Housing Bubble is going to burst in China!

For the last few months the financial analysts fore saw a financial crunch in China and their predictions were come to alive and now China is facing the beginning of the credit crunch now and it will accelerate further. According to the sources in China, most of the real estate developers owe billions of Yuan from the Banks and individuals which leads in turn to Bankruptcy.

Usually the defaults to the bank loans and bankruptcies are quite common but the quantity of amount borrowed as loan by the realtors in China caused the panic. The Chinese News service reported that Zhejiang and Xingrun real estates over 2.4 billion to Banks and 1.1 billion Yuan to private investors. Subsequent to these the real estate sector of the Shanghai stock exchange fell down by one percent

While some analysts are trying to reassure by stating that there will be no domino effect, it certainly begs to believe, but nothing is less certain ... Others point out, however, that real estate developers active in the Zhejiang region face serious difficulties last year, battered by intense speculation, including Ningbo and Wenzhou, two cities that have seen property prices strongly fall.

China's real estate market is showing signs of slowing since the end of last year, mainly because of measures taken by the authorities to contain prices. Many experts also believe that the failure to pay Chaori Solar, occurred on March 7, is related to the Chinese authorities' desire to impose greater rigor in the functioning of credit channels.

Another notable element according to banking and industry sources, many banks have reduced up to 20% of their loans to certain industries. They are worried due to the financial health of these sectors, which tends to be oversized in China.

In September 2013, the Chinese central bank had said for his part that the loans granted in August in the Middle Kingdom had almost doubled in a month, reaching 1.570 billion Yuan. But even more serious element is only 45% of them are bank loans and the majority of loans are informal credit (shadow banking), which already concerned at the highest point to the analysts.

In June 2013, already, the rating agency Fitch indicated that a bursting of a credit bubble unprecedented in the history of the modern world could explode in China.

The Chinese interbank market, on which financial institutions lend money daily , was facing a severe shortage of liquidity,. Chinese Central Bank had injected 17 billion Yuan (2.8 billion Euros) in the banking system.

In February 2013, we had already talked about our fears of analysts. These are alarming excessive growth of bank loans to the private sector, and the loans outside the formal sector were more and more and went up and difficult to repay. These lead to the high level of bad loans held by Chinese Banks.

Hence the Monetary authorities and Chinese policies now wish to terminate the very rapid credit growth in recent years. A situation that pushes the government to "clean up" the banking market, closing the valve to riskier institutions, a policy may lead some into bankruptcy.                                        

                                                                                                     (to be continued)

Moody’s Raise The Prospect Of EU and Maintains AAA rating

The rating agency Moody's announced on Friday in a renewed optimism for the finances of the European Union (EU), including pointing out the “decrease " risk to the debt crisis in the Euro area. The U.S. agency, which evaluates the creditworthiness of debt issuers, first confirmed the triple "AAA" assigned to the European Union, the maximum score that allows theory to borrow at lower cost in market. It does not, however, stop there and moved from "negative” to "stable" perspective of the EU, indicating that it was considering lowering the rating most in the medium term.

Criticized for its competitors to errors of judgment during the 2007-2008 financial crisis, Moody and seems to embody the improvement on the Old Continent, and more specifically in the Euro area which emerged from a long recession in mid -2013. In its statement, the agency asserts that the risks to the Euro area “declined" to reduce the pressure, the quality of financial assets in the region and on the creditworthiness of the whole of the Union.

Supported by the International Monetary Fund (IMF), the European Union had to come to the rescue of several countries in the Euro zone (Greece, Ireland , Portugal, Cyprus ) by bailing with billions of Euros in loans between 2010 and 2011 to avoid bankruptcy. Ireland was the first to overcome the international financial assistance in December and will soon be joined by Portugal. According to the agency, the risks that these two countries fail to repay their loans to the relief fund of the EU “decreased”. In support of its decision, Moody's also cites “improving the solvency “of key member states of the European Union, which had been involved in these large bailouts.

