What Capital Controls? Chinese Buyers Flood US Real Estate Market With $110 Billion
. . . Maddog agrees with this assessment. Maddogsbrer does not. He is smarter and better looking, go figure. Read more below!
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China is slowing down (again) a lot faster than anyone expected What do you mean "anyone?" Readers of maddogslair.com have long realized that China is "slowing" and fast, and what appeared to be growth in the past was mostly a Ponzi scheme of kited debt, and valueless construction of ghost cities, roads to nowhere, and other rubbish. Welcome to the party Business Insider . . . YOU'RE LATE! German Bearings Stomp Their Cheap Chinese Equivalents The key components are total rubbish. This test is simple and decisive, both bearings are weapons grade, yet the Chinese bearing cannot spin for more than a few seconds after being flipped. The bearings are not very round, this means friction, which means heat, which means wear, which means failure. These bearings are not sufficient for a child's bike, but they are apparently Chinese weapons grade. The German bearing spins about 5 times as long as the Chinese bearing, and so it should last longer. The Chinese may economically take over the world, but not in the near future, and not if they cannot develop new innovative products, and high quality products. Until then China will be little more than a manufacturer of trinkets, and baubles. Hat tip: Instapundit Surreal photos of China's failed 'city of the future' . . . there weren't any people! "The once flush-with-cash town of Ordos, China, has been called the world's largest ghost town. Roughly 15 years ago, a coal-mining boom led local government to throw money at urban development there, in the hopes of creating a new epicenter of culture, economy, and politics. Ordos New Town — also known as Kangbashi — would hold 1 million residents and be known for its massive conceptual-architecture projects, residential towers, and state-of-the-art sports venues. But high property taxes and poor construction deterred people from settling in Ordos. Today, though some 100,000 people call it home, most of the city sits unused, wasting away. "The whole city feels like a post-apocalyptic space station straight out of a science fiction movie," says photographer Raphael Olivier, who captured the city in a series titled, "Ordos - A Failed Utopia.'" China has at least 60,000,000 housing units in the same condition, unused. This is a shocking number. The entire US housing stock is about 117,000,000. Quick Facts: Resident Demographics| NMHC.org This reminds me of the most over populated city on Earth, Pyongyang. I amuse myself. The Age of Cheap Oil and Natural Gas Is Just Beginning
. . . although we will need to wait out the desperate oil bulls who keep fluffing the price every time something happens near an oil field. More below the fold. Hong Kong 1950-1960: The British and the Chinese escaping the CCP created a jewel. China Evicts Investment Firms Amid Fears of Unrest
. . . China might not make it through the decade! More below! Men with guns kindly ask Chinese economists to keep comments on the Chinese economy positive!5/4/2016 China Warns Economists, Analysts, Reporters About “Overly bearish” Remarks | MishTalk
They would hate for the truth to find its way out! Go read the whole thing. The Chinese economy is little more than a massive structure of lies attempting to confuse the world into believing something that is not. The Chinese economy will have its come-to-Jesus moment, and it will likely be spectacular. Well, unless you are one of the CCP. Then it might come at the end of a rope tied off to a lamppost. Or maybe the parties luck will hold. We need Chinese economy a dead pool! China Takes Drastic Measures To Save The Regime
China is in a rough patch, from the huge debt overhang, to the inane property values, to the fact that China has 60-70 million housing units which have been bought for speculative investment, and are unused, to the first time in human history, brand new never used ghost cities, to the wealth inequalities, to the PLA. Perhaps it will be able to suss out the problems, and find some intricate Rube Goldberg plan to resolve them, but I am not betting on it. This is a very good analysis of China's internal problems. Friedman did not point out that using the PLA to address issues as it did in 1989 is likely no longer possible. Nor did he discuss the fact that there are a near infinite number of ethnic groups in China who hate the Han, and who are about as stable as warm Nitroglycerine. China is a confusion of problems, competing interest, and lightly papered over chaos. It is just waiting for an economic crisis to touch off something the CCP can't control. Here's hoping! China has a frightening amount of debt, and it is building little of intrinsic value . . .4/30/2016 China’s debt reckoning cannot be deferred indefinitely - FT.com
. . . instead it is simple inflating an already inflated, and fraudulent economy. "Timing the end of a credit boom is more luck than judgment. There is no question that lenders own bad loans, reckoned unofficially by some banks and credit rating agencies to amount to about 20 per cent of total assets, the equivalent of around 60 per cent of GDP. These will have to be written off or restructured, and the costs allocated to the state, banks, companies or households. Yet in a state-run banking system, where loans can be extended and there are institutional obstacles to realising bad debts, the day of reckoning can be postponed for some time. More likely, the other side of the lenders’ balance sheets, or their liabilities, is where the limits to the credit cycle will appear sooner. Loans have to be funded by deposits, and China’s banks are venturing beyond fairly stable household deposits to more volatile funding sources in the shadow finance, interbank and corporate markets and overseas. Growing dependence on these liabilities renders the banking system, and the economy as a whole, more vulnerable to withdrawals that are prone to happen suddenly or when lenders lose confidence in economic and financial stability, as we know from 2008." This is an incredibly precarious position to be in for China. Add to this the fact that China is seeing a massive bums rush expatriation of money. This has driven home prices in Vancouver, and many parts of the West Coast into the stratosphere. China has been very lucky up to this point. However, what it was doing was fairly simple, in that it was adopting the earlier model that the West used to become wealthy. However, that model will only take China so far, and the next step requires the Chinese to innovate, and there is no evidence they can do so. "For the foreseeable future, China’s neglect of the problem of excessive debt growth looks likely to continue. Beijing cannot afford to spark a disruptive end to the credit boom and a slump in investment, with anecdotal signs of rising labour unrest and unemployment — especially before next year’s 19th party congress, where President Xi Jinping plans to consolidate his support at the upper levels of the Communist party. The question, then, is whether the politics of debt control will shift after the congress. With a slowing economy and rising financial instability risks, it is hard to imagine Beijing making a strong commitment to cut credit dependency and impose debt management policies such as more defaults and write-offs, the sale of national assets, and the transfer of wealth from indebted state companies and local authorities to private sector households and creditors. Yet, without such a shift, China is likely to experience greater financial turbulence than it has seen recently, which may not happen by the end of this year but will not take three years either. The main outcome would probably be a growth hiatus of unknown duration, for which the rest of us need to be prepared." The when question is unknowable, the next question is how severe. Take essential precautions, and make sure that if China has a rough landing you are nominally protected. I am assuming that once it goes it will be a doozy! |
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