PPCC: Pisitófilos Creditófagos. Invierno 2025

[Derby]

https://www.reuters.com/world/asia-pacific/china-dropping-red-lines-policy-that-sent-property-sector-into-crisis-report-2026-01-29/

China reportedly drops rules that sparked property crisis, developer shares surge


Real estate projects under construction are seen in the Shekou area of Shenzhen, Guangdong province, China November 19, 2021. REUTERS/David Kirton Purchase Licensing Rights

HONG KONG, Jan 29 (Reuters) - China has done away with borrowing limits on property developers known as its "three red lines" policy, local media said on Thursday, an apparent end to rules that triggered a debt crisis which continues to weigh on the world's second-largest economy.
In a separate new measure to help relieve financing pressure on the sector, authorities are also allowing banks to grant extensions of up to five years for loans to certain property projects, two sources with knowledge of the matter said.

China Real Estate Business, a media outlet managed by the Ministry of Housing and Urban-Rural Development, reported that the "three red lines" policy has basically ended. A spokesperson for the ministry could not immediately be reached for comment.

In some ways, China's abandonment of the red lines - caps on debt-to-cash, debt-to-assets and debt-to-equity ratios imposed in 2020 that developers could not exceed if they wanted fresh loans - is symbolic.

The rules were seemingly relaxed before this year, developer sources said, declining to be named. Analysts also said that funding challenges for a still deeply troubled industry would continue to persist even without the limits.

RED LINES CAUSED LIQUIDITY CRUNCH

Nevertheless, real estate developers surged on the news with China Overseas Land (0688.HK), opens new tab and Longfor (0960.HK), opens new tab both gaining 6% and the CSI 300 Real Estate Index (.CSI000952), opens new tab in mainland China climbing 5% to its highest level in two months.

The idea behind the "three red lines" was to rein in the sector's appetite for unbridled borrowing, but the policy backfired spectacularly by causing a liquidity crunch from mid-2021, and many developers have since defaulted on their debt.

For example, China Evergrande, once the country's biggest developer, is now in liquidation, while Country Garden (2007.HK), opens new tab recently completed a restructuring of its offshore debt. China Vanke (000002.SZ), opens new tab, another embattled top-ranked developer, recently gained creditor approval to defer some repayments, staving off a potential default.

The downturn in the sector, which used to account for about a quarter of China's GDP, has hit the economy hard with homebuyer and investor confidence slumping as swathes of apartments went unfinished.

Liu Shui, an analyst at China Index Holdings, a real estate analytical firm, said that the rules no longer served their intended purpose given changes in the industry.

Developers have "abandoned the debt-driven expansion model and no longer prioritize scale above all else, instead focusing on high-quality development," he said, adding that aggressive companies in the sector have already defaulted.

Analysts at Citi said in a research note that the removal of the policy is unlikely to bring an influx of new funds to the sector because most private developers are still grappling with debt extension or restructuring. State-owned firms still need to comply with other regulatory requirements to take on more borrowing, they added.

"That said, we see this move as a possible signal, indicating that the deleveraging and de-capacity of the property sector have been accomplished, sentiment wise," it added.

LOAN EXTENSIONS FOR 'WHITELIST' PROJECTS

Certain property projects are eligible for loan extensions from their original lending banks without additional collateral requirements, said the two sources, who declined to be identified as they were not permitted to speak about the matter publicly.

Those projects belong to a so-called "whitelist" launched in January 2024 aimed at ensuring the completion of residential projects. Local governments nominate eligible projects and banks are encouraged to provide financing.

Many of those loans are expiring after two years. The extension will offer breathing room for developers to complete unfinished projects and stabilize their operations, the sources said.

Chinese authorities have over the years taken a raft of measures aimed at supporting the property market, but new home prices extended declines in December, underscoring persistent strains in the sector.

An official Communist Party journal said on January 1 that the country's property sector remained a pillar of the economy but was "undergoing a profound adjustment". The article called for "strong policy actions" to stabilise expectations.

[Derby]

https://www.ft.com/content/0d6c67f6-37ef-4973-ade1-2f8e7610fb39

Kevin Warsh’s desire to shrink Fed’s balance sheet sets up clash with Trump, say investors

Long-term yields ticked up after president nominated former governor to lead US central bank


Longer-dated Treasury yields rose on Friday as investors bet that Warsh’s nomination could push up borrowing costs © FT montage/Bloomberg

Kevin Warsh’s long-held desire to slash the Federal Reserve’s balance sheet is likely to clash with Donald Trump’s relentless calls for the central bank to depress long-term borrowing costs, big fund managers have said.

