Andy Xie: Fear the Dark Side of China's Lending Surge

[ThePythonicCow]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

The CCP is a ruthless lot, if they would even sacrifice hundreds of thousands of people to ensure economic growth, let alone mere banks. If Deng bothered about face, he wouldn't have sent in the tanks.

Governments cannot ensure economic growth. At best, they can establish a legal, monetary and regulatory fabric that is conducive to growth. Ruthless tyrannies seldom (if ever?) achieve such optimal results.

[ThePythonicCow]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

I suspect that China's commodity purchases will turn into sales more quickly than you might imagine:

http://www.philstockworld.com/2009/0...-estate-story/

Good story - thanks. It sure paints a dismal picture for China.

I have to keep reminding myself that essentially every major monetary, financial or economic phenomenon I observe these days is but another wave top in civilizations biggest wedge (those monster Newport Beach waves mentioned in this article.) The bubble moves from dot.com to American (and other) real estate to mortgage securities and derivatives to treasuries and dollars to Chinese funded investments in foreign commodities and domestic real estate.

Faster, faster, faster, until the thrill of speed overcomes the fear of death.

-- Slogan on T-shirt of a motorcycling friend of mine.

There are no long term currency-denominated investments. Commodities, energy or t-bills are just the "next" bubble.

[metalman]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

I am still split towards if China will blow up now, or first boom 15 years like japan from 1975-1990. They seems to have quite some room, to blow up a bubble.

so... how's your new bull market in stocks coming along? is it just taking a breather before stock go to the moon in a new economic boom?

[jpatter666]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

I found it interesting that EJ also mentioned China creating a credit bubble. No comment on when it might be due to pop though.

As we all now know, bubbles can go on for far longer than we believe possible.

[touchring]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

Governments cannot ensure economic growth. At best, they can establish a legal, monetary and regulatory fabric that is conducive to growth. Ruthless tyrannies seldom (if ever?) achieve such optimal results.

There is tyranny everywhere, only differentiated by the severity. The Wall Street bailout by taxpayers and QE is tyranny not just to Americans but also to foreign creditors of America.

The plight of Chinese peasant workers thrown out of the city is an act of tyranny. If Michael Bloomberg says that everyone who has no job and is not a native of NYC will be thrown out of the city, that would be tyranny.

In Beijing, they threw out most of the peasants who migrated to the cities looking for work and ended up building the Olympic facilities. Now, the huge numbers of Chinese peasants that flocked to the cities (which was, by the way, the largest migration of human beings in the history of the world) have gone back to their farms, but they are mostly not needed there, either. 23 million migrant workers can’t find a job in the cities, and they can’t find work back home. University graduates spend years looking for work, and often end up selling clothes or working in one of the omnipresent KFCs. China’s answer? Well, according to the China Post, they want to train people to be housekeepers! Right. THAT oughta turn China into an economic powerhouse!

[ThePythonicCow]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

There is no miracle only misallocation covered in smoke and mirrors due to the complete lack of transparancy.

Heavy on the smoke ...



All over the country smoke ...

[touchring]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

Smoke or no smoke, knowing in advance what they do certainly means profit. I missed an opportunity to make quite a good sum of money when Petrochina bought Singapore petroleum company at 3 times the oct-dec lows. Note, this wasn't a bank that could go bankrupt like one of those banks, but a solid company with low P/E, high yield and almost guaranteed earnings.

I was tracking that stock whole of last 2 years, but missed out the fine clues that China was targetting that company. It didn't occur to me that China will be interested in a oil refinery with hardly any oil fields.

Darn it! :mad:

[jpatter666]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

Heavy on the smoke ...



All over the country smoke ...

We were in China in later 2007 in Beijing, Xian and Chengdu. Pollution -- especially in Chengdu was unbelievable. I looked up and blue sky, but ahead buildings vanished a few hundred meters away.

Locals told us the area is a big auto manufacturer. Government officials required pollution controls and they *were* on during the day, but these plants at the time worked three shifts and as soon as the inspectors went home, the controls were turned off.

China at times seemed a maze of contradictions. In Xian we saw a Hermes store. We ate lunch at a cafe nearby and I watched to see if anyone entered this store (and the Bally store next to it). No one.

