Headlines

Cracks are starting to show in China’s labor market as struggling industrial firms leave millions of workers in flux, Bloomberg News reported. While official jobless numbers haven’t budged, the underemployment rate has jumped to more than 5 percent from near zero in 2010, according to Bai Peiwei, an economics professor at Xiamen University. Bai estimates the rate may be 10 percent in industries with excess capacity, such as unprofitable steel mills and coal mines that have slashed pay, reduced shifts and required unpaid leave.

Thousands of Chileans took to the streets nationwide on Sunday to demand a dismantling of a private pension system criticized for providing retirees with low payouts, The Wall Street Journal reported. The backlash against the system follows years of accolades by multilateral organizations such as the World Bank, which held up Chile’s pioneering use of individual savings accounts as an alternative for countries with costly state pensions considered unsustainable because of aging populations.

It was billed as a powerful tool in the clean-up of bank balance sheets laden with bad loans, but has proved to be a bit of a dud. The strategic debt restructuring (SDR) initiative, which allowed creditors to convert debt into equity and take over the management of defaulting companies, could well end up in failure judging by the experience so far, said officials at three large banks, Deal Street Asia reported. In the 14 months since it has been introduced, banks have invoked the provisions of SDR in at least 21 cases. Of these, they have closed out only two.

When Woolworths reports its full-year results on Thursday, expect to see a loss of about $1 billion, analysts say, after restructuring costs and its exit from the disastrous Masters hardware business, The Sydney Morning Herald reported. Credit Suisse analysts say that with a restructuring charge of $960 million and its exit from the Masters Home Improvement business being treated as a "discontinued operation", total impairments could hit $2.7 billion. That could leave Woolies with a statutory loss of around $1 billion.

Famous Eurosceptic Joseph Stiglitz suggested there will be disaster across the bloc, with the euro causing havoc in several member states, Express reported. Nobel prize winning Mr Stiglitz served as a feather-ruffling chief economist for the World Bank. Despite Brexit scaremongering being rife across the UK, Eurosceptic Stiglitz has suggested the real tough times will be for the union. His book How to Save the Euro suggests, on its current course, the euro is certain to fail — and indeed, that it was fatally flawed from birth.

As Italy and Europe more broadly struggle to come to grips with an escalating problem with bad loans, a new paper by economists connected to the Center for Economic Policy Research, a European policy shop, highlights the extent to which Italy’s main banks — known to be the weakest in the eurozone in terms of cash reserves — have stepped up their lending to the country’s most troubled companies, the International New York Times DealBook blog reported.

Canada's national housing agency gave Maple Bank GmbH's Canadian branch the green light during a financial review, just one month before the federal banking watchdog seized the company's assets amid a German tax investigation, documents show. Documents obtained by The Canadian Press through an access-to-information request show that the Canada Mortgage and Housing Corporation reviewed Maple Bank GmbH's status as an issuer of mortgage-backed securities and a seller of Canada Mortgage Bonds in January 2016.

The Bank of Japan will likely take bold action next month, an adviser to Prime Minister Shinzo Abe said, rejecting speculation that the central bank may use a coming policy review to justify a paring back of its stimulus, The Wall Street Journal reported. “However they conduct the assessment, there is already an answer: Monetary policy hasn’t been eased enough,” Etsuro Honda said of the review set for release at the central bank’s next policy meeting in September. Without further action, people would give up on the Abenomics drive to defeat deflation, he added.

German oilseed crushing mill Naturoel Anklam has filed for insolvency at a local court, said its parent, German farm company KTG Agrar which is itself insolvent, Reuters reported. Naturoel Anklam, based in Anklam in east Germany, processes about 100,000 tonnes of oilseeds annually, especially rapeseed. The reason for the mill's insolvency application is a disputed tax payment demand, KTG Agrar said in a statement late on Wednesday. KTG Agrar itself filed for insolvency proceedings in July and is undergoing restructuring.

If a country’s fiscal deficit hit 10% of GDP five years running, you might reasonably conclude that its public finances were parlous, The Economist reported. So it is understandable that China has bristled at suggestions that it is veering into such territory. Officially, China is a paragon of fiscal rectitude: its annual deficits have averaged just 1.8% in the past half-decade. But the IMF, Goldman Sachs and others have come up with “augmented” estimates of nearer to a tenth of GDP, more than five times the official number.