Longer-dated Treasury yields rose on Friday as investors bet Trump’s nomination of Warsh to lead the world’s most influential central bank could push up borrowing costs. The move pushed the difference between 30-year and two-year debt yields — a measure that is closely watched on Wall Street — to 1.35 percentage points, close to the biggest gap since 2021.

The market fluctuations are an early sign of how traders are assessing Warsh’s statements in recent years, in which he has criticised the central bank for the scale of its bond purchases during the 2008 financial crisis — when he was a Fed governor — and later during the 2020 pandemic.

“You have an anti-balance sheet expansion guy against a backdrop of wanting lower interest rates. It’s a tension point. That’s what the market is focused on. That’s why the curve is steepening out,” said Greg Peters, co-chief investment officer of PGIM fixed income.  

Warsh served as Fed governor from 2006 to 2011 and has since become a prominent critic of some of the central bank’s flagship policies, particularly the multiple rounds of quantitative easing that left it holding almost $9tn of US Treasuries and other assets at its peak.

He has argued that the persistence of a vast balance sheet distorts asset prices and could risk entrenching inflationary pressure, even as he has argued that the US economy faces downside risks that justify a lower policy rate.

“The Fed has been the most important buyer of US Treasury debt — and other liabilities backed by the US government — since 2008,” Warsh said in a widely followed speech in April, adding that, “it’s a proxy for the Fed’s growing imprimatur on the economy”.

Stanley Druckenmiller, the billionaire investor and long-time mentor of Warsh, told the FT on Friday that the policymaker was not a permanent “hawk” and that “I’ve seen him go both ways” on monetary policy.

Some investors think he could push for lower short-term interest rates in the hope that advances in productivity caused by the AI boom would allow the economy to grow quickly without producing much inflation.

The Fed cut interest rates by 0.75 percentage points last year, but it signalled earlier this week that it would hold off on cuts for some time since growth has been strong and the jobs market appears to be stabilising after a period in which it was showing signs of weakness.

After Trump nominated Warsh, markets continued to price in two quarter-point rate cuts beginning this summer, indicating that traders’ short-term views on the Fed remain intact.

Bill Campbell, a portfolio manager at DoubleLine, noted that there would be tension if Warsh agitated for lower short-term rates while also pursuing a smaller balance sheet at a time of growing government debt and persistently high inflation. 

“Until you get fiscal under control and inflation under control, you are not going to be able to aggressively reduce interest rates and shrink the [Fed’s] balance sheet,” he said, adding: “I believe Kevin Warsh fully understands this.” 

The Fed ended its quantitative tightening programme to reduce its balance sheet late last year amid concerns over shrinking liquidity in short-term funding markets — easing some concerns over demand for sovereign debt issuance as analysts forecast an expansion in the central bank’s bond-buying.

“The issue is if you justify rate cuts by cutting the balance sheet, this does nothing to help lower long-term rates and improve mortgage affordability, which is what Trump wants,” said Mark Dowding, head of active fixed income at RBC BlueBay Asset Management.

[Derby]

https://www.reuters.com/world/asia-pacific/nvidia-ceo-huang-denies-he-is-unhappy-with-openai-says-huge-investment-planned-2026-01-31/

Nvidia CEO Huang denies he is unhappy with OpenAI, says 'huge' investment planned

TAIPEI, Jan 31 (Reuters) - Nvidia (NVDA.O), opens new tab plans to make a "huge" investment into OpenAI, probably its largest ever, CEO Jensen Huang said on Saturday, denying he was unhappy with the ChatGPT maker.

The chipmaker in September announced plans to invest up to $100 billion in OpenAI, a deal that would give OpenAI the cash and access it needs to buy advanced chips that are key to maintaining its dominance in an increasingly competitive landscape.

The Wall Street Journal reported on Friday that the plan had stalled after some inside the chip giant expressed doubts about the deal.

The report said Huang had privately underlined to industry associates in recent months that the original $100 billion agreement was non-binding and not finalised.

Huang has also privately criticised what he has described as a lack of discipline in OpenAI's business approach and expressed concern about the competition it faces from the likes of Alphabet's GOOGL.O Google and Anthropic, the WSJ said.

Speaking to reporters in Taipei, Huang said it was "nonsense" to say he was unhappy with OpenAI.

"We are going to make a huge investment in OpenAI. I believe in OpenAI, the work that they do is incredible, they are one of the most consequential companies of our time and I really love working with Sam," he said, referring to OpenAI CEO Sam Altman.

"Sam is closing the round (of investment) and we will absolutely be involved," Huang added. "We will invest a great deal of money, probably the largest investment we've ever made."

