China's economy is screwed

[Hawkeye10]

blablabla

trollboy knows it all. predicts it all. broken record on a loop

My Right/Wrong record is outstanding.

That's what the education was for.

 

[cawacko]

ironically, we claim to be about free markets, but China allows bubbles to burst.

They are not going to prop up mistakes of the past like we do

In what sense would you say we don't allow our bubbles to burst? In recent times I'm thinking of the dot com bubble bursting and of course the housing bubble. In both occasions you had the Fed hiking rates which contributed to the bubbles bursting (the Fed's role in causing the bubbles is a separate discussion)

I don't pretend to be a China expert but my understanding is their gov't has propped up their economy for a long time instead of letting it 'burst' naturally. Hence the massive property bubble they face now.

 

[NiftyNiblick]

.
China’s anticipated economic recovery in 2023 has fallen short, raising concerns on Wall Street.

In terms of balance of trade, Kowloon is still doing OK as far as I can see.
They buy nothing from me,
but I'm handing over money to them all of the time.

I had some left over sesame chicken for breakfast this morning.

 

[anonymoose]

I have been very clear what is going on....listen better if you want to learn.....which I doubt.

The first question required a very simple yes or no answer.
I must assume it was too uncomfortable for you.

 

[zymurgy]

In what sense would you say we don't allow our bubbles to burst? In recent times I'm thinking of the dot com bubble bursting and of course the housing bubble. In both occasions you had the Fed hiking rates which contributed to the bubbles bursting (the Fed's role in causing the bubbles is a separate discussion)

I don't pretend to be a China expert but my understanding is their gov't has propped up their economy for a long time instead of letting it 'burst' naturally. Hence the massive property bubble they face now.

China doesn't say something is too big to fail and prevent it from failing. They will let the real estate market bubble they created collapse and begin anew with a clean slate

 

[cawacko]

China doesn't say something is too big to fail and prevent it from failing. They will let the real estate market bubble they created collapse and begin anew with a clean slate

I'm not asking this in an argumentative way, I'm just trying to understand your position. What did you have in mind saying we don't allow our bubbles to burst?

China sure propped up their real estate market for a long time. Did they have an alternative to the bubble that is bursting?

 

[Uncensored2008]

Is The Rest of the World in alliance with China? Or is it just Russland with whom China has declared neutrality in their war?

As we inch into open war with Russia, who we are unlikely to defeat with DEI, the question becomes irrelevant. Even if we somehow survive a conventional war against Russia in Ukraine - as the War Pigs in DC are clearly pushing us into - we will be weakened to the point of defenseless against China. When they move on Taiwan, South Korea, and Japan, we will stand impotent.

 

[anonymoose]

As we inch into open war with Russia, who we are unlikely to defeat with DEI, the question becomes irrelevant. Even if we somehow survive a conventional war against Russia in Ukraine - as the War Pigs in DC are clearly pushing us into - we will be weakened to the point of defenseless against China. When they move on Taiwan, South Korea, and Japan, we will stand impotent.

The u.s. alone spends annually about 2.5 X’s per annum more than China and Russland combined. That has accumulated over time.
Add to that NATO , Japan, S. Korea, Australia, Taiwan along with western economies and technology, and that is quite formidable.
It will be a bloody WWIII no doubt.

 

[Uncensored2008]

The u.s. alone spends annually about 2.5 X’s per annum more than China and Russland combined. That has accumulated over time.
Add to that NATO , Japan, S. Korea, Australia, Taiwan along with western economies and technology, and that is quite formidable.
It will be a bloody WWIII no doubt.

I question the leadership of our armed forces.

Lockheed paid for my education through an Sc.D. - I don't want to piss in anyone's soup - and they were good to me the entire time I worked for them. Still, despite all of the NADCAP and AS9100 involved, many of our advanced systems are questionable.

15 years in, and we can't get Artemus off the ground. Sure, it's fun to tweak an old rival, Boeing - but it also underscores the illusion of our arsenal.

 

[Hawkeye10]

I question the leadership of our armed forces.

Lockheed paid for my education through an Sc.D. - I don't want to piss in anyone's soup - and they were good to me the entire time I worked for them. Still, despite all of the NADCAP and AS9100 involved, many of our advanced systems are questionable.

