CHINA’S BOOM IS BEGINNING TO SHOW CRACKS, ANALYSTS SAY

[On Monday, for instance, Credit Suisse said data recently released by the Chinese central bank showed that credit in China had expanded at “alarming levels,” far more than previous government estimates suggested. Credit Suisse downgraded its profit forecasts for Chinese companies and state-owned banks, as it warned of slowing growth for the overall economy.]

By David Barboza

A suit factory on the outskirts of Shanghai on Friday.

SHANGHAI — New economic analyses of China provide further indication that the nation’s supercharged economy is beginning to slow, and warn that soaring inflation, rising labor costs and mounting local government debt threaten to weaken growth even more.

Several economists in China have recently lowered their growth forecasts for this year and next year to about 8.5 percent, down from earlier forecasts of 9 to 10 percent, while warning about the possibility of a sharp rise in nonperforming loans at the nation’s big state-owned banks.

On Monday, for instance, Credit Suisse said data recently released by the Chinese central bank showed that credit in China had expanded at “alarming levels,” far more than previous government estimates suggested. Credit Suisse downgraded its profit forecasts for Chinese companies and state-owned banks, as it warned of slowing growth for the overall economy.

The reports come at a time of heightened concern about slower growth in other parts of the world, including the United States, Europe and Japan.

Since the financial crisis, China has been the world’s leading growth engine. But for much of the past year, China has been trying to rein in overly aggressive bank lending as way to tame soaring inflation and property prices.

Those tightening measures have not only weakened growth in China, analysts say, but have also begun to expose a host of other problems in the nation’s financial system.

While few analysts expect China’s growth to slow to below 8 percent in the next year, they still paint a troubling picture. The Chinese stock market has been in a slump for much of the last two years, the property market looks weaker and inflation is running at a 34-month high.

Analysts said exports have begun to show signs of weakness in recent weeks. Credit Suisse said Monday that China’s export growth could be flat in the coming months, partly because of weaker demand in the United States and Europe.

Credit Suisse’s new figures also indicate that off-balance-sheet lending, much of which took place outside the banking system, pumped a large amount of additional credit into the financial system last year. As a result, Credit Suisse downgraded its ratings of Chinese companies and the big state-controlled banks, and warned of a possible rise in bad loans.

Vincent Chan, the head of China research at Credit Suisse, said that the nation’s economy might avoid a “hard landing” but that growth over the next year was likely to be less robust.

“The market consensus is for a soft landing and two or three quarters of slowing down, then a growth rebound,” Mr. Chan said in a telephone interview Monday. But, he said, “we’re saying that after that, the growth may not re-accelerate and the indebtedness may be more serious.”

Early this month, Wang Tao, the chief economist in China at UBS, warned that over the next few years, loans to local government investment companies could result in as much as $460 billion in nonperforming loans.

Although Beijing used state-run banks to bolster growth after the financial crisis hit in late 2008, the central government is ordering them to help rein in growth.

Chinese banks have already raised interest rates and set aside larger reserves. The government is expected to announce additional measures in the coming months.

While those moves could help slow inflation, they will also probably weaken growth by driving up borrowing costs in China. That could hamper private companies and property developers, which have been among China’s biggest sources of growth.

Last week, Standard & Poor’s, the credit ratings agency, lowered its outlook on Chinese property developers, predicting that in some parts of the country property sales could drop sharply as a result of tighter credit and government curbs.

Another growth driver — local government investment in infrastructure projects — has also come under scrutiny from regulators because of worries that overly aggressive spending on new roads, bridges, tunnels, subways and showpiece projects could lead to a wave of nonperforming loans to municipalities.

Businesses, meanwhile, are trying to cope with rising labor costs, energy shortages and higher borrowing costs.

Those conditions could change if the government decided to loosen monetary policies and ramp up growth, the way Beijing did in early 2009. But Mr. Chan at Credit Suisse said the size of China’s debt could restrain regulators and lead to a longer period of slower growth.

Asked whether nonperforming loans — or N.P.L.’s — are set to rise, Mr. Chan said: “A rise in N.P.L.’s is a must. The question is, how much will they rise?”

