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No, we'll revolt, but you'll just be surprised who ends up being in the 1% killed.
The Chinese will revolt against their 1% long before the greasebag, TV-watching, diseased Americans revolt against their 1%.
I read where the the lawyers in the trial of the 1% lady who murdered an English businessman absolutely refused to touch the subject of she and her husband using the Engliish guy to move $Ms, Gecko-like, offshore, since it's known that the Chinese 1% does it.
Some Communists Are More Equal Than Other Communists.
No, we'll revolt, but you'll just be surprised who ends up being in the 1% killed.
LOL...
Why did he buy so much stock, or does the Chines Government say he must?
I read somewhere that China's GDP needs to grow 8% a year just to provide jobs for new workers entering the workforce.
Their crash would be relatively good news for the US I guess, at least from the compe ive side...
A poor understanding of Keynesian economics tbh.
The stat that tells the story is new construction was 16% of America's GDP at the peak of our real estate bubble while it's 50% of China's GDP right now. Idk how the construction ever becomes 50% of a country's GDP.
The largest human migration in our species' history.
Approximately 250,000,000+ human beings are moving from rural China to the cities to find work. Imagine having to build housing from scratch for every single person in the United States.
Even with construction at 50% of the economy many are living in what we would think of as closets, so they are not keeping up with demand yet.
Further making the problem worse is that no small part of the building they are doing is stupid and not economical.
Give it another 5-10 years and they will probably catch up, especially given how fast their population is aging, i.e. negative birth rate.
At some point, even with the bad investments, they will build enough housing in the cities. The problem is that they will continue to build and cause a massive collapse if they don't put on the brakes a bit before then.
Anybody who assumes the Chinese economy will continue to grow at 7-12% per year for the next 20 years is making a very tenuous assumption, IMO.
EEK!
So it begins?????
Cash crunch... short-term lending costs are soaring. (banks fear short term lending to each other, beacuse they are worried about loan defaults)
This is the credit crunch that accompanied our 2009 brew-ha-ha.
http://globaleconomicanalysis.blogsp...rest-rate.html
China’s one-year interest-rate swap rose by the most in 22 months as the central bank refrained from adding funds to the financial system to ease a cash squeeze, causing demand to fall at a government debt auction.
“The cash shortage may get even worse before the quarter-end because banks will have to hoard cash to meet loan-to-deposit ratio requirements,” said Chen Qi, a strategist at UBS Securities Co. in Shanghai. “The central bank probably won’t come out to intervene unless there is a sharp decline in economic growth and large capital outflows.”
“The market is disappointed by the lack of reverse repos from the PBOC,” said Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong. “The liquidity squeeze stems from less inflows and policy makers’ own policy to crack down on shadow banking, so the PBOC may be reluctant to use short-term tools to help.”
http://www.ft.com/cms/s/0/24e03fb0-d...#axzz2WllMTg8yIn the 1980s the west watched the Japanese “miracle” with wonder and tried to figure out how to copy its success. Britain still believed in the Japanese model in 1990 when Shirayama Shokusan bid for London’s County Hall, to create a luxury hotel over the river from the Houses of Parliament. The Chinese economic model has supplanted Japan (and the US of the 2000s) as the latest favourite – even as growth slows and problems build. Now China’s Wanda plans its own luxury hotel and apartment complex on the Thames.
The parallels between China now and Japan’s credit-driven boom of the 1980s are scary. Credit rating agency Fitch thinks Chinese credit has expanded far faster relative to economic growth in the past four years than during the heyday of Japanese lending at the end of the 1980s, or in South Korea in the four years leading up to its 1998 crisis.
This may be my confirmation bias seeking out information that confirms my hypothosis.
I think China's goverment has enough at its disposal to head off a total collapse, but I would note that their actions to prevent the bubble from getting bigger are what is causing this.
We'll see. Investors are beginnign to think that the emerging markets that have been so attractive are now a bit overpriced for the risk. A market correction would appear to be in the offing, not just for China, but for a lot of other developing economies.
Hang on to your hats.
Worst case scenario. Everyone knows Abenomics works and that Japan is going to be an economic powerhouse for the forseeable future. I don't see what the big deal is.
Haunted housing
Even big developers and state-owned newspapers are beginning to express fears of a property bubble
IN CHINA, property prices can keep going up forever. At least, that is what optimists seem to think. They point out that the country is undergoing the largest urbanisation in history. The throngs of migrants from the countryside all need homes, the argument runs. China’s swelling middle classes, many of whom live in shoddy 1980s housing, are also eagerly moving to fancier flats or McMansions. The result has been a spectacular property boom over the past decade.
I
At first glance, it seems the good times are still rolling (see chart). During the first three quarters of this year residential sales shot up by 35% versus the same period a year ago. Prices for new homes rose year-on-year in September in 69 of the 70 biggest cities. In Shanghai, Shenzhen and Beijing prices jumped by more than 20%; in slightly smaller cities, such as Nanjing and Xiamen, they rose by around 15%.
