2011. Ultimately, much of that bad debt turns into losses for the banks.
For a graphic showing auto loans that are 30-89 days past due and an auto sales projection, see http://tmsnrt.rs/24xv9vV
"I'm not actively hiring or growing our operations across the platform. That's for sure," said Andrew Stuart, head of TD Auto Finance, which is slightly smaller than Bank of America's auto business.
At a Feb. 10 conference, Capital One Financial Corp (COF.N) CEO Richard Fairbank said that while auto loans provided "once in a lifetime type returns" after the financial crisis, the business has begun to lose strength. In a January interview on CNBC, JPMorgan CEO Jamie Dimon called the market "stretched."
Portales Partners analyst Charles Peabody said Bank of America is late to the auto loans party. But in its defense, he noted that the bank's Chief Executive Brian Moynihan and his management team were too busy trying to resolve mortgage-related issues when the auto lending business seemed like a smarter bet.
"They should have been beefing this thing up two years ago, but two years ago Moynihan was still trying to stabilize the ship," Peabody said.
SLOWING MOMENTUM
All banks are struggling to boost revenue during a period of stubbornly low interest rates and tough post-crisis regulation, but Bank of America has felt the pain more acutely than most of its peers.
The second-largest U.S. bank by assets, Bank of America trades at just 50 percent of book value, compared to 90 percent for JP Morgan Chase & Co (JPM.N) and 130 percent for Wells Fargo & Co (WFC.N). Bank of America took bigger losses than those rivals during the crisis, and still lags them by other key metrics, including return on equity and costs in relation to revenue.
While Bank of America showed some progress in 2015, it still has to prove it can generate consistent performance under Moynihan, who took the helm in 2010. During his tenure, the bank has paid tens of billions of dollars in fines and settlements related to mortgages that were issued before he became CEO.
Bank of America ranks 10th among U.S. auto lenders, with just 1.84 percent of the market in the fourth quarter of last year, according to data released Thursday by Experian Automotive. Ally Financial Inc (ALLY.N), the largest U.S. auto lender, accounts for 6 percent, followed by Wells Fargo, which ranked second with 5.57 percent. JPMorgan was fifth with 4.15 percent.
Bank of America may rank higher on Thursday, when Experian says it will release fourth-quarter data, because Vernon said much of its growth came at the end of the year.
Auto sales remain very robust. Figures carmakers released on Tuesday showed that sales climbed to a 15-year high for the month of February, driven by low gasoline prices, wage growth, and because loans are both available and cheap. But most forecasters expect sales to peak in 2016 and trend down over the next few years.
"We remain in the 'plateau' camp," RBC Capital Markets analyst Joseph Spak wrote on Tuesday, sticking to his flat sales forecast.
Stocks have broadly declined in recent months over concerns about the global economy, and some companies that make money selling or financing vehicles have gotten hit even harder. They recovered some of those losses after the latest sales figures.
Ford Motor Co (F.N) and General Motors Co (GM.N) are down roughly 6 and 11 percent, respectively, since the beginning of the year, while publicly-traded auto lenders Santander Consumer (SC.N) and Ally are down 35.7 percent and 2.8 percent, respectively. The S&P 500 Index (.SPX) has dropped 2.8 percent so far this year.
Delinquencies on bonds comprised of subprime auto loans hit their highest level in six years, Fitch Ratings said last week. According to the FDIC, 1.82 percent of all auto loans were 30 to 89 days past due during the fourth quarter – the highest rate on record since the FDIC began keeping track in 2011.
As weakness in the auto sector has become evident, regulators have begun to sound alarm bells.
In a speech in October, U.S. Comptroller of the Currency Thomas Curry warned of risks from subprime auto loans, as well as loans that mature in six years or more, which tend to be issued to customers who can't afford monthly payments on loans with shorter durations. In November, the Federal Reserve Bank of New York issued a report on auto lending that showed a growing portion of loans being issued to consumers with poor credit.
FOCUSED ON PRIME
Bank of America says it is focused strictly on prime and "superprime" customers. The "majority by far" of its auto borrowers have credit scores higher than 700, Vernon said. Borrowers with credit scores above 660 are generally considered to have good credit.
Still, a decline in used car values would lower recoveries on loans that go bad, and the longer the life of the loan the greater the exposure to such a risk. Bank of America will lend up to 75 months — slightly longer than the six years Comptroller Curry cited as a concern — though Vernon said the average maturity is far lower.
The bank does not release granular data on its auto loan book, so it is hard to know how its borrowers' credit quality has held up over time. In data provided to Reuters, Bank of America said it made $23.7 billion in auto and recreational vehicle loans in 2015, up 41 percent from 2014.
Most of that growth came through auto dealers, the area Vernon oversees, and much of it happened in the fourth quarter after he hired seven "relationship managers" whose job is to drum up business with dealerships around the country. Vernon is targeting 5-10 percent growth for his operation in 2016.
Schleck, who oversees the business that works directly with retail customers, has also been staffing up — nearly doubling the number of loan officers to 110 from 60 since last May. Although Schleck said he is unlikely to continue growing staff at that pace, he may hire more this year if demand warrants. Likewise, if demand cools, Schleck said he is prepared to reduce staff.
"I needed to get to a certain level to be able to provide a certain level of service and I needed to get there very quickly—and did," he said. "Prior to May there was probably a lot of lost opportunity, whereas after May, I'm capturing what maybe we could have captured earlier."
Boland, their boss, said it's true that Bank of America was "in a different place in 2012," but disputed the idea that the bank is too late to build up its auto loans business.
"I don't feel like I'm late at all," he said. "There's not a timing issue to it. I'm going to continue to focus on growing across our consumer lending."
As long as the bank is cautious about borrowers and keeps staffing in line with demand, it can grow just by selling to more of its existing customers, Boland added.
Patrick Kaser, portfolio manager at Brandywine Asset Management, which owns about 26 million Bank of America shares, said the bank's strategy is sensible even if it comes at a less-than-optimal time. The bank pulled back "far too much" from certain businesses after the shock of its mortgage losses and fines, and re-entering the market with a focus on healthy consumers makes sense, he said.
"Only time will tell if they're entering at the peak and whether or not they'll be too aggressive," said Kaser, "but the banks have a lot of incentive to show discipline."
(Reporting by Dan Freed; Editing by Lauren Tara LaCapra and Martin Howell)

