2018-06-17

¥80 Billion, 3-Year Old Online Lending Platform With 10M Users Implodes, May Be Ponzi

An online lending platform Tang Xiaoseng was shut down by authorities over the weekend. Media warned about the company in 2016 and some have questioned whether it is a legitimate business because it offered extremely high returns to entice investors. According to a 2016 report, the incentives could generate 75 percent annual returns.
iFeng: 近800亿网贷平台爆雷了!成立3年用户超1000万
This is an online loan platform that claims to be a state-owned enterprise with a transaction volume of 75 billion yuan and a membership of over 10 million.

According to reports from various sources, online loan platform "Tang Xiaoxuan ran away", "parent company gold service was investigated", company legal person suspected "self surrender", employees "departed", investors could not cash out, and many other news breaking.
Investors cannot take cash

The fund monarch learned in some investors' exchange groups that some of them invested family pension money.
Others invested hoping to save up for a home.
One homebuyer is closing on a house and their downpayment is locked up:
The maximum amount invested by the investors who reported on the scene was nearly 3 million yuan, and small investors also invested tens of thousands of yuan. “This is the money I bought for the house. The deposit for the house was paid. There are days to expire. Now the money is not available.” An investor reluctantly said, “The day before yesterday put 50,000 yuan yesterday. With 10,000 yuan, it will be able to arrive quickly, but it is not enough to withdraw it today." Most investors' investments are due in the near future. This is why many investors have not mentioned it before.
The transaction volume exceeds 75.0 billion yuan

According to public information, Tang Xiaojun's operating company is Zibang Yuanda (Shanghai) Internet Financial Information Service Co., Ltd., which was established in October 2014 with a registered capital of RMB 260 million and legal person Tao Lei. The shareholders of Zibang Yuanda are Zhibang Jinfu Network Technology Group Co., Ltd. (with a shareholding ratio of 99%) and Zibang (Shanghai) Investment Management Co., Ltd. (with a shareholding of 1%).

In addition to Tang Xiaoxuan, Zibang Financial Services also has products and services such as immediate loans, Zibang Wealth, enjoyment of multiple periods, interest and interest, etc. Zhibang Jinfu is wholly-owned by Zibang (Shanghai) Investment Holdings Co., Ltd. The investment company also has two shareholders of natural persons, namely Tao Lei and Yu Yongsheng.

The specific amount of money involved by Tang Xiaoxuan is currently unknown, but it involves a wider range of investors. According to Tang Xiaoxuan's briefing, Tang Xiaoxuan went live on May 5, 2015. In less than a year, the turnover would have broken 10 billion yuan. According to the latest data, as of August 2017, Tang Xiaoxuan has reached 10 million registered users and the transaction volume exceeded 75 billion yuan.
Tang Xiaoseng used very generous rebates to attract investors:
The rapid expansion of the transaction size had to be attributed to the long-term high rebate activities. According to the channel rebates, Tang Xiaoyi returned 100 yuan for 3 days returned 50 yuan, 13,000 yuan for 37 days, 500 yuan; 2000 yuan, 16 days, return 90 yuan. This high cost rebate has always existed.
In 2016, there was a media alert to the risk:

1. Some people have calculated that, with activity income, Tang Xiaoyi’s annualized yield of current products on the 10th can reach 75%, which is a bit scary.

2, high-yield sources difficult to explain, suspected capital pool

Tang Xiaoxuan claimed to be a P2F (personal to financial institution) model. Assets are bank-level, safe and reliable.

According to common sense, the overall interest rate for "bank level" assets will not exceed 8%. According to a recent report, the average yield of bank wealth management products has dropped to 4.29%, and financial product portfolios such as trusts, funds, asset management, banks, etc., can hardly exceed 8% at the current market rate.

3. There is not enough disclosure of product information on Tang Xiaoying, and there is no way to judge the authenticity. For example, whether a third-party borrower borrows money from Tang Xiaoxuan or whether Tang Xiaoxuan actually purchased a third-party wealth management platform product, because it could not be confirmed because it was not corroborated by the relevant contract. e renting treasure has tens of billions of dollars by way of purchasing large quantities of fictional borrowing names. Judging from the existing materials, Tang Xiaotong has a question mark as to whether there is any act of issuing fictional assets.

