This one probably won’t cause systematic shocks through the global financial market but one we need to observe the effects closely as public companies from all across the world is now borrowing against their own stocks, not tangible assets, as collateral aka HNA Property Holdings LLC (10% majority holder of Deutsche Bank and Hilton Hotels and $50B USD due by June 2018)
Oversaturation is one thing given their relatively high margin and low inventory cost, but their parent company, Steinhoff International, is going through:
(1) Shady accounting scandals; realizing assets not on the actual book
(2) Debt borrowing has been fueled by using equity/stocks not tangible assets as collaterals aka domain effect of stock price falling and debt price increasing at the same time
(3) ECB bought their junk bond (kind of trapped right now as their QE also extended into private junk bond markets as well) (4) Employed over 140,000 employees globally so this should be an interesting point given the first 3 points
Intersection notepad 