Solar Firm Becomes China's First Onshore Default

Posted by mminnick 11 years, 1 month ago to Economics
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Even a relatively tight economy (ie Controlled by the State) can't pick winners and loosers. well maube not winners, but they can force loosers.
SOURCE URL: http://www.foxbusiness.com/markets/2014/03/07/solar-firm-becomes-china-first-onshore-default/


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  • Posted by Lucky 11 years, 1 month ago
    My suggestions:
    1. Bad management of the firm.
    2. That industry is slowing
    3. The economy is slowing
    4. Tightening up of credit
    Optimistically, it is (1). Bad management would be common world wide in solar, an industry so enmeshed with government and subsidies that talking skills outrank performance.
    Tighter credit (4) may be a cause, it is a pleasant dream that China having given up on Marx has not fallen for Keynes.

    straightline logic is correct, there is no evidence that credit that is too easy can be unwound without calamity.
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  • Posted by straightlinelogic 11 years, 1 month ago
    This is important because it appears that the Chinese government either cannot or will not keep China's huge debt bubble (by far the largest on the planet) inflated. Debt unwinds are inevitably much faster than the preceeding build up, and inevitably deflationary as debtors sell assets to meet creditors' demands. The blythe ignorance of both the general population and most of the economic and financial "experts" about the deflationary dangers lurking in the global economy is astounding. I've written about it several times. See: "We've run Out of Future," http://www.straightlinelogic.com/straigh... and also:

    "Danger Lurks in The Shadows," http://www.straightlinelogic.com/straigh...
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