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Signs China is about to Pop

This thread is almost a year old now. At what point do we consider this tread mindless fear mongering?

1) less then 9 months is 'almost a year' to you? Not to me. 11+ months is 'almost a year' to me. Each to their own, I suppose.

2) a gigantic economy that is heavily controlled by the government (like China's) is not going to react like traditional, pre-QE economies would as the governmnt is going to a) pump as much money as it has to into the mix to keep the numbers looking good and b) modify the numbers in th first place.
All this means that any eventual negative macroeconomic transgression's will take far longer to manifest then if the economy was left to it's own devices.
The same is happening in the West/Japan...but as their governments control is less then China's, they have less stimulus 'bullets' to shoot.

The negative of that is that when the economy finally does hit a recession - because the government can no longer conceal/artificially stimulate it's economy - the fallout is usually FAR worse then had the government just stayed out of it.

My point is that the Chinese economy is teetering...and eventually will fall. But because it is being artificially propped up, it could take years (as in the West/Japan) before the actual macroeconomic cycle is allowed to run it's inevitable course.
 
1) less then 9 months is 'almost a year' to you? Not to me. 11+ months is 'almost a year' to me. Each to their own, I suppose.

2) a gigantic economy that is heavily controlled by the government (like China's) is not going to react like traditional, pre-QE economies would as the governmnt is going to a) pump as much money as it has to into the mix to keep the numbers looking good and b) modify the numbers in th first place.
All this means that any eventual negative macroeconomic transgression's will take far longer to manifest then if the economy was left to it's own devices.
The same is happening in the West/Japan...but as their governments control is less then China's, they have less stimulus 'bullets' to shoot.

The negative of that is that when the economy finally does hit a recession - because the government can no longer conceal/artificially stimulate it's economy - the fallout is usually FAR worse then had the government just stayed out of it.

My point is that the Chinese economy is teetering...and eventually will fall. But because it is being artificially propped up, it could take years (as in the West/Japan) before the actual macroeconomic cycle is allowed to run it's inevitable course.

I guess to be fair China has really been doing this close to 40 years now. So what magical year number can you expect this to pop?
 
I guess to be fair China has really been doing this close to 40 years now. So what magical year number can you expect this to pop?

I have not the slightest...could be this year (though I highly doubt that), could be 5 years, could be more...all depends when the government teat runs out of milk...and I have not a clue when that will be.

As the Fed has shown, there seems to be no end to the creativity that these glorified bean counters use to 'artificially' prop up the economy...I suppose it will finally end when people start losing faith in the major currencies...especially the U.S. dollar.

But with almost every major western country (plus Japan) playing 'race to the bottom', then it is more difficult to judge...which was probably the plan these central banks had in the first place.

When one basketball player sucks on a team - it's easy to see. But when they all suck, more or less equally, it's harder to tell just how bad they really are...unless you REALLY know what to look for. And in my opinion, most economists do not know what to look for (which was proven during the dot.com AND the housing crashes when most 'economists' completely missed both).
 
What A Bank Run In China Looks Like: Hundreds Rush To Banks Following Solvency Rumors

China%20bank%20run_0.jpg


What A Bank Run In China Looks Like: Hundreds Rush To Banks Following Solvency Rumors | Zero Hedge
 
China’s Sizzling Real Estate Market Cools

...After almost two decades of nearly unceasing increases in real estate prices and construction across China, one of the world’s longest-running bull markets finally seems to be stalling, with broad consequences for the country’s economy and possibly its politics.

Prices are falling for both new and old apartments. The volume of deals is drying up. And developers are pulling back, furloughing workers and delaying new projects. In the latest sign, housing starts plummeted 25 percent in April from a year ago, the Chinese government announced on Tuesday...

The bulk of the homes in China were bought more than five years ago, and real estate prices have about doubled in the last five years. Down payments range from 20 to 40 percent and are often higher, giving banks a larger cushion against any losses.