In addition, the latest operating data found by the Fund’s official website today shows that as of May 31, the amount of funds still to be received by Tang Xiaotong has reached 930 million yuan. It is worth noting that the data shows that Tang Xiaolian has accumulated 54,000 loans, but the number of overdue transactions is 0. The data is incredible.

Annualized returns exceed 8%, claiming to be "central state enterprise background"

Since its establishment, Tang Xiaoyi has been surrounded by doubts. Many times it was exposed to funds pool, self-financing, financing fraud, mismatches and other news. Its parent company, Jinbang, is the news of the cooperation of fake state-owned enterprises:

Tang Xiaoyu, the parent company of the company, Jinbang, in January 2017, Zibang Jinfu announced that it had won the “Ruibao Liyuan” strategy of the central company and subsequently “Ruibao Liyuan” was investigated for alleged fraudulent schemes in the online pyramid scheme. The state-owned financial service "has also run aground. At the same time, this so-called state-owned enterprise "Ruibao Liyuan" has already become a private enterprise, rather than its so-called "central enterprise," after a series of changes in equity.

However, Tang Xiaoxuan has questioned the fact that the Chinese government has not fallen for several years. The industry believes that this may be due to the support of its offline wealth management business. It is understood that there are 41 branches in Shanghai. According to the network data, the resources of Zibang Wealth also opened in some cities such as Zhejiang and Jiangsu.
The recent Chairman of the China Banking Regulatory Commission, Guo Shuqing, said: “In the fight against illegal fundraising, efforts should be made to make people realize that high-income means high risk and that the rate of return exceeding 6% will be questioned, exceeding 8%. Is very dangerous, more than 10% will be prepared to lose all of the principal."
The Financial Times published an article discussing an impending regulatory crackdown back in April: China’s P2P lenders brace for renewed regulatory crackdown

Exploded Land Mine: Shanghai Morn Electric Equipment

From June 14, shares of Shanghai Morn Electric Equipment (002451) were limit down on June 15 after the second largest shareholder defaulted on a loan and was forced to reduce holdings by 6 percent of outstanding shares.

晚间利空公告:摩恩电气第二大股东拟被动减持6%股份
The second largest shareholder will reduce its shareholding by 6% after pledge share default

  Moen Electric (002451) announced on the evening of June 14 that shareholders holding 19.66% of stocks Rongping information, due to the default of some of the previous stock pledge contract, the securities company plans to focus on bidding and bulk trading within six months to Rongping The stocks of information are reduced and disposed of, and the number of shares held by the company less than 2635 million shares, representing no more than 6% of the company’s total share capital. Rongrong Information is currently the company's second largest shareholder.
Background: The Bubble's Revenge: China's A-Share Market is Littered With Pledged Share Land Mines Buried During 2015 Mania

The Bubble's Revenge: China's A-Share Market is Littered With Pledged Share Land Mines Buried During 2015 Mania

Risk has migrated from the credit market back to the stock market as practices from the 2015 stock market bubble come back to haunt investors again.

Back during the 2015 stock market bubble, many investors and companies pledged their shares for loans. Standards were low at the time. In addition to taking insanely overvalued shares as collateral, banks also loaned money against shares that the owner didn't have the right to sell. Here's a post I wrote nearly 3 years ago, back in July 2015, detailing what I thought was the craziest example: Is This Peak Insanity? Blanket Company With P/E of 6000 Pledges 30% of Shares As Collateral
A blanket company had a P/E of 5800 at the peak. Shares have plunged, but the P/E is still above 3000. Shares fell more than 60% from their peak. This week, they were limit down on Monday, halted for three days, and limit up on Friday.

Just in case you think the P/E ratio may be distorting things, the price-to-sales ratio is above 70. Debt-to-assets is 23 times. Price-to-book 159 times.

By itself, this is crazy enough to show how the bull market was an indiscriminate liquidity driven momentum trader market. But this is not the end of the story.

Reuters: China's companies at risk of stock-backed loan recalls
Chinese companies that borrowed money using shares as collateral may have to put up more assets or repay their debts, carrying the ripples from the stock market plunge into the wider economy.

A near 30 percent collapse in share prices has started to endanger some businesses using such financing, and the country's banking regulator said on Thursday it would let financial institutions renegotiate lending terms in these circumstances.

Bank and other loans backed by listed shares officially increased around 260 percent in May to 58.4 billion yuan ($9.4 billion) from a year earlier, representing about 4.8 percent of total social financing for the period.

