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Tag Archives: Elsewhere in Asia

India’s Vehicle Sales Plunge as Shadow Banks Topple: Clamoring for Government Bailouts amid Contagion from the Debt Crisis

“Probably the most prolonged de-growth phase we have seen.” Car sales in India, the fifth-largest auto market in the world, plunged 24% in June, compared to June last year, after they’d already plunged 26% in May, the Society of Indian Automobile Manufacturers reported. Year-over-year declines have been dragging on for nearly a year. Sales of “goods carriers,” which are seen as an indication of economic momentum, dropped 18% from a year ago. Goods carriers include vehicles such as...

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More Airline Woes: Avianca Brazil Gets Dismembered, Korea’s Asiana Airlines Gets Taxpayer Bailout, Air India Gets Rumors of Default

It Just Doesn’t Let Up With Airlines. By MC01, a frequent commenter, for WOLF STREET: Here’s an example of what should happen to an airline which has become unprofitable and failed to turn around its financial situation. On May 7, the assets of Avianca Brazil, formerly Brazil’s third-largest airline, will be auctioned off to pay creditors. To streamline sales and maximize proceeds, Avianca Brazil has been broken up in seven lots. The best assets are prime slots at the Congonhas and...

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Next Chapter in Bankruptcy & Restructuring Saga of European and Asian Airlines

The fate of the A380 is sealed. By MC01, a frequent commenter, for WOLF STREET: On February 5, German low-cost carrier Germania announced it has filed for insolvency in Berlin and that all flights will be suspended indefinitely. According to the press release, this was due to unfulfilled “short-term liquidity needs,” meaning the company was struggling to raise the cash needed to pay for obligations coming due in the short term, such as fuel bills/hedging, landing fees, maintenance...

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The Wild East: Airlines in South & Southeast Asia

Huge aircraft orders, booming traffic, dozens of upstarts with easy mega-funding, fierce competition, already a big collapse, and allegations of shady business. By MC01, a frequent commenter, for WOLF STREET: As of October 31, Airbus had 6,245 members of the A320neo family on order, of which around 250 had already been delivered. Even taking into account the large discounts which are the norm for large orders, the estimated value for this order book alone was in the region of about...

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As Erdogan Cements His Hold Over Turkey’s Economy, Global Investors Begin to Panic

His Toxic Mix: destruction of the lira and a mountain of foreign-currency debt. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Two big European banks, Italy’s Unicredit and Spain’s BBVA, will be following current events in Turkey extremely closely. The two lenders have the biggest exposure to the country, which is one of the world’s fastest growing emerging economies. But investing there is an increasingly risk business. Turkey continues to grow at high speed,...

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As Turkish Lira Collapses, Foreign Banks in Turkey Rue the Day

The biggest loser: BBVA, Spain’s second biggest bank. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Few foreign banks are as exposed to the risks currently affecting Turkey than Spain’s second biggest lender, BBVA. The bank owns about half of Turkey’s third biggest lender, which provides roughly 15% of its global revenues. But those revenues are under threat as the value of the currency they’re denominated in, the Turkish Lira, continues to fall. In 2016, when...

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Chasing Yield during ZIRP & NIRP Evidently Starved Human Brains of Oxygen. Now the Price Is Due

See Argentina’s 100-year dollar-bond and emerging-market “turmoil” as the Hot Money flees. Let’s be clear: It’s not just Argentina. But Argentina is the most elegant example. The exodus of the hot money from emerging markets where cheap dollar-debts were used to fund pet projects and jack up leverage is – once again – in full swing. Cheap dollar-debt in emerging markets is an old sin that, like all old sins, is repeated endlessly. The outcome is always trouble. But during the act, it...

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Hong Kong Warns: Its Housing Bubble is a “Dangerous Situation”

The HK financial system is “very strong” and “can withstand an adjustment in the property market.” The Hong Kong dollar is pegged to the US dollar. Hong Kong’s monetary policy is follows the Fed’s monetary policy. The Fed has embarked on a tightening cycle, raising rates four times so far. The Hong Kong Monetary Authority has followed each time. Last week, it raised its policy rate by 25 basis points to 1.5%. This will have consequences for the most expensive and ludicrously inflated...

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“Zombie Apocalypse”: The Hanjin Bailout that Didn’t Happen

“Shatters the complacency” that TBTF carriers “are immune to failure” South Korea’s Hanjin Shipping Co., the world’s seventh largest container carrier and a unit of Hanjin Group, Korea’s 10th-largest conglomerate that also controls Korean Air Lines, has been in financial trouble for a long time. Bankruptcy or rather a government bailout, not only for Hanjin, but also of the second largest Korean carrier, Hyundai Merchant Marine (HMM), has been bandied about for as long. HMM was...

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It Starts: Broad Retaliation Against China in Currency War

The biggest global “tail risk” is China’s deteriorating economy and an emerging market debt crisis, according to BofA Merrill Lynch’s monthly poll of fund managers. And 48% of them were expecting the Fed to raise rates, despite languid growth and low inflation expectations. Hot money is already fleeing emerging markets. Higher rates in the US will drain more capital out of countries that need it the most. It will pressure emerging market currencies and further increase the likelihood of a...

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