Asked whether it would be over $100 billion, he said: "No, no, nothing like that".

It was up to Altman to announce how much he wanted to raise, Huang added.

Amazon (AMZN.O), opens new tab is in talks to invest dozens of billions in OpenAI and the figure could be as high as $50 billion, Reuters reported on Thursday.

OpenAI is looking to raise up to $100 billion in funding, valuing it at about $830 billion, Reuters has previously reported.

Huang was speaking outside a Taipei restaurant having hosted all Nvidia's key suppliers in Taiwan, including the world's largest contract chipmaker TSMC (2330.TW), opens new tab, in what Taiwanese media called the "trillion-dollar dinner" because of the combined market capitalisation of those attending.

[Derby]

https://www.msn.com/en-us/money/companies/illinois-shuts-down-metropolitan-capital-bank-trust-in-first-us-bank-failure-of-2026/ar-AA1VnPBv

Illinois shuts down Metropolitan Capital Bank & Trust in first US bank failure of 2026


Illinois shuts down Metropolitan Capital Bank & Trust in first U.S. bank failure of 2026

The Illinois Department of Financial and Professional Regulation (IDFPR) closed Chicago’s Metropolitan Capital Bank & Trust on Friday due to unsafe and unsound conditions and an impaired capital position. The bank is the first U.S. financial institution to fail this year.

[Derby]

https://www.ft.com/content/f353376f-695c-4053-9c2d-5cbc58904d34

Chart of the Week: Will metals lose their lustre?

Unpacking the dramatic rallies in gold, silver and copper



Gold has long been the go-to diversification and safety trade for investors during times of chaos. But the sheer scale of the recent gold rally — silver and copper along for the ride — indicates that the price action has taken on a life of its own.

Friday gave a sign that investors have started to get more in touch with reality. The reduction in macro uncertainty following Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair triggered extreme profit-taking. Gold prices fell around 9 per cent, while silver prices plummeted about 26 per cent.

Macro uncertainty has been a big driver of prices over the past few months, and traditionally, metals prices have moved higher with a weaker dollar. However, the dramatic scale of the price rises and falls is historic. Retail investors flooding into precious metals-backed ETFs have turbocharged the price moves — particularly for gold and silver, and to a lesser extent copper, according to Hamad Hussain at Capital Economics. “This is [the] recent money which came into the market the last few months, but by nature is volatile,” said James Steel of HSBC.

As Unhedged has noted before, gold has become a momentum trade, and the risk for investors is global sanity. But even if gold prices retreated below $4,000, they would still be just at their levels about five months ago and still historically high. Gold also has a safety net in the form of central bank purchases. Meanwhile, silver and copper, which are mostly used for industrial purposes, are sensitive to cyclical booms and busts. Are Friday’s events enough to convince investors macro fears have been overdone and a fading of the momentum trade, or is the speculative rally just catching its next breath? Let us know your thoughts: unhedged@ft.com.

[Derby]

https://www.thebignewsletter.com/p/the-boomcession-why-everyone-but

[Currobena]

Nuestro primer mes de era zero.

Síii.

[Benzino Napaloni]

¿Estoy equivocado¿ ¿Es la IA como para tanto?

Recuerden, los que la vivieron hace 25 años, la burbuja de las puntocom. El discurso era prácticamente clavado: es el futuro, el que no se meta hoy está perdido, etc.

Algo de razón había. Internet cambió muchas cosas. Pero donde más dolió que se impusiera la realidad fue... en lo mismo de siempre. La burbuja se desplomó justo cuando a alguien le picó el bolsillo y empezó a pedir rentabilidad. Eso poco antes habría sido visto poco menos que como una blasfemia. Había que meterse como fuese. Había que invertir sin miedo, que los retornos ya llegarían. Un 'hodl', vamos.

Al final resultó que llegó no la impaciencia sino la sensatez. Algo tan elemental como preguntar cuándo se alcanzaría la rentabilidad y cómo. A partir de ahí quedaron en pie eBay, Google, Amazon, y cuatro gatos más.

Lo que el usuario común va a pensar. "Ah, ¿que esto no era la tecnología maravillosa que nos prometieron? ¿Que sólo es un buscador como Google con esteroides? ¿Que hay que validar lo que dice?". Un agente de IA ya te puede lanzar un prototipo de aplicación movil o web. Pero desconoce totalmente muchos "tradeoffs" o costes ocultos y variables que hay que entender. En el momento que le dices al tarugo común que "no, esto no te quita de responsabilizarte de los resultados", la magia y el encanto se van por el retrete.