"There is no doubt all the companies are facing a financing dilemma," said Zhang Jihong, board secretary at Hubei Landing Holding Co Ltd, a textile company that suspended its shares from trading on Tuesday - roughly half of all shares on mainland bourses are now suspended - after its stock fell 61 percent.

Hubei Landing has 29.9 percent of its shares pledged as collateral for a loan from a trust company.
The stock trading under the symbol of Hubei Landing is now called Gosun Holding after acquiring Gosun Technology in August 2015. Shares are at a new post-2015 low.
More importantly, the "financing dilemma" is back for many companies. Already, more than 10 companies have run into trouble this month. That may be far from the worst of it as 98 percent of A-shares companies have pledged shares. Some major shareholders have pledged 100 percent of their holdings, while other companies have more than 70 percent of outstanding shares pledged.

In fact, judging from recent years, this landmine of equity pledges was buried in the bull market in 2015. At that time, the stocks in the entire market soared. Many shareholders who did not have the necessary conditions for reducing shareholdings used the stock pledge to finance and increase leverage. This became a direct incentive for the rapid development of the A share stock pledge business at that time.

  From the perspective of the pledged ratio, among the 3,453 A-share companies that have pledged their stocks at present, there are 1,250 listed companies with more than 20% of the pledged shares, accounting for 36.2%, and 129 listed companies with more than 50% of the pledged shares. Among them, 51 listed companies pledged more than 60%, and 10 companies pledged more than 70%. Among them, the proportion of pledged stocks of Tibetan Song is 78%, ranking first.
The top ten companies by pledged shares as a total of outstanding:

Earlier this week Zhongnan Red Cultural Group saw its shares halted.

Nasdaq: China Stocks-Factors to watch on Wednesday
Zhongnan Red Cultural's share trade to halt as shares pledged by controlling shareholder triggered margin call

Nanfeng Ventilator (300004) is in the midst of a stock pledge crisis and it's largest shareholder, and chairman, is missing.

East Money: 股权质押危机之一:南风股份股权质押爆仓 实控人失联留下官司一堆
On June 12, Nanfeng Co., Ltd. (referred to as "Nanfeng Shares", 300004.SZ) issued the "Announcement on the Progress of the Missing Chairman-related Issues." He said that on May 3, he was informed of the company's actual controller and chairman. Yang Zishan lost contact and has not yet obtained contact with him. Loss of association, restructuring failed, the company’s multiple accounts were frozen, and the chairman’s pledged stock was taken. Namfung’s shares have yet to come out of the shadows of the dark May.

... According to the announcement, as of the announcement date, it was initially understood that Yang Zishan’s personal borrowings excluding stock pledges amounted to approximately 360 million yuan (without involving the company), and there may be a debt amount of approximately 380 million yuan in the name of the fraudulent company as a borrower or guarantor (not yet Verified) and other personal debts not involving the company (exact amount is unknown).

The company stated that the verification company confirmed that the relevant borrowings or guarantees were not corporate actions and none of the company’s board of directors or the shareholders’ meeting decided or approved the company. The company was unaware of this, and the related loan money did not enter the company. The company did not grant any related matters. The accreditation clearly stated that it would not assume related responsibilities and had reported the case to the public security agency.

...At present, Yang Zishan holds 12.37% of the company's shares, accumulative pledged shares accounted for 99.12% of its total shareholding, accounting for 12.26% of the company's total share capital. If Yang Zishan’s shares are closed or judicially auctioned, there will be no change in the actual control of the company. A person in charge of the company told the China Times reporter that the actual controller of Nanfeng shares was lost, which may be related to the debt crisis. Problems in funding led to an increase in the gap.
The article puts some value on pledged shares:
As of June 12, 129 listed companies had pledged more than 50% of the total share capital. According to statistical data, the stock pledges of the controlling shareholders of 404 listed companies have hit a closing line with a market value of RMB 328.9 billion. There are 86 listed companies with a market value of more than 1 billion yuan pledged by controlling shareholders, and 9 companies with more than 5 billion yuan. Industry insiders told the China Times reporter that the stocks held by the major shareholders and actual controllers of listed companies all have limited time for sale, and they cannot realize real-time liquidity. The equity pledge model has become a fast financing channel. In the field of listed companies, it is not surprising that major shareholders or actual controllers complete cash financing through equity pledge. The problem is that the risk is relatively large. The amount of financing with certain discounted proportions is financed through the market value of the pledged equity. If the stock price fluctuates, there may be a series of risks such as the inability to repay the principal due to pledge of equity.
Shares are experiencing "flash crashes" as a result of this "land mine" risk.