@ The New York Times 

THE MOUTH THAT ROARED BEGINS A NEW ‘COUNTDOWN’

[Mr. Olbermann’s new show looks the same as the old one, even down to the features, music and title, “Countdown With Keith Olbermann” but the pulpit is markedly different from his old perch at MSNBC. Current TV, a small, earnest network co-founded by Al Gore in 2005, favors civic-minded programs and averages about 50,000 viewers during prime time. Mr. Olbermann was wedged between two documentaries, “The OxyContin Express” and “Gateway to Heroin.”]

By ALESSANDRA STANLEY

Keith Olbermann returned to cable television on Monday mad as hell and pointedly madder than other self-described liberal anchors on his former channel, MSNBC.

“This is to be a newscast of contextualization,” Mr. Olbermann told viewers on his new channel, Current TV. He promised to posit “that the weakest citizen in this country is more important than the strongest corporation.” His first guest and contributor was the muckraking filmmaker Michael Moore, who joined him in bemoaning President Obama’s decision to not seek Congressional approval before attacking Libya. At the same time on MSNBC, Mr. Olbermann’s successor, Lawrence O’Donnell, asked a longtime Obama confidant, David Axelrod, to respond to the president’s critics on the issue of same-sex marriage.

Mr. Olbermann’s new show looks the same as the old one, even down to the features, music and title, “Countdown With Keith Olbermann” but the pulpit is markedly different from his old perch at MSNBC. Current TV, a small, earnest network co-founded by Al Gore in 2005, favors civic-minded programs and averages about 50,000 viewers during prime time. Mr. Olbermann was wedged between two documentaries, “The OxyContin Express” and “Gateway to Heroin.”

(Ms. Hermon Raju, an Indian woman hits Mr. Olbermann's 'Countdown with Kieth Olbermann'in Current TV show last night) 

Mr. Olbermann who quit MSNBC abruptly in January, is hoping that his new platform — politically progressive and free of corporate overlords, will attract left-of-liberal viewers seeking a more rabble-rousing champion. Mr. Olbermann assured his viewers that he and they would be the “last line of defense” against the “malfeasance of one political party and the timidity of the other.” He quoted Harriet Beecher Stowe on Abraham Lincoln and the Civil War. (“It is the war for the rights of the working classes of mankind, as against the usurpation of privileged aristocracies.”) He also noted, more bizarrely, that he is not the only person to start a new career on June 20 — Queen Victoria began her reign on the same day.

And his guests stoked his ego. Mr. Moore praised Mr. Olbermann for “keeping the good fight going.” Markos Moulitsas, founder and publisher of the liberal Web site Daily Kos, who is also a contributor to the show, called Mr. Olbermann a “national treasure.”

And it could well be that Current TV is better suited to Mr. Olbermann’s personality than even his politics. Rachel Maddow and Mr. O’Donnell, the liberal commentators he brought to MSNBC and helped showcase, have developed their own followings, and Mr. O’Donnell has done respectably in his stead. Both anchors share Mr. Olbermann’s righteous indignation, volubility and even his snarky sense of humor, but they come off as reasonable, respectable and even-keeled. ( Unlike Ed Schultz, the host of “The Ed Show,” who follows Ms. Maddow and seems like the cranky uncle who rants in post office lines — in May, Mr. Schultz was suspended from the network after calling the conservative firebrand Laura Ingraham a “right-wing slut” on his radio program.)

Mr. Olbermann, who has a colorful history of fighting with bosses and getting fired, is famously mercurial and thin-skinned. (Full disclosure: this critic was named “Worst Person in the World” at least once by Mr. Olbermann when he was on MSNBC.)

Even on the air, he looks as if at any minute he could lose his anchorman cool — a little like Jack Paar, who was famous for tearing up and sometimes walking out in the early days of the “The Tonight Show.” Mr. Olbermann’s disputes with management were public and vociferous. He was suspended by MSNBC, a unit of NBC Universal, last November after giving money to three Democratic politicians. Current TV said that there is no problem there with political donations.

And he took every opportunity to bash corporate greed, summing up Monday’s Supreme Court decision in favor of Wal-Mart this way: “The more employees you screw one way or the other, the more likely you are to get away with it, I guess.” John Dean, the former Watergate defendant, beamed at the host. “Nicely put,” he told Mr. Olbermann.

Viewers can be more fickle, as Conan O’Brien, now barely visible now that he is at TBS, can attest. But Mr. Olbermann tried to give his audience a stake in his survival by linking it to the fate of democracy. “Thank you for helping us preserve the freedom of the news,” he said.


@ The New York Times