Los chinos están siendo mucho más listos (otra vez). En vez de perseguir una inteligencia artificial general inalcanzable, se centran en objetivos más realistas y fáciles de alcanzar.


Sin el maquillaje contable de la IA, EEUU hace tiempo que estaría oficialmente en recesión. Más dura será la caída.

[Derby]

https://www.theguardian.com/environment/2026/jan/22/wind-and-solar-overtook-fossil-fuels-in-power-generation-for-eu-in-2025-report

Wind and solar overtook fossil fuels for EU power generation in 2025, report finds

Researchers say event described as ‘major tipping point’ for clean energy in era of destabilised politics


The Klettwitz Nord solar energy park in Germany. Photograph: Matthias Schräder/AP
Renewable energy

Wind and solar overtook fossil fuels in the European Union’s power generation last year, a report has found, in a “major tipping point” for clean energy.

Turbines spinning in the wind and photovoltaic panels lit up by the sun generated 30% of the EU’s electricity in 2025, according to an annual review. Power plants burning coal, oil and gas generated 29%.

Beatrice Petrovich, an analyst at the Ember thinktank and the lead author of the report, said it was a “major tipping point” that was of strategic importance to the EU, which has grown increasingly panicked about its reliance on other countries for energy.

“The importance of this goes beyond the power sector,” she said. “The danger of relying on fossil fuels looms large in destabilised geopolitics.”

Europe faces growing tensions with the US – its chief supplier of liquefied natural gas – over Donald Trump’s desire to take over Greenland. At a summit in Davos on Tuesday, the US commerce secretary, Howard Lutnick, criticised Europe’s adoption of solar and wind, arguing that its lack of domestic battery factories risked making it “subservient” to China.

“If you are going to be dependent on someone, it had better be your best allies,” he said in a justification of the “America first” approach that he encouraged other countries to emulate.



Analysts said the trend was driven by a boom in solar, which generated a record 13% of EU power. In five countries – including the Netherlands, which is not known for its sun – it provided more than 20%.

Wind turbines generated slightly less than the previous year, the report found, but remained the second-largest source of electricity, responsible for 17% of EU power.

The role of fossil gas increased by 8% – largely because of a weather-related drop in hydropower output – but remained well below its most recent 2019 peak, the report found. Coal-burning fell to a new historic low, accounting for less than 10% of EU power, most of it in Germany and Poland.

Solar and wind were “becoming the backbone” of Europe’s power system, said Petras Katinas, an analyst at the Centre for Research on Energy and Clean Air, who was not involved in the report.

“Solar alone grew by more than 20% in a single year, proving that clean power can scale faster than any conventional technology,” he said. “The challenge now is not generation, but how quickly Europe can deploy grids, batteries, and flexibility.”

Climate scientists and energy modellers have stressed that most of the electricity needed to power a carbon-free economy will come from rays of sunlight shining on panels and gusts of wind spinning turbines.

But European countries have been slow to modernise electricity grids to incorporate large volumes of renewable energy, which varies during the day and is delivered by a distributed network of machines.

However, the report found early signs that evening peaks in electricity demand – which typically require burning gas at great cost to bill payers – are starting to be met by batteries.

The analysts suggest that Italy, which hosts one-fifth of the EU’s operating battery capacity and has a large pipeline of planned projects, may be about to follow the same trajectory as California, where batteries routinely cover 20% of evening demand peaks and are crowding out gas.

Petrovich said this could smooth price spikes. “If I were a policymaker or investor, I would seriously start questioning if plans for new gas plants are inflated – and act to avoid a burden for taxpayers and risk of stranded assets.”

[Derby]

https://www.bloomberg.com/news/articles/2026-01-31/bitcoin-plunges-below-80-000-as-the-crypto-slide-accelerates

Bitcoin Plunges Below $80,000 as the Crypto Slide Accelerates

Bitcoin fell sharply in early Saturday afternoon trading in New York, tumbling below $80,000 mark to hit levels last seen in April 2025.

The decline came amid thin liquidity and limited buying interest, deepening a drawdown that has erased more than 30% from the world’s largest cryptocurrency.

Bitcoin fell as much as 7.1% to $78,159.41 at midday during New York trading hours Saturday, while other tokens posted steeper losses. Ether, the second-largest digital asset, shed more than 10%, while Solana fell over 11%.



The selloff knocked about $111 billion off the crypto market’s total value in the past 24 hours, according to CoinGecko data.

The retreat adds to weeks of macro disappointment for Bitcoin, which has failed to respond to a series of market developments that previously would have supported the asset. The dollar weakened for much of January, but the move did little to lift sentiment in crypto markets. Likewise, Bitcoin offered no meaningful response during gold’s rally to record highs — nor has it attracted inflows in the wake of gold and silver’s sharp reversal on Friday.