And this was in 2007! Infrastructure building going on everywhere. It seemed to me that the Chinese thought every country on Earth was going to outsource to China.

As we saw in mid-2008, the end of peak cheap oil is going to put an end to that dream. And China is going to have massive pollution and an upside-down population where the elderly outnumber the young.

[touchring]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

We were in China in later 2007 in Beijing, Xian and Chengdu. Pollution -- especially in Chengdu was unbelievable. I looked up and blue sky, but ahead buildings vanished a few hundred meters away.

Locals told us the area is a big auto manufacturer. Government officials required pollution controls and they *were* on during the day, but these plants at the time worked three shifts and as soon as the inspectors went home, the controls were turned off.

China at times seemed a maze of contradictions. In Xian we saw a Hermes store. We ate lunch at a cafe nearby and I watched to see if anyone entered this store (and the Bally store next to it). No one.

And this was in 2007! Infrastructure building going on everywhere. It seemed to me that the Chinese thought every country on Earth was going to outsource to China.

As we saw in mid-2008, the end of peak cheap oil is going to put an end to that dream. And China is going to have massive pollution and an upside-down population where the elderly outnumber the young.

Chengdu is suppose to be one of the less polluted cities in China, if it's that bad in that city, then things must be really bad in other cities.

[Mashuri]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

I am still split towards if China will blow up now, or first boom 15 years like japan from 1975-1990. They seems to have quite some room, to blow up a bubble.

It doesn't appear that way. From what I've read here, China is facing a Japanese-style simultaneous stock and real estate bubble-pop that will mire them in lost decades as well. Given the worse conditions their general population is in, I wouldn't be surprised to see an overthrow of their government within a decade.

[touchring]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

It doesn't appear that way. From what I've read here, China is facing a Japanese-style simultaneous stock and real estate bubble-pop that will mire them in lost decades as well. Given the worse conditions their general population is in, I wouldn't be surprised to see an overthrow of their government within a decade.

logically, that should be the case, but things aren't that straightforward. i'm betting on a reversal soon as interest rates rise, but the fact it can go up just after the big stock market collapse is a crazy enough.

http://www.overseaspropertymall.com/...state-rebound/

Limited Supply and Low Mortgages Help to Boost Hong Kong’s Real Estate Market

Buying has been increasingly encouraged by a limited supply and low mortgages in the city. This situation has been responsible for pushing Hong Kong’s real estate prices higher according to Wong. He said: “Some developers are accepting just 5 percent deposits from the purchase price, while others are offering interest-free payments for a few months.”
The overall house pricing index has jumped by 13.3 percent this year. This includes luxury residences as well. By May 10th the index had reached 64.34 according to a separate report by Centaline, after rising for a five week period.
Fixed home loans at 1.6 percent are now being offered by billionaire Lee Shau-kee who owns Henderson Land Development Ltd. and Bank of East Asia Ltd., for the builders new project in Hong Kong’s northern district Sheung Shui. The terms are for the first two years.

[nero3]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

so... how's your new bull market in stocks coming along? is it just taking a breather before stock go to the moon in a new economic boom?

That is a good question. In the best case, I still think it is just a cyclical bull in a secular bear, the selling volume is very light, however right now, it could very well just be a bear market rally that have faded. I think that is what most are confused, so therefore everyone is just letting go of their stocks in an effort to protect whatever gains they have.

[metalman]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

That is a good question. In the best case, I still think it is just a cyclical bull in a secular bear, the selling volume is very light, however right now, it could very well just be a bear market rally that have faded. I think that is what most are confused, so therefore everyone is just letting go of their stocks in an effort to protect whatever gains they have.

dec 23, 2007...

Debt Deflation Bear Market Update Part I: 2009 Windup

mar 27, 2009...

Debt Deflation Bear Market: First Bounce

jun 17, 2009...

The cheh shaped recovery – Part II: Yield curve says what? June 17, 2009, iTulip

• First Bounce is over

maybe right again?

[touchring]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

so gold going poof! :eek:

[metalman]

Re: Andy Xie: Fear the Dark Side of China's Lending Surge

so gold going poof! :eek:

yep... that's the forecast... all go down!