Friday, March 14, 2014
China's Li Keqiang warns investors to prepare for wave of bankruptcies
On March 9th or 10th, 2000 (gimme a break it was 14 years ago) Abby Joseph Cohen and Mark Mobius both came out to warn that the NASDAQ had gotten ahead of itself. The index was around 5000 at that point having risen from 3000 just 4 months earlier. The saying goes that they don't ring a bell at the top but you couldn't have gotten a clearer signal that the stock market was way too high at that point. I think we just had another bell ring.
China is braced for a wave of industrial bankruptcies as its slowing economy forces companies with sky-high debts to the wall, the country's premier has said.
Premier Li Keqiang told lenders to China's private sector factories they should expect debt defaults as the world's second largest economy encounters "serious challenges" in the year ahead.
Speaking after the annual session of the national people's congress, Li Keqiang said: "We are going to confront serious challenges this year and some challenges may be even more complex." He told lenders to China's private sector factories they should expect debt defaults. [Emphasis added.]