Be regular and orderly in your life, that you may be violent and original in your work.
― Clive Barker
- Confronting China’s Skyrocketing Local Debt (Governing): Due to the lack of a formal municipal lending market, as well as inconsistencies in reporting, local government debt in China is not easily calculated. But experts agree that the number is large, and more worrisome, the pace of growth has become unsustainable. In 2010, estimates for total local government debt were 10.7 trillion yuan. Estimates peg the 2013 number at 17.9 trillion yuan (nearly $3 trillion USD), representing a 67% increase in three years. The addiction to job-creating infrastructure projects seems to be a major driver of this debt explosion, but many believe that some Chinese municipalities are already struggling under debt levels that they will be unable to service.
- School Operator Seen Swapping Debt (Bloomberg): College operator Education Management Corp. (NASDAQ: EDMC) seems poised for a restructuring driven in part by increased regulatory scrutiny of for-profit colleges. With total debt of $1.3 billion and declining revenue, analysts believe the company will soon violate debt covenants.
- Signs of a Cooling Leveraged Loan Market (Forbes): April saw an uptick in price flexes – the re-pricing of deals during syndication – in favor of institutional investors. In the past year the market has strongly favored issuers, but market watchers believe that tightening by the Federal Reserve will bring about a switch to more investor friendly terms in the near future.
- Nintendo’s decline spells doom for casual game companies (Pando): Gaming company Nintendo, which revolutionized the industry in the 1980s with the Nintendo Entertainment System, is struggling to compete in a radically changed market. Having lost the console wars to Sony’s PlayStation and Microsoft’s Xbox, the company now finds itself an also-ran in a sector it once dominated, while new competitors such as Rovio and King have identified new market opportunities in the gaming space with titles Angry Birds and Candy Crush, respectively.
- Was Barclays the problem, or was it the business model? (Reuters): The announcement by Barclays that it will pull back from its former global ambitions has prompted writer James Saft to question whether this is illustrative of challenges specific to Barclays, or broader challenges with the universal bank model itself.