Chinese companies’ borrowing costs have never been so low. That’s little consolation to firms cutting debt rather than investing amid a slowing economy.As goes credit growth, so goes the economy.
The amount of local yuan bond sales minus maturities fell 39 percent in August from a year earlier for non-financial firms to 124 billion yuan ($18.6 billion), data compiled by Bloomberg show. Net issuance since March 31 has slowed to 496 billion yuan after a record 810 billion yuan in the first quarter of 2016. Yields on AA+ and AA rated five-year securities dropped to record lows this month.
The decline in bond financing and the lowest fixed-asset investment growth since 1999 suggest central bank monetary easing will have trouble reviving growth that’s forecast to slow through next year.
"The Lock-In Effect of Rising Mortgage Rates"
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Today, in the Calculated Risk Real Estate Newsletter: "The Lock-In Effect
of Rising Mortgage Rates"
A brief excerpt:
Here is new working paper from Feder...
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