Finshots Profile picture
Aug 20, 2019 7 tweets 3 min read Read on X
So McKinsey just released a report titled - Is Asia heading
toward a debt crisis?. And here's a tweet thread simplifying some of the most important points
Households & Governments across Asia Pacific have been borrowing a lot lately. Meaning we've seen a huge rise in Debt to GDP in countries like Singapore and China. India's situation is also bad, but not as bad because households in India don't borrow to spend
That's where the good news ends. One look at Indian corporates and you know its bad. As of 2017, 43% of all long term loans issues to corporates were held by companies that barely made enough profits to service their interest (Interest Coverage<1.5). #Stressed
It’s also troublesome because their ability to turn around performance and repay the debt requires working across multiple stakeholders—regulators, consumers, local
and national governments, and the companies
themselves—making recovery much more
complicated for corporates
Also the boom of shadow banking (NBFCs) hasn't exactly helped matters either with most NBFCs having created long term loans using short term funds. And with the IL&FS crisis, we are at a point where the cost of funding is slowly inching up as everybody is now scared to lend.
The equity buffer to support such a crisis is also dwindling and the inflow of monies from other countries have only magnified risks as they are well known to vacate emerging markets during times of crisis.

So what could trigger the crisis?
Many things, but the most important of which is the ongoing trade war. For example, analysts have estimated that an aggressive trade war between the United States and China could cut GDP by 1.7 to 2.5 percent in both countries and the ripples could soon spread to India as well

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Finshots

Finshots Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @finshots

Jan 10
Boeing is in trouble, and a deal it struck around 25 years ago is to be blamed.

What?!! 👀👇🏽 Image
You see, Boeing started as an "engineers" company.

But then in 1997, the aircraft manufacturer merged with McDonnell Douglas and things started to change.

The new entity started focusing more on affordability, rather than quality.
The company wanted to create shareholder value now, and not build quality aircraft.

And this shift in company culture started jeopardizing the business too.

But a company can still recover from an impact on business.
Read 5 tweets
Dec 18, 2023
The RBI made ₹2.20 lakh crores profit in FY23!

How on earth did it achieve this? 🧵👇🏽 Image
Well, through something called ‘seigniorage’.

Think about it this way—

If the RBI prints a ₹100 note and gives it to a bank for circulation.
The bank has to ‘buy’ the note and transfer the full face value of ₹100 to the RBI’s coffers.

But the only cost the RBI incurred was probably ~₹2 to print the note.
Read 10 tweets
Dec 7, 2023
Nov 2022: Valued at $450 Mn, ZestMoney was all set to be acquired by PhonePe.

Dec 2023: ZestMoney shuts down!

What changed?

🧵👇🏼 Image
2023 hasn’t been kind to ZestMoney–

The funding dried up;
PhonePe backed away from the acquisition;
And even the 3 founders resigned in May.

The reason?
Well, the business model itself.

See, if you made a purchase via ZestMoney, they’d take care of the bill at no cost– and you’d have to pay it back in installments over 3–6 months without interest.

And the company made money in 3 ways —
Read 9 tweets
Aug 25, 2023
🚨Retail inflation hit an alarming 15-month high of 7.44% in July 2023!

To give you some perspective, the RBI is expected to keep inflation between 4-6%. Now this could be a challenge for us. So, what should you do to protect your finances?🤔

Here are 3 things to know 🧵👇🏽
✅TRACK YOUR SPENDING

Bucket all your expenses into broad categories— rent, electricity, phone bills, personal care, groceries, childcare, fuel, subscriptions, transportation, house maintenance etc.
Once you have it all listed out, go over each category and see where you can comfortably trim down excessive expenses like frequently eating out or under utilized subscriptions.
Read 9 tweets
Aug 19, 2023
In 1995 Steve Jobs became a billionaire. But..

It wasn't because of Apple😲! Surprising, right?

Well, here's the story of what happened 🧵👇🏽

(Like❤️& RT🔄️) Image
See, the story starts in 1986 when after being forced out of Apple, Steve Jobs acquired Pixar from filmmaker George Lucas for a mere $5 million. And further invested another $5 million in the company. Image
At that time, Pixar was just a fledgling computer graphics division of Lucasfilm. However, Jobs saw the potential in the technology and the creative minds behind it!

But, the road to success was far from smooth for Pixar. Image
Read 10 tweets
Jul 6, 2023
The A B Cs of Recession Recovery 🧵👇🏼

(Don't forget to Like and RT this tweet)
Read 7 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(