Follow the money
Despite these signs of rude health, even some of China’s biggest property moguls appear to be growing uneasy. Wang Shi, the chairman of China Vanke, the country’s largest residential-property firm by volume, has called the market a bubble. Wang Jianlin, the country’s richest man and the chairman of Dalian Wanda, a property giant turned entertainment firm, acknowledges that parts of the country may be experiencing a property bubble, though he thinks it “controllable”. Li Ka-Shing, a Hong Kong tycoon who has long been bullish on China, has started to sell his mainland holdings.
The problem is not the wealthiest cities with the most vertiginous valuations. Indeed, in those markets prices may yet go higher. People from all over China buy trophy apartments in Shanghai and Beijing, making their markets as resilient as those of Manhattan and central London. In fact, policies aimed at squelching speculation may be artificially suppressing demand in those places.
http://www.economist.com/news/financ...-express-fears
Prices are rising faster than demand, essentially.
They cured their short-term cash crunch to keep things going, and pumped more money in.
There is still a lot of demand, but that is finite, and there is still more plans to build even more new "towns" on the edge of their cities (see article)
China will be fine no matter what happens.
ppl forget Chinese are not americans. They can easily go back to getting rations of rice and water a day. And whoever doesn't like it will dissapear from the map. And if they need to do some population cleansing here and there it won't be a problem at all.
think of China as a colony of bugs. as long as the colony and queen survive it won't matter what happens to tens of millions of mere worker bugs.
more prosaically, think of it as a barnyard, Some Animals Are More Equal Than Others.
yes and no. Communist ruling party can make rich ppl dissapear too as easily as poor.
Watch the movie Antz. That is a prophecy of China in few years. The ruling ant class decided to cleanse the colony and makes them dig a tunnel from the bottom in an upwards direction all the way to a pond
Well they've built entire cities...that have no people.
http://news.yahoo.com/strains-buildi...033751229.html
One has to wonder how much longer they can keep it up...
As Ties With China Unravel, U.S. Companies Head to Mexico
Revenues at its Mexican plant have grown by 80 percent since 2010, according to company records, prompting a search for a second location near Mexico City. And in the past year, a dozen corporations have come to Flambeau and requested bids on projects worth tens of millions of dollars for things like smartphone cases and car parts.
“They’re all looking for a new model,” said Mr. Sauey at his offices in Middlefield, Ohio. “It’s not just about cost; it’s about speed of response and quality.”
With labor costs rising rapidly in China, American manufacturers of all sizes are looking south to Mexico with what economists describe as an eagerness not seen since the early years of the North American Free Trade Agreement in the 1990s. From border cities like Tijuana to the central plains where new factories are filling farmland, Mexican workers are increasingly in demand.
American trade with Mexico has grown by nearly 30 percent since 2010, to $507 billion annually, and foreign direct investment in Mexico last year hit a record $35 billion. Over the past few years, manufactured goods from Mexico have claimed a larger share of the American import market, reaching a high of about 14 percent,according to the International Monetary Fund, while China’s share has declined.
“When you have the wages in China doubling every few years, it changes the whole calculus,” said Christopher Wilson, an economics scholar at the Mexico Ins ute of the Woodrow Wilson International Center for Scholars in Washington. “Mexico has become the most compe ive place to manufacture goods for the North American market, for sure, and it’s also become the most cost-compe ive place to manufacture some goods for all over the world.”
http://mobile.nytimes.com/2014/06/01...?from=homepage
I read about that yesterday and had to laugh. In a few years, Americans will be illegally migrating to Mexico looking for work...
This has been huge for the San Antonio economy. The owners/managers are moving their families to San Antonio to avoid the kidnappers and flying down every week to work. Watch the airport on Friday afternoons and it's a parade of private jets coming home for the weekend.
Yet I can't get a direct flight anywhere...
Yeah, agree it sucks. American, United, and Southwest that own all the gates hub out of Dallas/Houston. I've been driving to Austin to fly JetBlue.
An aside:
China banned the word today, yesterday, on all of its search engines.
Yeah, figure that one out.
See how long that lasts when the costs of corruption catch up.
http://www.telegraph.co.uk/finance/c...iff-nears.htmlChina is not the only country in Asia facing a hangover. Nomura's Rob Subbaraman says housing booms in India, Hong Kong and Taiwan all match or exceed the US bubble in 2008, with Malaysia not far behind. "Asia is setting itself up for a major credit crunch," he said.
Nomura warned that markets are relying too much on a "China policy put", betting that Beijing will always come to the rescue with more stimulus if need be. "We believe there is creeping investor complacency. We assign a one-in-three chance of a hard landing – growth averaging 5pc or less over four quarters – starting within the next two years."
Premier Li appears determined to grasp the nettle, openly acknowledging that China has exhausted the low-hanging fruit of catch-up growth and reached the safe limits of credit expansion.
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