Xi Vows Greater Access to China, Warns Against ‘Cold War Mentality’ In a 40-minute address, Xi Jinping promised foreign companies greater access to China’s financial and manufacturing sectors, pledging Beijing’s commitment to further economic liberalization amid rising trade tensions with the U.S.
In a speech that officials had billed as a major address, Mr. Xi said Tuesday that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies.
Throughout his 40-minute address, Mr. Xi never mentioned the trade friction with the U.S. or President Donald Trump. His remarks seemed designed to offer some policy initiatives, if not concessions, while drawing a contrast with President Trump’s “America First” agenda and portraying China as a steady global partner committed to the international trade order. (…)
“We have every intention to translate the measures into reality sooner rather than later,” Mr. Xi said, though he didn’t provide a clearer timetable for those or the other measures announced. (…)
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Xi Jinping speech offers no big concessions to Trump Chinese president’s rehash of Davos address fails to reduce risk of trade war with US
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Trump trade threats lack credibility (Lawrence Summers)
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Ray Dalio Says Odds Are Rising for Trade and Other Types of Wars
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Trump Acknowledges Farmers to Feel Impact From China Trade Actions President Donald Trump promised to remedy the negative effects on U.S. farmers caught up in his administration’s trade dispute with China.
How about these guys?
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U.S. Manufacturers Worry Tariffs Could Undermine Recovery Manufacturing companies are voicing concerns about the downside of U.S. tariffs meant to help the industry compete with China.
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Nafta Partners Seek Deal by Early May, Mexico Says Economy Minister sees 80% chance of agreement in principle in several weeks
(…) The official confirmed that negotiators are discussing a proposal from the U.S. that calls for certain vehicle parts to be made in zones where wages average at least $15 an hour
, which excludes Mexico, as part of the content calculation.
“The proposal would be aspirational, unreachable for Mexico in the short-term,” because the country doesn’t have such wage levels, he said. But the U.S. government first needs to reach an agreement with its own car manufacturers on such a plan.
“The devil is in the details,” Mr. Guajardo added. With U.S. eagerness to reach a deal soon, “when there’s urgency, there must be flexibility,” he said. (…)
And while car sales are plateauing:
DEBT MATTERS
CBO Sees Annual Deficits Exceeding $1 Trillion by 2020 Tax cuts and spending increases enacted over the past four months will lead to wider than previously expected budget deficits and a mostly temporary spurt in economic growth, the Congressional Budget Office predicted.
(…) The Congressional Budget Office said the federal budget deficit would total $804 billion this year, 43% higher than it had projected last summer, and exceed $1 trillion a year starting in 2020. The deficit was $665 billion in the fiscal year ended Sept. 30.
Economic growth will jump above 3% this year thanks to fiscal stimulus, the CBO said, but the agency predicted the acceleration will prove largely fleeting. Larger deficits will add to the national debt: Debt held by the public will hit $28.7 trillion at the end of fiscal 2028, or 96.2% of gross domestic product, up from 78% of GDP in 2018.
Those estimates assume current law will remain in effect, meaning Congress would allow some tax cuts to expire and spending caps to take effect again in the coming years. If Congress extends the tax cuts, as many Republicans want to do, the CBO predicted higher deficits and publicly held debt of about 105% of GDP by the end of 2028—a level exceeded only once in U.S. history, in the immediate aftermath of World War II.
“Such high and rising debt would have serious negative consequences for the budget and the nation; in particular, the likelihood of a fiscal crisis in the United States would increase,” CBO Director Keith Hall told reporters. (…)
The deficit is expected to rise from 4% of GDP in 2018 to 5.4% of GDP in 2022, then ease to 5.1% of GDP in 2028. The debt held by the public will climb from 78% of GDP in 2018 to 94.5% of GDP in 2027, then 96.2% in 2028, the agency said. (…)
It is unusual for the federal budget deficit to significantly expand outside of wars or recessions. (…)
Consumer Credit May Weigh on Economy Evidence is mounting that consumer lenders are slowing their credit card, auto and other loans
(…) First, lenders have grown more cautious over the past year in response to rising delinquencies and defaults on their loans. The Fed’s survey of senior loan officers shows more bankers tightening terms on consumer loans than not in four of the last five quarters. (…)
Second, consumers may now be paying down loans that they accumulated over the past few years of strong credit growth. This effectively means that consumers are saving more. (…)
Rising Home Prices Push Borrowers Deeper Into Debt More Americans are stretching to buy homes, the latest sign that rising prices are making homeownership more difficult for a broad swath of potential buyers.
Roughly one in five conventional mortgage loans made this winter went to borrowers spending more than 45% of their monthly incomes on their mortgage payment and other debts, the highest proportion since the housing crisis, according to new data from mortgage-data tracker CoreLogic Inc. That was almost triple the proportion of such loans made in 2016 and the first half of 2017, CoreLogic said. (…)
The amount of these loans packaged and sold by Fannie and Freddie increased 73% in the second half of 2017, compared with the first half of the year, according to Inside Mortgage Finance, an industry research group. In that same period, overall new mortgages rose 15%. (…)
Last summer, Fannie Mae moved to back more loans made to borrowers with debt-to-income ratios of up to 50%, up from a typical limit of 45%. Freddie Mac also started backing more of those loans, according to industry researchers.
Fannie’s new policy has resulted in 100,000 new mortgages that otherwise wouldn’t have been made last year and early this year, according to the Urban Institute, a nonpartisan research organization.
Caliber Home Loans, a Texas-based lender, said 25% of its funded loans have debt-to-income ratios of greater than 45%, up from 10% about a year ago. (…)
The Urban Institute found that the share of borrowers with Fannie Mae-backed mortgages who had high debt-to-income ratios and had credit scores below 700 jumped to nearly 25% in the first two months of this year from 19% a year earlier. (…)
Big Banks Find a Back Door to Finance Subprime Loans Big banks like Wells Fargo and Citigroup are taking a new approach to the subprime market by lending a record amount to nonbank financial firms.
These days, Wells Fargo WFC 0.04% & Co. and Citigroup Inc. C 1.22% are unlikely to make a $14,000 auto loan to a borrower with a subprime credit score. That is now the domain of direct lenders such as Exeter Finance LLC, based in Irving, Texas.
But where does Exeter get the money to make subprime auto loans? From Wells Fargo and Citigroup. They have helped lend Exeter $1.4 billion for that very purpose.
Bank loans to Exeter and other nonbank financial firms have increased sixfold between 2010 and 2017 to a record high of nearly $345 billion, according to a Wall Street Journal analysis of regulatory filings. They are now one of the largest categories of bank loans to companies. (…)
BTW, last March 14:
Last week:
MARCH 2018 REPORT: SMALL BUSINESS OPTIMISM INDEX The Index of Small Business Optimism slipped in March to 104.7, 2.9 points below the February reading of 107.6, the second highest level in its history.
