Yes Virginia...It's a Bubble...

[touchring]

Re: Yes Virginia...It's a Bubble...

You actually found a place where the Chinese are polite in a crowd?

Cultures differ across China. You'll be surprised with what you will find in West China especially in small cities.

I dislike huge crowds, metropolitan cities and polluted air. My experience in Shanghai 10 years ago wasn't good and in my short trip of 2 days, I saw a scuffle in the busy street, a near fight at the airport and a policeman using a small stick to hit a migrant worker. But this was 10 years ago.

[GRG55]

Re: Yes Virginia...It's a Bubble...

Certainly not forever, but not this year. Maybe next year? There's still a lot of momentum even if the real estate bubble is bursting. The Chinese society is transiting as we speak. When I was in West China, many times I thought I was in Japan - not referring to buildings but the way people behaved.

You actually found a place where the Chinese are polite in a crowd?

[touchring]

Re: Yes Virginia...It's a Bubble...

A long time indeed. But not forever.

https://drive.google.com/file/d/0B4Q...llNnVJOFk/view

https://www.youtube.com/watch?featur...&v=C2SStFt-k_A

Certainly not forever, but not this year. Maybe next year? There's still a lot of momentum even if the real estate bubble is bursting. The Chinese society is transiting as we speak. When I was in West China, many times I thought I was in Japan - not referring to buildings but the way people behaved.

[GRG55]

Re: Yes Virginia...It's a Bubble...

in another 3 months, this thread will celebrate its 5th anniversary. it's amazing how long these things can go on.

A long time indeed. But not forever.

https://drive.google.com/file/d/0B4Q...llNnVJOFk/view

https://www.youtube.com/watch?featur...&v=C2SStFt-k_A

[touchring]

Re: Broken China?

I think this is part of the shift we are seeing. It's a good time to invest in environmental companies or start one in China.

If you'll be going to China and take the high speed train, it's good to book over the Internet as morning train tickets are usually sold out the day before. When I was there, many people couldn't get tickets at the station.

It is possible to check seat availability on booking sites - as shown on this link, G-train tickets from Beijing to Shanghai are sold out till about 3pm - http://www.travelchinaguide.com/chin...03%2F13%2F2015

[jk]

Re: Broken China?

FRED!??! could you turn off autoplay on the david stockman interview above. please.

[touchring]

Re: Broken China?

The slowdown seems to be the shift from massive construction investments/housing etc into environmental investments. The majority of the Chinese, and I hate to say this, that are considered 'worthy" or are "upper elite" have made their money and are in a good place. The governments job now is to make sure that the environment in terms of pollution is secure and not dangerous.

I think this is part of the shift we are seeing. It's a good time to invest in environmental companies or start one in China.

It depends on what the elites are doing. If they run their own business, they'll have to move back to China or somewhere else in Asia eventually because that's where the opportunity is.

Not sure about environment companies, but Western China is relatively pollution free, at least the pollution I can see or smell. The air in Chengdu when I was there, is better than Singapore.

[ProdigyofZen]

Re: Broken China?

I just came back from a trip to Western China.

The trains and coaches are packed. The roads are packed with new cars. The only old cars you can see on the roads are cabs. Traffic is very bad. A quarter of people own an iPhone or a phone that looks like a iPhone (there are plenty of Chinese brands that appear like iPhones). Something that may surprise some of you, in the city, almost everyone uses some kind of smartphone with touchscreen display.

There are hordes of domestic tourists and shoppers spending money, very few Westerners or Japanese tourists, at least the places I went. I don't know if there's a slowdown but it's definitely not a Japan - I went to Japan 10 years ago and shopping malls are dead - really dead.

There are giant construction sites everywhere. Some projects appeared to have stalled but the majority (90% or so) are ongoing.

Unlike many places in Asia like Indonesia, I don't see people hanging out on the streets. Everyone is either shopper or commuter going to work or at the job, e.g. plenty of police on the streets, or manning a stall/business.

Conclusion: There maybe a slowdown, but at least for "backward" Western China, this slowdown looks like a boom town in other countries, at least for now....

The slowdown seems to be the shift from massive construction investments/housing etc into environmental investments. The majority of the Chinese, and I hate to say this, that are considered 'worthy" or are "upper elite" have made their money and are in a good place. The governments job now is to make sure that the environment in terms of pollution is secure and not dangerous.