East Money: 6月以来逾10家A股公司股权质押“炸雷” 你的股票有强平风险没?
[More than 10 A-share companies with pledged shares have "hit mines" since June. Have you had a strong risk in your stock? Since the beginning of this year, the share prices of some listed companies of A shares have seen multiple rounds of "flash crashes." If it is said that the “first flash crash” in the previous quarter is closely related to the “deleveraging” of institutional trust products, then in the “second quarter of the flash crash” that is coming, a high proportion of equity pledges will increasingly become a new "Gate of Life" for stocks. (Securities Times)
No stocks and no deposits: 98% of A-share companies pledged

  Judging from the characteristics of the recent market, whether it is the stock price drop triggering the risk of equity pledge closing (such as the South China Culture), it still triggers a real closeout behavior (such as Huayi Jiaxin), the stock price “flash collapse second quarter” and equity The relationship between pledges is particularly close.
Here's the charts of Zhongnan Red and Spearhead Integrated Marketing (Huayi). The former has halted trading.
Pledging shares is a way to obtain cheap financing, what could go wrong?
The equity pledge has the advantages of low cost, high efficiency, flexible business, and wide source of funds, which has become an important reason for the high enthusiasm for equity pledges in recent years. At the same time, investment bankers also told reporters that the prevalence of equity pledges, in addition to the relevant shareholders of the assets of the bank's assets, but also with the background of bank tightening, some projects can not achieve loans, loans have reached limits and other closely related. This makes the relevant shareholders more willing to finance through equity pledges.

  In fact, judging from recent years, this landmine of equity pledges was buried in the bull market in 2015. At that time, the stocks in the entire market soared. Many shareholders who did not have the necessary conditions for reduction used the stock pledge to finance and increase leverage. This became a direct incentive for the rapid development of the A share stock pledge business at that time.

Under the huge scale of equity pledges, if the company's value grows steadily and the secondary market performs smoothly, it will be calm. However, with the increase of external interference factors and the resulting price below the A-share market valuation center, equity pledges have become a major explosion. Since June of this year, more than 10 A-share companies have already announced the existence of pledges. The risk of equity liquidation involves the market value of nearly 10 billion yuan.
Naturally, there's possible fraud involved. One investment banker lays out a 3-step process that started with manipulating share prices higher:
"Three steps"

  “Equity pledges have been an important way of capital operation.” The aforementioned investment bankers explained that, for example, some of the fixed-income participants replaced the previous bridge loans used for the increase in the number of shares, and some of the companies The method of equity pledge achieves the change of major shareholders, in order to bypass the threshold of “can't backdoor”.

  However, under the equity pledge and the expected collapse of share prices, a "three-step" model is emerging in the market.

  “From a certain point of view, the major shareholder of the equity pledge is a group of smart capital players. Sometimes, they first blow the market value to achieve the maximum financing, but then the stock price will often appear due to the return value of the stock price It fell, and the institutions of the pledges became anxious at this time."
Here's one example: 361 shareholders of one company pledged all their shares, equivalent to nearly 50 percent of outstanding shares:
Statistically, many stockholders' stock pledges are conducted at relatively high stock prices. This is not only related to the overall downward trend of the market itself, but also related to the choice of shareholders for the pledge of specific time nodes.

  Three hundred and sixty-one controlling shareholders, Tianjin Qixin Zhicheng Technology, pledged 3.297 billion shares in one breath in March, which accounted for 100% of their shares, and also accounted for 48.74% of the company’s total share capital. At the time of its pledge, it was precisely when the stock price of three hundred sixty-six had the strongest performance. The company recently issued an announcement that the pledge was not a new issue, but a pledge of 460 shares in the equity of the controlling shareholder at the time of the privatization of US stocks.
Tianjin Qixin is a private company that has a stake in Qihoo. It says the shares are related to the delisting of Qihoo from the U.S. market.

Step two in this process is halting shares after they collapsed in price:
Secondly, after the equity pledge, under the influence of the big market, the stock price of the relevant company has become the norm. Most of the major shareholders have adopted a suspension to protect the interests. However, this approach is a double-edged sword, although it can suppress the stock price decline in the short term, it will also Bring the loss of stock liquidity. And in the context of stricter regulation of suspension, it cannot be used frequently.