That absence of bid has raised fresh questions over Bitcoin’s role in broader portfolios. Once pitched as both a momentum play and a hedge against monetary debasement, the token is now struggling to serve either function. Spot ETF outflows have persisted, geopolitical risks have not triggered demand, and traditional safe-haven flows remain concentrated in metals and cash.

[Derby]

https://www.bloomberg.com/news/articles/2026-01-31/ai-boom-is-triggering-a-loan-meltdown-for-software-companies-credit-weekly

AI Boom Is Triggering a Loan Meltdown for Software Companies: Credit Weekly

Amid broad euphoria in credit markets, one type of debt is facing growing fear.

Software companies, larded up with debt after leveraged buyout firms viewed their revenue as relatively predictable, have seen their loan prices drop this week. Investors are becoming increasingly worried that advances in artificial intelligence, including the growing coding capabilities of Anthropic’s Claude, will leave many software products and services obsolete.

A Cloudera Inc. loan fell by 7 cents on the dollar this week, with loans tied to firms from Dayforce Inc. to Rocket Software Inc. also declining. Other borrowers such as European software firm Team.Blue and software-focused private equity firm Thoma Bravo’s Conga have struggled to get new debt offerings done at a time when loan sales have broadly been heavy.

“A storm has hit the loan market,” said Scott Macklin, head of US leveraged finance at asset manager Obra Capital Inc. “The heaviest calendar in months, largely repricing-driven but still overwhelming, has collided with mounting existential questions around software business models as AI reshapes the sector, which is the single largest in loans. Layer on an unusually heavy flow of BWICs [bids wanted in competition] and you have a full blown ‘loan-ageddon’.”

Software is one of the biggest components of the leveraged loan market, accounting for 12% of the credits in the Bloomberg US Leveraged Loan Index. Software debt in collateralized loan obligations, which are bonds backed by portfolios of leveraged loans, has notched the worst total returns so far this year versus all sectors, according to data compiled by Nomura.



The software loan selloff is a stark contrast to the rest of the leveraged loan market, where overall sales surged this week after US President Donald Trump dropped his tariff threats around Greenland, emboldening companies to come forward amid the lull in tensions. In Europe, the rush pushed leveraged loan sales there to a fresh weekly record.

“Right now it seems like the market is kind of picking on the largest, most liquid structures and some of the more obvious ones that are vulnerable to disruption,” said Sinjin Bowron, portfolio manager and head of liquid credit strategies at Beach Point Capital Management LP. “Those are precisely the areas where deep diligence and an understanding of their competitive moat matter most.”

Bonds of software companies were also hit, with prices on notes from cloud computing firm Rackspace Technology Global Inc. as well as CDK Global, which provides software for car dealerships, dropping this week. The friction comes ahead of an anticipated borrowing binge backing AI projects next month, which could push US corporate bond sales to a record.

Representatives for Dayforce, Cloudera, Rocket and CDK didn’t immediately reply to requests for comment. Rackspace declined to comment.

“There is a certain element of throwing the baby out with the bathwater,” said Pratik Gupta, who leads CLO and RMBS research at Bank of America Corp. “The software sell-off got pushed into names which likely are not going to be affected by AI.”

A key fear is that AI will allow more companies and people to build their own custom software, reducing demand for off-the-shelf software products and services. Anthropic this month introduced a product, Claude Cowork, that looks like a chatbot but can complete tasks on your behalf like building apps and making spreadsheets. Recent media accounts have described how Claude makes coding easy for people with no formal training.

A Morgan Stanley report on Friday recommended shorting AI-exposed credits, and favoring junk bonds over leveraged loans because of the latter’s greater exposure to potential disruption in the technology and software space.

It’s not clear how many companies that are being hit in the market now are actually at risk of being undermined by AI. The selloff is also irrespective of underlying fundamentals, according to Beach Point Capital’s Bowron. He points out that many firms in the space generally report good results and are still gaining customers. “These are incredibly deeply entrenched software suites in company processes,” he added. “It would take potentially years to rip out and replace some of these.”

For the technology sector generally, a lot of deals done about five years ago were priced to reflect high-growth assumptions that in many cases haven’t panned out, said Ari Lefkovits, managing partner at Delos Capital who has advised companies on restructurings and other corporate finance transactions. In the years since, those companies also had to pay higher coupons as interest rates rose.

“The businesses aren’t broken,” Lefkovits said. “It’s just the balance sheets are stressed too much.”