Credit crunch may mean chips down for Macau’s VIP tables

    Published in: Latest Intelligence   Macau’s casinos may be starting to feel the pinch of a double squeeze. China is tightening credit, and has even precipitated a recent credit crunch. At the same time, the U.S. Federal Reserve has indicated plans to “taper,” or slowly cut down, its extensive program of quantitative easing in the face of an economic recovery there. The impact of China’s tightening is obvious for casinos and junket operators, threatening funding for the lucrative segment of VIP gamblers. The Fed’s influence is less direct but no less significant. Economists say its plans to taper asset purchases are significantly negative for emerging economies such as China and Macau, causing U.S. investors to repatriate money, raising the risk premium on emerging markets and prompting “hot money” flows generated by easy monetary policy in the West to reverse out of Asia. None of those trends suggest easy borrowing. Macquarie Capital analysts...

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