15 years in, and we can't get Artemus off the ground. Sure, it's fun to tweak an old rival, Boeing - but it also underscores the illusion of our arsenal.

The same folks that have just failed spectacularly in Ukraine.

BTW we are what 20 years into the f-35 program, and just now are being told that it does not work in the rain, does not work at night, and even under ideal conditions it does very little well.

And the Navy is scrapping ships that are only a few years old, because they are unfixable crap.

They are still trying to make the USS Ford work.

 

[Uncensored2008]

The same folks that have just failed spectacularly in Ukraine.

BTW we are what 20 years into the f-35 program, and just now are being told that it does not work in the rain, does not work at night, and even under ideal conditions it does very little well.

And the Navy is scrapping ships that are only a few years old, because they are unfixable crap.

They are still trying to make the USS Ford work.

Because the sad truth is that defense contractors are in it to fleece taxpayers, not to build viable systems.

 

[Hawkeye10]

Because the sad truth is that defense contractors are in it to fleece taxpayers, not to build viable systems.

And the officers are busy setting up their post military careers with the military industrial complex and running the social engineering programs dictated by the Revolution. Col Stuart Scheller says that America would be stronger if all of the two stars and up were gone tomorrow, and half the one stars as well....we have for a very long time promoted the wrong people.

 

[Uncensored2008]

And the officers are busy setting up their post military careers with the military industrial complex and running the social engineering programs dictated by the Revolution. Col Stuart Scheller says that America would be stronger if all of the two stars and up were gone tomorrow, and half the one stars as well....we have for a very long time promoted the wrong people.

Yep. 20 as an officer, then retire to a cushy job with one of the primes.

 

[Hawkeye10]

Yep. 20 as an officer, then retire to a cushy job with one of the primes.

I place the start of America's military collapse with the Clinton Era drawdowns, where there was zero attempt to keep the good people, they just wanted X number gone, so a lot of the best left because it was easy for them to start over and those who stayed understood that the people who run America dont give a flying fuck about the quality of the military.

Do you agree?

 

[Uncensored2008]

I place the start of America's military collapse with the Clinton Era drawdowns, where there was zero attempt to keep the good people, they just wanted X number gone, so a lot of the best left because it was easy for them to start over and those who stayed understood that the people who run America dont give a flying fuck about the quality of the military.

Do you agree?

I agree with your assessment of Clinton - but the military bounced back after 9-11. It has never been as bad as it is now, not even during Vietnam.

 

[Into the Night]

China almost never loses these days...betting against China is moronic.

China is already losing.

Their money velocity is extremely low.
Their money is getting devalued just like ours.
Revolts are increasing.

 

[Into the Night]

I was listening to a member of the Han say that the story is being misreported in the West, that actually the bankruptcy of this company does not mean that China is imploding, what it means is that the Party has decided how they are going to resolve the issues with this sector of the economy, and is moving forwards.

Big talk from a government that is losing control.

 

[Into the Night]

Hmm, I'm impressed that the Han, who are somewhat like the Borg, deigned to say anything. Sadly it's too late there will be an almighty crash it's been a long time coming.

China has a unique, state-driven model of capitalism that clueless economists have hailed as the “new model for economic success.”

Bubbles get so extreme — and China’s bubble is the most extreme of all — that once they start to unwind, you get an avalanche of deleveraging and defaults.

I expect major problems in China likely by the summer or fall.

I have been warning for years that the greatest - and final - bubble to burst, in this century of bubbles, would be China. Now that cracks in the great red dragon's economy are widening, it's time to prepare for the worst.

China has a unique, state-driven model of capitalism that clueless economists have hailed as the "new model for economic success."

But I say China's model (and economy) will fail drastically, proving once and for all that government-planned economies do not work as well as free market capitalism balanced by democracy.

China has massively overbuilt everything: industrial capacity, housing, offices, malls, infrastructure, you name it.

It's overbuilt twice as much, and for twice as long, as any other government-driven emerging economy ever has. In fact, the last government-driven overinvestment spree occurred in Southeast Asia, and it resulted in a financial crisis between late 1997 and late 2002. And China has made that situation look puny by comparison.