 

[tiznow]

Two darlings of the retail space Kroger and Costco reported today and disappointed .. Flashing warning signs to economy at large...

 

[snoop]

Ackman still calling herbal life a scam while he props up valeant is hilarious.

I doubt he stays a hedge fund celeb much longer

He sounds a lot like Marcosoft Rubot. He wants his cults to believe that losing is actually winning. The company is in a total mess, the chart is down, the headlines are bearish, himself is quiety trimming VRX position. It's a disaster all around.

Jim Chanos hit another home run from shorting VRX right at the top last year. He is a genius.

 

[tiznow]

See what's happening on Twitter

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St. Louis Fed– Verified account ‏@stlouisfed

Consumers across the country are borrowing more to buy cars and go to school [url]http://bit.ly/1WTUI4w [/URL]

 

[tiznow]

Jim Rodgers goes bold.. Says 100% probability us recession within a year...

everybody cheerleading jobs today.. Jobs always a lagging indicator.. Plus if you look beneath the surface quality sucks .. Losing good paying manufacturing and oil jobs.. Gaining low paying service jobs...

 

[CHOPTALK]

Dare I say we finally hit bottom on oil.

Lots of cancelled projects and underwater companies. The next boom is already set up.

 

[CHOPTALK]

How about this crazy theory .

We know the financial markets are flexible to an extent .

You can keep kicking the can down the road for years and years to delay the inevitable.


But both the republicans and democrats want to do whatever it takes for it to not be on their watch .


Wouldnt it be perfect timing for the elite to let an outsider like trump to take office then let all the shit hit the fan at once and blame it all on trump .



It would be perfect.

They could blame the outsider for all the problems they created the last 50 years.

They can say see we told you we aren't so bad.

What a perfect scapegoat situation . Haha

 

[PatsFan1283]

Yeah that is a pretty good idea. Trump gets in and they just start raising rates at every fed meeting.

The brilliance of Trump is he is smart enough to know who to blame and articulate that to the people in a way most politicians wouldn't. Also he is perfectly fine with deflecting blame whereas someone like George W. Bush isn't going to be like "Well gee we fucked up lending standards for 15 years and now I'm left holding the bucket." That just isn't really what President's do, atleast not emphatically. Trump will absolutely say all of that and then some. He would not go down unless it was in a blaze of glory.

 

[PatsFan1283]

DNR up 225% in 1 week

Crazy volatility. Went up 55% on Friday.

 

[eek.]

If Trump gets in I think that Finance will be the least of our problems. He's a loose cannon and a diplomatic disaster zone.
The Russians are smart enough to hustle with and around him but the Chinese are a lot less flexible when things get hot and feisty.

He's used to "getting his own way" at a major corporate level and soon he may have the ultimate resource at his disposal, an entire pissed off nation.
The thing is... what are Americas alternatives???

The only food option available at this election appears to be a shite sandwich

 

[eek.]

A wee nuclear article for our Tiz

Basically, they are getting electricity at at least 2 times the normal cost of selling, guaranteed by the government for 35 years as a minimum, the Chinese are underwriting 33% of the build, cost of building alone is currently 18 billion sterling, the most expensive new power project in the world

Output is 3200Mw

Hinkley point C

BBC article EDF finance chief quits ahead of Hinkley Point decision

Wind turbines on big farms are currently a lot less than 5 million sterling a Megawatt but we'll go to the top end of costs and say 5 million sterling a pop (7.5 million dollars)

Divide 18 billion by 5 million and you get 3600 Mwatts of capacity for wind, forever, with no decommissioning timebomb, ever.

Wind is a slam dunk winner as far as this citizen is concerned

Energy is a long game, the wind tortoise versus the nuclear hare

 

[tiznow]

Trump has near zero chance in a general election.. Hes just having some fun I think and doesn't really want to win anyway.. Cruz probably ends up getting nomination now once Rubio drops out after Florida..

 

[tiznow]

Dare I say we finally hit bottom on oil.

Lots of cancelled projects and underwater companies. The next boom is already set up.

Mayabe maybe not.. Assuming global recession coming think it'll roll back over and at least retest the lows... If nothing but sunshine and unicorns ahead and our central planners are geniuses and I'm totally wrong than yeah that's the bottom ha

 

[eek.]

Cruz is 14-1 at Paddy power... could be handy for a both sides bet in a few months