In recent weeks, the agency has identified "negative” to “stable" outlook from several European countries still enjoying the “AAA" rating including Germany and the Netherlands. Moody's was also more optimistic for countries hit hard by the debt crisis as Italy and Spain, which benefited from a bank recapitalization plan. The rating of the EU would be particularly sensitive to changes which could affect the top four contributors to the European Union, including France.

In its statement, the agency does not curiously referred to Greece, which is the epicenter of the debt crisis in the Euro area, while the country is still under financial infusion and continues to worry its international creditors. The EU and IMF blocked a new loan in the country since mid-2013 on the grounds that Athens refuses to make further cuts in its public finances. In summer 2011, the United States had been stripped of their triple-A by Standard and Poor's but had nevertheless continued to borrow from financiers in the markets at historically low rates.

Wall Street Shaken By The Ukrainian Crisis Ends Down

Wall Street finished in the red on Friday as investors fearing an escalation of tensions around the Ukrainian crisis since the absence of diplomatic agreement between Russia and the West hence the Dow Jones dropped 0.27 % and the NASDAQ 0.35%. According to final results, the Dow Jones Industrial Average lost 43.22 points and the NASDAQ, dominated by technology lost 15.02 points. Indices fell late in the session after reaching equilibrium stay around for much of the day. Peter Cardillo of Rockwell Global Capital told that obviously the United States failed to prevent the holding of a referendum in the Crimea Sunday and we could end up with a complicated situation on Monday.

The inhabitants of the Ukrainian peninsula must decide if they want to separate from Kiev to attach to Moscow. In the days before the election, the U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov in London have failed to find a amicable solution after two weeks of intense diplomatic activities. Indices were also weakened in early trading by two indicators on lackluster U.S. economy, namely a slight decline in producer prices in the U.S. in February and surprise morale of U.S. household’s fall in March.

The impact of these figures, however, remained limited because their weakness is attributed to bad weather mentioned by Christopher Low of FTN Financial. On the values front, Yahoo! closed up 0.99% at $ 37.6, benefiting from news reports on the arrival of the Chinese Wall Street giant Alibaba e -commerce, which he is a minority shareholder. The General Mills, which has published quarterly forecasts lower expectations, lost 2.43% to 49.77 dollars. The automaker GM remained unchanged at $ 34.09. A consumer protection agency said Thursday that some of the recently recalled by the automaker models had a problem with airbag involved in 303 deaths. Liberty Media, one of the holdings of U.S. billionaire John Malone, jumped 7.22% to 135.25 dollars.

The group said Thursday that he would take full control of U.S. satellite radio Sirius XM (2.08 % to 3.44 dollars), which is already the majority shareholder. Banking stocks were in the red. The U.S. agency guarantees bank deposits has launched legal action against several of them for manipulation of Libor interbank rate, including JPMorgan (-1.08 % to 56.80 dollars), Citigroup (-0 95% at $ 46.88) or Bank of America (-2.10 % to 16.80 dollars). The bond market, considered safer than stocks and popular with investors in times of uncertainty, closed slightly higher. The yield on 10-year Treasury fell to 2.645 % against 2.653 % Thursday evening and the 30-year 3.587 % against 3.601 % on Friday.

How To Overcome Your Financial Sins!

For starters, what is a sin financially? This is simply any type of expense that you might be likely to regret. It is very important to check its excesses and even those related to money. The problem is that it is difficult to know if you will regret a purchase until you have made. Personally, I have a personality that I was often pushed to the consumer, so I often "sin" financially in the past. But it also allowed me to make some purchases with passion and thus to consider improving my personal life (A brand new second car parked in my portico). To avoid having to follow the same path as me, that is to say from the blind without a real plan to buy, there are a few questions you should ask yourself.


Is it an impulse buy? To realize this, it is best to go buy items accompanied by a friend or family member. It is always easier to realize the stupidity of a purchase when you're in the presence of someone who brings an unbiased view and objective. Another good way to resist is the "30 day rule". If you're not sure you really want something, wait 30 days and if you want to always run is that it is not an impulse purchase (this does not mean that it must buy it, but simply that it is a deep and abiding desire). Is that it is a purchase in connection with my goals? Most purchases you make must follow some sort of guideline, guided by your goals. Your goals are not necessarily financial, but it is important that every purchase fits into logic. This will allow you to more easily distinguish between good and bad spending.


