I’ve been keeping an eye on the seemingly daily stories about the downturn in China. Bloomberg is at bat today, reporting that half of the country’s toymakers have shut down:
China’s largest banks, with 4 trillion yuan of cash, are resisting government efforts to boost lending to 42 million small and medium-size companies that drove the economic boom of the past decade. On Nov. 2, the central bank scrapped curbs on loans after three interest rate cuts in seven weeks failed to revive economic growth that has sagged to its slowest in five years.
Half the nation’s toy exporters have closed this year, and 67,000 smaller enterprises filed for bankruptcy in the first half, according to government statistics. Companies with assets of less than 40 million yuan provide three-quarters of urban jobs and 60 percent of China’s gross domestic product.
The LAT reports that the latest homeowner-aid plan is a flop:
But fewer than 100 homeowners applied for the program in October, and the Federal Housing Administration now projects that just 13,300 will be helped in its first year. An FHA official said at a mortgage industry conference recently that one large lender had reported that in a group of 23,000 troubled borrowers only 1,200 would be eligible for the program…
But lenders, mortgage investors and borrowers all see drawbacks in the FHA plan and have been slow to embrace it, industry and government sources say.
In some cases, the interested parties are playing a waiting game, hoping that other potential foreclosure-prevention options, among them a proposal promoted by Federal Deposit Insurance Corp. Chairwoman Sheila Bair, will be more attractive.
The initial reaction suggests Hope for Homeowners could be just the latest in a series of government and industry efforts that have failed to stem the rising tide of foreclosures.