 According to the aforementioned investment bank sources, in fact, after the major shareholders pledged their money, some of them are not afraid of falling stock prices. They are most afraid of the stock price falling but they are their pledges. “From this point of view, it is equivalent to the major shareholders transferring the risk to the pledgee. Therefore, the institutional equity pledge business including some brokerage companies has begun to shrink.”

  In accordance with the conventional practice, since the pledges reach the warning line, it is generally required to make up the position within 2 days, and to add additional pledged stocks or direct cash compensation. If it breaks below the open line, it will notify the emergency plan the next day: either, the priority shareholder redeems, the redemption amount = principal + unpaid interest; or, if there is no money to redeem, it will be equal.
According to the preliminary review of the announcement, in the past month, the equity pledges of more than 20 listed companies have been liquidated, and the number has quadrupled compared with April.

Finally, after stock prices fell due to equity pledges, if major shareholders cannot protect stock prices through repurchase or other means, there is no way to cover short positions and there is no way to repay loans. When financial institutions sell off, they will have an impact on the secondary market. As a result, stocks with a high ratio of pledges have seen their shares collapse.
Here's a list of companies whose controlling shareholders have pledged 100 percent of their shares:
Some companies are avoiding collapse by pledging more collateral. Others, such as Nanfeng discussed above, have shifted risk to the lender thanks to the court freezing the assets.
Take Ruikang as an example, the company received a letter from the company's controlling shareholder, Hangzhou Ruikang Sports Culture Co., Ltd. on June 12th. Due to the continuous decline in the stock price of the company in recent days, some of the shares of Ruikang Sports Pledge have already exceeded the liquidation line. . As a result, Ruikang Sports and its controlling shareholder Shenzhen Shenliyuan Investment Group Co., Ltd. began to actively negotiate with the pledgee to sign a supplementary agreement and added 20 sets of commercial houses and 5 sets of residential buildings totaling 5770.07m2 as collateral.

  Taking Southwind as an example, the shares of Yangzishan, one of the company's actual controllers, had already touched the liquidation line as early as the end of May. However, since all of its shares have been frozen by the judiciary, the shares pledged by Yang Zishan will not be forced. Warehouse transfer. This also means that the relevant risks have been accumulated here at the pledgee.
Final advice for investors:
The pledge rate of equity is below 30%, which is generally safer. Conversely, more than 70% of them belong to high-risk varieties, because once the warning line is touched, they may face the dilemma of no assets available for compensation. At the same time, for cases where the proportion of equity pledged exceeds 50%, it should always pay close attention to the changes in the stock prices of related companies and the latest equity pledge information.
So much for default risk from China's deleveraging effort being contained.




Update: AA+ Rated Yingkou Port Defaulted on ¥530 Million, Has ¥78.1 Billion in Debt

Last week I posted State-Owned AA+ Rated Yingkou Port Defaults on 530 Million, Has 68.7 Billion in Debt. I could find no English coverage of the story. As of today, I only find a small mention in Asia Insurance Review: At least 10 insurers involved in at-risk Yingkou Port debt investment plan. It mentions only the ¥530 million yuan default.

I was surprised about the lack of coverage given it is a AA+ rated state-owned enterprise (Dagong rates U.S. sovereign debt as BBB+). A week ago I posted in-depth research from Changjiang securities slicing and dicing the Chinese bond market and areas (industries, provinces) with increased default risk. The chart below shows the share of bonds issued below AA rating and the issuer. Private enterprises (red) and other (blue) are dwarfed by SOEs (yellow). The right hand side shows the total percentage of less than AA debt issued. There may or may not be a lot of debt with similar risk out there going by credit ratings.
Here's Dagong's (red) and China Bond Rating's *blue) rating history for Yingkou:

Last week the total debt was reported as ¥68.7 billion. The latest coverage from Sohu says ¥78.1 billion. The headline says: the creditor lineup is quite luxurious!

Sohu: 781亿债务!AA+省属国企营口港违约,债权人阵容相当豪华
According to Yingkou Port’s own statement, in the process of Liaoning port integration, the company’s financing activities have all but ceased, and the temporary funds are tight. Therefore, it is hoped that Everbright’s reorganization plan will be adjusted.

According to relevant media reports, Everbright's debt plan for Everbright has 14 beneficiaries, of which 13 are insurance companies and a total investment of 1.7 billion yuan; the other is Haikou Branch of China Everbright Bank Co., Ltd. with an investment of 300 million yuan.