I think this is part of the shift we are seeing. It's a good time to invest in environmental companies or start one in China.

[touchring]

Re: Broken China?

China economic data weaker than expected, fuels policy easing bets

BEIJINGWed Mar 11, 2015 3:03am EDT

(Reuters) - Growth in China's investment, retail sales and factory output all missed forecasts in January and February and fell to multi-year lows, leaving investors with little doubt that the economy is still losing steam and in need of further support measures.

The figures came a day after data showed deflationary pressures intensified in the factory sector in February, reinforcing expectations of more interest rate cuts and other policy loosening to avert a sharper slowdown in the world's second-largest economy.

"Activity data surprised the market on the downside by a large margin, suggesting that China’s first quarter GDP growth could likely fall to below 7 percent," ANZ economist Li-Gang Liu said in a research note.

"In our view, the extremely weak data at the beginning of the year suggest that China needs to engage in more aggressive policy easing, and we see that a reserve requirement ratio (RRR) cut will be imminent," he said, adding that stimulus measures rolled out since last year seem to have had limited effect.

Industrial output grew 6.8 percent in the first two months of the year compared with the same period a year ago, the National Bureau of Statistics said on Wednesday, the weakest expansion since the global financial crisis in late 2008...

...Retail sales rose 10.7 percent, the lowest pace in a decade and missing expectations for a 11.7 percent rise.

Fixed-asset investment, a crucial driver of the Chinese economy, rose 13.9 percent, the weakest expansion since 2001 and compared with estimates for a 15 percent gain.

"Fixed asset investment will likely face even more challenges," economists at Credit Suisse said in a note this week...

...The Chinese economy has had a rough ride in the last 15 months as a property downturn compounded slackening growth in foreign and domestic demand and persistent industrial overcapacity. A widening corruption crackdown also has weighed on everything from investment to retail sales.

Policymakers have cut interest rates twice since November, and in early February reduced the amount of cash that banks must hold as reserves (RRR), freeing up fresh liquidity to flow into the economy to offset rising outflows of capital...

...With consumer inflation hovering near the government's "vigilance level" of around 1 percent, analysts expect the central bank to lower reserve requirements and interest rates again to head off a potential deflationary cycle, in what would be its biggest easing campaign since the global crisis...

..."Double-digit industrial production levels will be a thing of the past," said Chester Liaw, an economist at Forecast Pte in Singapore. "It is highly unlikely that retail sales will hold out for long above the 10 percent mark as well."

I just came back from a trip to Western China.

The trains and coaches are packed. The roads are packed with new cars. The only old cars you can see on the roads are cabs. Traffic is very bad. A quarter of people own an iPhone or a phone that looks like a iPhone (there are plenty of Chinese brands that appear like iPhones). Something that may surprise some of you, in the city, almost everyone uses some kind of smartphone with touchscreen display.

There are hordes of domestic tourists and shoppers spending money, very few Westerners or Japanese tourists, at least the places I went. I don't know if there's a slowdown but it's definitely not a Japan - I went to Japan 10 years ago and shopping malls are dead - really dead.

There are giant construction sites everywhere. Some projects appeared to have stalled but the majority (90% or so) are ongoing.

Unlike many places in Asia like Indonesia, I don't see people hanging out on the streets. Everyone is either shopper or commuter going to work or at the job, e.g. plenty of police on the streets, or manning a stall/business.

Conclusion: There maybe a slowdown, but at least for "backward" Western China, this slowdown looks like a boom town in other countries, at least for now....

[touchring]

Re: Broken China?

repeat

[GRG55]

Re: Broken China?

Where Will It End?

...It is fast running out of effective responses to the iron law of diminishing returns.

China economic data weaker than expected, fuels policy easing bets

BEIJINGWed Mar 11, 2015 3:03am EDT

(Reuters) - Growth in China's investment, retail sales and factory output all missed forecasts in January and February and fell to multi-year lows, leaving investors with little doubt that the economy is still losing steam and in need of further support measures.

The figures came a day after data showed deflationary pressures intensified in the factory sector in February, reinforcing expectations of more interest rate cuts and other policy loosening to avert a sharper slowdown in the world's second-largest economy.

"Activity data surprised the market on the downside by a large margin, suggesting that China’s first quarter GDP growth could likely fall to below 7 percent," ANZ economist Li-Gang Liu said in a research note.