There is no way this can end any way other than very, very badly. The question is: when will an economic collapse come? The answer is, sadly: sooner than you'd like.

Here are the seven signs the end is near…

Sign #1: Recently, a large Chinese property developer decided, for the first time, to discount condos by 40% when sales stalled.

The thing is, this is a shocking step to take in China. It's just not done.

The affluent Chinese line up to buy overbuilt, empty condos at insanely overpriced levels. They don't rent them out because there is no rental culture in the country. Ninety percent of homes are owned. They simply buy the property and let it stand empty… so when a developer cuts prices and thus devalues their investment, they get bitterly angry.

But this discounting trend is likely to spread rapidly now as more developers are forced to discount prices just to raise cash and avoid bankruptcy.

Sign #2: The richest man in China, with $31.9 billion, is Li Ka-shing. He and his son, Richard, have sold $3 billion of prime commercial properties in the last nine months. That tells me the smart money is leaving before the bubble bursts!

Sign #3: A Bain & Company/Chinese bank survey of affluent households showed that 60% of the rich are considering moving overseas because they don't trust government or the bubble, pollution levels are getting intolerable, and they want to get their kids an English-speaking education.

Sign #4: A number of major developers have gone bankrupt. These developers are highly leveraged and pose the greatest threat to the banking system, which has grown more through shadow banking and sub-prime lending in the last few years than anything sustainable. The worst new statistic, as developers pull back, is that housing starts in floor space dropped 37% in the first four months of 2013.

Sign #5: Bad loans are rising fast in China. The country's private debt is now higher than that of the U.S. or Europe, as you can see in the chart below. At 190% and rising, it's higher than emerging countries in Asia in 1998, when private debt peaked at 160% before a five-year currency and financial crisis.

But note that this chart doesn't include financial sector or government debt. When you add those numbers into the pot, my estimates of the country's total debt is around 277% of GDP. That's much higher than other emerging countries like Brazil, which is at 152%, India at 130%, and Russia at 78%.

Emerging countries don't have nearly the private debt of developed nations because their incomes are low and their citizens and businesses are less creditworthy. So for China to have a total debt of around 277% is unprecedented for an emerging country.

Sign #6: A major agricultural co-op closed its doors and investors couldn't withdraw their deposits.

Sign #7: A major Chinese solar company defaulted on its bonds - the first to occur in China.

Thus far, the government has quietly bailed out or covered over the defaults and cracks. But they're now hinting that they're going to let more defaults happen to "slowly let the air out of the balloon."

The Chinese government simply doesn't have a clue. Actually, no government does. They always think they can deflate bubbles slowly to ensure a soft landing.

Soft landings never occur in major bubbles.

Bubbles don't correct. They burst.

They get so extreme - and China's bubble is the most extreme of all - that once they start to unwind, you get an avalanche of deleveraging and defaults that build on each other.

Bubbles become black holes.

I expect major problems in China likely by the summer or fall.

When China blows, there won't be an effective stimulus policy from the U.S., Europe, or Japan, to counter such a shock. It will make the U.S. sub-prime crisis look like a Sunday afternoon picnic.

https://seekingalpha.com/article/22...974308550:dsa-1485125208378^^666684245927^^^g

Capitalism is always free market. It is never anything else. There is no such thing as 'managed capitalism'. Fascism and communism are not capitalism and have nothing to do with it.

 

[Into the Night]

You can ignore it as you wish but it will happen regardless. Many wealthy educated Chinese are leaving, sadly they are moving to places like Singapore, where my son and daughter in law live, and pushing the rents there sky high.

People are seeing the writing on the wall. They are getting their money OUT of China any way they can.

 

[Into the Night]

You should be a little more humble and a lot less hubristic, sadly that unlikely to happen.

Youth unemployment is so high Beijing has stopped publishing the figures. The last set showed 21 percent were out of work. The real figure is probably closer to 50 percent.

China will only avoid meltdown if Jinping comes up with another massive stimulus package, but Beijing can't keep doing that forever.

No 'stimulus package' will save China. It is 'stimulus packages' that put China in it's current problems.