The 13 insurance institutions were China Life Insurance (subscribing 450 million yuan), China Ping An Life Insurance (subscribing 240 million yuan), China Pingan Property & Casualty Insurance (subscribing 0.6 billion yuan), Xinhua Life Insurance (subscribing 200 million yuan) and Taikang Life Insurance (subscribing) 100 million yuan), Indochina and Life Insurance (subscribing 150 million yuan), Indochina and P&C Insurance (subscribing to 50 million yuan), United States-China United Metropolitan Government (subscribing to 50 million yuan), and ICBC Ansheng Life Insurance (subscription of 100 million yuan) ), CCB Life Insurance (subscription RMB 50 million), Taiping Life Insurance (subscription RMB 100 million), Huatai Property Insurance (subscription RMB 50 million), and Huatai Life Insurance (subscription RMB 100 million) .
Such a luxurious lineup can be said to cover more than half of the insurance circle. The reason that the original insurance fund purchased this debt investment plan was in addition to the AA+ rating of Yingkou Port, another very important factor is that the Bank of China has undertaken irrevocable guarantees, and Chinese banks is exposed. Naturally, investors are not worried.
The resolution of Yingkou Port's debt restructuring could set the model for other defaulted Liaoning firms:
“Yingkou Port is not without money. It involves an overall debt restructuring. From the perspective of publicly disclosed information, it is the immediate repayment of bonds and the reorganization of debt for non-bonds,” said the person in charge of the insurance industry. The Economic Observer reporter said that in this process, Everbright's debt plan was allocated to non-bond debt , but in the eyes of the beneficiaries of the Everbright asset management and credit plan, the investment plan should not be divided according to the nature of the business. Included in the debt-to-equity swap.

The reason is very clear. It means that Yingkou Port intends to redeem all standardized bonds. However, such non-standard products as Everbright's debt investment plan are intended to convert debt into shares.

Wrote here, readers and friends, did you think of Liaoning Northeast Steel, open bondholders meeting, disregard the opposition of many investors, forced the implementation of debt-to-equity swaps, or GKX Proposes a line of three will suspend all LN Regional bond approvals.

The same story may be staged again in Liaoning's land.
The Sohu article also discusses another worrying aspect of the Yingkou default: good assets were stripped.
This is not, good financial assets are also being stripped : In December 2017, the State-owned Assets Supervision and Administration Commission of the city of Shangkou City approved the equity of three unlisted financial institutions held by Yingkou Port Group and its subsidiaries (Shenyang Rural Commercial Bank Co., Ltd. 10 %, 10% of Dalian Rural Commercial Bank Co., Ltd., and 14.6% of Yingkou Rongsheng Rural Commercial Bank Co., Ltd.) were transferred to Yingkou Venture Capital Guidance Fund Co., Ltd. and Yingkou Huiying SME Sustainable Development Services Co., Ltd. The audit base date for this free transfer was December 31, 2016. The total value of the equity transferred was RMB 1.253 billion , accounting for 3.6% of the owner's equity of the Yingkougang Group's audited consolidated financial statements for the 16th year.

We will wait and see how the development of Yingkou Port continues.

China: 11 B in Bond Offerings Canceled, Ratings Downgraded

In the wake of the second AA default (Yingkou Port having a AA+ rating) last week, ratings firms have begun downgrading their credit ratings. Twenty companies postponed or cancelled 11 billion yuan in bond offerings.
JRJ: 中融双创违约 蒙草生态评级调低
1. Zhongronghuang hit 597 million yuan in debt default, which was related to the expansion of its external guarantees and the deterioration of the regional financial environment.

  2. Ecology and Huayi Jiaxin were downgraded. 17 Mengcao Ecology SCP001, 17 Mongolian Ecology G1, 17 Mongolian Ecology SCP002 has its rating downgraded to A-, and its rating outlook is negative.

  3. The issuance of bonds by 20 companies such as Chongqing Expressway, Longyan Industry and Trade, Jintou Group and Yulin City Investment was postponed or cancelled, totaling 11.16 billion yuan.

GOP Can Sweep Midterms With Hardline Immigration

ZH: Bannon Says Trump "Will Run The Tables" In Midterms If He Does't Fold On DACA
Bannon said he opposes any immigration bill that provides a pathway to citizenship for DACA recipients - and that Trump's support for the bill stems from a desire to be a "leader for the whole country": "If you support this bill… I think this is a way to potentially lose 50 seats [in the House], otherwise I think we run the tables."
Bannon is correct.