Can you check the result? Many types of expenditure are to be avoided because of their addictive potential: gambling, tobacco, drugs and alcohol are things that you need to say no. If you have the personality of an "addict", consider spending some as prohibited, and authorize certain periods of the year (which should allow you to enjoy while keeping the activity within a limited time) .If you are a couple or married, give a lot of importance in the fact those two decisions. Your spouse can refuse a purchase and therefore bother you at the time, but he / she will also support you in a purchase, thus removing any sense of guilt.


Before any major purchase (depending on the current size of your wallet), it is important to ensure that it meets these conditions. If this is not the case, remove it from the list immediately! However, if the conditions are met, and that you are not likely to do too much harm to your savings, then you can move on to phase purchase. In summary, control of desires spendthrift comes from the identification of the quality of the purchase. Someone who controls its financial sins will be able to perform incredible savings, because the person can distinguish a good from a bad purchase.


Once the above conditions are met, you can add one more rule: No major purchase without getting off. There is always a way to save money on a large purchase. Whether a mattress, a TV, a phone or a car, it costs nothing to try to dig up a small (not big) discount. Especially some "%" reduction can quickly turn into hundreds of Euros on this type of product.

How to escape from debt trap?

We know that we could use a good debt to get rich but it is absolutely necessary to escape from bad debts! But most of us don’t know how to avoid succumb to debt in general? There are few tips to consider and I am detailing here follows. Strip wasteful spending budget and unnecessary expenditure budget. Debts are not always caused by uncontrolled spending.

Most of the time, they are the result of high costs. Debt is not spending a lot, but if the little expenses that occupy too much space in our budget then that will create a problem to your daily life. Analyzing your account will show fixed expenses such as rent of our accommodation, car insurance, home insurance, a mobile package, consumer utilization like power, water etc. For these expenses, our ability to reduce it remains limited but we must make the most of the money spent. We must try to get the best price or the quality and for that you need to run the competition.

Car insurance will be reviewable for example; a mobile package which cost us 50 USD each month will fall to 10 USD from the competitor if you are migrating to the better network. It can also lower a monthly borrowing or by renegotiating a new loan for example rate of 3.0%, to redeem the old rate was 4.75%. Thus, everything can be verified and judged. Thanks to the internet, all the information is accessible for all market players with details of the offer price, customer feedback on the service. This is the first step; that will reduce costs "fixed" in trying to get the most out of them.

Then, the variable costs come into play and there it is anyone's choice. Try to live more simply, do not clutter of objects that have the same function and that ultimately does not work after a few months. Prefer quality to quantity as feedstock. Keep only what brings you value, sell the rest, it will be a new contribution to your fund precautionary or your other investments. Some will be more extravagant than others but as mentioned above should seek the best quality / price ratio that is for fixed expenses services and for your variable expenses like food, cooking, dressing, equipment, appliances, high-tech.

Diversify and expand your sources of income: Debts lead us into a downward spiral, as they cause expenditures premiums and other interests. To head out of the water, it must cut expenses as above and / or increase revenues. This mean being more focused on your career in order to obtain a better paying job. We can also look for secondary sources of income, for example by developing your own business, selling skills (taking language classes, guitar, gardening, hairdressing, IT freelance, freelance financial missions) on sites.

There are many possibilities; you just open your eyes to the opportunities there to withdraw money. Credits are often a substitute for savings. Some live very well the fact of having no savings because they need something, if there is an emergency, it is possible to borrow ... This trend is based on credit is dangerous. It must be reversed and economies must become a priority. Initially you will not generate income but once a savings of security you will be made more serene.

Calculate your fixed costs and average variable costs, so you know how much you need each month. From there, you see if making some efforts without costing you in their quality of life, you could put 100, 500 or 1000 Euros every month aside. In the end the debt may become a distant memory, it should be organized in such expenses in obtaining and investment income.