Run for Cover: Chinese Implodometer Set to 10!

[bcassill]

Okay,

Interesting article over on ZeroHedge on China. Basically, China's easy credit machine is running on empty and will likely tank next year. The reverberations could very well be as big as Lehman Brothers and the Oct 08 crash.

http://www.zerohedge.com/article/foc...nancial-crisis

Another linked article from ZH on this here:

http://www.pivotcapital.com/reports/...he_Unknown.pdf

You gotta wonder how many other nations will follow in their footsteps (ahem, USA, ahem)?:rolleyes:

[grapejelly]

Re: Run for Cover: Chinese Implodometer Set to 10!

could not it go on for years longer than anyone could dream is possible?

[jpatter666]

Re: Run for Cover: Chinese Implodometer Set to 10!

Okay,

Interesting article over on ZeroHedge on China. Basically, China's easy credit machine is running on empty and will likely tank next year. The reverberations could very well be as big as Lehman Brothers and the Oct 08 crash.

http://www.zerohedge.com/article/foc...nancial-crisis

Another linked article from ZH on this here:

http://www.pivotcapital.com/reports/...he_Unknown.pdf

You gotta wonder how many other nations will follow in their footsteps (ahem, USA, ahem)?:rolleyes:

Well, in a previous posting EJ called a top to China and although he later admitted he should have called it for the Shanghai instead of Hong Kong index, China really hasn't moved much (FXI for instance is up about 7%).

A China crash would not surprise me in the least -- they have expanded the currency at a rate that makes the US look austere. And why would they not? IMO there is an implicit understanding between the Chinese Powers That Be (read CCP) and the populace.

So long as there is high employment and everyone is making money, the CCP can stay in relatively uncontested power.

They will do anything and everything to maintain that agreement, because if they ever lose power, it is doubtful they will ever regain it.

So, the scheme rolls higher and higher. But for an economy as tightly controlled as China's -- what *could* bring it down? They might be able to continue this shell game for way longer than anyone guesses. Western economy rules don't quite apply.....

[ASH]

Re: Run for Cover: Chinese Implodometer Set to 10!

could not it go on for years longer than anyone could dream is possible?

My bet is that a crash will occur just after the puts a certain iTulip member holds expire. So... later than January 2011. ;)

[Mega]

Re: Run for Cover: Chinese Implodometer Set to 10!

I wouldn't worry about Zero hedge, nothing much ever comes from their stuff.

Mike

[touchring]

Re: Run for Cover: Chinese Implodometer Set to 10!

So, the scheme rolls higher and higher. But for an economy as tightly controlled as China's -- what *could* bring it down? They might be able to continue this shell game for way longer than anyone guesses. Western economy rules don't quite apply.....

You have to see through the bubble to understand what China is doing. The bubble doesn't matter. All I know is that China companies are gaining market share at an astonishing pace, buying over brands and making inroads into developed markets. This is what Volcker will describe as "real economic growth".
http://seekingalpha.com/article/1773...ial-innovation

They will do anything and everything to maintain that agreement, because if they ever lose power, it is doubtful they will ever regain it.

The CCP will not lose power, regardless of what happens in China. You just have to look at the example in Singapore to know how politics work in Asia. The unchallenged incumbent does not easily give up power.

As for the bubble, who doesn't want to earn more money? CCP officials are involved in business and it is in their best interest that the RMB remains plentiful and cheap.

[oddlots]

Re: Run for Cover: Chinese Implodometer Set to 10!

I remember Michael Pettis ending a recent article on the turbo-growth in China's credit market since the crisis with a recommendation to his Chinese students to bone up on how to analyse and trade bad debt. Good enough for me.

As for future, long term potential, it ain't called "Chinese math" for nothing.

[Slimprofits]

Re: Run for Cover: Chinese Implodometer Set to 10!

I want to point out to Mega, whom might have been sarcastic, and everyone else, that it's not an article from Zero Hedge. It's from SocGen.

[stanley2008]

Re: Run for Cover: Chinese Implodometer Set to 10!

Here is my prediction on China:
The Chinese stock market will have a significant downward correction in the future.
And when it does, everybody who predicted a fall (EJ included) will claim credit for forecasting it.

[Nivelles]

Re: Run for Cover: Chinese Implodometer Set to 10!

Fortunately, the Chinese have one of those fancy Implodometers that goes up to 11.