Tuesday, March 01, 2016

More economic alarm bells. China credit outlook cut from stable to negative.

Thanks to Joe for the link!

via Bloomberg.
China’s credit-rating outlook was lowered to negative from stable at Moody’s Investors Service, which highlighted the country’s surging debt burden and questioned the government’s ability to implement reforms just days before leaders gather to approve a five-year road map for the economy.

The government’s financial strength may come under pressure if it takes on liabilities from troubled state-owned companies, while capital outflows have limited policy makers’ scope to stimulate the weakest economy in a quarter century, the ratings company said in a statement on Wednesday. State intervention in equity and foreign-exchange markets has heightened uncertainty about the leadership’s commitment to reforms, Moody’s said.
The elections will be about the economy.  Portions of the electorate...the elite have prospered during these times.  The rest of the country is holding on with both hands.

My prediction remains.  Things turn south in a big way by summer or early fall and because of it, Trump wins.

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