A bigger worry is the extent to which companies in other sectors have borrowed money from banks and trusts that they were supposed to invest in equipment purchases and other business activities, but have secretly speculated in real estate instead. Extensive anecdotal evidence suggests that such speculative activity by companies has been widespread....

But the trouble in the housing market has serious implications for consumers. A national survey released in March by the Southwestern University of Finance and Economics in Chengdu, China, found that households across the country had 66 percent of their assets in their homes, a figure that rises to 84 percent in Beijing. The comparable figure for the United States, where stocks and bonds are more popular, is 41 percent..​


.....well.
 
China’s Sizzling Real Estate Market Cools

...After almost two decades of nearly unceasing increases in real estate prices and construction across China, one of the world’s longest-running bull markets finally seems to be stalling, with broad consequences for the country’s economy and possibly its politics.

Prices are falling for both new and old apartments. The volume of deals is drying up. And developers are pulling back, furloughing workers and delaying new projects. In the latest sign, housing starts plummeted 25 percent in April from a year ago, the Chinese government announced on Tuesday...

The bulk of the homes in China were bought more than five years ago, and real estate prices have about doubled in the last five years. Down payments range from 20 to 40 percent and are often higher, giving banks a larger cushion against any losses.

A bigger worry is the extent to which companies in other sectors have borrowed money from banks and trusts that they were supposed to invest in equipment purchases and other business activities, but have secretly speculated in real estate instead. Extensive anecdotal evidence suggests that such speculative activity by companies has been widespread....

But the trouble in the housing market has serious implications for consumers. A national survey released in March by the Southwestern University of Finance and Economics in Chengdu, China, found that households across the country had 66 percent of their assets in their homes, a figure that rises to 84 percent in Beijing. The comparable figure for the United States, where stocks and bonds are more popular, is 41 percent..​


.....well.

Yes, Capitalism and its Speculation.

Capitalism is best!

Capitalism is always answer!

Speculation is just a kinky word for 'Can never lead to a systemic collapse'.
 
:) Thanks Buddha.



Yes. So if inflation becomes an explicit government policy, as it is under the Abe administration, then real depreciation is guaranteed as long as they are successful.



:raises eyebrow When you buy a U.S. Bond, you have to have the dollars to do so. We don't borrow in international currency, and neither do the Japanese. The Chinese borrow in dollars, I'm pretty sure.



To whom? When the major holders of JGB are all trying to sell at the same time?

1. Yes, which would obviously shift the focus from saving to Consumption. Which is his entire goal.

2. What I'm saying is this.

If I am a... Malaysian Company, but I have no way to get the needed domestic funds (or the rates are high, whatever or I'm expecting deflation which would increase my debt obligation de facto) I'm going to borrow a foriegn currency. Let's say the US Dollar.

Now, the economy collapses and the Malaysia government is attempting to bail everyone out, which they do so by Jacking UP the printing presses. Whilst these will lead to inflation, perhaps massive, it will also wash away all domestically written foreign obligations.

But our Malaysian Company owes most of its debt in US Dollars, to whomever that may be micro-wise, so their debt obligation keeps shifting FOR the inflation. Thus, they can not 'inflate their life boat', so to speak. It's exactly what happened in the 1997 IMF Crisis.

3. Well, if they're trying to sell at the same time the Bond Coupon rate will be relatively high. Thus, it equalizes since this would be the same for secondary purchasers (derivative purchasers? god damn terminology is my weakness). One would still need, for assurity, to have the Abe administration to incentivize domestic re-purchase of these bonds.
 
Kyle Bass On China's "Contraction" And "The Fed's Worst Nightmare"

Kyle Bass On China's "Contraction" And "The Fed's Worst Nightmare" | Zero Hedge

Your article kind of annoys me, he's blaming the Japanese debt crisis on Keynesian Abenomics while the 20 years prior's pain was caused by Bail-Outs and Neoconservative interest rate hikes (again, like the 1997 IMF Crisis).

Then he goes on to deplore the Yen's depreciation as if it wasn't a goal of Abe and it wasn't exacerbated by an outflow of Yen currency for energy imports after the loss of important electric infrastructure.