"In our view, the extremely weak data at the beginning of the year suggest that China needs to engage in more aggressive policy easing, and we see that a reserve requirement ratio (RRR) cut will be imminent," he said, adding that stimulus measures rolled out since last year seem to have had limited effect.

Industrial output grew 6.8 percent in the first two months of the year compared with the same period a year ago, the National Bureau of Statistics said on Wednesday, the weakest expansion since the global financial crisis in late 2008...

...Retail sales rose 10.7 percent, the lowest pace in a decade and missing expectations for a 11.7 percent rise.

Fixed-asset investment, a crucial driver of the Chinese economy, rose 13.9 percent, the weakest expansion since 2001 and compared with estimates for a 15 percent gain.

"Fixed asset investment will likely face even more challenges," economists at Credit Suisse said in a note this week...

...The Chinese economy has had a rough ride in the last 15 months as a property downturn compounded slackening growth in foreign and domestic demand and persistent industrial overcapacity. A widening corruption crackdown also has weighed on everything from investment to retail sales.

Policymakers have cut interest rates twice since November, and in early February reduced the amount of cash that banks must hold as reserves (RRR), freeing up fresh liquidity to flow into the economy to offset rising outflows of capital...

...With consumer inflation hovering near the government's "vigilance level" of around 1 percent, analysts expect the central bank to lower reserve requirements and interest rates again to head off a potential deflationary cycle, in what would be its biggest easing campaign since the global crisis...

..."Double-digit industrial production levels will be a thing of the past," said Chester Liaw, an economist at Forecast Pte in Singapore. "It is highly unlikely that retail sales will hold out for long above the 10 percent mark as well."

[touchring]

Re: Yes Virginia...It's a Bubble...

Property lending under pressure. Lending for commodity hoarding no longer advisable. What to do, what to do...

I hope you're correct, as I'm waiting to scoop my Alibaba and Chinese reits for cheap, but judging from the stock market right now, I don't know how long I need to wait.

The new President Xi ordered government officials not to spend money in parties, cars, luxury goods and conventions, some kind of self-impose austerity. Can you imagine if the US government forbids federal and state government officials not to spend money, not to hold conventions in hotels, only travel by economy class, not to buy cars, stay in cheap motels, not to send christmas presents?

[GRG55]

Re: Yes Virginia...It's a Bubble...

The 'brilliant' ploy for some of these Chinese players was to use different receipts as collateral for the same physical commodities for too-eager-to-lend counter parties. Nice way to produce leverage.

Property lending under pressure. Lending for commodity hoarding no longer advisable. What to do, what to do...

Chinese banks back risky stock margin finance in face of regulator crackdown

SHANGHAI Thu Jan 29, 2015 5:47am EST

(Reuters) - Chinese banks seeking to profit from the country's stock market frenzy have bought into the recent surge in margin finance, foiling regulatory efforts to reduce debt-fueled speculation and amplifying the risk if the rally turns into a rout.

Although regulators are cracking down on credit flows into the stock market, financial industry insiders say they still have not closed loopholes that allow banks to channel credit into the stock market via brokerages...

..."I estimate that around 18 to 20 percent of margin finance loans end up with banks, but it varies from brokerage to brokerage," said a senior brokerage auditor at one of the big-four accounting firms in China. "It is definitely growing."

The easiest way banks get into margin financing is by treating margin loans made by brokerages to investors as collateral for loans to the brokerages themselves. This creates a quick profit for banks and frees up brokerages to lend more...

...Despite a 40 percent jump since November, the current rally has still not returned indexes to their 2009 peaks.

The broader impact of the 2009 implosion was limited because most of the speculation was done with cash, not credit. But China has lifted restrictions on margin financing since then...

...There are many variations on the theme, however.

Some banks accepting margin finance loans as collateral are repackaging them as wealth management products (WMP), which are sold to retail customers. Major banks including Agricultural Bank of China have gotten into the act along with smaller ones like Dongguan Bank, which if offering a WMP with an annualized rate of return of 5.5 percent and a guarantee on principal...

[vt]

Re: San Diego is expensive

Hey, it might not matter!

12 ways the world could end:

http://www.ft.com/intl/cms/s/0/260e3...44feab7de.html

As EJ says though: "The end of the world is a bad bet, it only happens once."

[vt]

Re: Let's get back to basics

Maybe he feels guilty

He does have insight to government, and the beginnings of the creation of the FIRE economy. Maybe he wants to set things right. This doesn't mean what he's saying is correct.