Rebel Traders – Analysis Without The Hype

Of course, when you start a credit flood, this is to be expected… But yet, China is climbing into another American-style issue: defaults on credit card debt are rising by 131 %. Nice to see that the US have succeeded in exporting their irresponsible behavior to other countries.

Credit card debt in China at least six months overdue rose 131.3 percent year on year in the second quarter of 2009 to 5.77 billion yuan ($845.24 million), the People’s Bank of China, the central bank, said Wednesday.

Debts overdue by six months or more accounted for 3.1 percent of the total outstanding credit card debt at the end of June, or 0.7 of a percentage point more than in the same period last year.

The bank warned of potential risks of increasing overdue credit card debt as banks expanded the business.

By June 30, China’s banks had issued 162.62 million credit cards, or 0.12 per person, up 32.9 percent from a year earlier.

In the first quarter this year, credit card debt at least six months overdue rose 133.1 percent from a year earlier to 4.97 billion yuan.

The cost of purchasing insurance against Irish Government bonds rose to record high levels on Friday, having tripled in just one week as fears mount that the Irish Government may default on its rising debt.

The cost of insuring Irish debt hit 350 basis points on Friday, meaning that for every £100 of debt it would cost £3.50 to insure against default. A year ago it would have cost 10p to insure every £100 of Irish debt.

Ireland, like so many other nations around the globe are experiencing growing problems related to the banking industries. Ireland’s current pledges to support its banking sector amount to 220% of the Ireland’s annual economic output. This enormous commitment to support the banks is putting Ireland in a dire situation of possible default.

With the recent scandal at Anglo Irish Bank concerning undisclosed loans the fear is rising that the Irish Government will be hit with much more ‘yet to be disclosed’ losses and will push Ireland over the edge into default.

Ireland is set to borrow an additional €15 Billion ($19.3 Billion US) this year and Ireland’s national debt will reach €70 Billion ($90 Billion US). A default by Ireland would have wide sweeping implications for the EU Union. This comes on top of other nations believed to be on the brink of default, such as Ukraine and Russia and follows the disastrous financial failures in Iceland just a few months ago that toppled the Icelandic Government.