Monday, September 19, 2016

The two sides of China's debt; UK financial fraud soars 53%; Architect finds inspiration in snakes, peanuts

1 The two sides of China’s debt (Karishma Vaswani on BBC) A full blown banking crisis for China in three years' time. The warning from the Bank of International Settlements (BIS) certainly sounds dire, and it should be taken seriously - but don't forget China's banking system is still relatively well protected because it is largely state controlled.

That means that in the event that some Chinese banks face massive defaults, the Chinese government could and very likely would bail them out. The way the BIS's risk instrument is calculated is also worth taking a look at: the credit to GDP gap is basically a measure of how much banks are lending, compared to the size of the country's economy.

What that means is if banks lend too much, and the economy is shrinking, the gap widens - and that's where the risk of a banking crisis is created. Individuals and companies won't be able to pay back their loans at a time when economic growth is sluggish.

But China needs this debt, because it is helping the economy to grow. China's economy has been slowing down, and one of the ways that growth has been propped up is through debt, which is now thought to be worth 225% of GDP, according to, amongst others, the International Monetary Fund.

The key figure to look at is corporate debt. While household debt is still considered to be within global norms, the IMF warns that potential losses from bad debts in China's corporate sector could be worth some 7% of GDP.

Both the BIS and IMF have urged China to act fast to address this, but other China-watchers have said the government will be able to manage any impending crisis because of its deep pockets.

2 UK financial fraud soars 53% (Rupert Jones in The Guardian) Fraud in the UK payments industry has soared by 53% in a year as criminals resort to increasingly sophisticated tactics to trick people out of their personal details and steal their money.

Official industry data shows that a total of 1,007,094 cases of financial fraud – involving online and phone banking, debit and credit cards, and cheques – occurred between 1 January and 30 June this year. That compares with the 660,308 cases reported during the same six-month period in 2015.

This means that an incident is happening every 15 seconds, according to Financial Fraud Action UK (FFA UK), whose members include the major banks and card issuers, and which issued the data. FFA UK and major banks and financial services providers have come together for the first time to launch a national campaign to combat financial fraud called Take Five.

Among the biggest growth areas are impersonation and deception scams, which involve criminals duping victims into disclosing their details. Fraudsters have increasingly been hacking into email accounts and then posing as the builder, solicitor or other tradesperson that the consumer has legitimately employed.

In 2015, fraud in the UK payments industry totalled £755m. The new campaign is designed to remind people “that it pays to stop and think” before they respond to any financial requests and share any personal details. Its launch came a day after separate research claimed that one in 10 people have been the victim of a cyber-attack on their credit or debit card in the last year.

3 Architect finds inspiration in snakes, peanuts (San Francisco Chronicle) Architect Javier Senosiain looks out over his sinuous snake's nest of a building, which seems to writhe amid a green and tranquil vista on the very edge of Mexico City's urban sprawl, and reflects on over 30 years of building egg- and cocoon-like dwellings that are quite literally out of the box.

"When a child is born we put him an incubator, which is a box," said Senosiain, 68. "Then we put him a playpen. The child is placed in a succession of boxes throughout his life, and then when he dies, he is put In another box."

"The idea here is to break with the box," he said, pointing to the 10-apartment complex that looks like a snake with eyes in its body — architectural homage to Quetzalcoatl, the Aztec "feathered serpent" god of light and knowledge.

At the project known as the "Nest of Quetzalcoatl," enormous snakes are conformed into passageways, bridges, fountains and walls. The people who live here have to get used to passing through gigantic snakes' mouths to reach surprisingly spacious if cave-like dwellings filled with soft angles and curves.

Senosiain isn't offended by cave comparisons; in fact he kind of likes his homes to look caves. Or wombs. Anything but boxes. He's used whales, snails, sharks and mushrooms as inspiration for previous projects. The buildings often merge into the landscape, sometimes half buried.

He has just opened a retrospective exhibition of his work at Mexico's premiere cultural venue, the capital's Palace of Fine Arts, and the display includes a proposal for prefabricated, low-income housing in a shape that can be compared to an organic Airstream trailer made of concrete or, as he describes it, a peanut.

Given the super-light spray-concrete-over-metal-frame design, the homes can just be picked up and placed on a footing with a crane. "You just hook up the light, water and sewer lines, and it's ready," Senosiain said.

He proposes placing about 60 of these 300-square foot (28-square-meter) micro-homes (they're modular and can be combined into bigger houses) together in a neighborhood, where no house is more than an eight-minute walk from urban services like schools or stores.

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