The media and the establishment have few good arguments for why millions of illegal aliens should be allowed to flow over the border. In the past couple of weeks, they've argued that domestic abuse and gang violence should qualify someone for asylum. Meanwhile, millions of Americans are victims of domestic abuse and gang violence, yet they have no asylum. They've defined asylum down from facing serious political repression under a hostile government to local crime and choosing the wrong spouse or lover. It's an absurd position that both exposes them as immigration extremists and is 180 degree out of step with social mood. Addendum: It's also absurd given than child welfare and domestic abuse laws separate children from their parents all the time, all over the USA. What's being done at the border is no different that how all American citizens are treated if they are only accused of violating the law. Children are taken out of homes with no evidence, sometimes a complaint is enough. At the border, illegal border crossers are being detained. None are claiming to be innocent of illegally crossing the border.

Devoid of a positive argument, the estbalishment is also reverting to pedophrasty.
Taleb defines pedophrasty:
There weren't photos, but Italy's new interior minister Matteo Salvini turned back a migrant ship with pregnant women and children. In the face of international pressure, he stood strong. The result is a solid majority support his action.

Social mood is turning more negative, making the public more in favor of immigration restrictions. Majorities of the public already wanted immigration restrictions years ago. When immigration restriction is offered to voters, they will vote for it. It is considered (by voters) the #1 problem in most European countries. Angela Merkel may lose her Chancellorship and end her political career this week because of the immigration issue.

The establishment's resort to pedophrasty reveals the weakness of their position. They can't defend their extremist immigration policies (policies that would be extreme for peak social mood) when the public mood is far, far removed from peak mood. They are selling gasoline to voters worried about a burning home. This is the panic before total defeat, if President Trump and Republicans choose to forge ahead. If it was President Trump's decision alone I might bet on him standing firm, but for the GOP overall, it is likely they will snatch defeat from the jaws of victory. If they stand firm though, we will see a apoplectic media warn of a Democrat landslide in November. Then you will be able to load up on election bets and "clean house" in November.

Strong Majorities Back Salvini Shutting Ports and Confronting EU

Once people are allowed to vote, they vote strongly in favor of immigration restrictions. Where the left is smart (as in Denmark), it will flip on immigration. In some countries such as Sweden and Italy, the anti-immigration parties have enough center or left policies to win a majority. Elsewhere, where sane immigration policies are labeled as racist, xenophobic, etc., whatever party or politician delivers on immigration restriction will win power.

2018-06-15

Dutch Study Shows Diversity Lowers Economic Growth, Increases Crime, Increases Alienation

The chief economic policy of the Western establishment is mass immigration. In order to save social welfare and deeply indebted economies, it hopes more people will lead to more GDP. It also invented theories to explain how diversity will boost growth. This message is spread constantly in the press and countries that do not have mass immigration, such as Japan, are told to increase immigration for their own benefit.

The reality is the plan is a failure. It is 180 degrees at odds with reality.

A Dutch study is the latest to find diversity has either zero or a negative impact on economic growth, increases willingness to commit crime and reduces social cohesion.
De nieuwe verscheidenheid. Toenemende diversiteit naar herkomst in Nederland

These changes aren't simply the reactions of natives. They are true for all of society, including the immigrants.

Diversity and mass immigration are the main force propelling populists into power. The weak economy post-2008 is only adding fuel to the fire. Declining social mood since 2000 is not caused by diversity, but mood will fall far further than otherwise possible thanks to diversity. Alienation doesn't occur as natives vs the others, it is a sense of alienation from all of society. White Democrats and White Republicans in the USA who used to get along are increasingly polarized because diversity has caused a general sense of alienation for everyone. We are a long, long way from seeing peak polarization.The current period will be remembered as the good times.

Finally, Trump is the creation of the establishment. He can be defeated, but the forces propelling him to power cannot be unless the fundamentals are reversed. If he is defeated and his immigration policies aren't implemented, then another more powerful populist will take his place. The same is true in Italy, the UK, Germany, etc. The political establishment may think Trump, Brexit, AfD and 5-Star/Lega are lung cancer, but they are the ones doing the smoking. The establishment believes the solution to lung cancer is to go from 2 packs a day to 4 or 5 packs a day.