Everyone knows Chinese businesses were leveraging and mus-approporiating funds to construction... that's like a given.

But yea, there's a birth decline in Japan as well so Marriage Loans to save the day!!
 
Your article kind of annoys me, he's blaming the Japanese debt crisis on Keynesian Abenomics while the 20 years prior's pain was caused by Bail-Outs and Neoconservative interest rate hikes (again, like the 1997 IMF Crisis).

Then he goes on to deplore the Yen's depreciation as if it wasn't a goal of Abe and it wasn't exacerbated by an outflow of Yen currency for energy imports after the loss of important electric infrastructure.

Everyone knows Chinese businesses were leveraging and mus-approporiating funds to construction... that's like a given.

But yea, there's a birth decline in Japan as well so Marriage Loans to save the day!!

Bass is pretty much wrong all the time when it comes to macro economics. I am banned from a thread where they used Bass to predict higher bond interest rates for the US three years ago. Still hasn't happened. And China still hasn't popped yet.

Aint gonna happen
 
Bass is pretty much wrong all the time when it comes to macro economics. I am banned from a thread where they used Bass to predict higher bond interest rates for the US three years ago. Still hasn't happened. And China still hasn't popped yet.

Aint gonna happen

1) So China will never 'pop'?

And what exactly do you mean by 'popped'?


2) And where is your link(s) to unbiased proof that Bass is 'pretty much wrong all the time when it comes to macro economics'?

And remember, to know if he is 'pretty much wrong all the time' then you have to be aware of pretty much everything he ever says about macroeconomics...otherwise, you cannot judge just how often he is wrong.
So you cannot just post a couple of times he was wrong as proof of your statement...you have to post almost ALL the times he have an opinion recently and prove that they are almost all wrong or your statement means little.
If you are going to go around saying people are 'almost always wrong' - you should at least have proof to back it up.

(Btw - I know little of Bass myself)
 
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1) So China will never 'pop'?

And what exactly do you mean by 'popped'?


2) And where is your link(s) to unbiased proof that Bass is 'pretty much wrong all the time when it comes to macro economics'?

And remember, to know if he is 'pretty much wrong all the time' then you have to be aware of pretty much everything he ever says about macroeconomics...otherwise, you cannot judge just how often he is wrong.
So you cannot just post a couple of times he was wrong as proof of your statement...you have to post almost ALL the times he have an opinion recently and prove that they are almost all wrong or your statement means little.
If you are going to go around saying people are 'almost always wrong' - you should at least have proof to back it up.

(Btw - I know little of Bass myself)
You should focus more on the content then nitpicking an almost absolute I used. :)

Obviously proving this would be incredibly time consuming and likely impossible, so of course you cherry picked that which can't be proven.

Insread why not focus on the fact that BAS has been wrong on CHina and on US bond rates for the past three years? Focus on the proveable parts and not the unproveable ones.
 
You should focus more on the content then nitpicking an almost absolute I used. :)

Obviously proving this would be incredibly time consuming and likely impossible, so of course you cherry picked that which can't be proven.

Insread why not focus on the fact that BAS has been wrong on CHina and on US bond rates for the past three years? Focus on the proveable parts and not the unproveable ones.

You should not slander people without proof...that was my only point in #2.
If someone had said that about you I would have asked them the same question.


As for number 1...'And what exactly do you mean by 'popped', please?
 
You should not slander people without proof...that was my only point in #2.
If someone had said that about you I would have asked them the same question.


As for number 1...'And what exactly do you mean by 'popped', please?

You should ask the OP that question, I am just using that term as the OP uses it.
 
You should ask the OP that question, I am just using that term as the OP uses it.

No offense man, but that doesn't make much sense.

You are saying something will never happen - yet you don't know what that something is?
 
I agree with JP and don't believe China will pop. They'll change and adapt to economic shifts in the global arena, especially getting oil/gas from Russia.

The US is just starting to ease off QE and may even raise interest rates, because there's actually not enough volatility in the markets for the big players to take advantage.
 
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